Portfolio Review (first time): 31 & hoping to finally take control of finances

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Cranberry44
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Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Thu May 21, 2020 12:24 pm

Emergency funds:
Working on it. I have about 1.5 months expenses in a savings account at a local bank (0.01% interest) that I’m hoping to move to a high yield account at some point soon. I also have $12,000 in contributions in Roth IRA.

Debt:
Student Loan Debt: $6,940 at 6.25% interest
— Repayment schedule: 105 months at $132.12; projected end date: 06/09/2029


Tax Filing Status:
Single, no kids.

Tax Rate:
New job beginning in September, so:
— For 2020 taxes, I think I’ll be in 22% Federal; 8% State brackets.

— Before September 2020: 12% Federal, 4% State
— After September 2020: 24% Federal, 9.3% State

State of Residence:
CA. VHCOL; Rent: $2,400 (studio apartment).

Age: 31

Desired Asset allocation:
I’m unsure: any advice on this given surrounding context?

Current retirement assets

Taxable (mid five figures)
+0.54%: VXUS — 0.08% (Vanguard Total International Stock ETF)
*2.18%: SPY — 0.095% (SPDR S&P 500 ETF Trust)
*28.23%: VTI — 0.03% (Vanguard Total Stock Market Index ETF)
*34.70%: VT — 0.08% (Vanguard Total World Stock ETF)
*15.52%: BLV — 0.07% (Vanguard Long-Term Bond ETF)

Roth IRA
*18.28%: VTI — 0.03% (Vanguard Total Stock Market Index ETF)

* = held at Raymond James (See “Key Points” below); dividends are reinvested.
+ = E*Trade

401k: None. I’ve never had a job that offered one; the new job does not either.

Questions:
0. I’m mostly seeking general advice: am I on the right track? Anything to reexamine or change?

1. New Job Benefits, beginning 09/2020, offers either a Traditional or Roth IRA with TIAA and a company match of up to 1% in salary for first two years, increasing each year until 8%. No match at current job. I’m assuming I should I opt for the traditional IRA since I already have a Roth?

2. A concern is the combination of the VT & VTI combination. This puts an emphasis on US as far as I know — which I don’t necessarily mind I suppose, but I’d be happy to change it around. Any thoughts here? My advisor suggested it (see Key Point below)

3. Thoughts on BLV? Again, my advisor suggested this, apparently over BND. During the last 12 months since I’ve had it, it has been my best performer, but I’m unsure going forward, and everything I've read on the forum and wiki seems to suggest BND. Any reason to sell BLV and buy BND?

Key Points:

*Taxable account at Raymond James was inherited circa 2012, but was originally all in a single company stock that went no where for the last 9 years. About 12 months ago I sold it all and put it in its current allocation after reading the wiki and speaking with the RJ advisor. I didn’t start an IRA until two years ago because I’ve had no real guidance on finances and was scared to touch anything.

Thanks all :happy
Last edited by Cranberry44 on Mon May 25, 2020 6:09 pm, edited 1 time in total.

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CyclingDuo
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by CyclingDuo » Thu May 21, 2020 12:30 pm

Cranberry44 wrote:
Thu May 21, 2020 12:24 pm
Emergency funds:
Working on it. I have about 1.5 months expenses in a savings account at a local bank (0.01% interest) that I’m hoping to move to a high yield account at some point soon. I also have $12,000 in contributions in Roth IRA.

Debt:
Student Loan Debt: $6,940 at 6.25% interest
— Repayment schedule: 105 months at $132.12; projected end date: 06/09/2029

I would knock that student loan debt out as fast as possible - especially with the 6.25% interest rate. Can you ramp up the payoff schedule to something like less than a year?
"Everywhere is within walking distance if you have the time." ~ Steven Wright

HomeStretch
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by HomeStretch » Thu May 21, 2020 12:35 pm

Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Thu May 21, 2020 12:53 pm

CyclingDuo wrote:
Thu May 21, 2020 12:30 pm
Cranberry44 wrote:
Thu May 21, 2020 12:24 pm
Emergency funds:
Working on it. I have about 1.5 months expenses in a savings account at a local bank (0.01% interest) that I’m hoping to move to a high yield account at some point soon. I also have $12,000 in contributions in Roth IRA.

