How to simplify and overcome Boglehead perfectionism?

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markfaix
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How to simplify and overcome Boglehead perfectionism?

Post by markfaix » Thu Aug 01, 2013 11:02 am

As a group, I suspect that Bogleheads have perfectionistic tendencies, and I am no different. In the past, I have spent a lot of time keeping track of every dollar spent, entering every transaction into Quicken, changing bank accounts to gain a few basis points, etc. DW urged me to stop sweating the small stuff, letting go. Here's what I've done to try to break old habits and simplify our financial life:

1. Stopped searching for the perfect portfolio, stopped adjusting asset allocations by a few percentage points here and there. Pared down from 10 to 5 funds (US, intl, EM, TIPS, TBM).
2. Stopped entering every cash purchase and CC transaction into Moneydance, now just download and scan for errors. I still enter every checking account transaction to avoid bouncing checks.
3. Hired a lawn service.
4. Stopped switching financial accounts to save a few bucks in commission or gain a few basis points in interest.
5. Carry only 2 CCs: Fidelity Amex and Visa, with 1.5-2% cash back rebates. No thinking about rotating categories, teaser bonus rates, etc.
6. Tried using a CPA. I ended up spending more time and $ correcting their errors. Back to Turbo Tax.
7. Tried a house cleaning service. They pilfered a few items, and we don't trust anyone now.
8. Rebalance once 1-2x/year unless new cash to invest or a large market swing.

Have others struggled with financial/ Boglehead perfectionism or making things too complex? Please share what you've done to overcome it and enjoy life.

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G-Money
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Re: How to simplify and overcome Boglehead perfectionism?

Post by G-Money » Thu Aug 01, 2013 11:25 am

The thing about perfectionism is it's tiring. I got too lazy for that. :)
Don't assume I know what I'm talking about.

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Re: How to simplify and overcome Boglehead perfectionism?

Post by MnD » Thu Aug 01, 2013 11:27 am

We are at peak life complexity right now.
The number of accounts for investments, banking, education, kids, credit, services, travel, miles, hotel points etc. is just ridiculous.

Things should start to simplify in 18 months when my oldest graduates from college.
Major simplification should kick in 4-5 years when youngest graduates and we retire.

Down the road I envision something like.....
60% Vanguard Total World Stock
40% Vanguard Total World Bond (we can wish right?)
Automatic periodic transfer of SWR to household savings/checking - adjust annually.

Autopay and pay all expenses on to to a 2% cash back on everything credit card.
Autopay in full the 2% card from checking.
Information copy of monthly investment statement, credit card bill and checking statement sent automatically to my oldest daughter.

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Re: How to simplify and overcome Boglehead perfectionism?

Post by gerrym51 » Thu Aug 01, 2013 11:30 am

my secret is my wife runs everything.

i just post on bogleheads

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Re: How to simplify and overcome Boglehead perfectionism?

Post by Default User BR » Thu Aug 01, 2013 12:58 pm

I have not made a conscious decision to do anything like that. Some of your points I agree with, others I don't.


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Re: How to simplify and overcome Boglehead perfectionism?

Post by J295 » Thu Aug 01, 2013 1:18 pm

For our first 30 years of marriage we kept track of nearly every penny spent and managed quite nicely. We know quite well our annual expenses. Just this year we decided to use a bucket approach to the annual expenses. We placed a year's worth of expenses in an account and just use that account to live on, fully expecting that we will not use up the entire bucket during the year. It keeps things simple, and frees us up a bit in terms of spending (trying to minimize the risk of being the richest guy in the graveyard).

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Re: How to simplify and overcome Boglehead perfectionism?

Post by Dandy » Sat Aug 03, 2013 8:55 am

I'm not where you were. You have done a very good job of de perfectionizing you life. So how has that felt mentally? Are you feeling free or are you still craving to roll up your sleeves and track every expense? If you feel free then you have made the transition. If not - don't get sucked into the details again.

