Money Talks
I never got around to putting in my two cents, for which you'll really get
the value for your money ;). As I have a background on Wall Street, and an
MBA, I'm not only in charge of the money (of which we have none right now,
but that's beside the point), but this discussion prompted me to inquire
about being a financial advisor.
I've rolled over three 401(k) plans and would definitely advise you to do
so. It's worth the 30 or so minutes it will take you to do the paperwork.
You can set up an IRA anywhere - Schwab has a great program - and once the
rollover is in effect, you can have complete control over your money. You
can keep it in the same funds, stocks, and bonds that it is now (I think
that's called an asset rollover) or you can liquidate and just rollover the
funds. Then you can control everything from one simple online interface. Mwa
ha ha ha!
Most importantly, if you need to request a disbursement for any reason, like
buying a new house, paying for medical bills, or generally being broke, you
don't have to spend weeks going through the HR department of your old job.
No looking up phone numbers in your now-broken palm pilot. No spending hours
on hold. It's all right there for you.
And, if something should happen to any of your ex-employers - I was in this
position twice (one corporate bankruptcy, one psycho tax-evading CEO) - you
won't have to worry about your money possibly being held up for months or
even years while you go through the legal inner workings of whoever's
holding your retirement account.
As for investments? I'm a stock girl myself. I pick my own, do my own
research, buy stocks of companies whose business models I believe in. We're
young yet, and if you have a good feeling for the honesty of the management
and the quality of the product, it's hard to go wrong. I'm heavily invested
in stocks like eBay, Starbucks, and companies I've worked with in my career
(one hospital company was sold recently for a hefty premium to the stock
price and they singlehandedly increased my portfolio by 50%. course my
portfolio is very small right now given the aforesaid disbursements for
general brokeness. just because i'm good with investments doesn't mean i'm
good with finding jobs that pay the bills and allow me to work part-time.
*sigh*).
If I was going with a bond I'd head towards a high-yield bond fund. I could
give recommendations if you're interested. These are on the safe side of the
spectrum, give a relatively stable yield, and since we're young enough we
can handle the risk.
I'm very anti-mutual fund but it's a bias. I believe that mutual funds are
set up to make their managers rich (and lots of my classmates from business
school manage funds like this so I know exactly how rich they are ;).
They're so hard to pick because the managers, and philosophies, change
often. If you have a good amount of money - say at least $10,000 - it makes
ever so much sense to me just to create your own mutual fund.
I took the hardest class at business school which required me to develop
hedged-risk portfolios. It's super technical but I'd be happy to help you
out with picking a carefully risk-averse selection of investments if you're
into that. If not? Pick a big reliable company like Fidelity or a local fund
manager like Columbia and just go with whatever they're offering. It's a
crap shoot after you get past the "is this company going to run off to Costa
Rica with my money" question. Bottom line - the performance depends on the
fund manager and there are often revolving doors for those positions. Unless
you personally know the manager you're not going to get any benefit from
researching them. It's all just marketing and you know how that goes. Past
performance is no guarantee and all that - returns are truly random.
And go with the Oregon savings plan, as someone mentioned you get a tax
credit. You won't if you go with another state. I researched it in-depth and
the fees and minimums are almost identical. Yeah, the Alaska one is supposed
to be great but the Oregon state tax credit offsets any greatness in my
mind. Then you can invest lots more and a few percentage points more of 100%
of your money is a lot less than a few percentage points less of 150% of
your money. If that makes any sense at all ;)
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