Where should I start? (First post!)

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Topic Author
stnixon
Posts: 4
Joined: Wed Sep 09, 2020 12:15 pm

Where should I start? (First post!)

Post by stnixon »

Hey folks,

I'd greatly appreciate any help for a new investor. I'm 24 and I teach at a private school. I don't have a 403b yet, but within the next few years I plan to work in a public school.

Currently, I have a brokerage account with Thrivent. I've had this account since I was 16 and inherited some money from my grandfather. I've read and listened to some of Bogle's books and interviews, but I am quite a new investor. I'm currently taking some finance courses to better understand the industry, but this forum seems like a great place to get some advice.

My question is: where should I get started, and how can I focus on lowering my financial/investing fees?

I'm not exactly sure what kind of fees Thrivent charges; I've been looking around, and I really don't understand what kind of fees I'm currently being charged for this brokerage account with the Thrivent financial advisor.

I only hold Fidelity funds in my account: FXAIX, FSMAX, FXNAX, FNSOX, FIPDX, FZAXX. If you see any red flags with the funds I have feel free to mention them, but I'm more concerned with account fees. My thought is to transfer this brokerage account over to Fidelity since I have only Fidelity funds as is.

Looking forward to hearing thoughts from this community on my first post.

Thanks all, and thank you for welcoming me to the community!
pkcrafter
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Re: Where should I start? (First post!)

Post by pkcrafter »

Welcome to the forum. I've provided the fund names.

FSAIX - air transportation port 0.81%
FSMAX - extended mkt 0. 046%
FXNAX - US bond index 0.025%
FNSOX - St term bond index
FIPDX - inflation protected bond
FZAXX - money market

Thrivent costs

https://www.google.com/search?client=fi ... ent=psy-ab

Getting started with Bogleheads

https://www.bogleheads.org/wiki/Getting_started

The basic 3-fund portfolio

https://www.bogleheads.org/wiki/Getting_started

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
Topic Author
stnixon
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Joined: Wed Sep 09, 2020 12:15 pm

Re: Where should I start? (First post!)

Post by stnixon »

Thanks Paul!
DesertDiva
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Re: Where should I start? (First post!)

Post by DesertDiva »

While you’re at it, take some time to read the following:
https://www.etf.com/docs/IfYouCan.pdf
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arcticpineapplecorp.
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Re: Where should I start? (First post!)

Post by arcticpineapplecorp. »

wow, those fees for thrivent are high. I wasn't aware they were that bad. definitely look for a cheaper brokerage or management.

some questions:
1. do you need to have an advisor or could you d-i-y?

2. if you need an advisor, look for a lower cost advisor:
(Vanguard's robo advisor is 0.15% a year: https://investor.vanguard.com/financial ... al-advisor
their personal advisor service is 0.30% per year: https://investor.vanguard.com/financial ... al-advice/
Fidelity has several plans (seems to be more than Vanguard's), scroll halfway down the page to planning and advice fees: https://www.fidelity.com/why-fidelity/pricing-fees)

3. how did you determine to invest in Select Portfolios Air Transportation?

4. Assuming all of these funds are in taxable (not retirement accounts)?

5. make sure you are able to transfer in kind if you switch brokerage so as to not have to liquidate and reinvest. If you liquidate from taxable, that could generate capital gains which could create tax.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
Topic Author
stnixon
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Joined: Wed Sep 09, 2020 12:15 pm

Re: Where should I start? (First post!)

Post by stnixon »

Hey arctic,

Thanks for all your thoughts; I really appreciate the input.

1. I was happy for an advisor when I was a 16 year old kid, but I think I can do it myself, especially now that I am taking some financial planning courses at my local city college.

2. I'm not sure that I need an advisor; I'm not sure what benefit I'm really getting under one right now.

3. Sorry if I listed the fund incorrectly. It is FXAIX: Fidelity 500 index fund.

4. They are in taxable accounts (I will not likely have a 403b until I start working at a public school -- fingers crossed -- in about 2 years)

5. Thanks for the advice about transferring in kind as to not incur capital gains tax.

I hope these clarify. Thanks so much for all the help!
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Duckie
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Re: Where should I start? (First post!)