I stopped some of my excessive actions when I realized that it didn't really accomplish anything. It was a comforting ritual that really made no other difference. I didn't really uncover any great truth about spending and didn't really benefit my portfolio - it was just a ritual that made me feel better but really was a waste of time. I have a friend that tracks every expense and compares to prior year. He was surprised at how much he spent eating out -- a good learning point. I could have told him that and he knew it. You don't eat out 2 to 3 times a week without spending a lot. He keeps tracking and keeps eating out. So maybe once he had a learning point but it didn't modify his behavior.

I run all expenses through my checking account. Once a month I allocate each expense to one of maybe 20 categories. Each credit card is a category - I just enter the total. I footnote any large unusual expense. It takes about 20 minutes. I did that initially to figure out my retirement expense and what draw I needed to supplement my pension. For 20 minutes a month I may continue but I'm not learning much new.

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Re: How to simplify and overcome Boglehead perfectionism?

Post by livesoft » Sat Aug 03, 2013 9:07 am

When a clerk or a machine asks me if I want the receipt, I almost always say, "No, thank you."
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Re: How to simplify and overcome Boglehead perfectionism?

Post by The Wizard » Sat Aug 03, 2013 9:30 am

livesoft wrote:When a clerk or a machine asks me if I want the receipt, I almost always say, "No, thank you."
I don't take receipts from ATMs or self-service gas stations either.
I kept track of expenses for a few months back when I was 16 for some merit badge and never since then.
I did just sign up for a Visa card with no Foreign Transaction fees so I might cancel my other card after I've used the new one for a while.
Perfectionism isn't an issue for me, just a matter of making occasional changes to improve something...
Attempted new signature...

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Re: How to simplify and overcome Boglehead perfectionism?

Post by Default User BR » Sun Aug 04, 2013 10:40 am

livesoft wrote:When a clerk or a machine asks me if I want the receipt, I almost always say, "No, thank you."
I do take the receipt from the ATM because I don't go there very often. Gas stations never, and I dislike the pumps that don't give you an option on that.

The main exception is the supermarket and drug store. I always scrutinize the receipt before leaving the store because frequently there are mispriced items, and I want to take care of that before I go.


Brian

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Re: How to simplify and overcome Boglehead perfectionism?

Post by mickeyd » Sun Aug 04, 2013 1:04 pm

I always opt for a receipt when it is optional. I also reconcile my CC statements and checking account monthly. They are always correct, but I still am out to prove them wrong.

All that takes about 1 hour per month to accomplish. Now, what to do with the additional 719 hours each month...?
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

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Taylor Larimore
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Re: How to simplify and overcome Boglehead perfectionism?

Post by Taylor Larimore » Sun Aug 04, 2013 1:17 pm

Markfaix:

Congratulations!
Our life is 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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Re: How to simplify and overcome Boglehead perfectionism?

Post by ruralavalon » Sun Aug 04, 2013 1:25 pm

1. I have realized :idea: that a small number multiplied times a very small number still gives a small number. A small change in expense ratio (say 0.01 - 0.04%) gives little benefit. If $10k is switched to Fund X to gain an ER advantage of 0.01%, then the change in ER gives $1 a year, < 1/2 of a medium sized cup of coffee/year at Starbucks. "Why bother?" is a good question to ask myself. (And I might lose some other advantage not measured by the expense ratio, like really good diversification, tax-efficiency etc.). And a even large number multiplied by a very small number still yields a small number.

Made me curious, so I just computed what our portfolio's weighted expense ratio is now, its < 0.07%. Not much room to shave off expenses, no matter what I do. Still I'm pleased everytime Vanguard announces a reduction of ER on any of the funds we own.

2. Our portfolio is down to just 5 funds plus some Treasury bonds.

3. I just download spending from 1 checking account and 2 credit cards, we don't even try to track cash spending.

4. We have lawn service for fertilizer and pests, lawn mowing and trimming service, and snow removal sevice, plus house cleaning service every 2 weeks.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Jay69
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Re: How to simplify and overcome Boglehead perfectionism?

