D 2021-08-19T20:52:14.079
L funds
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U zie
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<h1>Funds to use</h1>
Which funds to use and when to use them. Also see [FixedIncome]. Or you can go get lost in the weeds with [AssetClasses] and [AssetAllocations].
We generally have the following expenses one needs to plan for:
1 Monthly regular expenses (rent/mortgage, phone, internet, groceries, etc)
2 semi-annual or annual expenses (insurance, property taxes, some subscriptions, etc)
3 Planned irregular expenses (new car, maintenance(house or car), vacation, etc)
4 Unplanned irregular expenses (lost job, emergency room visits, etc)
5 long term (retirement) savings.
1 and 2, the regular expenses, are super easy to plan for, just add them all up for a year, divide by 12, and you know how much you need in your checking account every month. This should all be in your core holding or [FTEXX].
3 is a great place for [FIKFX], you don't know when you need these things, but you know you need them. You can definitely plan these expenses. Vehicles are $.58 per mile and houses are 1-10% of value in maintenance per year. or you guesstimate $x/month moving into that fund to keep it full enough to handle any single biggest expense you expect. Alternatively if your savings rate is high enough, you can just absorb whatever comes along as it comes along from your cash flow and not have this fund, your savings would just decrease some whenever these expenses come up.
4 is also a great place for [FIKFX], just plan for the biggest expense you want to plan for (probably lost job, you will need to cover #1(monthly regular) for X months and maybe some or all of #2. Add it up add 10% and that's how much should be in this fund.
5 should be in total stock market index funds and total bond market index funds.
<h2>Another way to think about it:</h2>
<h3> Short Term < 1 year.</h3>
For short term < 1 month, just use the core account.
For a month but less than 3-6, use [FTEXX]
For expenses more than 6 months down the line; if you want growth see [FIKFX] or use [FTEXX] if you want stability.
<h3> Medium Term 1-5 years</h3>
Use [FIKFX]
<H3> Long Term (greater than 5 years) </H3>
Use [FZROX] in your tax-advantaged account(s) @ Fidelity.
Use [VTI] or [VTI|VT] in your taxable account.
For bonds, if you want them, use [FXNAX] or [BND]
For International total stock market use [FZILX] in tax-advantaged or VXUS or [VTI|VT] in taxable.
Or for the ultra-lazy, FFNOX or a Target Date Retirement Fund.
A list of funds to consider. These are all in 1 funds, so you could put the entire 1M in the one fund you pick and be fine.
[https://fundresearch.fidelity.com/mutual-funds/composition/315792150#|FIKFX] is 20/80 fund(20% stocks). This will likely keep up with Inflation and maybe even earn you a little above inflation, but probably not a lot. A 50+% crash in the stock markets would bring FIKFX down about 15% max. Probably more like 10%. A great conservative fund. It has a fee of 0.12% ER. This is basically where I store my shorter-term money that I will need in the next 5-10 years or so (so car replacements, "Emergency Fund", etc)
The rest are ETF's and can be held basically anywhere, all with an ER of 0.25%:
* [https://www.ishares.com/us/products/239733/ishares-conservative-allocation-etf|AOK] iShares Core Conservative Allocation ETF is a 30/70 fund, so it's 30% stocks and 70% bonds.
* [https://www.ishares.com/us/products/239765/ishares-moderate-allocation-etf|AOM] iShares Core Moderate Allocation ETF is a 50/50 fund.
* [https://www.ishares.com/us/products/239756/ishares-growth-allocation-etf|AOR] iShares Core Growth Allocation ETF is a 60/40 fund.
* [https://www.ishares.com/us/products/239729/ishares-aggressive-allocation-etf|AOA] iShares Core Aggressive Allocation ETF is an 80/20 fund, so it's 80% stocks and 20% bonds.
The iShares funds are not locked at exactly the % I mentioned above, they fluctuate up and down a little, depending on various factors, read the prospectus for all the details, but generally speaking, what I said above is true. AOK is the most conservative of them, and AOA is the most aggressive of them.
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