40 Yr Old with $500/month for Investment. Best Course of Action?

[Norwayguy]

Not in bullion. I do have a nice collection of silver quarters going though

I have a friend who is heavily invested in silver. He loves the metal.

Too much volatility for me to have as rainy day money. Plus it takes a heck of a lot more room to store vs. gold... I would need about 50 safety deposit boxes of silver to match 1 of gold!!!!

When I talk about precious metals I like to show a coin. I prefer to put a silver coin down over gold its like pens (though I believe I would be much more cognizant of keeping track of a gold coin over a pen).

 

[agentjhc]

Ok, Same question, $500 a month, but clients are a 56 yr old male and 53 yr old female. $500 each. Stop putting money in at 70.

 

[scagnt83]

Ok, Same question, $500 a month, but clients are a 56 yr old male and 53 yr old female. $500 each. Stop putting money in at 70.

Again, not enough info to even begin giving recommendations. There is no one size fits all strategy. Its a mix of goals/needs/wants/haves

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(though I believe I would be much more cognizant of keeping track of a gold coin over a pen).

Not if that gold pen was made out of real gold... lol

 

[brett013]

Low cost index fund approach:

VTI in a Vanguard RothIRA (or regular IRA) account for the first few months, until he has $3,000 balance. Then switch to VTSMX, the mutual fund version of VTI. Switch again to VTSAX when he has $10k in.

Can balance it with VXUS, VNQ, VNQI, and BND for international, real estate and bond diversification, as you see fit. Switch to their mutual fund counterparts similarly when you hit the minimum balances.

But...I agree with wfs. "No way to answer such a question with such limited information."

 

[KaseyNM]

Ok, Same question, $500 a month, but clients are a 56 yr old male and 53 yr old female. $500 each. Stop putting money in at 70.

Not nearly enough information.
What are they trying to accomplish with the money? Are there other assets in their portfolio? What's their tax diversity like on existing assets?
So, so much more qualifying information is required.

 

[LGilmore]

he's got 500 a month? Awesome.

First question you left unanswered? What is he doing now?

 

[ltcadviser]

Low cost index fund approach:

VTI in a Vanguard RothIRA (or regular IRA) account for the first few months, until he has $3,000 balance. Then switch to VTSMX, the mutual fund version of VTI. Switch again to VTSAX when he has $10k in.

Can balance it with VXUS, VNQ, VNQI, and BND for international, real estate and bond diversification, as you see fit. Switch to their mutual fund counterparts similarly when you hit the minimum balances.

But...I agree with wfs. "No way to answer such a question with such limited information."

So, Brett, if an IRA has the following percentages in it, and the balances are all greater than $10,000 are there better Vanguard funds?

30 vti
10 vwo
15 vea
15 vnq
15 vgit
15 tip

 

[DWPCL]

As someone who is younger than your client. Personally I invest mainly (for retirement) in 3 things:
1. IUL (some WL too)
2. Index Funds (S&P/Bonds/International)
3. Indexed Annuities that are growth oriented

I only put Qualified Money into the Index Funds. Im not a fan of most mutual funds... way too expensive and way too much overlap (even within the same fund).

My play money is in the FX market. And my rainy day money is in cash and physical gold.

What company did you purchase your IUL through?

I own some guardian whole life as well as some penn mutual whole life and I'm thinking its time to add some universal life in the mix.

 

[Justin Bilyj]

I like indexed annuities, Ultra Value has a 2% bonus and a 95% participation rate.
Dividend stock investing is great, invest in companies who have had a reliable past history of paying dividends and watch the equity in your position grow along with the dividends. Also find some DRIP plans if you can.
Dividend Mantra
Dividend Monk - Top Dividend Stocks
these are some cool sites, the dividend mantra site has been gaining alot of exposure on reddit and other sites, the guy is a frugalist and reinvests his money into dividend stocks.
I personally own a ton of gold and silver (my hedge against currency weakness) as well.

I would personally forgo variable annuities or mutual funds, not a fan of the fee situations.

 

[aclaro]

I like indexed annuities, Ultra Value has a 2% bonus and a 95% participation rate.
Dividend stock investing is great, invest in companies who have had a reliable past history of paying dividends and watch the equity in your position grow along with the dividends.

Isn't this an oxymoron? You're recommending dividend investing AND indexed annuities, which just so happen to not participate in dividends.

Also, if you're talking about National Western Life 's Ultra Value then don't forget to include out the spread and that it's a monthly average annual reset. That's kind of important information.