$1000 a month for life into a taxable account

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Topic Author
WanderingDoc
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$1000 a month for life into a taxable account

Post by WanderingDoc » Mon Feb 05, 2018 3:50 pm

Ladies and gents,
If one wanted to DCA $1000 a month into a taxable account (I would probably use Vanguard) for life, what 1-3 funds would you select and why? Assume that this is just an experimental/fun fund as an extra diversification play. Job is very stable, so are other sources of income. Appreciate your thoughts.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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Pajamas
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Re: $1000 a month for life into a taxable account

Post by Pajamas » Mon Feb 05, 2018 3:52 pm

WanderingDoc wrote:
Mon Feb 05, 2018 3:50 pm
Ladies and gents,
If one wanted to DCA $1000 a month into a taxable account (I would probably use Vanguard) for life, what 1-3 funds would you select and why? Assume that this is just an experimental/fun fund as an extra diversification play. Job is very stable, so are other sources of income. Appreciate your thoughts.
Why in the world would you do that since you believe that real estate provides higher returns than equities? Or are you just asking for a friend?

Topic Author
WanderingDoc
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Re: $1000 a month for life into a taxable account

Post by WanderingDoc » Mon Feb 05, 2018 4:04 pm

Pajamas wrote:
Mon Feb 05, 2018 3:52 pm
WanderingDoc wrote:
Mon Feb 05, 2018 3:50 pm
Ladies and gents,
If one wanted to DCA $1000 a month into a taxable account (I would probably use Vanguard) for life, what 1-3 funds would you select and why? Assume that this is just an experimental/fun fund as an extra diversification play. Job is very stable, so are other sources of income. Appreciate your thoughts.
Why in the world would you do that since you believe that real estate provides higher returns than equities? Or are you just asking for a friend?
1) Diversification.
2) Real estate income already covers my living expenses.
3) Anticipate a big correction and sale prices. Of course, cannot predict.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

bloom2708
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Location: Fargo, ND

Re: $1000 a month for life into a taxable account

Post by bloom2708 » Mon Feb 05, 2018 4:06 pm

49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

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Tyler Aspect
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Re: $1000 a month for life into a taxable account

Post by Tyler Aspect » Mon Feb 05, 2018 4:13 pm

Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

Topic Author
WanderingDoc
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Re: $1000 a month for life into a taxable account

Post by WanderingDoc » Mon Feb 05, 2018 4:18 pm

bloom2708 wrote:
Mon Feb 05, 2018 4:06 pm
49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.
I like it. Is there a way to "set it and forget it" so that it automatically buys the same # of shares per month?
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

bloom2708
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Location: Fargo, ND

Re: $1000 a month for life into a taxable account

Post by bloom2708 » Mon Feb 05, 2018 4:24 pm

WanderingDoc wrote:
Mon Feb 05, 2018 4:18 pm
bloom2708 wrote:
Mon Feb 05, 2018 4:06 pm
49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.
I like it. Is there a way to "set it and forget it" so that it automatically buys the same # of shares per month?
I do not think the new brokerage accounts allow for an automatic purchase. There are some threads on this topic.

The one way you could tweak it would be to buy toward your desired asset allocation each month. So if International is high, but a bit more US. If Bonds are low, buy more Bonds. This is our taxable account. I get paid two times per month, so I typically buy two times. I buy whatever is "out of favor". As your account balance grows, your purchases can't "right the ship" fully. That is where the rebalance one time a year comes in. Small purchases toward your goal. 1 or 2 re-balances to move it if it gets too far off.

