Age 29, No Debt, 137,000+

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Topic Author
westeast
Posts: 4
Joined: Wed Jun 28, 2017 11:19 am

Age 29, No Debt, 137,000+

Post by westeast »

Emergency funds: 6 months of expenses
Debt: $0
Tax Filing Status: Single
State of Residence: Oregon or Massachusetts (in the process of moving)
Age: 29
Income: ~TDB - Currently working freelance as a designer, looking for full-time job at an agency. I have a steady small revenue stream from a small business of 1,000 a month, as well as revenue of 1,000 a month for 4 more years from a loan repayment to me. Long story there.

Expenses etc.:
I have extremely low expenses since I designed and built and live out of a tiny house on a small farm. I spend about 1,500 a month outside of this. I don’t own a car and have no debt.
I just finished a masters program in design, so this has been a low income year and is the year to change over investments from the brokerage firm that has been managing my assets. I’ve spent quite a bit of time recently gearing up to manage my own investments and am finally ready to take the plunge. I’ll be maxing out my ROTH this year, but since I don’t work with my 401k company anymore I can’t add anything there. Any and all help is welcome.

Questions/Comments:
1. Should I leave the 401k well enough alone since I’m no longer with that employer and it has very low fees with a high rate of return?
2. What is the best allocation of the the 119,000 portfolio and which holdings should I jettison when I transfer over from the management firm to self- managed. This will be a low-tax bracket year since I just finished a master’s program and have had very low income this year.
3. I will be maxing out the Vanguard Roth this month with 5,500.
4. Should I open a simple IRA within the s corp?

The BIG question:
1. What are the best fund options for the taxable account given my current portfolio and situation? I wouldn’t be opposed to early retirement but I do enjoy my work and the flexibility it allows me to enjoy my current lifestyle. I enjoy saving, feel fairly good at it, but mostly am looking to invest well and re-allocated every 18 months. I am planning on a salary of +60,000 in the next few month. I have a high risk tolerance.

Desired Asset allocation: Somewhere between 90% stocks / 10% bonds and 80% stocks/ 20 % bonds
Desired International allocation: 30% of stocks

CURRENT RETIREMENT ASSETS:
(beyond 6 months emergency fund)
ETRADE - Cash 3,000
401 K - Fidelity 12,600 with 8,400 vested
Roth IRA - 7,600
Managed portfolio: 119,000 with Brokerage fee of 60 a month


Managed Portfolio
Name - Ticker -Fee - Current Portfolio Allocation - Yield - Fund Fee

Fixed Income Securities: 24.536%
ARTISAN HIGH INCOME-ADV
Ticker:APDFX -0.84% 5.024% 6.1%

METROPOLITAN WEST T/R BOND - I
Ticker:MWTIX -0.44% 19.512% 2.0%


International Equities: 29.054%
ARTISAN INTL VALUE FUND-ADV
Ticker:APDKX - 1.07% 13.933% 0.8%

DRIEHAUS EMG MKTS GROWTH FD
Ticker:DREGX - 1.67% 8.091% 0.3%

TRANSAMERICA INTL SMALL CAP VALUE FD
Ticker:TISVX - 1.12% 7.030% 1.9%


Large Cap Core Equities: 33.043%
FMI LARGE CAP FUND-INST
Ticker:FMIQX - 0.72% 11.209% 1.1%

VANGUARD 500 INDEX FUND ADM
Ticker:VFIAX - .04% 21.834% 1.9%


Other Equity Classes: 8.727%
VANGUARD SMALL CAP IDX FD ADM
Ticker:VSMAX - .06% 8.727% 1.5%


Cash & Equivalents: 4.639%
FMIQX - FEDERATED GOVT OBLI FD-PRM
Ticker:GOFXX 4.639% 0.7%


Roth IRA - 7,600
VANGUARD TOTAL STOCK MKT ETF
Ticker:VTI - 0.04% 73.279% 1.9%

ISHARES CORE U.S. AGGREGATE BO
Ticker:AGG 0 0.05% 24.496% 2.4%


401 K With Fidelity -
Currently 12,600 with 8,400 vested

TRP INST LGCAP GRTH
18.16% $2,293.02 65.347 $35.09 -$0.40 Stock Investments Large Cap

FID 500 INDEX IPR
17.26% $2,178.89 25.640 $84.98 -$0.69 Stock Investments Large Cap

BTC ACWI EX US IMI M
17.04% $2,151.54 168.989 $12.73 -$0.02 Stock Investments International

HARTFORD MID CAP Y
11.12% $1,404.00 42.099 $33.35 -$0.40 Stock Investments Mid-Cap