Debt:
Student Loan Debt: $6,940 at 6.25% interest
— Repayment schedule: 105 months at $132.12; projected end date: 06/09/2029

I would knock that student loan debt out as fast as possible - especially with the 6.25% interest rate. Can you ramp up the payoff schedule to something like less than a year?
Thanks for responding, CyclingDuo :)

Yes -- and I truly hope knock it out asap, but that is the current repayment plan. I also have some parental help in paying it off at the moment. However, would paying off student loan debt be a good cause to sell from the taxable account?

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Thu May 21, 2020 12:56 pm

HomeStretch wrote:
Thu May 21, 2020 12:35 pm
Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?
Thanks, HomeStretch.

I am curious about this as well, but as far as I can tell, the RJ advisor hasn't charged anything in 10-ish years. There are no "fees" listed online nor in tax documents. Perhaps they are hidden somewhere else ?

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CyclingDuo
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by CyclingDuo » Thu May 21, 2020 1:12 pm

Cranberry44 wrote:
Thu May 21, 2020 12:53 pm
However, would paying off student loan debt be a good cause to sell from the taxable account?
Usually always is if you ask yourself this question "Would I borrow money to invest in the stock market?".
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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ruralavalon
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by ruralavalon » Thu May 21, 2020 1:47 pm

These are my suggestions.
Debt:
Student Loan Debt: $6,940 at 6.25% interest
— Repayment schedule: 105 months at $132.12; projected end date: 06/09/2029

I suggest selling "15.52%: BLV — 0.07% (Vanguard Long-Term Bond ETF)" in the taxable account to pay off the 6.25% student debt. A bond fund is not very tax-efficient in a taxable account, and paying off a 6.25% debt is a good "investment".

Wiki article "Tax-efficient Fund Placement".

Kill two birds with one stone.
Roth IRA
*18.28%: VTI — 0.03% (Vanguard Total Stock Market Index ETF)

= held at Raymond James (See “Key Points” below); dividends are reinvested.
+ = E*Trade
Rollover the Raymond James Roth IRA to a Roth IRA at a low cost provider like Vanguard, Fidelity, Schwab or E*Trade.
1. New Job Benefits, beginning 09/2020, offers either a Traditional or Roth IRA with TIAA and a company match of up to 1% in salary for first two years, increasing each year until 8%. No match at current job. I’m assuming I should I opt for the traditional IRA since I already have a Roth?
That is not an regular IRA. Is it a 401k, 403b, 457, SEP IRA, SIMPLE IRA?

What funds are offered in that plan? Please give fund names, tickers and expense ratios.

Contribute at least enough to get the full employer match. If any decent funds are offered then contribute more.
Last edited by ruralavalon on Thu May 21, 2020 1:56 pm, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

dvvader
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by dvvader » Thu May 21, 2020 1:52 pm

Hey Cranberry!

Congrats on the new job! Seems like quite the pay bump which is great!

Regarding asset allocation, I am 30 years old and my desired allocation is 70% stocks/30% bonds with international being 30% of stocks. I arrived at this allocation following the general advice I've seen around this forum, which is "% of bonds = age, -10% if you want to eat well, +10% if you want to sleep well". Also, many advocate holding between 20-40% of stocks in international, so I figured let's split the difference and go with 30%. Not super scientific. I've been at this allocation for the past few years and am comfortable with it so I don't anticipate making any changes in the near future (I will probably reevaluate my bond position at age 35 or 40 and see if I want to increase from 30%).

Also, I'm curious why you hold Total World in addition to Total Stock and Total International in your taxable account? Ideally you would want to hold Total Stock and Total International in taxable to be able to take advantage of the foreign tax credit. Holding the separate funds also makes tax loss harvesting easier. Total World is a great fund (I own it in a Roth), but I believe it's best suited for tax-advantaged accounts. And you are correct, with your current holdings of VT and VTI you are tilted towards the US compared to market weight. Is that a bad thing? No one knows! :D

:sharebeer

retired@50
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Location: Living in the U.S.A.

Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by retired@50 » Thu May 21, 2020 2:13 pm

Cranberry44 wrote:
Thu May 21, 2020 12:56 pm
HomeStretch wrote:
Thu May 21, 2020 12:35 pm
Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?
Thanks, HomeStretch.

