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Subject:  Beginner wants to invest beyond ROTH IRA. Help!! Date:  9/4/2011  9:44 PM
Author:  es3190 Number:  69508 of 78166

I am a new investor. 25 years old.

Have maxed out my Roth IRA for the past 2 years (currently at 10k) and am planning to continue to do so for the foreseeable future. My ROTH is with Vanguard, and I am investing in the 2050 Target Retirement fund (VFIFX).

I do not have a 401k, as I am working freelance.

My only debt are 3 student loans, all at fixed interest rates:

Loan 1: $7600 @ 4.875%
Loan 2: $5900 @ 6.8%
Loan 3: $3700 @ 5.00%

I pay $160 on each loan monthly, for a total of $480.

My income is $25,000 a year - or approximately $2,000 per month.


With that said, I am looking to invest more money. I am aware I am socking away 20% of my annual income in the ROTH. Coupled with my student loan payments, its approximately $900 monthly (though in actuality I pay the ROTH payments in a lump sum at the beginning of the year), or 45% of my monthly income. After my rent each month ($350), this 45% jumps to 62.5% of my monthly income.

I now have $750 left over each month that I deposit into my checking account.

I have approximately $8000 in my checking account that I consider my "emergency fund", though I also live off of it. (It hasn't dipped below $7,000 in over a year.)


I would like to contribute an additional $200 (or so) monthly to another Vanguard index fund, while continuing my ROTH contribution.

I know I have very little to work with. Am I jumping the gun on wanting to invest beyond my ROTH? Do I simply not have enough income to work with? I am aware that whatever I invest in outside of my ROTH is subject to taxes, and I have to be mindful of any transaction fees associated with any of the Vanguard funds I decide to invest in.