Post by Jay69 » Mon Aug 05, 2013 4:04 pm

"Out of clutter, find simplicity” Albert Einstein

Again below
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"Out of clutter, find simplicity” Albert Einstein

minneapples
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Re: How to simplify and overcome Boglehead perfectionism?

Post by minneapples » Mon Aug 05, 2013 4:16 pm

I had a baby a few months back, and he now occupies the time I used to have for financial planning, plus some. We are cruising on autopilot to a large extent for retirement investing, bill paying, etc. We have a housecleaner come every other week and starting in the fall will hire a lawn service, too. We paid for amazon prime (and recouped the cost with the shiping costs saved on our first purchase, a large tool my husband used for a home improvement project) so now get free shipping on most of our transactions there, and we and do less comparison shopping but save a few trips to the store each month. Things like that. In short, becoming a mom means that I now prioritize time savings over money savings, provided we still meet certain thresholds (maxing out 401k, monthly discretionary spending below a certain amount as reflected by the monthly credit card bill only and not by Quicken or similar, etc.). Baby understands time with mom and dad but has no concept of net worth, so I expect we will continue in this way for a few years at least.

Still, I do not recommend this strategy unless you also want a baby. Fortunately, we did. :D

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Re: How to simplify and overcome Boglehead perfectionism?

Post by ruralavalon » Mon Aug 05, 2013 4:26 pm

I forgot the most obvious:

5. Stay the course and indexing (combined) mean I spend almost zero time managing our investments. Fiddle away a lot of time here, of course.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: How to simplify and overcome Boglehead perfectionism?

Post by tweeter » Mon Aug 05, 2013 4:29 pm

minneapples wrote:I had a baby a few months back, and he now occupies the time I used to have for financial planning, plus some. We are cruising on autopilot to a large extent for retirement investing, bill paying, etc. We have a housecleaner come every other week and starting in the fall will hire a lawn service, too.
I have an 11 month old daughter and this post speaks to me! Sometimes I find the urge to check Mint or SigFig when I am playing with my daughter. Then I have to tell myself to let go and enjoy this moment, because it is fleeting.

The lawn service was a tough pill to swallow, but it has allowed me more time with my family and I feel it is worth the cost. Cleaning service is still up for review. I think it will happen if we have another baby.

A friend told me something that stuck with me. When you are lying on your deathbed you are not going to be thinking about how much wealth you amassed, you are going to be thinking about all the great times you had with friends and family.

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Re: How to simplify and overcome Boglehead perfectionism?

Post by BillyG » Mon Aug 05, 2013 4:31 pm

I don't understand the question. Becoming a Boglehead made my financial life a whole lot easier.

Instead of a gazillion accounts I consolidated to a few.

Instead of few zillion asset classes I know have four -- US stocks, International stocks, total US bonds, and TIPS.

Instead of too many IRA accounts, I consolidated those, and rolled over the pre-tax portion to 401(k)s so I could do a Roth conversion. And now I don't make and have to track dumb after-tax IRA contributions except for one back-door Roth annually.

Instead of trying to figure out which asset classes I should use for my investments and investing all the time and research that go into that, I simply go with my asset allocation and rebalance periodically, primarily with new money.

I now receive only a few investment statements instead of a gazillion that I would have to file in different places.

For me the Boglehead life is much much simpler.

As far as getting rid of perfectionism that's a WHOLE 'nuther question and I'm the wrong person to ask about that!

Billy

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Re: How to simplify and overcome Boglehead perfectionism?

Post by IlliniDave » Mon Aug 05, 2013 5:16 pm

I've actually gone the other way, from being a bit carefree and being okay with "probably good enough" to being somewhat driven with a concrete plan in place. To that end I've had to begin paying more attention to detail, focus more on where I'm at and what I'm doing. The possibly strange thing is that attention and focus have allowed me to grow more calm, shed clutter (literal and figurative), and maintain a sense of inner peace.

