Search found 196 matches

by Mode32
Sun Sep 13, 2020 10:19 pm
Forum: Personal Investments
Topic: Increase 401K contributions vs start an IRA?
Replies: 25
Views: 1675

Re: Increase 401K contributions vs start an IRA?

Read wiki Prioritizing investments Thanks for the link. I don’t really understand the reasoning for the recommendation to maximize IRA (after contributions to EF and at least 401k match amount)...instead, why not increase 401k contributions even further before even starting or maximizing an IRA? Is...
by Mode32
Sun Sep 13, 2020 8:10 pm
Forum: Personal Investments
Topic: Increase 401K contributions vs start an IRA?
Replies: 25
Views: 1675

Increase 401K contributions vs start an IRA?

Bogleheads, Appreciate the advice you had given my sibling earlier who is starting out in their career and was looking for further insights on whether my sibling should increase 401K contributions vs start an IRA. My sibling is already contributing past the employer match for 401K and is building a ...
by Mode32
Sun Aug 30, 2020 5:17 pm
Forum: Personal Investments
Topic: Is value investing only beneficial for small caps?
Replies: 9
Views: 954

Re: Is value investing only beneficial for small caps?

I’m not sure if I should start a new post, but was looking for further advice and insights into the same 529 plan mentioned above. Again, our 529 is made up of vanguard large cap growth and large cap value with initial AA 50/50 between the two funds. Over the course of the last several months (proba...
by Mode32
Sun Aug 30, 2020 4:25 pm
Forum: Personal Investments
Topic: time to invest cash reserves?
Replies: 54
Views: 3862

Re: time to invest cash reserves?

During the last 6 months of acrimony, we have not touched our portfolio. We rode the market down and back up. The one thing we didn't do that we usually would: invest excess cash (that is, monies left over after maxing out our tax-advantaged accounts). So now, we have about $75K sitting in cash tha...
by Mode32
Thu Aug 27, 2020 5:06 pm
Forum: Personal Investments
Topic: Using MD 529 beats taxable even with penalty?
Replies: 28
Views: 1968

Re: Using MD 529 beats taxable even with penalty?

Don’t most 529 plans have higher ER for the same fund, and it still works better?
by Mode32
Thu Aug 27, 2020 12:00 am
Forum: Personal Investments
Topic: Is value investing only beneficial for small caps?
Replies: 9
Views: 954

Re: Is value investing only beneficial for small caps?

Thank you for the insights on value; it has helped me frame things related to value much better. I had moved away from small/mid caps because I didn't want so much volatility in my 529 Plan. I stopped contributing to small/mid-caps (overall, 20% of my 529 with the rest being 50/50 split with Large ...
by Mode32
Wed Aug 26, 2020 5:56 pm
Forum: Personal Investments
Topic: Is value investing only beneficial for small caps?
Replies: 9
Views: 954

Re: Is value investing only beneficial for small caps?

Thank you for the insights on value; it has helped me frame things related to value much better. I had moved away from small/mid caps because I didn't want so much volatility in my 529 Plan. I stopped contributing to small/mid-caps (overall, 20% of my 529 with the rest being 50/50 split with Large ...
by Mode32
Wed Aug 26, 2020 2:50 pm
Forum: Personal Investments
Topic: Is value investing only beneficial for small caps?
Replies: 9
Views: 954

Re: Is value investing only beneficial for small caps?

rkhusky wrote: Fri Aug 21, 2020 12:25 pm
Mode32 wrote: Fri Aug 21, 2020 10:50 am From what I have read, it appears that value investing is really only beneficial for small caps.
No one knows what the future holds. Small Value or Small Growth or Large Value or Large Growth could shine brighter than the others.
Very true!
by Mode32
Wed Aug 26, 2020 2:46 pm
Forum: Personal Investments
Topic: Is value investing only beneficial for small caps?
Replies: 9
Views: 954

Re: Is value investing only beneficial for small caps?