I am curious about this as well, but as far as I can tell, the RJ advisor hasn't charged anything in 10-ish years. There are no "fees" listed online nor in tax documents. Perhaps they are hidden somewhere else ?
FEES.
I'd look a little deeper than online or tax documents. I'd suggest you absolutely scour the year-end or quarterly statements (perhaps a PDF download available online) for anything that looks like an advisory fee. It will likely be hard to find, but nobody works for free, so something is up...

Did any part of the RJ account hold cash? If so, look for deductions from the cash balance by inspecting transaction history for at least 12 months.

Regards,
This is one person's opinion. Nothing more.

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Thu May 21, 2020 4:21 pm

retired@50 wrote:
Thu May 21, 2020 2:13 pm
Cranberry44 wrote:
Thu May 21, 2020 12:56 pm
HomeStretch wrote:
Thu May 21, 2020 12:35 pm
Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?
Thanks, HomeStretch.

I am curious about this as well, but as far as I can tell, the RJ advisor hasn't charged anything in 10-ish years. There are no "fees" listed online nor in tax documents. Perhaps they are hidden somewhere else ?
FEES.
I'd look a little deeper than online or tax documents. I'd suggest you absolutely scour the year-end or quarterly statements (perhaps a PDF download available online) for anything that looks like an advisory fee. It will likely be hard to find, but nobody works for free, so something is up...

Did any part of the RJ account hold cash? If so, look for deductions from the cash balance by inspecting transaction history for at least 12 months.

Regards,
I've been searching around and finally found a discrepancy when looking at a recent purchase of two single shares of VTI (taxable and Roth). For example, the price for one was $136.69 but the amount spent was $142.64. I then looked at all the other purchases and shares, multiplying the price by the quantity and comparing that number with the amount spent and am seeing they don't match-up anywhere. Sometimes off by $100 or more. Is this the advisor fee, or something else?

Here is an screenshot of it: https://imgur.com/a/7UdUERC
Last edited by Cranberry44 on Thu May 21, 2020 6:25 pm, edited 1 time in total.

retired@50
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by retired@50 » Thu May 21, 2020 5:00 pm

Cranberry44 wrote:
Thu May 21, 2020 4:21 pm
retired@50 wrote:
Thu May 21, 2020 2:13 pm
Cranberry44 wrote:
Thu May 21, 2020 12:56 pm
HomeStretch wrote:
Thu May 21, 2020 12:35 pm
Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?
Thanks, HomeStretch.

I am curious about this as well, but as far as I can tell, the RJ advisor hasn't charged anything in 10-ish years. There are no "fees" listed online nor in tax documents. Perhaps they are hidden somewhere else ?
FEES.
I'd look a little deeper than online or tax documents. I'd suggest you absolutely scour the year-end or quarterly statements (perhaps a PDF download available online) for anything that looks like an advisory fee. It will likely be hard to find, but nobody works for free, so something is up...

Did any part of the RJ account hold cash? If so, look for deductions from the cash balance by inspecting transaction history for at least 12 months.

Regards,
I've been searching around and finally a discrepancy when looking at a recent purchase two single shares of VTI (taxable and Roth). For example, the price for one was $136.69 but the amount spent was $142.64. I then looked at all the other purchases and shares, multiplying the price by the quantity and comparing that number with the amount spent and am seeing they don't match-up anywhere. Sometimes off by $100 or more. Is this the advisor fee, or something else?

Here is an screenshot of it: https://imgur.com/a/7UdUERC
In both cases, the exact dollar amount difference is $5.95. So, it looks as though you're paying a $5.95 commission for each trade. With a price of $136.69 that's over 4.3% as a surcharge. Time to put an end to this... Get away from RJ if at all possible.

Regards,
This is one person's opinion. Nothing more.

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Thu May 21, 2020 5:37 pm

ruralavalon wrote:
Thu May 21, 2020 1:47 pm
1. New Job Benefits, beginning 09/2020, offers either a Traditional or Roth IRA with TIAA and a company match of up to 1% in salary for first two years, increasing each year until 8%. No match at current job. I’m assuming I should I opt for the traditional IRA since I already have a Roth?
That is not an regular IRA. Is it a 401k, 403b, 457, SEP IRA, SIMPLE IRA?

What funds are offered in that plan? Please give fund names, tickers and expense ratios.