Maybe it's not quite perfectionism on my part, per se, and it's certainly not stressing to me. Quite the opposite. I guess each of us is wired in a unique way.
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Re: How to simplify and overcome Boglehead perfectionism?

Post by Default User BR » Mon Aug 05, 2013 6:29 pm

People are making out that having a more complex portfolio is a huge investment in time. It's not. I have a spreadsheet set up to aggregate all the information. All I have to do is download or update spreadsheets for each account. That takes approximately ten minutes, and I have seven accounts at six custodians. That's much more than most.

If it's taking you a long time to manage your portfolio, then you're doing it inefficiently.


Brian

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Re: How to simplify and overcome Boglehead perfectionism?

Post by minneapples » Tue Aug 06, 2013 9:15 am

The OP wasn't talking just -- or even mostly -- about investment strategies, more about the related personal finance attitudes that seem to go along with bogleheadism -- living below your means/thrift/frugality/modest living/whatever you want to call it, expense tracking, all that stuff that you do so that you do have money available to invest. I can't really speak to whether simplified index based investing saves more time than any other kind. It makes sense to me that it would, but since it's what I've done since I got my first full time job, I don't have anything else to compare it to.

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Re: How to simplify and overcome Boglehead perfectionism?

Post by mchop » Tue Aug 06, 2013 9:57 am

interesting topic. Without realizing it...i did something that helped me recently.

I got a new computer for work and gave my wife my laptop with all our financial info (excel / quicken). I just realized that i no longer open this every day and check portfolio performance etc. If i want to do that i need to go find my old PC and log in. I tend to do this once every week / two. I will update quicken etc..

Try not to use cash - that way i can guess / estimate the CC or Debit card expenses and allocate to expenses appropriately.

I love quicken.

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Re: How to simplify and overcome Boglehead perfectionism?

Post by Taylor Larimore » Tue Aug 06, 2013 10:03 am

Bogleheads:

This is a post I made four years ago on the subject of Simplicity. I hope you find it helpful.
Hi Bogleheads:

Today, I decided on my forum "signature." I chose "The Majesty of Simplicity." Here's why:

My library contains 34 binders from "Annuities" to "Vanguard" containing the best articles I have saved about successful investing. For my personal forum "signature" I choose "Simplicity" because it is a proven pathway to successful investing and recommended by our mentor, Jack Bogle. "Simplicity" is also a counter-balance to our many discussions using complex portfolios and esoteric techniques promising to "beat the market."

I have read hundred's of investing books (co-authored two of my own) and thousands of articles about investing. I hold a Morningstar record of more than 25,000 posts. The more I learn, the more I understand "The Majesty of Simplicity." Others, who know much more than I do, agree:

Scott Adams, author of Dilbert: "I once tried to write a book about personal investing. - After extensive research I realized I could describe everything that a young first-time investor needs to know on one page."

Christine Benz, Morningstar Director of Personal Finance: "Simplicity is one of the greatest--but in my view, woefully underrated--virtues when managing a portfolio."

Bill Bernstein, author of Four Pillars of Investing: "If, over the past 10 or 20 years, you had simply held a portfolio consisting of one quarter each of indexes of large U.S. stocks; small U.S. stocks; foreign stocks; and high quality U.S. bonds, you would have beaten over 90% of all professional money managers and with considerably less risk."

Richard Bernstein, Merrill Lynch strategist: "Investors find it hard to believe that ignoring the vast majority of investment noise might actually improve their performance."

Jack Bogle, Vanguard founder: "Simplicity is the master key to financial success. When there are multiple solutions to a problem, choose the simplest one."

Jack Brennan, Vanguard CEO and author of Straight Talk on Investing: "It's in the interest of many financial service companies to make you think that investing is difficult.--It's really quite simple."

Warren Buffet, one of the world's most successful investors: "There seems to be some perverse human characteristic that likes to make easy things difficult."

