Portfolio help

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Wyodoc
Posts: 14
Joined: Sat Oct 27, 2018 9:32 am

Portfolio help

Post by Wyodoc » Sat Oct 27, 2018 12:54 pm

Hello!
First time poster here. I would very much appreciate any advice on my portfolio. I am a physician and started investing late (due to school, lot of training, and lack of knowledge about investing). I have a few questions that I would appreciate some advice on after I post some info below. I recently switched over from Betterment to Vanguard given my increased knowledge and honestly don’t want to pay 0.25 for things I can do myself.

Emergency Fund: Savings account 4-6 months (2%)
Debt: Mortgage- 360k 30yr fixed 3.6% w 27yrs left, Rental property 98k 15yr 5.5
Tax filing: Married Jointly
Tax rate: 37% Fed and 3% State (PA)
Age 35
Income 600k
Single income family (wife+ 2 kids, 3 month old and 3yr old)
Desired Asset Allocation: 90% Stocks 10% Bonds and portion to real estate
US/Int’l: Debating but at 60/30 now.
Goal- Retire by 55-60 with around 6M in taxable, 401k/cash balance, real estate (hopefully won’t need IRAs)

Current Assets
Taxable (100k)
100% Money market VMFXX (just moved from betterment not invested yet)
I would like to lean slightly towards small and value in my portfolio so here are my thoughts on portfolio
1) 45% VTSAX (total Stock market)
15% VSIAX (Small value)
20% VFWAX- (All world ex-US) I like having some emerging markets
10% VFSVX- (International small) Again, I like small tilt.
10% Bonds (given my tax bracket debating between VPAIX and treasury VUSTX Given horizon prefer long term bonds…I think)

529s (40k)
Kid 1 (3yrs) Vanguard age based 25k
Kid 2 (3months) Same 15k
His Roth-IRA (55k) My goal is to never use the money in these hence 100% equity
100% now Vanguard VMMXX (just over from Betterment)
Goal:
70% VTSAX (total Stock market)
30% VFWAX (All world ex-US)

Or Debating (I know, probably not big hit here but…)
100% VFMFX (0.18) (multifactor)

Her R-IRA (Starting this yr unfunded)
100% VTSAX (total Stock market)

HSA (9k)- Vanguard 100% total market
His 401K + Cash balance (40k)—> Used to use Blooom but taking over soon
Currently: 30% Principal LargeCap s&p 500 (0.31)
6% Nuveen Rea Estate Securities A Fund (1.29)
12% Principal s&p 400 Mid-cap (0.31)
12% Principal small cap s&P 600 (0.31)
14% Oppenheimer Developing Markets A fund (1.31)
28% Vanguard Total Int’l (0.17)

Will switch to—> (not gonna mention all other equity options as ER sky high but I’m taking out REIT and Emerging due to high ER)
40% Principal LargeCap s&p 500 (0.31)
5% Principal s&p 400 Mid-cap (0.31)
15% Principal small cap s&P 600 (0.31)
30% Vanguard Total Int’l (0.17)
10% Bonds (Not sure which ones…Listed below)
401k bond options
-Lord Abbett Short duration Income R4 Fund (0.64) (short term income- debt, bonds, cash equiv)
-Mellon Capital Bond Market Index (0.43)(Total bond index)
-Neuberger Berman/Mellon High yield I Separate Account (0.83)(below investment grade bonds/income and has a fairly high yield 5.8%)
-Principal Income Separate Account(0.64)(diversified fixed income “intermediate-term bond”)
Real Estate (30k) (income $400/month after all payments)
-1 Rental property

Annual Contributions
401k- 18,500 + 30K cash balance
Backdoor Both R-IRA- 11,000 (Will hopefully never need these and pass on to kids but never know)
HSA-max
2 529s- Goal is 60k btwn both accounts per yr for both me+wife until around 150k and stop (I know this is heavy but important to us to cover our kids for college and want to take advantage of compounding early.
Taxable- about 50K per yr (depending on below) + high 6 digit lump-sum in 6-12 months
Real Estate- goal of a property every1-2yrs and may do some syndication (have a lot of passive income and this area helps with tax implications-depreciation ect.)

Questions
1)Emergency fund/cash- VMMXX vs VPTXX(PA MM)? I think w my tax bracket VPTXX is preferred.

2)Taxable Portfolio recommendations?

3)401k new Portfolio?

3)Bond recommendations due to high tax bracket in taxable? Bond Recs in 401K?

4)R-IRA thoughts?

5)I know I’m not doing asset allocation between all accounts as one but I prefer to keep everything separate and I don’t mind keeping track of all the allocations. Sound reasonable? Plus we are selling part of our practice and I’ll be getting a large lump-sum payment in high 6 figures which will mostly go in taxable so will end up w bonds there anyway (will be losing some long-term income after this so trying to save A LOT early on here).

If there’s anything else I missed please let me know.
Thank you very much for the time and feedback.
Last edited by Wyodoc on Sun Oct 28, 2018 9:03 am, edited 2 times in total.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Portfolio help

Post by PFInterest » Sat Oct 27, 2018 1:34 pm

Wyodoc wrote:
Sat Oct 27, 2018 12:54 pm

4)R-IRA thoughts?
have you already learned about backdoor rIRA?