Contribute at least enough to get the full employer match. If any decent funds are offered then contribute more.
Thanks for your input, ruralavalon.

All I know so far (still doing paper work, so I don't have specifics) is that they only offer pre-tax and Roth retirement plans through TIAA, and that employees can participate in a traditional or a ROTH IRA retirement savings plan. I've been assuming it is a regular IRA. Let me know if this sounds incorrect -- this is all new to me since my previous employer has no retirement benefits whatsoever (contract worker, essentially). If I find out any of the information you requested above I will update it here. Thank you again.

HomeStretch
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by HomeStretch » Thu May 21, 2020 6:17 pm

Cranberry44 wrote:
Thu May 21, 2020 4:21 pm
retired@50 wrote:
Thu May 21, 2020 2:13 pm
Cranberry44 wrote:
Thu May 21, 2020 12:56 pm
HomeStretch wrote:
Thu May 21, 2020 12:35 pm
Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?
Thanks, HomeStretch.

I am curious about this as well, but as far as I can tell, the RJ advisor hasn't charged anything in 10-ish years. There are no "fees" listed online nor in tax documents. Perhaps they are hidden somewhere else ?
FEES.
I'd look a little deeper than online or tax documents. I'd suggest you absolutely scour the year-end or quarterly statements (perhaps a PDF download available online) for anything that looks like an advisory fee. It will likely be hard to find, but nobody works for free, so something is up...

Did any part of the RJ account hold cash? If so, look for deductions from the cash balance by inspecting transaction history for at least 12 months.

Regards,
I've been searching around and finally a discrepancy when looking at a recent purchase two single shares of VTI (taxable and Roth). For example, the price for one was $136.69 but the amount spent was $142.64. I then looked at all the other purchases and shares, multiplying the price by the quantity and comparing that number with the amount spent and am seeing they don't match-up anywhere. Sometimes off by $100 or more. Is this the advisor fee, or something else?

Here is an screenshot of it: https://imgur.com/a/7UdUERC
You should have received a fee disclosure sheet as part of the RJ account-opening paperwork. It will tell you what types of fees your account is subject to.

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Topic Author
Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Thu May 21, 2020 6:23 pm

HomeStretch wrote:
Thu May 21, 2020 6:17 pm
Cranberry44 wrote:
Thu May 21, 2020 4:21 pm
retired@50 wrote:
Thu May 21, 2020 2:13 pm
Cranberry44 wrote:
Thu May 21, 2020 12:56 pm
HomeStretch wrote:
Thu May 21, 2020 12:35 pm
Aim for a low-cost portfolio. Advisor fees and/or high-ER funds will significantly reduce your investment returns over your lifetime.

Does your RJ advisor charge a fee to manage your taxable account? If yes, have you considered moving your RJ account to your e*Trade account (assuming you are not paying any advisor fees) or another low-cost brokerage?
Thanks, HomeStretch.

I am curious about this as well, but as far as I can tell, the RJ advisor hasn't charged anything in 10-ish years. There are no "fees" listed online nor in tax documents. Perhaps they are hidden somewhere else ?
FEES.
I'd look a little deeper than online or tax documents. I'd suggest you absolutely scour the year-end or quarterly statements (perhaps a PDF download available online) for anything that looks like an advisory fee. It will likely be hard to find, but nobody works for free, so something is up...

Did any part of the RJ account hold cash? If so, look for deductions from the cash balance by inspecting transaction history for at least 12 months.

Regards,
I've been searching around and finally a discrepancy when looking at a recent purchase two single shares of VTI (taxable and Roth). For example, the price for one was $136.69 but the amount spent was $142.64. I then looked at all the other purchases and shares, multiplying the price by the quantity and comparing that number with the amount spent and am seeing they don't match-up anywhere. Sometimes off by $100 or more. Is this the advisor fee, or something else?

