Yearly check up - thanks!

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Topic Author
Timon0201
Posts: 88
Joined: Thu Oct 23, 2014 3:20 am

Yearly check up - thanks!

Post by Timon0201 »

I started playing with the idea of paying for a financial advisor so thought i would snap out of it by doing my 1 year check in. thank you in advance for your thoughts!

Emergency funds: 1 year
Debt: Mortgage - ~$300K 30 year fixed at 3.375% with ~$400k equity
Tax Filing Status: Married Filing Jointly
Tax Rate: 35% Federal, 9% State
State of Residence: CA
Age: 35/35/1 year old
Desired Asset allocation: 70% stocks / 30% bonds
(retirement is 90/10, taxable is more 50/50 - blends to about 70/30)
Desired International allocation: 25%

Taxable (~ $300K)
60% - VTMFX (vanguard tax managed balance fund) 0.09%ER - 50/50AA - this is for wealth accumulation and unforeseen big expenses if ever needed
30% - VWIAX (vanguard wellesley income fund) 0.15%ER - 30/70AA - this is emergency fund money we don’t want sitting in cash - okay with risk. stopped contributing once this hit $100K. if fund goes down, will contribute again to stay at 100k
10% - Schwab intellectual portfolio (robo advisor) - 65/35 - this is for additional retirement savings

His 401k (~$165K)
TRRMX (TRowe 2050 target) 0.76%ER
high ER, crappy funds available - all high expense ratio
Company match - $1 for $1

(all these accounts below have the same portfolio so lumped together)
His Roth IRA at Vanguard (~40K)
Her Roth IRA at Vanguard (~50K)
His Rollover IRA at Vanguard (~160k)
Her 401k (with 50c to $1 matching) (~200K)
35% - RSP - S&P 500 equal weighted - 0.40%ER
12.5% - VB - Vanguard small cap - 0.06%ER
5% - VNQ - Vanguard Reit - 0.12%ER
12.5% - VO - Vanguard Mid Cap - 0.06%ER
10% - BIV - Vanguard Intermediate Term Bond - 0.07%ER
5% - VWO - Vanguard Emerging Markets - 0.14%ER
20% - VEA - Vanguard Developed Mkts - 0.07% ER

529 Plan - (~10K)
60% - vanguard total stock market
15% - vanguard total international stock market
25% - vanguard total bond market

Contributions:
every month we contribute:
- $600 into 529 plan
- $700 into Schwab Portfolio advisor - for taxable retirement savings
- $4K into the Vanguard VTMFX - wealth accumulation/unforeseen big expenses
every year we both max out 401ks and wife does max backdoor roth contribution

Misc
Currently live in condo, looking to buy a home in expensive bay area. Have the downpayment sitting in cash (~400K). Would either keep the condo as rental or sell - variable on cost of home we purchase - don’t want to be house poor. might also consider renting home instead of purchase.
if buy house, ability for monthly savings contributions will significantly decrease in the near term (hopefully future salary raises will help with this)

Questions:
1. Majority of assets are in portfolio i created (the vanguard one holding the Roth IRA’s, her 401k, his rollover). what is your opinion? where can i improve?
2. thoughts on monthly savings contributions, how i’m allocating those contributions based on goals, and thoughts on the funds for those savings?
3. the dreaded rent vs. buy in the bay area haunts me. i put a post about this earlier and it went wild, so don’t really want to get into that here as that’s not what i’m focused on with this post. but it's a huge financial decision and hard to gulp!
4. i already know this is a no - but market is so high, i've debated selling half of my VTMFX and then dollar cost averaging back in over time so that i have the cash to buy if there is a big market drop. (i know i know! bad bad!)
5. am i forgetting to do anything i should be doing?

Again, thank you all in advance for your time on this!
PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Yearly check up - thanks!

Post by PFInterest »

you are potentially getting killed on wellesley by taxes. might consider something more tax efficient.
i havent used the schwab program but again you could probably do it cheaper and potentially more efficient.
Topic Author
Timon0201
Posts: 88
Joined: Thu Oct 23, 2014 3:20 am

Re: Yearly check up - thanks!

Post by Timon0201 »

PFInterest wrote:you are potentially getting killed on wellesley by taxes. might consider something more tax efficient.
i actually put up a post about a year back trying to make this tax efficient, but the after tax performance was still much better with wellesley than any portfolio i would try to make myself with index funds. of course this is a managed fund, so who knows what performance will be like in the future. have you looked into making your own wellesley type portfolio and see how it would perform after-tax?
PFInterest wrote: havent used the schwab program but again you could probably do it cheaper and potentially more efficient.
this is the account i keep wanting to close, but it's done pretty well so i keep putting money in it every month. haha it's a small part of our overall portfolio and i do keep meaning to close it haha. i really just opened it because i wanted to see how the robot thing worked and never stopped.

thank you for your points. you definitely hit two things i know aren't great!
aristotelian
Posts: 8625
Joined: Wed Jan 11, 2017 8:05 pm

Re: Yearly check up - thanks!

Post by aristotelian »

PFInterest wrote:you are potentially getting killed on wellesley by taxes. might consider something more tax efficient.
i havent used the schwab program but again you could probably do it cheaper and potentially more efficient.
Agreed, you could just increase tax managed balanced index and reduce stock elsewhere in the portfolio. Consider building a position in I Bonds for a tax deferred emergency fund.
Topic Author
Timon0201
Posts: 88
Joined: Thu Oct 23, 2014 3:20 am

Re: Yearly check up - thanks!

Post by Timon0201 »

Good thought. I will look into that!
Jack FFR1846
Posts: 13088
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Yearly check up - thanks!

Post by Jack FFR1846 »

#4: head slap

I have Schwab for taxable with 100% in SCHB at 0.03 ER. Their robo adviser uses high ER funds with lots of cash drag. I would never use it.
Bogle: Smart Beta is stupid
Topic Author
Timon0201
Posts: 88
Joined: Thu Oct 23, 2014 3:20 am

Re: Yearly check up - thanks!

Post by Timon0201 »

jack - haha i know! k, thanks for reassuring my already stupid idea that i knew what stupid, but can't shake off

anyone have any thoughts on the retirement portfolio i made up?
MotoTrojan
Posts: 10729
Joined: Wed Feb 01, 2017 8:39 pm

Re: Yearly check up - thanks!

Post by MotoTrojan »

Timon0201 wrote:jack - haha i know! k, thanks for reassuring my already stupid idea that i knew what stupid, but can't shake off

anyone have any thoughts on the retirement portfolio i made up?
Could be simplified. Vanguard Small-cap fund is actually more of a 50/50 small/mid blend. Thus, I don't see a ton of added value in adding their even larger mid-cap fund. I also prefer small-value, but that is another story.

Also your 20% VEA 5% VWO is nearly identical to 25% VXUS (Total International), so I would simplify and just hold that. Only reason I could see to break it up is if it was in taxable, for TLH reasons.
Topic Author
Timon0201
Posts: 88
Joined: Thu Oct 23, 2014 3:20 am

Re: Yearly check up - thanks!

Post by Timon0201 »

Thanks Moto! I will look into that!
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