Scott Burns, Columnist: "Concentrate on a simple portfolio with two basic assets--a stock index fund and a bond index fund. Do that and you'll enjoy superior performance with less risk."

Andrew Clarke, author of "Wealth of Experience": "In investing, simple is usually more productive than complex."

Jonathan Clements, author of "You've Lost It. Now What?": "Investing is simple. To be sure, you can make it ludicrously complicated."

Paul Crafter, author of "Investment Guide": "After doing it all, I now feel I've come around in a complete circle, ending up with this: The more I learn, the less I really need to know."

Michael Edesess, author of The Big Invesment Lie: "As a mathematician I know when mathematical-sounding analyses are little more than elaborate sales pitches, designed to thoroughly obscure the simple fact that smart investing is non-mathematical and accessible to everyone."

Albert Einstein: "Out of clutter, find simplicity.”

Charles Ellis, author of "Winning the Loser's Game": "Investment advice doesn't have to be complicated to be good."

Rick Ferri, CFA, author of "All About Index Funds": "It does not take much to outperform the average investor. All you have to do is put half your money in the Vanguard Total Stock Market and the other half in an intermediate-term bond index fund. Then rebalance your account once per year. By keeping it simple, you will achieve all the benefits the markets have to offer."

Future Metrics looked at the performance of 224 pension plans over about 14 years compared with the performance of 60% S&P 500 index and 40% aggregate bond index benchmark. Of those 224 plans, only 19 beat that simple benchmark.

Gensler & Baer, authors of "The Great Mutual Fund Trap": "If you simply buy and hold you don't need to read investing magazines, watch financial news networks, subscribe to newsletters, or pay a broker to execute new trades."

Benjamin Graham: "In the stock market, the more elaborate and abstruse the mathematics, the more uncertain and speculative are the conclusions we draw therefrom."

Alan Greenspan, former chairman of the Federal Reserve: "This decade is strewn with examples of bright people who thought they built a better mousetrap that could consistently extract abnormal returns from financial markets. Some succeed for a time. But while there may occasionally be misconfigurations among market prices that allow abnormal returns, they do not persist."

Daniel Kahneman, Nobel Laurete: "All of us would be better investors if we just made fewer decisions"

Edmund Kean: "Complexity is easy. Simplicity is hard."

Michael LeBoeuf, author of "The Millionaire in You": "The master key to wealth can be summed up in just one word: Simplicity."

Leonardo da Vinci: “Simplicity is the ultimate sophistication.”

MIT study: "The less well-informed group did far better than the group that was given all the financial news."

Joe Maglia, CEO TD Ameritrade: "Wall Street goes out of its way to make investing incredibly sophisticated and complex because they can make a tremendous amount of money by doing so."

Burton Malkiel, author of "Random Walk Down Wall Street": "The overarching rule for achieving financial security: Keep it simple."

John Markese, CEO of American Association of Individual Investors: "If you have more than eight funds you should slap yourself."

Wm McNabb, Vanguard CEO: "If you can't understand an investment product in five minutes, walk away."

James Montier, author: "Never underestimate the value of doing nothing."

Morningstar Guide to Mutual Funds: "Good investing doesn't have to be complicated. In fact, simplification may lead to better investment results."

Suze Orman: "We make investing so complicated and it really is not. -- A total market index fund is a great one-stop-shopping choice that provides you instant diversification among different types of stocks."

Mike Piper, financial author and editor of Oblivious Investor: "There's an entire industry built on convincing us that investing is complicated."

Jane Bryant Quinn, syndicated columnist and author of "Smart and Simple Financial Strategies": "You shouldn't buy anything too complex to explain to the average 12-year old."

John Rekenthaler, Morningstar Research Director: "How many funds should you have? Four to six should do."

Paul Samuelson, Nobel Laurete: "Investing should be like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."

Bills Schulthies, author of "The Coffeehouse Investor": "When you simplify your investment decisions, not only do you enrich your life by spending more time on families, friends and careers, but you enhance portfolio returns in the process."

