Sanity check and Taxable account review please

[grizzlypanda]

Hello everyone, I’m a long-time lurker and first-time poster – thanks for the awesome community and reading my post.

I’ve made allocations and choices based on the posts in the forum and advise in the wiki. I would greatly appreciate it if you can sanity check my portfolio and provide any advice / comments / suggestions.

Emergency Funds – 100K (~14% allocation)
I am aware that the emergency fund is higher for my age and needs – but this helps me sleep well at night.
Held in Short Term Treasury Bill ETFs (50k in TFLO and 50k in SGOV) paying 4%+ dividends and exempt from CA state income taxes. Monthly dividends are used to re-balance with contributions (see table below) in taxable account.
Debt – $0
Tax Filing Status – Single
Tax Rate – 27.28% Federal, 8.63% State
State of Residence – California
I was fortunate enough to find a high paying job in big tech last year – my rent is ~$3,500 but housing is too expensive here and I don't see myself living here for 10+ years.
Age – 37
Desired Asset Allocation – 90% Stock, 10% Bonds
Overall Portfolio Size – 740K

Current Retirement Assets:

401K - ~500K (~68% of the portfolio)
100% allocation to Vanguard 2065 TDF (90% stocks, 10% bonds)
I have been able to take advantage of the mega-backdoor Roth contribution through current employer and will be maxing out the entire $70,000 in 2025.

Roth IRA – 80K (~11% of the portfolio)
100% allocated to Vanguard Mega Cap Growth Index Fund ETF (MGK)
Maxed out $7,000 for 2025 already through backdoor contributions.
I am aware that this is a very US, Large Cap, tech heavy and goes against Bogleheads advice. I plan on moving this to 2065 TDF fund as well, but I might not do it for another 2-3 years.

HSA – 18K (~2.5% of the portfolio)
100% allocated to BRK.B – This is due to my laziness. California treats HSA accounts as a taxable account; Berkshire Hathaway doesn’t pay any dividends and is diverse enough. Helps me save some time during tax season.

Taxable Account – 40K (~5% of the portfolio and growing)

Code: Select all

+------------------------+-------------------+--------------+------------------+-------------------------------------------+
| Asset Class            | Target Allocation | Primary ETF  | Tax Loss Partner | Note                                      |
+------------------------+-------------------+--------------+------------------+-------------------------------------------+
| U.S. Large-Cap Growth  |        25%        | VUG (0.04%)  | SCHG (0.04%)     | Split SP500 into Growth + Value for       |
+------------------------+-------------------+--------------+------------------+ better tax loss harvesting opportunities. |
| U.S. Large-Cap Value   |        25%        | VTV (0.04%)  | SCHV (0.04%)     |                                           |
+------------------------+-------------------+--------------+------------------+-------------------------------------------+
| U.S. Small-Cap         |        20%        | AVUV (0.25%) | DFSV (0.31%)     |                                           |
+------------------------+-------------------+--------------+------------------+-------------------------------------------+
| Int'l Developed Market |        20%        | VEA (0.06%)  | SCHF (0.06%)     | Split VXUS into Developed + Emerging for  |
+------------------------+-------------------+--------------+------------------+ better tax loss harvesting opportunities  |
| Int'l Emerging Market  |        10%        | VWO (0.08%)  | SCHE (0.11%)     |                                           |
+------------------------+-------------------+--------------+------------------+-------------------------------------------+

This is the area I’m overthinking the most and need some help – as part of RSU diversification, I’m hoping to invest ~5k per month into the portfolio allocation above in a taxable trading account. I split the 3 fund portfolios a bit more as there’s potential for tax loss harvesting.

I typically re-balance with contributions every month and harvest the losses once a year during December (or significant market event).

Checking Account - ~5k (FDLXX – Fidelity Treasury Money Market fund)
Pay stub lands in Fidelity Cash account that I manually convert into treasury money market. I’ve been receiving 4%+ dividends, and it’s exempt from California taxes.

Questions:

• Does the taxable allocation look good or am I making it too complex? (I enjoy doing it and don’t find it as a chore.)

• Am I missing something/overlooking obvious?

• Should I be doing anything else, say to optimize my portfolio, update allocation, tax situation etc.?

Thanks again for your time and help!