TRP INST LG CAP VAL
10.10% $1,274.80 57.243 $22.27 -$0.11 Stock Investments Large Cap

NORTHERN SM CAP VAL
8.12% $1,025.56 42.982 $23.86 -$0.15 Stock Investments Small Cap

PRU CORE PL BD CL 5
7.20% $908.99 5.748 $158.14 -$0.48 Bond Investments Income

LZRD EMRG MKTS EQ IS
6.48% $818.47 45.597 $17.95 -$0.15 Stock Investments International

DODGE & COX INTL STK
4.51% $569.62 12.996 $43.83 -$0.04 Stock Investments International

401k Summary -

Beginning Balance as of 01/01/2017 $11,502.95
Fees -$33.05
Change in Market Value $1,154.99
Current Balance as of 06/27/2017 $12,624.89
Vested $8,418.88
Personal Rate of Return from 01/01/2017 to 06/27/2017. 9.75%


These are all the available funds for the 401 k at fidelity

FID 500 INDEX IPR (FXAIX)
02/17/1988 Stock Investments Large Cap 17.45% 10.13% 15.41% 6.93% 05/31/2017 Show
FID CAP APPREC K (FCAKX)
11/26/1986 Stock Investments Large Cap 13.96% 8.05% 13.51% 6.86% 05/31/2017 Show

TRP INST LG CAP VAL (TILCX)
03/31/2000 Stock Investments Large Cap 15.63% 8.23% 15.73% 6.06% 05/31/2017 Show

TRP INST LGCAP GRTH (TRLGX)
10/31/2001 Stock Investments Large Cap 27.41% 13.15% 18.13% 10.00% 05/31/2017 Show

HARTFORD MID CAP Y (HMDYX)
12/31/1997 Stock Investments Mid-Cap 17.54% 9.46% 16.41% 8.02% 05/31/2017 Show
BTC RUSSELL 2500 M
09/30/2008 Stock Investments Small Cap 17.04% 7.92% 14.44% 11.28% 05/31/2017 Show
HARTFORD SMCO HLS IA (HIASX)
08/09/1996 Stock Investments Small Cap 20.22% 4.12% 11.63% 5.60% 05/31/2017 Show

NORTHERN SM CAP VAL (NOSGX)
03/31/1994 Stock Investments Small Cap 17.03% 8.25% 14.20% 6.77% 05/31/2017 Show

BTC ACWI EX US IMI M
02/28/2011 Stock Investments International 18.26% 1.83% 8.87% 3.49% 05/31/2017 Show

DODGE & COX INTL STK (DODFX)
05/01/2001 Stock Investments International 25.91% 1.07% 11.65% 2.37% 05/31/2017 Show

LZRD EMRG MKTS EQ IS (LZEMX)
07/15/1994 Stock Investments International 26.79% -0.31% 4.51% 2.69% 05/31/2017 Show
VANG TOT WLD STK IS (VTWIX)
06/24/2008 Stock Investments International 17.90% 5.71% 11.95% 5.68% 05/31/2017 Show
BTC LIFEPATH 2020
08/01/2005 Blended Fund Investments* N/A 8.41% 3.88% 6.89% 4.11% 05/31/2017 Show
BTC LIFEPATH 2025
07/05/2006 Blended Fund Investments* N/A 9.99% 4.32% 7.80% 4.17% 05/31/2017 Show
BTC LIFEPATH 2030
08/01/2005 Blended Fund Investments* N/A 11.42% 4.71% 8.61% 4.21% 05/31/2017 Show
BTC LIFEPATH 2035
07/05/2006 Blended Fund Investments* N/A 12.81% 5.07% 9.34% 4.23% 05/31/2017 Show
BTC LIFEPATH 2040
08/01/2005 Blended Fund Investments* N/A 14.05% 5.37% 9.97% 4.22% 05/31/2017 Show
BTC LIFEPATH 2045
07/05/2006 Blended Fund Investments* N/A 14.78% 5.55% 10.54% 4.18% 05/31/2017 Show
BTC LIFEPATH 2050
09/30/2007 Blended Fund Investments* N/A 15.01% 5.60% 10.97% 4.43% 05/31/2017 Show
BTC LIFEPATH 2055
05/19/2010 Blended Fund Investments* N/A 14.98% 5.57% 11.33% 10.22% 05/31/2017 Show
BTC LIFEPATH 2060
11/17/2014 Blended Fund Investments* N/A 14.99% N/A N/A 6.06% 05/31/2017 Show
BTC LIFEPATH RET
08/01/2005 Blended Fund Investments* N/A 7.08% 3.49% 5.49% 4.66% 05/31/2017 Show
BTC STR COMP NL M
09/01/2011 Blended Fund Investments* N/A 2.69% -1.07% 1.76% 0.92% 05/31/2017 Show
DODGE & COX BALANCED (DODBX)
06/26/1931 Blended Fund Investments* N/A 17.23% 7.30% 13.45% 5.79% 05/31/2017 Show
STABLE VALUE FUND
06/30/2005 Bond Investments Stable Value 1.94% 1.94% 1.93% 2.81% 05/31/2017 Show
BTC US DEBT INDEX M (DEBTM)
06/06/1996 Bond Investments Income 1.60% 2.62% 2.33% 4.53% 05/31/2017 Show

