I currently have ~$25k sitting in a brokerage fund that was set up for me when I was born with the intent of using it for college. Since I went to school fully on scholarship, I luckily never needed to touch it. My family recently handed over control of the account to me, and it turns out it isn't performing very well - the fees on it are higher than my returns. Yikes! Needless to say, I'm trying to figure out where to take this money for biggest impact.
Someone suggested to me that instead of immediately moving my money to a better performing fund (I was looking at moving to a fund with Vanguard) that I take this opportunity to put my entire salary into my 401k until I max it out (this would take 4 months) and use some of my $25k as living money in replace of the paychecks I wouldn't get during this time. If I did this, I would move the $25k to a high interest savings account and setup automatic transfers of the same value of my current paycheck. Is this sound advice? I worry there is a catch or something else I should be considering before making this move.
For reference:
- 28 years old
- Have no debt
- Currently putting enough in my 401k to max out my employer match (match is paid out once per year)
- Recently opened a Roth IRA with $3k in it
- Have $16k in liquid assets, then this $25k that I'm trying to move around to a higher performing investment option
Submitted May 09, 2017 at 08:27AM by catsm3ow http://ift.tt/2qmD1Vy