1st of all, I wouldn't lose any sleep over your decision. You should view it as one portfolio, not two funds, and trying to get Total Market exposure was a smart start. Here is a backtest back to 2005 of 50/50 VTV/VUG (Vanguard Large Value and Large Growth) rebalanced every 6 months, hard to tell t...
by Mode32
Fri Aug 21, 2020 10:50 am
Forum: Personal Investments
Topic: Is value investing only beneficial for small caps?
Replies: 9
Views: 954

Is value investing only beneficial for small caps?

Bogleheads, Looking to get some insights on value investing. From what I have read, it appears that value investing is really only beneficial for small caps. I have about 50% Large Cap Value in my kids 529 with the rest Large Cap Growth; I was trying to mimic a blended approach when I started the 52...
by Mode32
Thu Aug 13, 2020 10:44 pm
Forum: Personal Investments
Topic: Best financial gift to give a newborn child
Replies: 47
Views: 4644

Re: Best financial gift to give a newborn child

529 Plan and UTMA's are a consideration if you want something under their name with some tax benefits.
by Mode32
Thu Aug 06, 2020 6:12 pm
Forum: Personal Investments
Topic: UGMA vs Vanguard Brokerage Account
Replies: 15
Views: 1003

Re: UGMA vs Vanguard Brokerage Account

Some kind soul here gave me this good tidbit: with a UGMA account the child gets $1100 of tax free income/gains each year. So every year you can "tax gain harvest" and bump the cost basis up on at least a portion of the portfolio. I'm personally nervous about them changing the tax rules (...
by Mode32
Wed Aug 05, 2020 3:52 pm
Forum: Personal Investments
Topic: Fixed Income Advice
Replies: 5
Views: 808

Re: Fixed Income Advice

2. As part of saving about two years of expenses in cash (currently in savings account), what are your thoughts about considering placing money in an IRA? Would my mom still qualify for an IRA at age 69 and if she works until about 72 years old? Also what are your thoughts about Roth vs Traditional...
by Mode32
Wed Aug 05, 2020 3:48 pm
Forum: Personal Investments
Topic: Fixed Income Advice
Replies: 5
Views: 808

Re: Fixed Income Advice

A stable value fund is a somewhat complicated product, but for most practical purposes it's the 401k equivalent of a money market. Like money markets, it has not benefited from the recent drop in interest rates. So as you can tell from the past performance, it would've been better to be in one of t...
by Mode32
Tue Aug 04, 2020 6:28 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

A couple things I haven't seen covered: Definitely take the 401k up to the match before anything else, but if your sibling has a mediocre 401k, then maxing out their IRA comes before maxing out their 401k. I don't see much benefit to opening a 529. If your sibling goes to grad school soon, they are...
by Mode32
Tue Aug 04, 2020 6:28 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

A couple things I haven't seen covered: Definitely take the 401k up to the match before anything else, but if your sibling has a mediocre 401k, then maxing out their IRA comes before maxing out their 401k. I don't see much benefit to opening a 529. If your sibling goes to grad school soon, they are...
by Mode32
Tue Aug 04, 2020 6:25 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

They should look into how much rent they would be paying and save that on top of the 20%. Elizabeth Warren's 50/30/20 formula is accessible for a lot of people. In your sibling's case, the part of that 50 that would go to housing should be redirected to savings. This will give them a more realistic...
by Mode32
Tue Aug 04, 2020 6:24 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

4. Should my sibling consider Roth or Traditional for 401k and IRA? Depends on salary, tax bracket, and prospects for income growth. If in doubt: defer taxes at 22% or higher tax bracket, Roth at 12% or below. But one needs to take some time to figure out how tax brackets (and the standard deductio...
by Mode32
Tue Aug 04, 2020 6:23 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

Tamalak wrote: Mon Aug 03, 2020 1:46 pm The formula I've lived by is spend half of what you make, plus 4% of what you've saved :sharebeer
:sharebeer !
by Mode32
Tue Aug 04, 2020 6:22 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

