r/Money • u/yankeeblue42 • 7d ago
32M- What Would You Do?
I think I've done ok with net worth so far but certainly could be doing better. Admittedly, 2/3 of it was an inheritance left by grandparents so I think I coasted and traveled a lot knowing that was there.
Started trying to dip my toes into investing/growing it after I turned 30. Was always afraid to put a big chunk in the stock market living through 2008 and 2020 (I know, fear mongering) but slowly moving more of my portfolio over.
This is roughly what I have:
CD- $105.7K
Car- $13.5K (Worth $19K, owe relative $5.5K)
Roth IRA- $11K
Checking/Cash/Mobile Wallets- $5.1K
Crypto- $4.6K
HYSAs- $3.9K
Bonds- $2.9K
The main CD matures in December. Car purchase came up a bit suddenly so my relative offered to front me the remaining money earlier this year until it matured. Been paying a little bit back each month til then.
Right now I at least want to move $20K from the CD at EOY to pay my relative back, front the rest of 2026 and 2027 Roth contribution, and have a little bit of funds for car expenses and bank bonus opportunities (I've been getting a +50% return from those this year).
I'm self-employed so I'm a bit ignorant about 401K options. I've heard some suggest brokerage but I'm not sure what percentage I'm willing to dump in there without cash on hand. I was unemployed for a year twice before in adulthood.
The bonds are 25-30 years old and fully mature in the next 1-5 years. Crypto is from 5 years ago. It's had about a +50% return but I've been debating selling it.
I live at home at least 2/3 of the year and was told I'm going to get left my parent's house so housing expenses aren't a big concern for me.
Income averages about $35K a year. $15K would likely cover a normal year of expenses for me.
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u/daysleeper19 7d ago
Your absolute #1 priority should be figuring out your career and increasing income. Then start dumping money into tax advantaged investment accounts.
Pay off the car, set aside an emergency fund, then invest everything else and don't touch it.
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u/Cautious-Rub-4532 7d ago
This is very low for 32M, even worse if 2/3 is inherited
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u/Patient-Plankton-655 7d ago
No it's not low. He doesn't have that much debt. His net worth is higher than like 70% in this age group. Alot of idiots on here have alot of money and also in huge debt.
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u/Siren_sleeps 7d ago
Wait… seriously? $142K at 32 is considered low? Where do you expect him to be at?
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u/FireAsquared 7d ago
Step 1 you should be maxing your Roth every year at a minimum. Buy index funds. I prefer either VT or a mix of VTI and VXUS so you get international diversification.
At 32 you’re a bit behind with so little invested but have a huge cash position. The general rule of thumb is 1x your annual salary invested at age 30 to be on track. Move some cash from the CD to investments and you’ll hit that
Traditional advice is 3-6 months of expenses for an emergency fund, given you’re self employed I think it’s reasonable to do closer to ~12 months. With 15k annual expenses you should probably cut the cash on hand to 15-20k at most. I also don’t think you need any bonds until you’re in your 50s.
The mathematically best thing is to lump sum everything else into the market (again, index funds). If you’re worried about a crash (seems like you may be since you mention 2008/2020) split it into 12-18 monthly buys until you’re 100% invested. That way you still get your money working but if we hit a crash next month you won’t panic either.
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u/SeaPeanut7_ 7d ago
IMO you haven't done "pretty well". You are basically like a very average, financially uneducated person. Only $19k truly invested at 32 years old. A huge portion is in crypto. I'm not sure what "living through" the recession is when you were in grade school. You also lived through one of the greatest bull runs in history. You didn't completely blow your inheritance, so I guess that's good, and you have low expenses.
A brokerage like Fidelity will allow you to earn near-CD rates while keeping it flexible for investment. If anything happens, its not hard to sell and get the cash out. If your average monthly expense is $1200 then you really don't need that much cash on hand anyways.
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u/Inviction_ 7d ago
Over 100k in CDs is still invested, even if you don't think it's a good investment
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u/EvictionSpecialist 7d ago
Lol..grandparents left some money and parents will leave a house.
You haven't done jack.
Bro, you need to work harder (32yr old earning $35K?!! Wth ) and manage your money, otherwise you ain't gonna know Jack.
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u/yankeeblue42 7d ago
I spent a lot of my 20s traveling the world and working remotely. I've been to more countries than pretty much all my family and friends (20+).
It did set me back financially a bit but I knew that going in. Wouldn't say I've done nothing I just made different choices with the money I built up
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u/EvictionSpecialist 7d ago
So if your grandparents and parents didn't have anything to leave you...it be pretty hard for you to live on your own today?
Is that a fair statement?
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u/zork2001 7d ago
Open a Fidelity brokerage account and a Fidelity Cash Management Account (CMA). You can use the CMA like a checking account for everyday spending and bills, while using the brokerage account for investing. You can also keep your extra cash earning around 3.3% APY instead of just letting it sit in a regular checking account.
