Does an IPS really need to be 5 pages long to be valuable?

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Cody
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Does an IPS really need to be 5 pages long to be valuable?

Post by Cody » Thu Jun 21, 2018 8:39 am

While looking at sample IPS's online I see many are long (5+ pages). My belieif is something that long will not get read and sit in a drawer forever.

Or should the be that long to make it valuable.

We are actually looking for sample IPS's for my adult daughter to use as a template. Where to look for shorter, but valuable ones?

Thanks much,
Cody

dbr
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dbr » Thu Jun 21, 2018 8:51 am

In my opinion such an IPS is insane and has confused planning with execution. It might be a person should have detailed procedures for execution, but if that is the case the direction had better be tested with whoever might eventually need to follow it. Also, plans for actual operations have to be updated constantly or become useless.

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GoldStar
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by GoldStar » Thu Jun 21, 2018 8:53 am

There is a vanguard paper that has a single page version that I used. I don't remember the name of the paper - maybe something like best practices for investing.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by DGE » Thu Jun 21, 2018 8:56 am

No. I can't imagine any reason why an IPS would be longer than 1-2 pages.

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AAA
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by AAA » Thu Jun 21, 2018 8:58 am

And an IPS is...what?

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by AlohaJoe » Thu Jun 21, 2018 8:59 am

The only sample IPSes I'm seeing that are 5+ pages are for advisors to send to their clients. That's not your use case.

dbr
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dbr » Thu Jun 21, 2018 9:03 am

Are you finding the suggestions in the Wiki not adequate: https://www.bogleheads.org/wiki/Investm ... xample_IPS

I don't know if one of those is five pages somehow. I have interesting experiences at school with kids who write 25 word one page essays by skipping every line of a wide ruled page and writing three words to a line. Is that happening here?

Also, a list of details about specific accounts may be vital documentation but it isn't policy.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by stan1 » Thu Jun 21, 2018 9:07 am

The best IPS is simple, such as:

"Maintain an emergency fund of $XK and save at least 20% of salary each year by maximizing Roth IRA and 401K contributions and investing in Vanguard Target Retirement 20XX."

That's very clear and actionable for your adult daughter who might not be an expert in investing. If you wanted you could add a few sentences on why Target Retirement funds are being used. If there are further complexities of high income and a taxable account you might need a few more sentences. If she wants more complexity she can update the IPS herself as she learns more.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by retiredjg » Thu Jun 21, 2018 9:46 am

I think my IPS was about 4 sentences, written on a scrap of paper in case I forgot what my allocation decisions would be.

Since I didn't write it till after retirement, some things (like "maintain an emergency fund") were just a given and didn't need to be written down at that stage in my life.

An IPS should be as long or as short as you need, but I'd say that few people should need anything more than 1 page long, maybe 2 or 3 of there are charts or diagrams.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dbr » Thu Jun 21, 2018 9:47 am

I don't have a written IPS.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by UpperNwGuy » Thu Jun 21, 2018 9:50 am

I keep mine as a Note in my iPhone. It would fit on a 3x5 card.

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Ice-9
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Ice-9 » Thu Jun 21, 2018 9:54 am

In lieu of a text document IPS, for more than a decade I have had an asset allocation spreadsheet along with an unwritten understanding that my absolute floor savings rate should be 15%. (It's a good bit higher than that most years.)

My asset allocation spreadsheet lists all the asset classes, target percentages, actual percentages, and amounts on the front sheet. It derives these numbers from the second sheet, which lists all the funds, shares, and balances. I update the shares column on the second sheet, and Google Finance functions calculate the rest. I use conditional formatting on the front sheet to highlight an asset class when the actual percentages drift too far away from the target percentages, indicating time to rebalance.