I'm starting to see the focusing on "savings rate" may not be the most useful. I will need to talk with my sibling about budget and how they want to approach it. Otherwise, I think it would force too many restrictions that would lead to non-compliance. Thank you! Fwiw, I have found focusi...
by Mode32
Tue Aug 04, 2020 6:18 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

They should look into how much rent they would be paying and save that on top of the 20%. Elizabeth Warren's 50/30/20 formula is accessible for a lot of people. In your sibling's case, the part of that 50 that would go to housing should be redirected to savings. This will give them a more realistic...
by Mode32
Tue Aug 04, 2020 4:21 pm
Forum: Personal Investments
Topic: Fixed Income Advice
Replies: 5
Views: 808

Fixed Income Advice

Bogleheads, Just wanted to get some advice for my mother's retirement investments (specifically Fixed Income) as the economic climate keeps changing. Your wise advice has helped in the past (thank you). Briefly, my mom 69 and is looking to continue working part-time for another 2-3 years at least. H...
by Mode32
Mon Aug 03, 2020 12:48 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

A couple things I haven't seen covered: Definitely take the 401k up to the match before anything else, but if your sibling has a mediocre 401k, then maxing out their IRA comes before maxing out their 401k. I don't see much benefit to opening a 529. If your sibling goes to grad school soon, they are...
by Mode32
Mon Aug 03, 2020 12:45 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

As 02nz addressed, "savings rate" may not be a useful measure. Instead, consider saving/investing the difference between gross income and an annual budget, whatever that is. Doing this by "paying yourself first" (e.g., payroll deductions) is a good way to enforce the budgeted sp...
by Mode32
Mon Aug 03, 2020 12:43 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

If sibling has student/car loans, credit card debt, needs to purchase a car or to save up for non-retirement goals (such as 3 months of advance rent/deposit for an apartment), that needs to be factored in when developing the emergency fund/retirement savings plan. Thankfully, there is no debt. Howe...
by Mode32
Mon Aug 03, 2020 12:40 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

Good advice above. You’re a nice sibling to be asking these questions for your sibling. I’d encourage your sibling to get involved in this process. It’s unclear if they asked you for help. If they did, they should join this forum and post all of their details for feedback. It’s their life! They nee...
by Mode32
Mon Aug 03, 2020 12:38 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

2. What are your thoughts about investment priorities as stated above? There are also other types of savings like saving up for the down-payment for a house or to be able to pay cash for their next car. Doing things like paying down student loans also builds up your net worth. A few suggestions for...
by Mode32
Mon Aug 03, 2020 12:35 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

SheReadsHere719 wrote: Tue Jul 28, 2020 3:41 pm I Will Teach You to be Rich by Ramit Sethi is a great book for young adults just starting out.
I have heard a lot about this book. Although I havn't read it and sounds like an efficient read. Thank you!
by Mode32
Mon Aug 03, 2020 12:34 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

02nz wrote: Tue Jul 28, 2020 3:44 pm
SheReadsHere719 wrote: Tue Jul 28, 2020 3:41 pm I Will Teach You to be Rich by Ramit Sethi is a great book for young adults just starting out.
Here's a quick and good read: https://www.etf.com/docs/IfYouCan.pdf
Thank you, this is a great read!
by Mode32
Mon Jul 27, 2020 10:59 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Re: Savings rate for sibling starting out

1. What is a realistic and manageable savings rate for someone starting out (ie, 15-20%)? (Note: my sibling will not have to pay rent for next two years). Expenses and salaries vary so much that it's hard to give a rule of thumb. I would say if someone is not paying for housing, they should be able...
by Mode32
Mon Jul 27, 2020 10:33 pm
Forum: Personal Investments
Topic: Savings rate for sibling starting out
Replies: 30
Views: 1994