Wyodoc
Posts: 14
Joined: Sat Oct 27, 2018 9:32 am

Re: Portfolio help

Post by Wyodoc » Sat Oct 27, 2018 1:36 pm

Should have mentioned in post but all future contributions will be backdoor roth IRA
thank you

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Portfolio help

Post by PFInterest » Sat Oct 27, 2018 1:52 pm

Wyodoc wrote:
Sat Oct 27, 2018 12:54 pm
5)I know I’m not doing asset allocation between all accounts as one but I prefer to keep everything separate and I don’t mind keeping track of all the allocations. Sound reasonable?
no. you should look at all of your accounts as one and allocate accordingly to get the best option in each one. you should not be re-creating your portfolio in each account.

Wyodoc
Posts: 14
Joined: Sat Oct 27, 2018 9:32 am

Re: Portfolio help

Post by Wyodoc » Sat Oct 27, 2018 2:09 pm

Theoretically I agree with you but 2 issues.
1)Ideal would be bonds in 401k as IRA I want growth and taxable isn't favorable in my bracket. However, my bond options in 401k all have high ER over 0.43-0.83).
2)A majority of my income will end up in taxable and not tax-advantaged which would make most of my 401k bonds (which will limit growth) or I would need bonds in roth IRA which I don't want.
So overall I don't see this as a good option in my situation. Obviously I could be missing something but that's how I see it.

User avatar
car733
Posts: 153
Joined: Sun Feb 25, 2018 10:07 am
Location: Chicago, IL

Re: Portfolio help

Post by car733 » Sun Oct 28, 2018 8:37 am

Wyodoc wrote:
Sat Oct 27, 2018 12:54 pm
100% Money market VMFXX (just moved from betterment not invested yet)
This called my attention. Did you do an in-kind transfer or you sold your position and betterment and move the cash?

User avatar
Sandtrap
Posts: 5471
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Portfolio help

Post by Sandtrap » Sun Oct 28, 2018 8:51 am

1. Great job listing accounts. (please insert "fund names" next to "tickers" to help others.. . edit original post with pencil icon).
2. Clarify Real Estate. What percentage allocation of total assets is your goal?
3. Read:
TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505
*4. Plans for new funds toward diversification of assets and income stream to include physical R/E income property?
5. Some tools (you probably have already) to help manage allocation across all accounts.
ONLINE FINANCIAL TOOLS
PORFOLIO VISUALIZERS, PROJECTIONS, AND ANALYSIS
https://www.portfoliovisualizer.com
Firecalc. Retirement. How long will your money last?
https://www.firecalc.com
Morningstar Instant Xray
http://www.morningstar.com/portfolio.ht ... Entry.aspx
Optimal Retirement Planner (I-ORP)
https://www.i-orp.com/paper/index.html
http://www.calculator.net/investment-calculator.html
6. Additional help and info:
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
Asset allocation in multiple accounts
https://www.bogleheads.org/wiki/Asset ... accounts
7. EF and "fixed" diversification to include brokered CD Ladder, short and intermediate term treasuries, muni's, etc. ??

Great job so far!
j :happy

Wyodoc
Posts: 14
Joined: Sat Oct 27, 2018 9:32 am

Re: Portfolio help

Post by Wyodoc » Sun Oct 28, 2018 9:14 am

car733 wrote:
Sun Oct 28, 2018 8:37 am
Wyodoc wrote:
Sat Oct 27, 2018 12:54 pm
100% Money market VMFXX (just moved from betterment not invested yet)
This called my attention. Did you do an in-kind transfer or you sold your position and betterment and move the cash?
I sold my position first but was only at betterment a little over a year and actually minimal gains but with the tax loss harvesting ended up with more loses...

Wyodoc
Posts: 14
Joined: Sat Oct 27, 2018 9:32 am

Re: Portfolio help

Post by Wyodoc » Sun Oct 28, 2018 9:23 am

Sandtrap wrote:
Sun Oct 28, 2018 8:51 am
1. Great job listing accounts. (please insert "fund names" next to "tickers" to help others.. . edit original post with pencil icon).
2. Clarify Real Estate. What percentage allocation of total assets is your goal?
3. Read:
TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505
*4. Plans for new funds toward diversification of assets and income stream to include physical R/E income property?
5. Some tools (you probably have already) to help manage allocation across all accounts.
ONLINE FINANCIAL TOOLS
PORFOLIO VISUALIZERS, PROJECTIONS, AND ANALYSIS
https://www.portfoliovisualizer.com
Firecalc. Retirement. How long will your money last?
https://www.firecalc.com
Morningstar Instant Xray
http://www.morningstar.com/portfolio.ht ... Entry.aspx
Optimal Retirement Planner (I-ORP)
https://www.i-orp.com/paper/index.html
http://www.calculator.net/investment-calculator.html
6. Additional help and info:
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
Asset allocation in multiple accounts
https://www.bogleheads.org/wiki/Asset ... accounts
7. EF and "fixed" diversification to include brokered CD Ladder, short and intermediate term treasuries, muni's, etc. ??

Great job so far!
j :happy
WOW, thanks for all the info!

2) Above was mostly allocation to market investing. My overall goal with real estate is about 30-40% of total investments. Not solid yet as just starting off. In future will save about 30-40% to invest towards both physical properties and syndication. I've done both and although higher cap rate/income with physical property the syndication gives me less headaches and still with the tax advantages I'm looking for against passive income. I look at real estate as a way to build equity, get some income, tax advantages , hedge against volitility in market.

Thanks again!

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