For me, the spreadsheet more succinctly tells me everything I need to know that I would hope to get from a text document IPS. At least it worked for me through the 2008-9 crash and ever since.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Sandtrap » Thu Jun 21, 2018 9:57 am

My IPS Statement is outlined for others, my hares, to follow after my demise. It is made for "non-Boglheads" to understand and, hopefully, follow. As such, it has to be a lot longer than if it were just for myself.
Toward that end, whatever length or pages it needs to fulfill its purpose is the right length.

mahalo,
j

Glockenspiel
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Glockenspiel » Thu Jun 21, 2018 10:00 am

Mine is literally about 5 lines written in my spreadsheet that I keep track of all my investments in. I'm not sure what else I would include to make it that long. A lot of my philosophy is in my head though.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by LiterallyIronic » Thu Jun 21, 2018 10:02 am

Mine's not even written down. I just know to keep my emergency fund at $10,000, to automatically invest 25% of gross income into target retirement funds, and pay an extra $200/month to my mortgage. Doesn't matter what happens beyond that.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by mouses » Thu Jun 21, 2018 10:04 am

AAA wrote:
Thu Jun 21, 2018 8:58 am
And an IPS is...what?
Apparently an Iberian Peninsula Scenic tour, is my guess.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by MI_bogle » Thu Jun 21, 2018 10:05 am

AAA wrote:
Thu Jun 21, 2018 8:58 am
And an IPS is...what?
Investing Policy Statement


Mine is 1 page long, and under 500 words. It has a few objective/goals (target retirement age, savings goal, etc), a 1 sentence investment philosophy, a note about houses/cars, asset allocation, funds/accounts, review process (once annually), and rebalancing bands

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Ice-9 » Thu Jun 21, 2018 10:15 am

Sandtrap wrote:
Thu Jun 21, 2018 9:57 am
My IPS Statement is outlined for others, my hares, to follow after my demise. It is made for "non-Boglheads" to understand and, hopefully, follow. As such, it has to be a lot longer than if it were just for myself.
Toward that end, whatever length or pages it needs to fulfill its purpose is the right length.

mahalo,
j
I would love to think that my well thought out asset allocation plan would be carried out by my heirs. However, my wife has already told me if I go first, she's moving everything in tax-advantaged accounts (which is almost everything) to target date funds, just like her own retirement accounts. She has made it clear she has no interest in me explaining my asset allocation strategy to her. :D

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dcabler » Thu Jun 21, 2018 10:37 am

You can always use smaller font to reduce the number of pages. :D

But seriously, mine started out at around 5 pages and included a lot of thought processes that led me to where I am. That's all been deleted. It's now down to just 2 or 3 pages, but I include things like:

- a listing of all accounts, account numbers and agents (where applicable) for investing for anything that touches our financial universe: investing, savings, checking, life insurance, LTC insurance, HSA, etc.
- overall philosophy for what sort of stock/bond investments we have and in which accounts they are located and why
- Current target AA and what sort of funds we have (or may have) which meet that target.
- Withdrawal methodology and filename that contains a spreadsheet
- Filename and location of tracking spreadsheet I use.
- Current plan for when to take SS for each of us.
- Plans for when to drop/reduce life insurance as we age and our daughter becomes launched
- Current plan for how to withdraw from taxable and deferred accounts and (possible) future Roth conversion
- In the event of my early demise, and given my DW's current lack of interest in the details, some suggestions of who/where to go for help, as well as institutions to avoid, lest I come back and haunt her! :twisted:

The IPS is in MS Word and all revisions are noted in the document. The file itself is password protected, as is the memory stick where it exists. A paper copy is kept in our safety deposit box and my DW reviews the whole thing first before a new version is stored away in the box.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by alpenglow » Thu Jun 21, 2018 10:47 am

AlohaJoe wrote:
Thu Jun 21, 2018 8:59 am
The only sample IPSes I'm seeing that are 5+ pages are for advisors to send to their clients. That's not your use case.
I imagine advisors would want to make things look very complicated!

I feel that most IPS's should fit on one side of a page.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by bertilak » Thu Jun 21, 2018 10:53 am

Sandtrap wrote:
Thu Jun 21, 2018 9:57 am
My IPS Statement is outlined for others, my hares, to follow after my demise. It is made for "non-Boglheads" to understand and, hopefully, follow. As such, it has to be a lot longer than if it were just for myself.
Toward that end, whatever length or pages it needs to fulfill its purpose is the right length.

mahalo,
j
That is the key.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

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goingup
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by goingup » Thu Jun 21, 2018 10:53 am

UpperNwGuy wrote:
Thu Jun 21, 2018 9:50 am
I keep mine as a Note in my iPhone. It would fit on a 3x5 card.
Morningstar's Christine Benz wrote a piece advocating this. http://cawidgets.morningstar.ca/Article ... &id=843104

I hand wrote my last IPS in 2010 and it has 5 lines and fits on a 1/2 sheet of paper.