Savings rate for sibling starting out

Bogleheads, I’m looking for advice on an appropriate and reasonable savings rate for my younger sibling just starting out. I’ve been reading that 15-20% savings rate is decent. I was also going to advise my sibling to prioritize investments as follows: 1. emergency fund (3-6 months) 2. 401K (at leas...
by Mode32
Tue Jul 14, 2020 5:04 pm
Forum: Personal Investments
Topic: Paying off Mortgage
Replies: 19
Views: 1930

Re: Paying off Mortgage

Once the mortgage is paid off, you can start investing in a taxable brokerage account. View all your accounts as one portfolio to get your target asset allocation. You might well have your entire taxable account in Total Stock Market Index if you can get the bond and international funds you need in...
by Mode32
Tue Jul 14, 2020 1:34 pm
Forum: Personal Investments
Topic: Paying off Mortgage
Replies: 19
Views: 1930

Re: Paying off Mortgage

With less than two years on the mortgage, you are effectively buying CDs maturing within the next two years, for a risk-free and tax-free 2.75% return. That is a better deal than actual CDs are paying, so it's a good use of the money. The interest payments are low because the balance is low, but by...
by Mode32
Wed Jul 01, 2020 4:26 pm
Forum: Personal Investments
Topic: Is Large Cap Value Worth it?
Replies: 6
Views: 589

Re: Is Large Cap Value Worth it?

Value includes a lot of energy, financials, and industrials. There is a reason why each of those will not do well in the future. Political risk+labor unions bodes poorly. Growth is the new utilities. It's growing because the tide is changing. Look at the stocks in each one. Would you rather be with...
by Mode32
Wed Jul 01, 2020 10:00 am
Forum: Personal Investments
Topic: Is Large Cap Value Worth it?
Replies: 6
Views: 589

Re: Is Large Cap Value Worth it?

Jack FFR1846 wrote: Wed Jul 01, 2020 9:58 am Don't do something. Just stand there.
Just the kind of advice I probably needed :sharebeer

Thank you!
by Mode32
Wed Jul 01, 2020 9:59 am
Forum: Personal Investments
Topic: Is Large Cap Value Worth it?
Replies: 6
Views: 589

Re: Is Large Cap Value it?

Jags4186 wrote: Wed Jul 01, 2020 9:57 am Splitting 50-50 gives you a 100% chance of owning the winner.
Well said!

Thanks
by Mode32
Wed Jul 01, 2020 9:55 am
Forum: Personal Investments
Topic: Is Large Cap Value Worth it?
Replies: 6
Views: 589

Is Large Cap Value Worth it?

Bogleheads, This question may warrant a "stay the course" type of answer; however, I would like to get your thoughts. My 529 Plan is evenly split evenly between Large Cap Growth Index Fund and Large Cap Value Index Fund. With these two funds combined, it was my closest approximation of a l...
by Mode32
Tue Jun 30, 2020 10:05 am
Forum: Personal Investments
Topic: Choosing a 529 - am I splitting hairs?
Replies: 10
Views: 1088

Re: Choosing a 529 - am I splitting hairs?

Thanks, everyone! I think given my situation and your thoughts, it makes sense to go with the Massachusetts plan. +1 I can understand some apprehension because a lot of 529 Plans are not great (high ER's, poor fund choices). In your case, I agree with getting tax break while contributing to the 529...
by Mode32
Fri Jun 19, 2020 10:35 pm
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

To check the tax-efficiency of any fund BEFORE you buy, you can look at the "Distributions" tab at Vanguard. See link. https://investor.vanguard.com/mutual-funds/profile/distributions/vghax By reviewing the information on this tab you can see that the fund dishes out Dividends, ST Cap Gai...
by Mode32
Fri Jun 19, 2020 10:33 pm
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

Questions: [/color] 2) Would changing where the capital gains/dividends goes for VGHAX to VFIAX in the same account incur any taxes or other costs? No, it should not. Send distributions to your checking account if you want. 3) Are there any other recommendations to think about? We would rather not ...
by Mode32
Fri Jun 19, 2020 10:31 pm
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

