Mutual Funds - Vanguard - Investing

[Anonymous]

I have decided that I am not going to buy a house until I have 20% down. I have $20K in savings so far. I can put $5500 a year in a mutual fund (IRA) account right? But how liquid is it and what will I have to pay when I pull out to buy a house. These past few years I have been watching my Aunt's 401K account and IRA and she has had an 18% return for two years. My small 401K is at about 11%. Is this nice trend going to continue for awhile, because the chatter is that it isn't.

[Anonymous]

Anyone?

[Anonymous]

Bueller?

[Anonymous]

No one knows what your returns are going to be, or even what they are likely to be. If you're not currently contributing to an IRA, it's a fine place to start. Since you don't seem to have a definite time frame for when you want to buy a house, a 70/30 Stock/Bond allocation at Vanguard is a good start that can be made more conservative as you get closer to your goal.

Are you thinking of a Roth IRA that will allow you to withdraw all contributions at some point (earnings withdrawn are subject to penalty), or a Traditional IRA, where you will be limited to a $10k withdrawal for a first time home purchase? You should definitely make it a goal to be able to sustain dedicated retirement contributions in addition to downpayment savings.

[Anonymous]

Anonymous wrote:No one knows what your returns are going to be, or even what they are likely to be. If you're not currently contributing to an IRA, it's a fine place to start. Since you don't seem to have a definite time frame for when you want to buy a house, a 70/30 Stock/Bond allocation at Vanguard is a good start that can be made more conservative as you get closer to your goal.

Are you thinking of a Roth IRA that will allow you to withdraw all contributions at some point (earnings withdrawn are subject to penalty), or a Traditional IRA, where you will be limited to a $10k withdrawal for a first time home purchase? You should definitely make it a goal to be able to sustain dedicated retirement contributions in addition to downpayment savings.

I forgot! I had planned to do the IRA for College for my little girl...then if she gets a sports scholarship for basketball or crew (LOL) that money can be for my retirement.

So I guess this is a moot point.

I have a ROTH 401K through my employer...but the IRA was going to be traditional. (Starting That with Vanguard in January)

Arg...I guess my money market savings account will just have to do.

[Anonymous]

You could just open a brokerage account.

[Anonymous]

if you are saving for a house, do not invest in the stock market. if you need money in the next few years, the stock market is the last place you should put it (especially now, after a huge run-up. like you, i suspect many people have noticed friends/relatives getting double digit returns the last couple years and want a piece of that. this is usually a sign that the market is about to correct).

[Anonymous]

Anonymous wrote:if you are saving for a house, do not invest in the stock market. if you need money in the next few years, the stock market is the last place you should put it (especially now, after a huge run-up. like you, i suspect many people have noticed friends/relatives getting double digit returns the last couple years and want a piece of that. this is usually a sign that the market is about to correct).

While there's been a run up, I doubt timing is this easy

[Anonymous]

Well for you my friend. I would suggest you to check with the financial advisers in your neighborhood. You will likely find a good mutual fund investment. Usually, mutual funds have different plans and choosing the right one will help you have it liquidated at the right time to buy the house. Personally I have opted for Birla Sun Life Ultra Short Term Fund - Liquid Fund and I am pretty satisfied with the plan. This plan aims to generate income with lowest interest rate risk. For more information and decent plans you can check here - http://mutualfund.birlasunlife.com

[Anonymous]

I would not look into financial advisers. They will just take your money.
for a downpayment for 5 years time I would do something like 50 percent bonds, 50 percent equity. chose vanguard trackers for stock - lowest fee you can find.