J295
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by J295 » Thu Jun 21, 2018 10:53 am

Ours is five sentences
Works wonderfully

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T-Wrench
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by T-Wrench » Thu Jun 21, 2018 10:56 am

Mine is 2 pages on a Google Doc, and that's only because my workplace gives me 4 different accounts.

As others noted, you want to keep it simple and actionable. My investing philosophy is summed up by a Bogle quote about indexing, and then I describe percentages for my overall investing scheme.
MI_bogle wrote:
Thu Jun 21, 2018 10:05 am
AAA wrote:
Thu Jun 21, 2018 8:58 am
And an IPS is...what?
Investing Policy Statement


Mine is 1 page long, and under 500 words. It has a few objective/goals (target retirement age, savings goal, etc), a 1 sentence investment philosophy, a note about houses/cars, asset allocation, funds/accounts, review process (once annually), and rebalancing bands
+1

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Fallible » Thu Jun 21, 2018 10:57 am

Cody wrote:
Thu Jun 21, 2018 8:39 am
While looking at sample IPS's online I see many are long (5+ pages). My belieif is something that long will not get read and sit in a drawer forever.

Or should the be that long to make it valuable. ...
Can you provide some examples of the online statements you saw? It would be helpful to know what five or more pages include and whether they might reflect too many investments.

An effective written IPS is one that works for the individual investor. Mine is just over a page, listing the investments and one or two sentences explaining why I chose them, and then listing overall goals. I wrote more when I started out in the late '90s, in particular to stay away from tech. Just writing out thoughts helped. Gradually, I refined and shortened it - not hard since I have only four investments.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

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Taylor Larimore
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Taylor Larimore » Thu Jun 21, 2018 11:06 am

Cody:

I do not have an IPS (Investment Policy Statement). With only three broad market index funds, plus a "stay-the-course" philosophy, I found an IPS to be an unnecessary waste of time.
Our lives are frittered away with detail. Simplify. Simplify. -- Henry David Thoreau
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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DanMahowny
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by DanMahowny » Thu Jun 21, 2018 11:10 am

IPS = Inter Press Service?
Funding secured

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by PhilosophyAndrew » Thu Jun 21, 2018 11:16 am

Mine is a single paragraph.

I can understand the need for a more detailed “death book” document providing many more specific details for heirs or executors, but my investment policy statement is short because my investment policy is simple.

Andy.
Last edited by PhilosophyAndrew on Thu Jun 21, 2018 11:22 am, edited 1 time in total.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by longinvest » Thu Jun 21, 2018 11:22 am

Taylor Larimore wrote:
Thu Jun 21, 2018 11:06 am
I do not have an IPS (Investment Policy Statement). With only three broad market index funds, plus a "stay-the-course" philosophy, I found an IPS to be an unnecessary waste of time.
Our lives are frittered away with detail. Simplify. Simplify. -- Henry David Thoreau
Thanks!
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VLB/ZRR

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by triceratop » Thu Jun 21, 2018 11:26 am

Mine has 2709 characters and has not been modified since last November (when I clarified how taxes would impact my decision -- I currently do not hold corporate bonds for tax reasons). It has a total of 346 words. My IPS:

Code: Select all

===============================================================================
                            INVESTMENT POLICY STATEMENT
===============================================================================

Investment Philosophy:
----------------------
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-
bottom cost, are the surest of all routes to the accumulation of wealth"
    - John C. Bogle

Further diversification to market-weighted global equities will be
selected to yield exposure to beta, HmL, and SmB factors, where possible.

Asset Allocation:
-----------------
Maintain overall 90% stock + 10% fixed-income allocation
Assets should be diversified across major asset classes including domestic equity,
international equity (global market weight of equities), government bonds of
short to intermediate term.