Here is an screenshot of it: https://imgur.com/a/7UdUERC
You should have received a fee disclosure sheet as part of the RJ account-opening paperwork. It will tell you what types of fees your account is subject to.
Hmmm... the account was held in the custody of someone else until I turned 25 (this was in the Will of the person who bequeathed it to me). But I don't even remember being contacted when I turned of age, so to speak. I really have had very little interaction with the advisor which is why I am so in the dark. I'll have to investigate. Thanks, HomeStretch

gr7070
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by gr7070 » Thu May 21, 2020 6:30 pm

Personal Finance Basics:
0. Live within your means - spend less than you make
1. Have an emergency fund, even if just 1 month's expenses (3-6 months recommended, more is unnecessary)
2. Pay yourself first. Save as much as you can afford in tax-protected, retirement plans (401k, 457, 403b, Roth IRA). Target 15+% minimum
3. Pay off credit cards every month
4. The loan most worth of having is your home mortgage. Consumer debt is often an excuse to overspend
5. Drive an appropriately priced car, the longer you keep it the better
6. Have appropriate insurance; must-haves: health, long-term disability, auto, term life once you have dependents
7. Give some to charity; even if it's a little, including time

Not sure I saw 6 discussed. Very important.
No need to over-insure, as well.

AA:
Anywhere in 100-70:0-30 for a 30 year old is reasonable. I'd recommend at least 10% bonds. Even 20+ isn't unreasonable at 30 years.

20-40% of equities in international. 0% could be argued for, but I'd do at least 20 for the diversification alone.
Last edited by gr7070 on Thu May 21, 2020 6:38 pm, edited 1 time in total.

gr7070
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by gr7070 » Thu May 21, 2020 6:31 pm

And move from the RJ account. Understand all potential ramifications of that move to do so most efficiently.

gr7070
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by gr7070 » Thu May 21, 2020 6:35 pm

Lastly I presume your job does have a 401k, or at least some 4##x plan. After you settle in talk with HR about your savings options. They have something by what you mentioned and it's not a Roth IRA. It might have Roth, but not an *Individual* RA.

JamesJonesJrJr
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by JamesJonesJrJr » Thu May 21, 2020 6:41 pm

Cranberry44 wrote:
Thu May 21, 2020 12:24 pm

0. I’m mostly seeking general advice: am I on the right track? Anything to reexamine or change?
What is your goal? How much are you contributing to your savings per year?

sd323232
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by sd323232 » Thu May 21, 2020 6:41 pm

Cranberry44 wrote:
Thu May 21, 2020 12:53 pm
CyclingDuo wrote:
Thu May 21, 2020 12:30 pm
Cranberry44 wrote:
Thu May 21, 2020 12:24 pm
Emergency funds:
Working on it. I have about 1.5 months expenses in a savings account at a local bank (0.01% interest) that I’m hoping to move to a high yield account at some point soon. I also have $12,000 in contributions in Roth IRA.

Debt:
Student Loan Debt: $6,940 at 6.25% interest
— Repayment schedule: 105 months at $132.12; projected end date: 06/09/2029

I would knock that student loan debt out as fast as possible - especially with the 6.25% interest rate. Can you ramp up the payoff schedule to something like less than a year?
Thanks for responding, CyclingDuo :)

Yes -- and I truly hope knock it out asap, but that is the current repayment plan. I also have some parental help in paying it off at the moment. However, would paying off student loan debt be a good cause to sell from the taxable account?
My advice would be that at 31 you dont need any parental help, you have carry your own weight by now, you are not 19 anymore. You have to be self sufficent from here on. Parents holding your hand is like fighting fight with one hand tied behind your back. You never go in 100%. Once you decided that it is all you, nothing will hold you back, you are in the game 100%.

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ruralavalon
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by ruralavalon » Fri May 22, 2020 9:53 am

Cranberry44 wrote:
Thu May 21, 2020 5:37 pm
ruralavalon wrote:
Thu May 21, 2020 1:47 pm
1. New Job Benefits, beginning 09/2020, offers either a Traditional or Roth IRA with TIAA and a company match of up to 1% in salary for first two years, increasing each year until 8%. No match at current job. I’m assuming I should I opt for the traditional IRA since I already have a Roth?
That is not an regular IRA. Is it a 401k, 403b, 457, SEP IRA, SIMPLE IRA?

What funds are offered in that plan? Please give fund names, tickers and expense ratios.

Contribute at least enough to get the full employer match. If any decent funds are offered then contribute more.
Thanks for your input, ruralavalon.