PRU CORE PL BD CL 5
12/01/2014 Bond Investments Income 4.93% N/A N/A 4.05% 05/31/2017 Show
BROKERAGELINK



Funds I’ve been looking at:
VANGUARD SMALL CAP VALUE INDEX ADMIRAL (VSIAX) (0.07%)
VANGUARD TARGET RETIREMENT 2060 INV (VTTSX) (0.16%)
VANGUARD GROWTH INDEX INSTITUTIONAL (VIGIX) (0.05%)
VANGUARD TARGET RETIREMENT 2020 INV (VTWNX) (0.14%)
VANGUARD WELLESLEY INCOME ADMIRAL (VWIAX) (0.15%)
VANGUARD TARGET RETIREMENT 2040 INV (VFORX) (0.16%)
VANGUARD TARGET RETIREMENT INCOME INV (VTINX) (0.13%)
VANGUARD EXTENDED MARKET INDEX INSTLPLUS (VEMPX) (0.05%)
VANGUARD TOTAL INTL STOCK IDX INSTLPLS (VTPSX) (0.07%)
VANGUARD SHRT-TERM INFL-PROT SEC IDX ADM (VTAPX) (0.07%)
VANGUARD INSTITUTIONAL INDEX INSTL PL (VIIIX) (0.02%)
VANGUARD EMERGING MKTS STOCK IDX INSTL (VEMIX) (0.11%)
VANGUARD SHORT-TERM BOND INDEX ADM (VBIRX) (0.07%)
VANGUARD TARGET RETIREMENT 2030 INV (VTHRX) (0.15%)
VANGUARD MATERIALS INDEX ADMIRAL (VMIAX) (0.10%)
VANGUARD MID-CAP VALUE INDEX ADMIRAL (VMVAX) (0.07%)
VANGUARD SMALL CAP INDEX ADM (VSMAX) (0.06%)
VANGUARD TOTAL INTL BD IDX ADMIRAL (VTABX) (0.12%)
VANGUARD INFLATION-PROTECTED SECS I (VIPIX) (0.07%)
VANGUARD TARGET RETIREMENT 2050 INV (VFIFX) (0.16%)
VANGUARD REIT INDEX INSTITUTIONAL (VGSNX) (0.10%)
VANGUARD VALUE INDEX ADM (VVIAX) (0.06%)
VANGUARD TOTAL BOND MARKET IDX INSTLPLS (VBMPX) (0.03%)


Thanks for your help Bogleheads!!! I can't wait to hear your questions and comments!!!
hightower
Posts: 863
Joined: Mon Dec 12, 2016 1:28 am

Re: Age 29, No Debt, 137,000+

Post by hightower »

Get rid of that managed portfolio thing. 60 dollars a month is a rip off. You are in the land of bogleheads where we will tell you to use low cost passive index funds instead. Do like you're doing with your roth and just use VTI and total bond market funds, etc.
lazylarry
Posts: 515
Joined: Sat Apr 04, 2015 10:35 pm
Contact:

Re: Age 29, No Debt, 137,000+

Post by lazylarry »

**Would be careful stating your income range. I thought you were <15% tax bracket but your last statement clearly indicated you will not be! What is your projected tax bracket? Income is based on calender year - e.g. all of 2017.

1. Consider Roth conversion of 401k (after rolling it over to IRA) since your income is low this year. You could also leave it alone. Depends on your income now and potentially at retirement.
http://www.afinancialrevolution.com/200 ... ome-years/

2. There are numerous ways to do this. I assume this is in a taxable account. I'm not sure of the capital gains you have built up or the expense ratios for your various stocks. I'm venturing a guess that most of these have higher expense ratios and not much in capital gains. If they do have decent capital gains, then you are in a bit of a pickle.

