/personal-finance-notes

Quick notes on personal finance that I've learned from friends and books.

Notes on personal finance that I've learned from friends and books.

Here is the list of books I recommend to read if you want learn about personal finance and investing. Highly recommend to start from A Random Walk down Wall Street. It's a great book for beginners that introduces the main concepts of investing and personal finance.

Emergency Fund

  • Vanguard Prime Money Market Fund* is a great option for your emergency stash.
  • New Jersey Tax-Exempt Money Market (VNJXX) ($3,000 minimum) (0.16% ER)

Saving Accounts

  • In general not a good choice because you lose money upon yearly inflation.
  • Has less than 1% annual return
  • Maybe good just simply for safety net
  • Maybe money market funds can replace the saving accounts

Vanguard

  • American investment management company based in Malvern, Pennsylvania with over $4 trillion in assets under management.
  • Vanguard Index Fund that has 0.1% - 0.2% fee and ~9% annual return, but after inflation it comes down to 3.5% - 4%.
  • There is no commission fee on Vanguard. Funds charge you an expense ratio
  • Long term investment 20–30 years
  • Total World Stock Index Fund
  • Vanguard Total Stock Mkt Idx Inv (VTSMX)
  • Vanguard Growth Index Fund Inv (VIGRX)
  • Vanguard Growth and Income Inv (VQNPX)
  • Vanguard Large­Cap Index Fund Inv (VLACX)
  • Vanguard 500 Index Fund Inv (VFINX)

If you need your money in a year or less (short term investment), you better stick with low-risk investments that are easy to access, like money market funds or savings accounts.

Saving for house down payment

  • Intermediate term bonds
  • maybe 60% bonds and 40% stocks (mostly depends on the risk you're willing to take)
  • Vanguard Total Bond Market Index ($3,000 minimum) 60%
  • Vanguard Total Stock Market Index - 40%

Savings tips

  • Save as much as possible on 401K plan. Max it out.