When rebalancing during an equity market crash, use treasuries as needed as they
will likely receive a price boost.

Funds & Accounts:
-----------------
Use low cost index funds which provide maximum diversification across asset
classes and the 5 factors of beta, HmL, SmB, Term, and Default. Try to assume
only market risk and factor risk as far as possible. Continuously evaluate
tax-efficiency of fund selection and shelter tax-inefficient funds in
tax-advantaged accounts to improve tax-adjusted returns.

Target Allocation:
------------------

Equity subcomponents (90% of portfolio)
-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*

U.S.  (50% of equities)
///////////////////////
VTI  - Total Stock Market Fund     60% - Taxable account
IJS  - Small-Cap Value Index Fund  40% - Taxable account

Intl. (50% of equities)
///////////////////////
IXUS - Total Int'l Market Fund     37.5% - Taxable account
VSS  - Small-Cap Int'l Market Fund 37.5% - Roth IRA / Taxable account
Emerging Markets Funds             25%   - Taxable account
VWO
FNDE
IVLU

Fixed Income subcomponents (10% of portfolio)
-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*
VGIT - Intermed-Term Govt Bond Fund 100% - Taxable account

Investor Behavior & Portfolio Maintenance:
------------------------------------------
Regularly (ideally, monthly) purchase funds, preferentially buying assets which
are underweight of target allocation.

Tax Loss Harvesting & Tax Gain Harvesting shall occur when it is anticipated to
maximize long-term tax-adjusted return of portfolio. Notably, paying state
taxes to harvest long-term gains at a 0% rate shall be a tradeoff. Loss
harvests should be restricted to $3000/yr while future Tax Gain Harvesting is
expected.

A minimum of six (6) months will transpire between any changes to this IPS and
resulting portfolio adjustments.

Date: November 29, 2017

Code: Select all

-r--r--r-- 1 xxxxx xxxxx 2709 Nov 29  2017 IPS.txt
However, I rarely look at my IPS and my actual portfolio decisions are driven by my custom-made spreadsheet which tracks how closely I am in balance with my IPS-mandated allocations. One is a decision framework, the other an implementation assist.

I guess I need to update my IPS to note that VGIT's name changed to Intermediate-term Treasury fund, but then I would have to modify my document, and change permissions, which is too much effort. ;)
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dbr » Thu Jun 21, 2018 11:27 am

The recommendation for an IPS is to ensure that people think through their investing properly rather than flying around with wrong, half-baked, or constantly waffling and flapping in the breeze ideas. Once that purpose is achieved or if a person is not doing that, it isn't needed. An IPS might be a good tool to leave to someone who has to take over affairs later. However a person who is flummoxed by investing probably wouldn't benefit and someone who knows what they are doing should be able to see what is going on anyway. This is not to be confused with documenting what is what.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by packet » Thu Jun 21, 2018 11:38 am

Cody wrote:
Thu Jun 21, 2018 8:39 am
We are actually looking for sample IPS's for my adult daughter to use as a template. Where to look for shorter, but valuable ones?

Thanks much,
Cody
Perhaps she can use yours as a template?
:)

:beer Cheers,
packet
First round’s on me.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by MI_bogle » Thu Jun 21, 2018 11:42 am

packet wrote:
Thu Jun 21, 2018 11:38 am
Cody wrote:
Thu Jun 21, 2018 8:39 am
We are actually looking for sample IPS's for my adult daughter to use as a template. Where to look for shorter, but valuable ones?

Thanks much,
Cody
Perhaps she can use yours as a template?
:)

:beer Cheers,
packet
Or, perhaps the greatest value would be for her to create the IPS herself, using yours as inspiration but deciding herself what is important and what could be kept and what could be eliminated or modified

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by BanditKing » Thu Jun 21, 2018 11:48 am

It's pretty simple, it should be as long as is suitable for you.

