Put up or shut up.
I don’t know how many time’s I’ve written about short-term investing, specifically in taxable investment accounts. I just know it’s been too many considering I am yet to contribute a single penny to one.
I mean, one of my top referring blog posts of all time was titled “If you have more than $10,000 in the bank, I think you’re silly.” Yet here I am, being a big ol hypocrite, keeping much more than that in my own savings account.
It’s easy to tell other people what they should do. It’s hard to make those changes myself.
We’ve had a boat load of cash in savings for years now, at one point breaking $100,000. But now that we’ve bought a place, spent our down payment money, and have a good idea of what our monthly expenses are, it’s time to put my money where my mouth is.
AND FINALLY DO IT.
A few days ago, we withdrew $20,000 from our savings account and plan on dropping it in our taxable investment account this week.
But Ninja, why would you do this when the dow is at an all time high?
Because I can’t time the market, that’s why. Anyone that invests should understand that their goal is for the markets to always trend towards an all-time high. Yes, they are at an all time high right now, but ten years from now they should theoretically be at a NEW all time high.
How will I be investing this money?
Probably in this vanguard fund, VTTVX. It’s a target retirement fund for people looking to retire in 2025, ten-ish years from now. It’s split between 70% stocks and 30% bonds. I like this because it is equity heavy, and I’m aggressive, but still provides a little relief in the event the markets plummet.
Target retirement funds are not the most efficient taxable investments.
Who freakin’ cares. Wanna know what isn’t efficient?
Wasting hours of my life trying to figure out what is the most efficient means of investing.
Or how about having $100,000 in a savings account earning 0.7%, when the markets shoot up 30%. I’m not trying to beat the market. I’m simply trying to earn a reasonable 3% to 6% return with minimal effort on my part. This account should do just that.
You look really sexy.
Don’t you have a baby on the way? This seems risky.
Yes, Baby Ninja is coming in June. And he is exactly the motivation I needed to finally get this taxable investing thing going. Girl Ninja and I racked our brains, trying to think of what major expenses are on the horizon, and couldn’t come up with anything in the next five to ten years. Since we don’t envision needing this $20,000 at any point in the near future, the only logical thing to do was put it in some type of investment so it hopefully grows faster than inflation.
What if the markets tank?
Even if the markets drop 50% in one year, which is almost unheard of, we’d still have $10,000 of our original $20,000 investment. It’s not like I’m putting all my chips on black okay. Is this a risk? Sure, but a calculated one.
If that doesn’t answer all of your questions about why now is finally the right time for the Ninja household to start short-term investing, feel free to ask them below and I’ll do my best to get back to ya.
Remember, it’s not about working harder, but working smarter 🙂