[/color] Could we move some of VGHAX shares to UTMA's for our kids because I believe there may be some tax advantages for UGMA's (at least until they are 18 or 21)? However, it seems like I would be moving a tax inefficient fund from me to my kids who will have to deal with similar concerns later. ...
by Mode32
Sun Jun 14, 2020 8:49 pm
Forum: Personal Investments
Topic: Tilting a 60/40 fund toward value
Replies: 13
Views: 1004

Re: Tilting a 60/40 fund toward value

In a moderate 60/40 portfolio with VTSAX (Total Stock Market Index) as the core fund, if you wanted to tilt toward value and small stocks, what percentage would you tilt toward Large Cap Value? What percentage would you tilt toward Small Cap Value? For myself, I do not tilt toward either large cap ...
by Mode32
Wed Jun 10, 2020 9:30 am
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

Questions: [/color] 2) Would changing where the capital gains/dividends goes for VGHAX to VFIAX in the same account incur any taxes or other costs? No, it should not. Send distributions to your checking account if you want. 3) Are there any other recommendations to think about? We would rather not ...
by Mode32
Wed Jun 10, 2020 9:26 am
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

Questions: [/color] 2) Would changing where the capital gains/dividends goes for VGHAX to VFIAX in the same account incur any taxes or other costs? No, it should not. Send distributions to your checking account if you want. 3) Are there any other recommendations to think about? We would rather not ...
by Mode32
Wed Jun 10, 2020 9:08 am
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

Looking to get some advice on a taxable account in terms of optimizing overall long term performance while being tax efficient along the way. We have a long investment horizon. 70% S&P 500 Index fund: VFIAX (ER .04) 30% Vanguard Healthcare Fund: VGHAX (ER .27) I recently looked closely at the t...
by Mode32
Wed Jun 10, 2020 9:02 am
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Re: Optimizing Taxable Account

VGHAX is one of actively managed funds of Vanguard. It is not good for a taxable account. ( There must be wiki page on this issue) I used to have it in my taxable account in my early days of investing. Not reinvesting distributions (dividends & capital gains) will be a minimum you can do as you...
by Mode32
Tue Jun 09, 2020 11:57 pm
Forum: Personal Investments
Topic: Optimizing Taxable Account
Replies: 18
Views: 1634

Optimizing Taxable Account

Looking to get some advice on a taxable account in terms of optimizing overall long term performance while being tax efficient along the way. We have a long investment horizon. 70% S&P 500 Index fund: VFIAX (ER .04) 30% Vanguard Healthcare Fund: VGHAX (ER .27) I recently looked closely at the ta...
by Mode32
Wed May 13, 2020 11:41 am
Forum: Personal Investments
Topic: Odd advice for 401K and IRA
Replies: 23
Views: 1302

Re: Odd advice for 401K and IRA

FelixTheCat wrote: Tue May 12, 2020 12:45 pm FIL is guessing about the market.
Agreed!
by Mode32
Wed May 13, 2020 11:41 am
Forum: Personal Investments
Topic: Odd advice for 401K and IRA
Replies: 23
Views: 1302

Re: Odd advice for 401K and IRA

Whole different post maybe, but I'm comfortable with 100% stocks AA. Maybe considering trying to move some into fixed income to protect assets isn't a bad idea? If you're considering adding bonds to your portfolio, I'd suggest you simply start buying them in your 401k or IRA with regular contributi...
by Mode32
Wed May 13, 2020 11:40 am
Forum: Personal Investments
Topic: Odd advice for 401K and IRA
Replies: 23
Views: 1302

Re: Odd advice for 401K and IRA

Is your FIL doing what my FIL does? He hangs around the senior center and talks to all types of whack balls who all have their conspiracy theory and great annuity idea and thoughts that you must buy BB guns and kill all the squirrels to avoid Covid 19 (which he did buy). Haha, he doesn't do that. A...