2015
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by 2015 » Thu Jun 21, 2018 11:52 am

longinvest wrote:
Thu Jun 21, 2018 11:22 am
Taylor Larimore wrote:
Thu Jun 21, 2018 11:06 am
I do not have an IPS (Investment Policy Statement). With only three broad market index funds, plus a "stay-the-course" philosophy, I found an IPS to be an unnecessary waste of time.
Our lives are frittered away with detail. Simplify. Simplify. -- Henry David Thoreau
Thanks!
Exactly. My initial IPS was something like a full 8 pages long as I am a firm believer in the benefits of understanding the process by which my decisions are made. Putting things in writing helped to not only clarify my thinking, but increased my understanding of critical concepts related to my own micro investing, economics, personal finance, and decumulation strategies. Once I completed this process, however, and particularly since changing to a 3 fund PF, I never think about the IPS anymore, much less look at it. Yet one more benefit of Simplicity.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dbr » Thu Jun 21, 2018 12:09 pm

2015 wrote:
Thu Jun 21, 2018 11:52 am
longinvest wrote:
Thu Jun 21, 2018 11:22 am
Taylor Larimore wrote:
Thu Jun 21, 2018 11:06 am
I do not have an IPS (Investment Policy Statement). With only three broad market index funds, plus a "stay-the-course" philosophy, I found an IPS to be an unnecessary waste of time.
Our lives are frittered away with detail. Simplify. Simplify. -- Henry David Thoreau
Thanks!
Exactly. My initial IPS was something like a full 8 pages long as I am a firm believer in the benefits of understanding the process by which my decisions are made. Putting things in writing helped to not only clarify my thinking, but increased my understanding of critical concepts related to my own micro investing, economics, personal finance, and decumulation strategies. Once I completed this process, however, and particularly since changing to a 3 fund PF, I never think about the IPS anymore, much less look at it. Yet one more benefit of Simplicity.
A very good illustration of my point as well. There are lots of things people learn by wrestling with it, and then it is put away because what needed to be done is done.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by GoldenFinch » Thu Jun 21, 2018 12:16 pm

Mine just says, “Paws off.” So far it has worked. I will write a longer one someday, but for now I think I’m okay.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by MikeG62 » Thu Jun 21, 2018 12:32 pm

2015 wrote:
Thu Jun 21, 2018 11:52 am
...My initial IPS was something like a full 8 pages long as I am a firm believer in the benefits of understanding the process by which my decisions are made. Putting things in writing helped to not only clarify my thinking, but increased my understanding of critical concepts related to my own micro investing, economics, personal finance, and decumulation strategies. Once I completed this process...I never think about the IPS anymore, much less look at it.
I agree with this. My IPS is 2 and 1/2 pages long, plus a one page appendix (list of specific acceptable ETF's/Mutual funds) and one page of footnotes.

A good portion of the IPS details not only "the what", but "the why". Last thing I want is to try and remember a decade or more from now why I came to the decisions that I did when I prepared it.

As other have said, I rarely look at my IPS since developing it ~5 years ago. There simply is not a need to do that.
Real Knowledge Comes Only From Experience

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by tuningfork » Thu Jun 21, 2018 12:44 pm

I'm one with a long IPS (10 pages) but that's because it's more than an IPS. The actual investment policy, as most people here describe it, is less than a page. It also includes target asset allocation with listing of acceptable funds in each asset class at each financial institution I use, when and how to rebalance, my withdrawal strategy (I am retired, pre-SS, so it tells me which accounts to withdraw from, how to determine the amount, what to do with dividends, and it also includes notes for how I think my withdrawal strategy will change when I start taking SS and RMDs). It includes my Social Security strategy (when I plan to start, along with some text to remind me why I want to wait until age 70). It includes some details about my Roth IRA conversion strategy, some notes about how I want to use my HSA, a list of things I need to remember to do or change when I turn 65 (re: Medicare) and 70.5 (RMDs, SS), a note about figuring out what to do about IRMAA before I turn 63, and so on... And links to Bogleheads wiki pages about some of these topics.

My point: I want to remind my future self *why* I manage my investments in this way, and what the ramifications might be if I make changes. If all I included was my simple investment policy statement, I might forget something. I am acknowledging that my memory might falter sooner than I expect, so I want those reminders front and center. I look at my IPS at least once a year and revise the details as appropriate as laws change or as I learn something important I didn't know about (e.g. IRMAA, which I only heard about here a few months ago but may change what I do with Roth conversions a few years from now).