It takes $50k to get Admiral shares of Int-Term Tax-Exempt. That means you need a taxable portfolio of ~$166,667 to get to Admiral level if bonds are 30%. Kind of a fun milestone.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

anil686
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Re: $1000 a month for life into a taxable account

Post by anil686 » Mon Feb 05, 2018 5:07 pm

I would use 100% TSM. I assume you still mean that you would have access to tax deferred plans such as an IRA and 401K or the like? If so, I would try to keep it as tax efficient as possible. With 100% TSM (VTSAX) - you will have primarily qualified dividends as well as keeping high quality bonds in a tax deferred wrapper as well as international of which only 2/3 are qualified dividends. JMO though...

run_ere
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Re: $1000 a month for life into a taxable account

Post by run_ere » Mon Feb 05, 2018 5:09 pm

I'm in the same boat with extra cash left over at the end of the month after maxing out 401ks/IRAs and paying off the mortgage. All of my 401k/IRA money is in lifecycle type funds that will automatically adjust asset allocation over time. I like this set it and forget it type investing. For my taxable account, I'm thinking about a permanent 60/40 asset allocation and the Vanguard LifeStrategy Moderate Growth Fund does exactly that. Would it be ok to just throw all of my extra taxable account money into that fund every month and just leave it be? I understand the "no bonds in taxable" sentiment but I've also read some conflicting information on that from I think the White Coat Investor. Is the Vanguard LifeStrategy Moderate Growth Fund really that bad in taxable?

Thanks in advance for any replies.

nolesrule
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Re: $1000 a month for life into a taxable account

Post by nolesrule » Mon Feb 05, 2018 5:17 pm

I calculate how much I expect to add into all of our accounts for the year and then determine the optimal investment choices and percentages for each account based on tax efficiency and cost and our overall asset allocation. That includes our 401ks, Roth IRAs and taxable. This year our money going into taxable is split 75/25 into Total Stock and Total International Stock. The Roth IRAs are 100% Total International Stock and the 401ks are Total Stock/S&P500 and Total Bond, and a sliver of Total International Stock. The only account that contains all 3 is my wife's 401k.

dbr
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Re: $1000 a month for life into a taxable account

Post by dbr » Mon Feb 05, 2018 5:31 pm

WanderingDoc wrote:
Mon Feb 05, 2018 3:50 pm
Ladies and gents,
If one wanted to DCA $1000 a month into a taxable account (I would probably use Vanguard) for life, what 1-3 funds would you select and why? Assume that this is just an experimental/fun fund as an extra diversification play. Job is very stable, so are other sources of income. Appreciate your thoughts.
I would spend the money. That would be a lot more fun and diversifies the use of money away from saving it.

IRT
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Re: $1000 a month for life into a taxable account

Post by IRT » Mon Feb 05, 2018 6:10 pm

WanderingDoc wrote:
Mon Feb 05, 2018 4:18 pm
bloom2708 wrote:
Mon Feb 05, 2018 4:06 pm
49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.
I like it. Is there a way to "set it and forget it" so that it automatically buys the same # of shares per month?
Sure. Search 'automatic investing' on the vanguard website. It's dead easy to link to a personal banking account.
I like the AA, too. Very much a 'set and forget about it' AA.

RRAAYY3
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Re: $1000 a month for life into a taxable account

Post by RRAAYY3 » Mon Feb 05, 2018 6:14 pm

Is $1000 a month really not that big of a deal to invest each month? Guess I’m screwed - whatever

Nearly A Moose
Posts: 905
Joined: Fri Apr 22, 2016 5:28 pm

Re: $1000 a month for life into a taxable account

Post by Nearly A Moose » Mon Feb 05, 2018 6:43 pm

bloom2708 wrote:
Mon Feb 05, 2018 4:24 pm
WanderingDoc wrote:
Mon Feb 05, 2018 4:18 pm
bloom2708 wrote:
Mon Feb 05, 2018 4:06 pm
49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.
I like it. Is there a way to "set it and forget it" so that it automatically buys the same # of shares per month?
I do not think the new brokerage accounts allow for an automatic purchase. There are some threads on this topic.

The one way you could tweak it would be to buy toward your desired asset allocation each month. So if International is high, but a bit more US. If Bonds are low, buy more Bonds. This is our taxable account. I get paid two times per month, so I typically buy two times. I buy whatever is "out of favor". As your account balance grows, your purchases can't "right the ship" fully. That is where the rebalance one time a year comes in. Small purchases toward your goal. 1 or 2 re-balances to move it if it gets too far off.