Sample portfolio:
Taxable
83k VTSMX
36k VGTSX

Roth IRA
$7.6k VANGUARD TOTAL BOND MARKET IDX INSTLPLS (VBMPX) (0.03%)

401k
$12.6k VANGUARD TOTAL BOND MARKET IDX INSTLPLS (VBMPX) (0.03%)

https://www.bogleheads.org/wiki/Three-fund_portfolio

3. Nice job.

4. I'm not too familiar with S corp. I would do SIMPLE if you can deduct it pretax.

Big question
1- Three fund portfolio. Index funds that match Vanguard's larger international and domestic index funds.
My profile: https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=86026 | Virtua lBogleheads® Blog: https://virtualbogleheads.wordpress.com/
sawhorse
Posts: 3745
Joined: Sun Mar 01, 2015 6:05 pm

Re: Age 29, No Debt, 137,000+

Post by sawhorse »

Getting rid of that managed portfolio is a great idea, and like you said, it's good to do it in a low income year.

If you're moving to Massachusetts, be prepared for a big jump in expenses if it's on the eastern side of the state.
Topic Author
westeast
Posts: 4
Joined: Wed Jun 28, 2017 11:19 am

Re: Age 29, No Debt, 137,000+

Post by westeast »

Hi ALL! Thanks so much for your earlier responses. A lot has happened this year, here's the update (and the question). :D

Emergency funds: 6 months of expenses
Debt: $0
Tax Filing Status: Single
State of Residence: Oregon
Age: 29
Expenses etc. 1,500-2,000 a month

CURRENT RETIREMENT ASSETS:
(beyond 6 month emergency fund)
Vanguard portfolio: 137,000
VG Roth IRA - 14,000
VG IRA - 3,000
(no 401k)

Desired % allocation: Somewhere between 90% stocks / 10% bonds and 80% stocks/ 20 % bonds
Desired International allocation: 30% of stocks

Questions/Comments:
1.Recommendations for specific funds and allocation %'s for my taxable and non-taxable accounts?
Lazylarry - would you be willing to talk about how/why you chose those funds?

NOTE: It turns out I was able to rollover the 401k into ROTH IRA and IRA at VG.
I also moved my brokerage over as well, as of this week- thus the allocation question.

Thanks in advance everyone!!!
:moneybag :moneybag :moneybag
kerplunk
Posts: 842
Joined: Sun Apr 17, 2011 9:58 pm

Re: Age 29, No Debt, 137,000+

Post by kerplunk »

Halfway between 90/10 and 80/20 is 85/15.

59.5% Vanguard Total Stock Market
25.5% Vanguard Total International Stock Market
15.0% Vanguard Total Bond Market

I would consider converting that $3,000 Traditional IRA to Roth IRA if you are in a low tax bracket.
whiteprius
Posts: 168
Joined: Thu Feb 04, 2016 5:48 pm

Re: Age 29, No Debt, 137,000+

Post by whiteprius »

Set up an account at Fidelity immediately and move your money there. You should not be paying a broker fee.
Topic Author
westeast
Posts: 4
Joined: Wed Jun 28, 2017 11:19 am

Re: Age 29, No Debt, 137,000+

Post by westeast »

To clarify - I don't pay a brokerage fee at Vanguard. I manage it myself.
whiteprius
Posts: 168
Joined: Thu Feb 04, 2016 5:48 pm

Re: Age 29, No Debt, 137,000+

Post by whiteprius »

Your portfolio seems OK. I didn't analyze every single security but the ones I checked out were near best for their category. I would personally never keep anything in cash (except what's in my bank account) though. THere is virtually zero risk in a bond fund tied to Barclays Aggregate so MMFs don't make sense in this interest rate environment.

One thing I might research, with respect to your world funds, is whether you'd be better off moving their US portion into an S&P 500 index fund and moving their foreign portion into an all foreign fund, e.g. OAKIX is one foreign (no US) fund I like.

But overall looks like you did a lot of research and made good decisions.
Topic Author
westeast
Posts: 4
Joined: Wed Jun 28, 2017 11:19 am

Re: Age 29, No Debt, 137,000+

Post by westeast »

Note - all components of this portfolio are now in Vanguard. I'll clarify because I don't think I was super clear up top. :oops:
So all original brokerage account holdings stand, they are just now in Vanguard, self-managed account.

1. I'm looking for new/updated positions in the IRA and the ROTH.
2. In addition, I'm wondering whether to sell the brokerage (non-tax exempt account) positions and to buy index funds.
If you think yes, sell and index, what funds would you recommend? If you think no, don't convert, hold positions, I'd like to know also.
Happy either way, just asking for thoughts.

Thanks all!
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