Having been in banking for a while I almost have not invested at all except for my 401k. Now that I have ~350k cash and no debt. What are your suggestions? Thinking about 6 months of emergency money and rest goes to equity / bonds etf?
MORE DETAILS:
- Late 20s,
- no house / mortgage / debt
- monthly expense incl. rent (~$5-6k)
bump
Weird flex but alright. Yeah basic finance shit... I'd say a 6 month runway is also a bit nuts considering you can always liquidate your equity holdings. Maybe 2 - 3 months (start pulling more out if you think you'll be unemployed for a while for whatever reason), Assuming you're nearing mid to late 20's yeah you could probably do 80-90% equity.
Personal finance should always start with a budget. So do a budget.
If you're really interested, maybe read up on Dave Ramsey or Suze Orman.
Thanks! Watched Suze Orman on cnbc but never thought people actually take her seriously!
Would anyone recommend dumping 30-40% of cash into etfs now? or wait until the downturn
With anything investing, always scale in right. 30%-40% sounds good, but make sure to have an investing timeline as well. Such as saving and putting in every month of quarter. This helps smooth out loses a little
First of all, I want to thank you for the original question. It's not like this has been answered millions of times (both on this website and everywhere else online).
Second of all, I want to congratulate you. You have $350,000 in cash. The CEO of Amazon has over $160 billion, and many people on this website make more than that in 6 months. But to have amassed such an intense quantity of wealth is a feat like no other. I encourage you to please remain humble. This is truly an amazing feat.
Third, nobody really cares about your financial position.
Fourth, if you want accurate advice, you might want to provide more details. Do you own a home? Do you have a family/children? How old are you? What are your current expenses? All of this would have been amazing to know beforehand in order to create suggestions that are actually useful.
Fifth, good luck, and godspeed.
Not sure where is this coming from...this is obviously not a bragging post? Most young finance professionals (particularly bankers) have little ideas on personal finance
Do you happen to have an idea about this cool thing called the search bar?
I think the basic start is typically a spreadsheet of expenses, income/paycheck typically easy to tell if you don't have rental homes/alternate income. If you have a rough idea, 5-6k you can go off that but personally I find it nice to know where my money is going, MINT by intuit can help with this if you're an app person.
Three buckets, in increasing size
First bucket, emergency funds, 3-6months living expense, 6 month end if you like to play it safe, 3 month typically good baseline. This can be in a savings account but honestly putting it into something liquid like 6Month CDs/money market funds can get you something while being liquid (2%, not much but >0 in savings acc).
Second bucket 3-5 years goal, typically this is a down payment for a home, you mentioned you currently don't have a mortgage, maybe something to consider, in NYC (going by your username) probably 200-300k for the mortgage down payment, you have that currently but don't know your thoughts on buying real estate, in the meantime you can put it into something like 60 stocks 40 bonds portfolio, try to yield 4-6%, relatively safe (may need to use in 3-5 years) but still growing at a good rate, and if you're a bit flexible on when you need to buy a house (i.e. if markets tank you can delay a few years no problem) then you can be a bit more aggressive on the stocks side. Specifically what you're investing in is up to you, ETFs always safe, vanguard is great, cheap choice, if you want to do some homework I would include some mutual funds that you've looked into/liked, diversified across sectors.
Third bucket Retirement, this basically is the most aggressive/long term, should be the biggest bucket (includes your 401k, hopefully you have a good match/have been contributing), and you can aim, given your under 30, perhaps 80% stock, 20% other/bonds, subject to your own risk profile/comfort with investing. Note, many people go higher than 80% in stocks because frankly, you don't/shouldn't touch this money for about 30ish years, assuming retire at 60, of course retire early is something else to consider but given you're in banking that's probably not a big deal/another discussion.
This turned out a bit longer than expected but PM me if you have any questions, like I said I'd start with an excel spreadsheet and go from there. I have one that I use that I'm happy to send you, it's not that hard to make a quick one though.
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