It takes $50k to get Admiral shares of Int-Term Tax-Exempt. That means you need a taxable portfolio of ~$166,667 to get to Admiral level if bonds are 30%. Kind of a fun milestone.
You can set up an auto purchase from a checking account. I do that. The system is set up to buy a set dollar value of shares, not a set number.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

Topic Author
WanderingDoc
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Joined: Sat Aug 05, 2017 8:21 pm

Re: $1000 a month for life into a taxable account

Post by WanderingDoc » Mon Feb 05, 2018 7:59 pm

anil686 wrote:
Mon Feb 05, 2018 5:07 pm
I would use 100% TSM. I assume you still mean that you would have access to tax deferred plans such as an IRA and 401K or the like? If so, I would try to keep it as tax efficient as possible. With 100% TSM (VTSAX) - you will have primarily qualified dividends as well as keeping high quality bonds in a tax deferred wrapper as well as international of which only 2/3 are qualified dividends. JMO though...
Yep. I currently do $18.5K into the TSP (90/10), 50% Roth 50% traditional. And a backdoor Roth IRA, Target 2055 fund.

I do have 5 figures in a taxable acct, all in VTSAX. I suppose that is relevant, since maybe I should be putting in all international until it catches up with the VTSAX balance?
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

Topic Author
WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: $1000 a month for life into a taxable account

Post by WanderingDoc » Mon Feb 05, 2018 8:01 pm

dbr wrote:
Mon Feb 05, 2018 5:31 pm
WanderingDoc wrote:
Mon Feb 05, 2018 3:50 pm
Ladies and gents,
If one wanted to DCA $1000 a month into a taxable account (I would probably use Vanguard) for life, what 1-3 funds would you select and why? Assume that this is just an experimental/fun fund as an extra diversification play. Job is very stable, so are other sources of income. Appreciate your thoughts.
I would spend the money. That would be a lot more fun and diversifies the use of money away from saving it.
I already spend ~$10K per year on trips.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

sharukh
Posts: 160
Joined: Mon Jun 20, 2016 10:19 am

Re: $1000 a month for life into a taxable account

Post by sharukh » Mon Feb 05, 2018 8:32 pm

WanderingDoc wrote:
Mon Feb 05, 2018 4:18 pm
bloom2708 wrote:
Mon Feb 05, 2018 4:06 pm
49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.
I like it. Is there a way to "set it and forget it" so that it automatically buys the same # of shares per month?
m1finance.com

dbr
Posts: 27555
Joined: Sun Mar 04, 2007 9:50 am

Re: $1000 a month for life into a taxable account

Post by dbr » Mon Feb 05, 2018 10:35 pm

WanderingDoc wrote:
Mon Feb 05, 2018 8:01 pm
dbr wrote:
Mon Feb 05, 2018 5:31 pm
WanderingDoc wrote:
Mon Feb 05, 2018 3:50 pm
Ladies and gents,
If one wanted to DCA $1000 a month into a taxable account (I would probably use Vanguard) for life, what 1-3 funds would you select and why? Assume that this is just an experimental/fun fund as an extra diversification play. Job is very stable, so are other sources of income. Appreciate your thoughts.
I would spend the money. That would be a lot more fun and diversifies the use of money away from saving it.
I already spend ~$10K per year on trips.
In that case charitable donations can be personally rewarding. That can involve serving on the board of something worthwhile. Board members are generally expected to be significant donors as well.

hulburt1
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Re: $1000 a month for life into a taxable account

Post by hulburt1 » Tue Feb 06, 2018 8:02 am

I'm building up my Roth with my Ira. Plan is have about $240000 at 70 in 5 years. soo I will be taking out $2000 a month tax free. Plus SS with wife $4400 low tax. then the Ira will kick in a lot. I can live on just SS and Ira. The 2000 will be play time money most likely kids will get it.

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welderwannabe
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Re: $1000 a month for life into a taxable account

Post by welderwannabe » Tue Feb 06, 2018 10:38 am

bloom2708 wrote:
Mon Feb 05, 2018 4:06 pm
49% Total US Stock Index
21% Total International Stock Index
30% Int-Term Tax-Exempt Bond index

Re-balance on your birthday each year.