[geetzromo123]

In my opinion you easily pass the sanity check. There's nothing you're doing, including your 5 fund taxable account allocation, that strikes me as wrong or lacking. There are many versions of right and I'd say yours is one of those. It's a bit more complicated than a three fund portfolio, but it's low cost and diversified and, as you say, you enjoy managing it. As for the 80k in your Roth IRA invested in a mega cap fund, your comments show that you are aware that this is not going to be recommended by a Boglehead crowd, but my view is that it's a relatively small part of your stock holdings and what the hell, it may well continue to highly outperform the total market. More important than how you invest is how you save, and you're getting an A+ for that - making a ton of money and saving a big hunk of it. So congrats. I also hope you enjoy your work and have people in your life who you like and love, because without that your ever growing wealth will provide insufficient warmth to your life.

[grizzlypanda]

Thank you very much for the quick response and kind words. It’s a relief to hear that I’m not overdoing it and staying the course.

I got lucky with work. It has been rewarding both financially and intellectually. I’ve been learning a lot from a lot of smart people which is great. I was a bit stressed about the tech layoffs, but I understand that it’s beyond my control and try not to think about it too much.

My partner and I are also talking about getting married this year. We’ve been together for a while now and are looking forward to starting a family together.

Have a great 2025! I’m hoping to share a positive status update a few years from now.

[breakfastinbed]

Nothing here is really "insane." Agree that this doesn't really follow the "Boglehead way" but so be it. I personally like the growth/value split and if you don't want to truly split 50/50 large growth/small value, some large value thrown in can help "bridge" that.

Target date funds are a little cost-inefficient but if you like the simplicity, that also works. And while you do have more growth than value, you can kind of consider BRK.B a "value" index of sorts. I do think this is a reasonable long-term holding, just be careful for a price drop when Buffet passes away.

Only other comment is your international holding is a little low, and at your income tax rate is probably better held in tax sheltered. Could consider moving a bit to 401K if you like.

[grizzlypanda]

Thanks for your response!

Nothing here is really "insane." Agree that this doesn't really follow the "Boglehead way" but so be it. I personally like the growth/value split and if you don't want to truly split 50/50 large growth/small value, some large value thrown in can help "bridge" that.

Does that mean adjusting the split into something like 45/55 large growth/large value? Or doing 50/50 large growth/small value and 20 large value?

I don’t fully understand what you mean by it.

Target date funds are a little cost-inefficient but if you like the simplicity, that also works.

Yeah, I like the simplicity and this also prevents me from adjusting the allocation percentages.

And while you do have more growth than value, you can kind of consider BRK.B a "value" index of sorts. I do think this is a reasonable long-term holding, just be careful for a price drop when Buffet passes away.

Yeah I agree that there could/will be a price drop. I’m not too worried about it as it’s relatively a small part of my portfolio and I’ll just keep dollar cost averaging over the next decade.
(I was actually surprised that there was no significant drop when Charlie Munger passed way.)

Only other comment is your international holding is a little low, and at your income tax rate is probably better held in tax sheltered. Could consider moving a bit to 401K if you like.

Hum, I wasn’t aware of it and thanks for pointing it out. I thought I’d get foreign tax credits from these ETFs that I can just deduct from my taxes. I should spend some time looking into this further and should do the math.

[breakfastinbed]

Does that mean adjusting the split into something like 45/55 large growth/large value? Or doing 50/50 large growth/small value and 20 large value?

I don’t fully understand what you mean by it.

There is a strategy of splitting one's US holdings into large growth and small value, with the idea that you are holding the two most productive "corners" of the market, which are also the least correlated with each other within US equities. By holding a portion of your equities in this fashion (large growth, small value) you potentially capture this benefit. You absolutely do not have to tilt your portfolio 50/50 large growth/small value, and I would consider doing so to be aggressive.

To reword, I like that you have given an allocation to large growth, large value, and small value, and think there is empiric evidence for such an allocation. The percentages are up to you

[grizzlypanda]

Does that mean adjusting the split into something like 45/55 large growth/large value? Or doing 50/50 large growth/small value and 20 large value?

I don’t fully understand what you mean by it.

There is a strategy of splitting one's US holdings into large growth and small value, with the idea that you are holding the two most productive "corners" of the market, which are also the least correlated with each other within US equities. By holding a portion of your equities in this fashion (large growth, small value) you potentially capture this benefit. You absolutely do not have to tilt your portfolio 50/50 large growth/small value, and I would consider doing so to be aggressive.

To reword, I like that you have given an allocation to large growth, large value, and small value, and think there is empiric evidence for such an allocation. The percentages are up to you

I wasn't aware of the large growth and small value strategy. Thanks for letting me know - I'll read about it more to see if/how I must adjust the portfolio allocations.