About to start our aggressive investing, could use some advice
 

I could use some insight from you guys/gals on where you think my wife and I should go starting now regarding our investing strategy. We're meeting with our main bank on Saturday to talk some strategy but I know several of you guys have a lot of great experience and knowledge when it comes to this kind of stuff and I'm really trying to take in as many educated opinions as possible so that we can make an informed decision. I'll try to keep it brief while still providing what I think are pertinent details:
My wife and I are both 28, no kids,
We have no debt except 1 car payment and our mortgage.
We both work full-time, making ~$120k together, with more stable jobs than the average (probably).
We've just hit the point where we have about ~6 months of normal, business-as-usual expenses in cash. That would be if both of us lost our jobs at the same time and didn't collect any unemployment (which would be silly...) we could pretty easily get by for 6 months without changing much at all, so obviously we could go longer by cutting back on several things if needed.
I currently have about ~$20k in my 401k. Wife has about ~$5k in mutual funds.
I put in 10% 401k tax free with 4% match, my wife puts in about 9% to her "retirement" fund that is managed (blindly) by the state - she's a state employee (teacher) and gets no quantitative matching... it's basically a "we'll take care of you" plan "after x amount of years." It has virtually (almost literally) zero liquidity. I can barely figure out how well it's performing.
With our current investment rates and conservative returns, we should easily (knock on wood) be at the "rule of thumb" value of 1x our combined salary in just my 401k alone, by age 35. Plus any/all of our other investments.
I put in another ~$4k into an HSA tax free every year. There's an option to invest excess money here but we're planning on having a kid soon so I think we'll just sit on it until that time comes.
We've set ourselves up (W4's) to get about ~$6k in tax returns per year - I've broken the details out hardcore via spreadsheet, so there should NOT be any surprises this year lol.


We own a home well below our means (our mortgage is < 20% of our take home pay).
Our typical months expenses is about 75% of our take home pay (which is after 401k cont, HSA, ins., etc.), which includes mortgage, car payment, donations, and everything else we pay money for every month but doesn't include fun shopping money. We'll usually spend 10% on shopping and pocket the 15%.


We will probably start trying to have a kid soon (maybe having a [planned] kid as early as 1/2017). This will probably be a game changer lol, so food for thought.


Okay, whew. Now with that said, we have this 6-month emergency fund sitting in a checking account. I'm wondering if we are in a boat where we could be a little more aggressive and put that fund somewhere with a moderately high risk/reward (i'm thinking mutual/index fund) because we won't need to "cash it out" immediately, and even if we lose a bunch of the money if the market tanks or something... we're only 28; we can cut back very easily at this point in our lives and could just build back up.
I'm thinking we really need to take advantage of a full roth IRA contribution, since the money is relatively liquid and is another tax deduction (we do itemize, btw, mostly because we're in the first year of our mortgage)

Anyone have any tips for this? I'd like to have some info/options before we go to the bank saturday.

Thanks!

honestly your doing very well already. Kids will be expensive but i think you will be able to manage it efficiently.

If i were you i would go into moderate/high risk individual stock plays. I'd bet long on a handful of companies, mix in some very risky plays like marijuana pharma companies.

Also i would look into some local multifamily real estate (stabilized), for cash flow and long term growth. Lock in 10 year debt now.

Yes, that sounds like a good plan, but I kind of am wanting to be a little more hand-off at this stage of our lives. I'm starting my MBA very soon, plus this whole having a kid thing... I don't want to always be looking at my tdameritrade account and doing some degree of research on performance and making changes if needed.

Same idea with the real estate. I want to be hands off as much as possible.

I'm thinking I might just want to make monthly dumps into mutual funds with good track records at some small to moderate expense level. If I can find something in the 0.5% expense ballpark, I think I would be more than happy with that. Not sure if this is a good decision or not though. It's mot something I've messed with a lot.

true makes sense. I haven't messed with any funds. All my investments are in real estate or long term plays on individual stocks. Surprisingly though my investments have been pretty hands off. My real estate has a management company, and my stock plays are long term. I check prices weekly, but I only trade a few times a year. I've gone weeks without even looking at my account, b.c I'm confident in the companies long term. Short term prices mean nothing to me. Once in awhile I will make short term plays if I think something is undervalued b.c of a market over correction (POAHF & VW were my last trades, made out like a bandit).

true makes sense. I haven't messed with any funds. All my investments are in real estate or long term plays on individual stocks. Surprisingly though my investments have been pretty hands off. My real estate has a management company, and my stock plays are long term. I check prices weekly, but I only trade a few times a year. I've gone weeks without even looking at my account, b.c I'm confident in the companies long term. Short term prices mean nothing to me. Once in awhile I will make short term plays if I think something is undervalued b.c of a market over correction (POAHF & VW were my last trades, made out like a bandit).
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The main turnoff for me was the fee structure of stocks. Most are per trade. So getting buying up front can be very costly up front, if you want to diversify to some degree. For example, if I wanted to pick up 15 different stocks with the intention of selling them sometime in the future, assuming I sold them to zero shares in one transaction, I would pay a minimum of $300. If my initial investment was say, $15,000, that's 2% (of initial investment, granted... but assuming I held them for 5 years at 6% avg return on each, that's still ~1.5%). Or, I could go with a mutual fund of 0.5% per year with let's say a track record of the same 6% yield (and let's be honest, they're probably gunna have a stronger portfolio than I could come up with) then I would net 5.5% per year yield on $15,000 and have essentially paid 3.1% of initial investment, but at the same time, that fund may have shifted (strategically) a few times at no added cost to me, plus I didn't have to be involved with it, and in reality (statistically) it would ~probably~ a higher yield with more safety anyways than what I could gamble at with my very limited knowledge in market strategy.

I dunno.

Well, I was planning on dropping our tax returns and our bonuses into out roth IRA's to max out our contributions for the year because I thought I had remembered that there was a tax credit for contributions made to this type of account. I knew the amounts were already taxed since it's post-tax income but I could have sworn last time I was in turbo tax that they had a slot for roth IRA contribution that deducted some amount of taxes.

But I guess that makes sense, since the roth IRA account type is one that you can withdraw from penalty-free, and if you claimed some type of deduction of any kind then there would be talk of having to give that back somehow. So I guess that makes sense.

But now that has me thinking about what we should do with this money. Still thinking the roth IRA might be the way to go, since it's still relatively liquid money and hands-off. There's got to be a reason why you can't put in more than ~$5,500 per year. Maybe because there's no fees, and it's completely hands-off? So maybe this is still a good way to go for us? Especially considering we're late 20-somethings?

If you want to be hands off, mutual funds or indices would be your best bet. Generally speaking, 1-your age = % invested into stocks; age = % in fixed income. It is a nice structure to live by and helps minimize risk. Not sure if this is feasible but I'd put away $1k a month into an index as long as you can. Good luck with your MBA! I finished my MBA last year.

In our case, we do invest on real estates, mutual funds and used to consider stocks. But, my husband realized that shares of stocks are not quite good in value all the time. There are more risks.

Two thoughts for aggressive investing, after you have done all the things you "should" do with your money then:
1. real estate, either personal units or commercial buildings
2. Individual stocks