Post by Duckie »

stnixon wrote:I only hold Fidelity funds in my account: FXAIX, FSMAX, FXNAX, FNSOX, FIPDX, FZAXX. If you see any red flags with the funds I have feel free to mention them, but I'm more concerned with account fees. My thought is to transfer this brokerage account over to Fidelity since I have only Fidelity funds as is.
Yes, move the assets "in kind" to Fidelity. Make sure you have the cost basis for every fund before you leave Thrivent. You're going to eventually sell all but FXAIX and FSMAX. Bonds don't belong in taxable. And at your age you could ignore them completely for a while.

Open an IRA (possibly a Roth IRA) at Fidelity and contribute up to $6000 for 2020.

Do you have a desired Asset allocation?

Do you want international stocks?

Read the Investment Planning post by Laura and its follow-up post Asking Portfolio Questions.
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Eagle33
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Re: Where should I start? (First post!)

Post by Eagle33 »

Do you have a Roth IRA account?

Morningstar recently did an article regarding What to Do If You Don't Have a 401(k) or 403(b).
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
Chris K Jones
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Re: Where should I start? (First post!)

Post by Chris K Jones »

Welcome to the forum. One of the things that has really helped me is writing my Investment Policy Statement. I would strongly urge you that this should be one of the first things you do. Search the term in the search bar on the upper right. This gives me direction and keeps me focused. Best wishes.
rockstar
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Re: Where should I start? (First post!)

Post by rockstar »

I like Bogle's Little Book of Common Sense Investing. It's short and provides a lot of great information.

When it comes to fund selection, I'm of the mindset that less is better than more.

The one thing books won't teach you is how to deal with this stuff psychologically. They'll try to keep you on the right track. But ultimately when things go south, a lot of people deviate from their plans. There is a lot of great information here for staying the course.
Topic Author
stnixon
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Re: Where should I start? (First post!)

Post by stnixon »

@Duckie. Thanks for all the info, those are some really useful tips. I don't care about international stocks if I'm honest, but I do have a few follow-up questions if you don't mind.

I'll transfer the asset "in kind" to Fidelity as you mentioned. I'm a bit confused about the cost basis, but I'm assuming this is for tax purposes if I sell all but FXAIX and FSMAX as you suggest. I can get an average cost summary as I'm seeing from my Thrivent portal. It has trade, settlement, and position cost information. I'll save these pages, but are there any other tax documents I need? I'll make sure to save the forms that show the cost basis.

I've seen this advice elsewhere, but could you reiterate for me why bonds do not belong in taxable accounts?

I'll work on the other questions such as asset allocation.
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22twain
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Re: Where should I start? (First post!)

Post by 22twain »

stnixon wrote: Thu Sep 10, 2020 1:49 pm could you reiterate for me why bonds do not belong in taxable accounts?
Dividends from bond funds are taxed at your ordinary income tax rate. Dividends from stock funds are mostly (completely or almost so in the case of index funds) taxable at the lower "long term capital gains and qualified dividends" tax rate. For me, those rates are currently 22% and 15%, a 7% difference. If your taxable income is low enough, they might be 12% and 0%, a 12% difference.
Help save endangered words! When you write "princiPLE", make sure you don't really mean "princiPAL"!
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Duckie
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Re: Where should I start? (First post!)

Post by Duckie »

stnixon wrote:I'll transfer the asset "in kind" to Fidelity as you mentioned. I'm a bit confused about the cost basis, but I'm assuming this is for tax purposes if I sell all but FXAIX and FSMAX as you suggest.
It's for tax purposes when you sell anything in taxable.
I can get an average cost summary as I'm seeing from my Thrivent portal. It has trade, settlement, and position cost information. I'll save these pages, but are there any other tax documents I need? I'll make sure to save the forms that show the cost basis.
You need the cost basis for every separate purchase including reinvested dividends. I've usually sold funds as First In First Out but Specific ID is the best way to sell.
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