All I know so far (still doing paper work, so I don't have specifics) is that they only offer pre-tax and Roth retirement plans through TIAA, and that employees can participate in a traditional or a ROTH IRA retirement savings plan. I've been assuming it is a regular IRA. Let me know if this sounds incorrect -- this is all new to me since my previous employer has no retirement benefits whatsoever (contract worker, essentially). If I find out any of the information you requested above I will update it here. Thank you again.
When you say that it will be job benefit with a company match, that tells me it is not a regular IRA. A regular IRA is an account you set up yourself, and fund entirely with your own money without any employer contribution. You get to choose whatever funds you wish, the choices are almost limitless.

A company plan could be a 401k, 403b, 457b, SEP IRA, SIMPLE IRA, orThrift Savings Plan. A company plan usually includes some type of employer match or employer contribution. You get to choose investments from a fairly limited list of funds selected by the employer.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Fri May 22, 2020 12:53 pm

dvvader wrote:
Thu May 21, 2020 1:52 pm
Hey Cranberry!

Congrats on the new job! Seems like quite the pay bump which is great!

Regarding asset allocation, I am 30 years old and my desired allocation is 70% stocks/30% bonds with international being 30% of stocks. I arrived at this allocation following the general advice I've seen around this forum, which is "% of bonds = age, -10% if you want to eat well, +10% if you want to sleep well". Also, many advocate holding between 20-40% of stocks in international, so I figured let's split the difference and go with 30%. Not super scientific. I've been at this allocation for the past few years and am comfortable with it so I don't anticipate making any changes in the near future (I will probably reevaluate my bond position at age 35 or 40 and see if I want to increase from 30%).

Also, I'm curious why you hold Total World in addition to Total Stock and Total International in your taxable account? Ideally you would want to hold Total Stock and Total International in taxable to be able to take advantage of the foreign tax credit. Holding the separate funds also makes tax loss harvesting easier. Total World is a great fund (I own it in a Roth), but I believe it's best suited for tax-advantaged accounts. And you are correct, with your current holdings of VT and VTI you are tilted towards the US compared to market weight. Is that a bad thing? No one knows! :D

:sharebeer
Thanks, dvvader!

Glad to hear from someone that is also about my age -- thanks for sharing. I like your reasoning on asset allocation, and will likely choose something similar.

Although, based on other replies, it has been suggested I sell my bonds (14% of current AA) and pay off the student loan debt. I suppose I should then sell from the other funds to get to my desired AA.

I'm unsure about the VT/VTI combination too, but again, my advisor suggested and I went with her advice. I will likely use a combination of VTI and VXUS going forward -- but I'll likely move to another brokerage before making the change to avoid more fees.

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Fri May 22, 2020 12:58 pm

sd323232 wrote:
Thu May 21, 2020 6:41 pm
Cranberry44 wrote:
Thu May 21, 2020 12:53 pm
CyclingDuo wrote:
Thu May 21, 2020 12:30 pm
Cranberry44 wrote:
Thu May 21, 2020 12:24 pm
Emergency funds:
Working on it. I have about 1.5 months expenses in a savings account at a local bank (0.01% interest) that I’m hoping to move to a high yield account at some point soon. I also have $12,000 in contributions in Roth IRA.

Debt:
Student Loan Debt: $6,940 at 6.25% interest
— Repayment schedule: 105 months at $132.12; projected end date: 06/09/2029

I would knock that student loan debt out as fast as possible - especially with the 6.25% interest rate. Can you ramp up the payoff schedule to something like less than a year?
Thanks for responding, CyclingDuo :)

Yes -- and I truly hope knock it out asap, but that is the current repayment plan. I also have some parental help in paying it off at the moment. However, would paying off student loan debt be a good cause to sell from the taxable account?
My advice would be that at 31 you dont need any parental help, you have carry your own weight by now, you are not 19 anymore. You have to be self sufficent from here on. Parents holding your hand is like fighting fight with one hand tied behind your back. You never go in 100%. Once you decided that it is all you, nothing will hold you back, you are in the game 100%.
Yes, you are correct; thank you for the advice. I've always been making the minimum payment, at minimum, but a parent has been throwing in some more on top occasionally to help out. But the psychology of being 100% on your own is a mindshift that has tangible consequences. Unfortunately, I feel I have not been well educated in finances, but I am taking the leap now to self educate and get myself on track. I'm quite nervous about it all -- but am determined to make the best of my situation. Thanks, sd323232.