By the way, here is the actual IPS part of my IPS:

Goals:
  • Simplify my portfolio toward the Three-Fund Portfolio investment approach at bogleheads.org using low cost index funds, and consolidate accounts when practical to Fidelity and Vanguard.
  • Convert up to half of traditional IRA accounts to Roth IRA to reduce future RMDs and increase tax diversity. As of 2018 make this a priority to convert to the top of the 24% bracket.
Target Asset Allocation:
  • 65% Equities, 35% Bonds and Cash Equivalents, comprised as follows: (details of specific funds and accounts omitted here)

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by z91 » Thu Jun 21, 2018 1:48 pm

Never heard of this before. I imagine if I had one it would be:

Make as much as possible.
Save as much as possible.
Spend as little as possible.
Maximize tax-deferred accounts.
Invest in a low expense target fund.
Stay the course.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by NoHeat » Thu Jun 21, 2018 1:49 pm

Sandtrap wrote:
Thu Jun 21, 2018 9:57 am
My IPS Statement is outlined for others, my hares, to follow after my demise.
I’m missing something. Why would your heirs need a plan that was intended to meet your goals, after you are gone? Your goals are no longer a factor then.

Wouldn’t they just need a list of debts and investing accounts, with a notation of whether an account has specified benefiaries?

dbr
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by dbr » Thu Jun 21, 2018 2:25 pm

NoHeat wrote:
Thu Jun 21, 2018 1:49 pm
Sandtrap wrote:
Thu Jun 21, 2018 9:57 am
My IPS Statement is outlined for others, my hares, to follow after my demise.
I’m missing something. Why would your heirs need a plan that was intended to meet your goals, after you are gone? Your goals are no longer a factor then.

Wouldn’t they just need a list of debts and investing accounts, with a notation of whether an account has specified benefiaries?
I think the big concern is someone who has planned things to provide for a spouse or other dependent who has little knowledge or interest in how to manage those affairs. I suppose a fair argument is that such a person would not be helped be the IPS.

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TheTimeLord
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by TheTimeLord » Thu Jun 21, 2018 2:29 pm

Cody wrote:
Thu Jun 21, 2018 8:39 am
While looking at sample IPS's online I see many are long (5+ pages). My belieif is something that long will not get read and sit in a drawer forever.

Or should the be that long to make it valuable.

We are actually looking for sample IPS's for my adult daughter to use as a template. Where to look for shorter, but valuable ones?

Thanks much,
Cody
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by fourwheelcycle » Thu Jun 21, 2018 2:36 pm

Cody wrote:
Thu Jun 21, 2018 8:39 am
We are actually looking for sample IPS's for my adult daughter to use as a template. Where to look for shorter, but valuable ones?
I don't know how old your daughter is, but when my wife and I were in our twenties our savings and investment plan was:

1. Max out all employer-based savings opportunities, using lowest ER total market equity and bond funds.

2. Spend whatever we need to (no budget, ever) based on our (modest) spending needs and inclinations.

3. Pay off all credit cards every month and never take out any loans except for home mortgage.

4. Save whatever is left in taxable and IRA accounts (at Vanguard), using lowest ER total market equity and bond funds.

5. Aim for 70% equity, 27% bond and 3% cash/money market AA across all savings, including employer-based accounts.

Essentially, we have used the same plan for our whole careers and into retirement.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by tesuzuki2002 » Thu Jun 21, 2018 3:43 pm

Cody wrote:
Thu Jun 21, 2018 8:39 am
While looking at sample IPS's online I see many are long (5+ pages). My belieif is something that long will not get read and sit in a drawer forever.

Or should the be that long to make it valuable.

We are actually looking for sample IPS's for my adult daughter to use as a template. Where to look for shorter, but valuable ones?

Thanks much,
Cody
It only needs to be as long as you need it! Just like a resume.. Short is simple.

