Sandtrap, as already mentioned by a few people, it's not going to matter much what you do as long as you don't get stupid and gamble it away. Seems unlikely.
So almost any decision is good enough.
You have more than enough money to live a somewhat lavish life, yet your yearly expenses are planned to be quite low (for wealthy people). You could set up almost any sort of reasonable portfolio and accomplish this.
So almost any decision is good enough.
When all the choices are good enough, just do whatever you like, whatever makes sense to you. Especially if "whatever" is easy. If simplicity is important to you in your older years, just keep a very simple portfolio so you don't have to "tend" to it all the time.
A few comments about how things are taxed.
- Dividend income from bonds will be taxed at your ordinary rate - 15%.
Stock long term capital gains (except REIT) will be taxed at 0% to the extent that your total income stays in the 15% bracket. Whatever spills over into the 25% bracket will be taxed at 15%. To harvest this income though, you need to sell shares of your stock funds. I think this might be a sticking point for you.
REIT stocks produce a lot of income but it is all taxed at 15% - you don't get the lower tax rate for REIT because the dividends are not qualified.
Based on the above....where is the best place to have your income stream from? An income stream that is all taxed at at least 15% or an income stream that has no tax at all on part and 15% on the rest? Hmmmm, something to ponder.
The problem with the above choice may be that you are stuck in the idea that "living on the dividends" and never touching the principal is the best way to go. It simply isn't so. The only thing that matters is the
total return of your portfolio, not the
income it produces. I believe you read the Vanguard paper on Total Return and caught on immediately. Perhaps you should review it again.
1 How to create a “pension” portfolio with some of the funds that generates an immediate reliable income stream of approx.. $6k/month with conservative growth potential and min. risk? (Not interested in SPIA)
2. How to create a secondary “portfolio” (3-4 fund?) with the balance of funds available that will be added to as my business assets are liquidated?
First, figure out what stock to bond ratio you can tolerate. NOTHING can happen until you decide this.
I don't think having a primary portfolio and a secondary portfolio are needed. As you get the new money, just add it to the first portfolio. I also don't think having two portfolios is harmful with one exception - it makes it more complex. If that satisfies a need you have, fine. But don't add complexity that you don't get some benefit from.
3. Does a 50/50 Wellington/Wellesley have a useful role to accomplish these goals?
Half and Half W & W is about 50% stocks and 50% bonds. If that fits in with your primary decision (what stock to bond ratio do I want?), they you could consider it. This would be a fine portfolio if you can stomach the losses of a 50% stock portfolio during a crash. It is not as tax-efficient as you could be, but since you are not going to run out of money, it probably doesn't matter much.
4. Would a 3 fund portfolio such as SWTSX (Schwab total stock market), SWISX (Schwab International), and SWLBX (Schwab total bond index) be a good starting point and for which portfolio? (or Vanguard equiv)
The Vanguard or Fidelity equivalent would be fine. The Schwab funds are OK, but the international fund is incomplete (probably not in any way that matters a lot) and they have no Total Bond Index mutual fund. They do have a Total Bond fund that is not an index that people mistake for an index. It may not matter much, but if holding index funds is important to you, the Schwab mutual fund isn't one. Schwab does have excellent ETFs if you want to use ETFs rather than mutual funds.
5. I’ve asked this on another thread but will reinsert it here because maybe it’s in better context.
Is there anything to be gained by “containment” to help focus the 2 purposes/goals I have in mind by having my funds split between 2 brokerages, Schwab and Vanguard?
Financially, there is nothing to be gained. If it makes you feel better, it isn't going to hurt much.
7. Homework welcome.
Homework is a good thing, but don't let it become a roadblock. Apparently you have an appointment with Vanguard PAS in a few weeks? If your decision is not made by probably 2 weeks after that, you need to give serious consideration to how to fix your analysis paralysis.
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