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Fri May 22, 2020 1:04 pm

JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
What is your goal?
My general goal is to be able to retire comfortably at a typical retirement age, in about 35-38 years.
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
How much are you contributing to your savings per year?
Besides the last two years of maxing out my Roth contribution, basically nothing. I've been essentially living pay check to pay check. I just finished my PhD a couple years ago, and have been teaching adjunct at a college for the last 6 years. I'm very frugal and don't spend anything on entertainment or unnecessary things, drive a crap car etc., but each year I have had substantial travel expenses due to national and international academic conferences. With my new job I will be making just under 6 figures and hope to save at minimum 20% of my salary --- but as much as possible. Thanks :)

retired@50
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Location: Living in the U.S.A.

Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by retired@50 » Fri May 22, 2020 1:24 pm

Cranberry44 wrote:
Thu May 21, 2020 6:23 pm

Hmmm... the account was held in the custody of someone else until I turned 25 (this was in the Will of the person who bequeathed it to me). But I don't even remember being contacted when I turned of age, so to speak. I really have had very little interaction with the advisor which is why I am so in the dark. I'll have to investigate. Thanks, HomeStretch
You can be thankful, every day, to the person who left you this money. For sure, they did a good thing. However, don't hold on to this adviser or continue to use this firm based on sentimental feelings. You've learned to be smart with your money and avoiding unnecessary fees and expenses goes with that. Honor their memory by taking good care of the money.

You've learned what that entails, now you just have to act on it.

Regards,
This is one person's opinion. Nothing more.

JamesJonesJrJr
Posts: 63
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by JamesJonesJrJr » Fri May 22, 2020 1:50 pm

Cranberry44 wrote:
Fri May 22, 2020 1:04 pm
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
What is your goal?
My general goal is to be able to retire comfortably at a typical retirement age, in about 35-38 years.
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
How much are you contributing to your savings per year?
Besides the last two years of maxing out my Roth contribution, basically nothing. I've been essentially living pay check to pay check. I just finished my PhD a couple years ago, and have been teaching adjunct at a college for the last 6 years. I'm very frugal and don't spend anything on entertainment or unnecessary things, drive a crap car etc., but each year I have had substantial travel expenses due to national and international academic conferences. With my new job I will be making just under 6 figures and hope to save at minimum 20% of my salary --- but as much as possible. Thanks :)
To retire at 67 years old in a VHCOL metro, I estimate that you'd need to invest $26k per year, increasing with inflation until you retire. At a minimum you should max your 401k and a Roth IRA. To meet the growth assumption of 6% you'd need to invest in a relatively aggressive portfolio consisting of mostly equities for most of your career. I generated a report for your review if you'd like to see the plan in detail or adjust anything.

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Fri May 22, 2020 6:26 pm

retired@50 wrote:
Fri May 22, 2020 1:24 pm

You can be thankful, every day, to the person who left you this money. For sure, they did a good thing. However, don't hold on to this adviser or continue to use this firm based on sentimental feelings. You've learned to be smart with your money and avoiding unnecessary fees and expenses goes with that. Honor their memory by taking good care of the money.

You've learned what that entails, now you just have to act on it.

Regards,

Thanks for that, retired@50, I think you hit the nail on the head here. I have been holding on to this broker due to sentimental feelings. In fact, last year it was quite hard for me to sell the original stock that the money was invested and put it into the vanguard funds mentioned above. But, it was the right decision, because that stock, even before the pandemic lost over 40% of its value. Honoring their memory by taking good care of the money will be a helpful refrain for me.

retired@50
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Location: Living in the U.S.A.

Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by retired@50 » Fri May 22, 2020 6:30 pm

Cranberry44 wrote:
Fri May 22, 2020 6:26 pm
retired@50 wrote:
Fri May 22, 2020 1:24 pm

You can be thankful, every day, to the person who left you this money. For sure, they did a good thing. However, don't hold on to this adviser or continue to use this firm based on sentimental feelings. You've learned to be smart with your money and avoiding unnecessary fees and expenses goes with that. Honor their memory by taking good care of the money.

You've learned what that entails, now you just have to act on it.

Regards,

Thanks for that, retired@50, I think you hit the nail on the head here. I have been holding on to this broker due to sentimental feelings. In fact, last year it was quite hard for me to sell the original stock that the money was invested and put it into the vanguard funds mentioned above. But, it was the right decision, because that stock, even before the pandemic lost over 40% of its value. Honoring their memory by taking good care of the money will be a helpful refrain for me.
:wink: :beer
This is one person's opinion. Nothing more.