NoHeat
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by NoHeat » Thu Jun 21, 2018 5:24 pm

dbr wrote:
Thu Jun 21, 2018 2:25 pm
NoHeat wrote:
Thu Jun 21, 2018 1:49 pm
Sandtrap wrote:
Thu Jun 21, 2018 9:57 am
My IPS Statement is outlined for others, my hares, to follow after my demise.
I’m missing something. Why would your heirs need a plan that was intended to meet your goals, after you are gone? Your goals are no longer a factor then.

Wouldn’t they just need a list of debts and investing accounts, with a notation of whether an account has specified benefiaries?
I think the big concern is someone who has planned things to provide for a spouse or other dependent who has little knowledge or interest in how to manage those affairs. I suppose a fair argument is that such a person would not be helped be the IPS.
It seems to me that a trust is the solution for this situation, and an IPC for a deceased person is hardly a substitute for a trust.

2015
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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by 2015 » Thu Jun 21, 2018 6:43 pm

NoHeat wrote:
Thu Jun 21, 2018 1:49 pm
Sandtrap wrote:
Thu Jun 21, 2018 9:57 am
My IPS Statement is outlined for others, my hares, to follow after my demise.
I’m missing something. Why would your heirs need a plan that was intended to meet your goals, after you are gone? Your goals are no longer a factor then.

Wouldn’t they just need a list of debts and investing accounts, with a notation of whether an account has specified benefiaries?
This.

It's highly situational, but I would never saddle my heirs, even an SO or spouse with my IPS. End of life usually starts with a long, slow process of health decline of some sort, then death, all which exists in its own chaotic system and which someone is going to have to oversee. Google caregiver to learn how easy it is crash and burn during this process. Nonetheless, the party hasn't even begun yet. Because it's only after all of that (and believe me, it is all of that), that someone has to settle the estate. To expect any stakeholder to attempt to decipher my thinking, mimic my IPS, and go through everything required to adopt and execute it, after the health decline/death process is about the most unfair thing I think I could do to anyone.

I agree with the concept of shifting into major simplicity mode as one ages because the last thing you want is all kinds of complex things hanging out that you want done "beyond the grave" that some poor soul is has to make sense of (at a time when any energy to do so may have already been depleted).

Seasons change. Drastically and dramatically. What you wanted to control may have nothing to do with many aspects of reality after you're gone. YMMV.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by GoldStar » Thu Jun 21, 2018 6:46 pm

GoldStar wrote:
Thu Jun 21, 2018 8:53 am
There is a vanguard paper that has a single page version that I used. I don't remember the name of the paper - maybe something like best practices for investing.
I found the PDF on Vanguard's site I was thinking of. See "Figure 1: Example of a basic framework for an investment plan"

https://personal.vanguard.com/pdf/ISGPRINC.pdf

Simple single page table. All you need.
(And not a bad paper to have your daughter read).
Last edited by GoldStar on Thu Jun 21, 2018 7:41 pm, edited 1 time in total.

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by Horsefly » Thu Jun 21, 2018 6:56 pm

I got the idea here from Bogleheads, and my IPS is 5 pages long. However, mine is morphed into something beyond an Investment policy, and more of a financial review. Beyond the normal IPS stuff, it has sections about our debt (accounts and philosophy) where our investment and banking accounts are, our general monthly inflows and outflows, our estimates of future social security income (based on calculators), etc. As I started writing it I realized it might be a useful thing for my wife if I kick-off before her, so I put lots more stuff in there. I found it somewhat cathartic to put all this into writing, and will expand it along the "Financial AND Investment Policy" lines.

Steve

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Re: Does an IPS really need to be 5 pages long to be valuable?

Post by LadyGeek » Thu Jun 21, 2018 7:55 pm

This thread is now in the Investing - Theory, News & General forum (Investment policy statement).

New investors - This is something worthwhile to do.

=================

Cody, you ask a very good question. Our sister Canadian site, Financial Wisdom Forum, has also asked this question.

The on-going discussion is here: The One-Line Investment Policy Statement (IPS). Don't worry about the Canadian investing terminology, the same concepts apply.

Taylor - You are quoted here: Re: The One-Line Investment Policy Statement (IPS)

Disclaimer: Myself and longinvest are members of both forums.
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