+1, I do the same thing except I am

56% Total US Stock Index
24% Total International Stock Index
20% Int-Term Tax-Exempt Bond index
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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DaftInvestor
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Re: $1000 a month for life into a taxable account

Post by DaftInvestor » Tue Feb 06, 2018 11:05 am

Not enough info posted to answer....
It depends upon what your other assets are and what you have (if anything) in tax-advantaged accounts. It depends upon your goals, time-horizon (age, retirement age plan, etc.) and risk tolerance.
You should look at your portfolio as a whole - not separate out a "taxable" account and come up with a separate plan for it.
If I were to assume you have no access to tax-advantaged account (for whatever reason) I would put a percentage in Total-Stock-Market, a percentage in International Total Stock Market and a percentage in Bonds - the Bond choice depends upon your tax bracket and time horizon. The mix of the three funds depends upon your risk tolerance and time horizon.

an_asker
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Re: $1000 a month for life into a taxable account

Post by an_asker » Tue Feb 06, 2018 11:08 am

RRAAYY3 wrote:
Mon Feb 05, 2018 6:14 pm
Is $1000 a month really not that big of a deal to invest each month? Guess I’m screwed - whatever
Haha! We're in the humblebrag section of Bogleheads :oops:

wolf359
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Re: $1000 a month for life into a taxable account

Post by wolf359 » Tue Feb 06, 2018 4:45 pm

RRAAYY3 wrote:
Mon Feb 05, 2018 6:14 pm
Is $1000 a month really not that big of a deal to invest each month? Guess I’m screwed - whatever
This is all relative. When I first got started investing, $1,000/mo was a VERY big deal for me. I was also only making $24K/year.

30 years of career progression later, and it's not that big a deal anymore.

Bogleheads covers people at different stages of their life, and at multiple income levels. Don't be intimidated by the folks who have ridiculously large salaries or portfolio balances. The advice is the same, and the math works at all income levels.

remomnyc
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Re: $1000 a month for life into a taxable account

Post by remomnyc » Tue Feb 06, 2018 4:57 pm

Assuming you have tax advantaged accounts AND assuming your fixed income is housed there, I would invest 60% VTI and 40% VXUS in a taxable account.

bck63
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Re: $1000 a month for life into a taxable account

Post by bck63 » Sat Jan 12, 2019 9:06 am

wolf359 wrote:
Tue Feb 06, 2018 4:45 pm
Bogleheads covers people at different stages of their life, and at multiple income levels. Don't be intimidated by the folks who have ridiculously large salaries or portfolio balances. The advice is the same, and the math works at all income levels.
Reading some old posts about taxable accounts and wanted to say that I found this very helpful, wolf359. Much appreciated. Easy to feel it's not worth it when I see so many seven-figure net worths mentioned. I need to remind myself that I am on track to do just fine.

Miriam2
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Re: $1000 a month for life into a taxable account

Post by Miriam2 » Sat Jan 12, 2019 5:23 pm

bck63 wrote:
wolf359 wrote: Bogleheads covers people at different stages of their life, and at multiple income levels. Don't be intimidated by the folks who have ridiculously large salaries or portfolio balances. The advice is the same, and the math works at all income levels.
Reading some old posts about taxable accounts and wanted to say that I found this very helpful, wolf359. Much appreciated. Easy to feel it's not worth it when I see so many seven-figure net worths mentioned. I need to remind myself that I am on track to do just fine.
Yes Bck63! And also, for my kids just starting out, they had no access to a 401k, so their most important accounts were their Roth IRAs and their taxable accounts - and the most important thing was to get in the habit of saving something every month into that taxable account - even if it's only $100, then increases to $200, and so on.

Our parents often did quite well investing regularly into a plain taxable account - a savings account. As many experts say, it's the savings habit not the particular fund that is the most important factor in building personal wealth.

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LiveSimple
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Re: $1000 a month for life into a taxable account

Post by LiveSimple » Sat Jan 12, 2019 6:01 pm

Just Total Stock Market Index fund

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