Best Way to Pay for a Large Purchase?

[Dugie8]

This is the smartest thing you've ever said.

Now, keep this thought in mind when your idiot emotions tell you to waste $10k on a ring.

Oh, one last thing: if your soon-to-be brother-in-law spent $30k on a ring, then he's the schmuck, not you.

That was supposed to be "isn't".

Stupid iPhone...

 

[drunkenbeagle]

Thank you for your advice, doing that already though!

Question, even though I do have a long way to go, what should you do once you hit 45? Put that chunk it in a Target Date fund and then keep investing the future contributions in an Index Fund? Split the future investments once you hit 45 at 50/50 between Index and Target Date fund?

All things being equal, I would agree with @ATN_Pilot, at 45, I would still be 100% in equities (S&P500). I personally, would start shifting the allocation to be heavier each year on dividend paying stocks/ETFs, like the VIG or DVY. My reasoning there is that while they have higher expenses and slightly underperform the S&P, the higher dividend may give them some support in a down market. (When the price goes lower, dividend yield attracts buyers, usually limiting how low they tend to go.). I might consider moving 5% or so a year, maybe. But the returns won't be much different than the S&P, just a bit lower with hopefully less volatility. Right now, both of the ETFs I mentioned pay dividends that are barely better than the S&P, so I would be inclined to just stick with the broader market index. I own both, but it is less than 10% of my retirement account. Even in retirement, I wouldn't go less than 50% stocks.

The real answer would depend on your circumstances. When are you planning to retire? How much of the money do you plan on needing and when? Are you planning to work in retirement? Would you keep flying for a few more years if the market tanked? How much are you planning on taking out every year? And how much money is in a 401k, ROTH, or taxable account? Money in the ROTH is worth the most, then taxable accounts, then the 401k last (in the order that pays the least taxes).

Even if another worst case 2008 crash happened the year you retired, being 100% in stocks, if you have saved more than you need, I think most people would still be fine.

 

[smack300]

She asked me what I was willing to spend . She had to talk me down from $30k. I don't think she cares. But I do. Alas, $5000 seems not quite doable unless the financing is awesome.

I have been pressuring her to get a better job because I don't like the dollar amount her career will bring in.

You wanted to pay 30K for a ring, but you can't even afford a 5k ring "unless the financing is awesome"?

I am definitely not as money smart as some of the other guys on this forum, but this hurts my head.

 

[drunkenbeagle]

She asked me what I was willing to spend . She had to talk me down from $30k. I don't think she cares. But I do. Alas, $5000 seems not quite doable unless the financing is awesome.

Good, because you can't afford $5k, no matter what the financing. Lot's of people are happily married with $100 engagement rings, and they can still afford to eat.

 

[HRDiva]

I never got an engagement ring because we could not afford one in addition to a wedding band. We will be married 36 years this June.