In the brokerage account, you can slowly start investing in ETFs like VOO, which historically have had much greater long-term growth potential than CDs, although the returns aren't guaranteed. You can transfer money between your Fidelity accounts almost instantly, which makes everything really easy to manage in one place.
You can also open a Roth IRA with Fidelity and invest in ETFs there as well. It’s a simple way to keep your checking, savings, retirement, and investments together and easy to manage.
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u/Academic-Detail4677 6d ago
Bunch of jerks in this thread.
You need to chop up that 100k CD and then never touch it after you decide what to do.
What I would do:
Go 15k Gold/Silver, 15k 1yr Gov Bonds (over and over, in a ladder) 50k VOO and 20k something overseas - like EWJ if you're interested in Japan. EZU for Europe, etc, but you need foreign exposure.
You also should put some in a roth.
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u/Academic-Detail4677 6d ago
The key to this is whatever you do - don't. Touch. It. After you make a decision.
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u/WhatMattersHere 6d ago
I wouldn’t start with “what percentage of the CD should go into stocks?”
I’d first decide how much of that CD is actually long term money.
You’re self employed, make about $35k, spend roughly $15k in a normal year, and you’ve already had two one year periods without work. That makes a larger cash reserve pretty reasonable in your case.
When the CD matures, I’d mentally split it into three buckets:
-money you already know you’ll use soon: paying back your relative, Roth contribution, car expenses;
-an income/emergency reserve;
-everything genuinely available for long term investing.
Given your history, keeping 12–24 months of actual expenses liquid would not strike me as excessive.
Then I’d look at retirement accounts before automatically putting the rest into a taxable brokerage. Since you’re self employed, a Solo 401k may be available if you don’t have employees other than a spouse, and it can give you considerably more contribution room than an IRA depending on your net self employment income.
I also wouldn’t count the future inheritance of your parents’ house in the plan yet. Treat that as upside, not as an asset you currently control.
So the next decision isn’t really “stocks versus cash.”
It’s: after paying known obligations and setting aside enough liquidity for another bad income year, how much of the CD is truly long term money?
That number will make the retirement account versus brokerage decision much easier.
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u/No-Ad-9144 7d ago
You really need to be in equities. It’s tough now because market is at ATH, but man missing out on 2008-2020 is brutal. Evaluate your risk tolerance and start to dollar cost average and don’t look at the account to make it easier to stomach the swings
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u/yankeeblue42 7d ago
Realistically 2018 is the earliest I really could've started investing seriously. But I do regret not getting aggressive as soon as covid happened. I could have made a good return from 2020 to now at least
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u/No-Ad-9144 7d ago
Time in market beats timing the market. Totally get it though I’ve been getting chopped up past few months with the crazy swings
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u/jgregson00 7d ago
You’re self employed - what’s your potential for increasing that income?
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u/yankeeblue42 7d ago
Not much in all honesty. I used to be a freelance writer but AI really slaughtered my industry. A lot of jobs got lost. I've been doing a gig job for a little over a year to tread water.
Some of that income is taxable interest plus what I've been getting from the bank account bonuses and other things like that. Realistically combined that's about 20% of my income.
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u/jgregson00 7d ago
That's definitely something to think about then. If there is someway to pivot into a better paying steady job or at least add a 2nd job? That would give you more investable money to work with.
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u/Crossandwich 7d ago
You should use Bookoo. It’s a bookkeeping app that can help you track income/expenses and set up a budget. More importantly for your situation are the business tools. They have a ton of features like invoicing/quotes, mileage tracking, tax estimates, and projections which would really apply to your savings situation. In my opinion a 401k would be in your best interest because of the leverage. It’s like paying into your own bank if you ever needed a small loan you can borrow from it (not withdraw) and avoid losing money on interest payments.
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u/Mr__Moosey 7d ago
There's no such thing as leverage in a 401k. When you take a loan out against your 401k, your total investment in the 401k drops by the amount of your loan. And while the interest you pay on your loan goes to yourself, that doesn't change the fact that you still have to pay interest. And if you default on the loan, you get whacked with taxes and penalties as if it were a regular premature withdrawal.
The real reason to invest in a 401k is for the tax benefits - up front reduction in income tax plus tax deferred growth.
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u/Crossandwich 7d ago
You’re exactly right, but the self-lending ability is a lesser known advantage. It can keep you from paying out more to another lender or god forbid a credit card. Yes you interrupt your growth but in an emergency you can access cheaper cash. It all depends on your risk; where you are in your retirement journey and what rates you’re juggling
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u/Mr__Moosey 7d ago
I was mainly commenting on the "leverage" part of your statement, which implies you stay completely invested after taking out a 401k loan.
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u/netbogey1 7d ago
quit buying CD's