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Topic Author
Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Fri May 22, 2020 6:33 pm

JamesJonesJrJr wrote:
Fri May 22, 2020 1:50 pm
Cranberry44 wrote:
Fri May 22, 2020 1:04 pm
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
What is your goal?
My general goal is to be able to retire comfortably at a typical retirement age, in about 35-38 years.
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
How much are you contributing to your savings per year?
Besides the last two years of maxing out my Roth contribution, basically nothing. I've been essentially living pay check to pay check. I just finished my PhD a couple years ago, and have been teaching adjunct at a college for the last 6 years. I'm very frugal and don't spend anything on entertainment or unnecessary things, drive a crap car etc., but each year I have had substantial travel expenses due to national and international academic conferences. With my new job I will be making just under 6 figures and hope to save at minimum 20% of my salary --- but as much as possible. Thanks :)
To retire at 67 years old in a VHCOL metro, I estimate that you'd need to invest $26k per year, increasing with inflation until you retire. At a minimum you should max your 401k and a Roth IRA. To meet the growth assumption of 6% you'd need to invest in a relatively aggressive portfolio consisting of mostly equities for most of your career. I generated a report for your review if you'd like to see the plan in detail or adjust anything.
Wow -- thanks, JamesJonesJrJr! This looks like a great tool. The savings number was quite off (my savings is a mid-five figure), so I adjusted the number, but I still need to be saving about 23k a year. I think saving 23k a year is possible, perhaps even more. Looking forward to this new journey. Thanks again.

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ruralavalon
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Location: Illinois

Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by ruralavalon » Sat May 23, 2020 10:26 am

Cranberry44 wrote:
Fri May 22, 2020 1:04 pm
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
What is your goal?
My general goal is to be able to retire comfortably at a typical retirement age, in about 35-38 years.
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
How much are you contributing to your savings per year?
Besides the last two years of maxing out my Roth contribution, basically nothing. I've been essentially living pay check to pay check. I just finished my PhD a couple years ago, and have been teaching adjunct at a college for the last 6 years. I'm very frugal and don't spend anything on entertainment or unnecessary things, drive a crap car etc., but each year I have had substantial travel expenses due to national and international academic conferences. With my new job I will be making just under 6 figures and hope to save at minimum 20% of my salary --- but as much as possible. Thanks :)
Congratulations on the new job and better income :) .

When just starting out establishing a high rate of contributions is the most important investing decision you can make.

Here are calculators you can use to estimate the range of possible outcomes at different levels of contributions:
1) www.firecalc.com; and
2) www.i-orp.com.

Here are some predictions about rates of return in investing. Morningstar (4/23/2020) "Experts Forecast Stock and Bond Returns: Crisis Edition".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Cranberry44
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Re: Portfolio Review (first time): 31 & hoping to finally take control of finances

Post by Cranberry44 » Mon May 25, 2020 5:57 pm

ruralavalon wrote:
Sat May 23, 2020 10:26 am
Cranberry44 wrote:
Fri May 22, 2020 1:04 pm
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
What is your goal?
My general goal is to be able to retire comfortably at a typical retirement age, in about 35-38 years.
JamesJonesJrJr wrote:
Thu May 21, 2020 6:41 pm
How much are you contributing to your savings per year?
Besides the last two years of maxing out my Roth contribution, basically nothing. I've been essentially living pay check to pay check. I just finished my PhD a couple years ago, and have been teaching adjunct at a college for the last 6 years. I'm very frugal and don't spend anything on entertainment or unnecessary things, drive a crap car etc., but each year I have had substantial travel expenses due to national and international academic conferences. With my new job I will be making just under 6 figures and hope to save at minimum 20% of my salary --- but as much as possible. Thanks :)
Congratulations on the new job and better income :) .

When just starting out establishing a high rate of contributions is the most important investing decision you can make.

Here are calculators you can use to estimate the range of possible outcomes at different levels of contributions:
1) www.firecalc.com; and
2) www.i-orp.com.

Here are some predictions about rates of return in investing. Morningstar (4/23/2020) "Experts Forecast Stock and Bond Returns: Crisis Edition".
Theses are great -- thanks so much!

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