Chandon Sengupta, author of "The Only Proven Road to Investment Success": "There is overwhelming evidence that the simplest possible investment method works much better than all the other more complex ones."

Larry Swedroe, author of "The Successful Investor Today": "The more complex the investment, the faster you should run away."

David Swensen, Yale Chief Investment Officer: "As a general rule of thumb, the more complexity that exists in a Wall Street creation, the faster and farther investors should run."

Andrew Tobias, author: "I believe in selecting the most straighforward and easiest-to-implement strategy for achieving our goals."

Tweddell and Pierce, authors of "Winning with Index Mutual Funds": "Keep it simple. Investment success depends on asset allocation, diversification, and risk management, not on complexity."

Walter Updegrave, editor of MONEY magazine: "Simpler is better. Ignore the siren song of sophisticated investments"

Richard Young, author of "The Intelligence Report": "If you can't run your portfolio taking 60 minutes a month, it's too complicated."

Jason Zweig, Wall Street Journal columnist and author of "The Intelligent Investor": "The less you fool with your portfolio, the less often you'll play the fool."
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: How to simplify and overcome Boglehead perfectionism?

Post by Howard Donnelly » Tue Aug 06, 2013 10:21 am

Thank you, Taylor. Talk about a preponderance of evidence!

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Re: How to simplify and overcome Boglehead perfectionism?

Post by sschullo » Tue Aug 06, 2013 11:04 am

Taylor Larimore wrote:Markfaix:

Congratulations!
Our life is frittered away with detail. Simplify. Simplify -- Henry David Thoreau
Best wishes
Taylor
Talk about an expert on simplicity; Thoreau also wrote: "Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million, count half dozen, and keep your accounts on your thumb-nail."

Paid myself first. Didn't need a budget. Why? I couldn't afford a new car every 3-4 years, couldn't afford expensive clothes and every shiny electronic upgrade, couldn't afford boats, off road vehicles, season tickets (nor the time to attend all games!), expensive trips, and couldn't afford dinner out every other night.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: How to simplify and overcome Boglehead perfectionism?

Post by The Wizard » Tue Aug 06, 2013 11:32 am

mchop wrote: Try not to use cash - that way i can guess / estimate the CC or Debit card expenses and allocate to expenses appropriately.
The above might be necessary if you are getting reimbursed for certain expenses by your employer, otherwise it might be a symptom of Boglehead perfectionism, no?
Attempted new signature...

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Re: How to simplify and overcome Boglehead perfectionism?

Post by IlliniDave » Tue Aug 06, 2013 11:53 am

Taylor, thanks for all the quotes. Certainly a lot of well-respected people with similar viewpoints.

At the risk of sounding cynical, it would be fun to know what some of their portfolio compositions actually are. I was surprised in The Clash of the Cultures when Bogle mentioned currently owning shares of T Rowe Price.

As a parent I learned that it is much easier to dispense sound advice than to uniformly follow it oneself. :happy
Don't do something. Just stand there!

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Mr. Bogle's portfolio.

Post by Taylor Larimore » Tue Aug 06, 2013 12:11 pm

Dave:
I was surprised in The Clash of the Cultures when Bogle mentioned currently owning shares of T Rowe Price.
Many investors, especially older investors, own funds that they would not buy today. This is because their funds were purchased long ago in taxable accounts. Exchanging now into a preferred fund would trigger large capital-gain taxes. Informed investors also know that capital-gains are eliminated if their funds are held until death. For these reasons, many investors are "stuck" with less than ideal securities.

Bottom line: It can be dangerous to copy someone else's portfolio.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

enderland
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Re: How to simplify and overcome Boglehead perfectionism?

Post by enderland » Tue Aug 06, 2013 12:46 pm

This is one reason I like target date funds.

Do the research, make sure the target date fund has a decent AA and low ER, and then not worry.

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Re: Mr. Bogle's portfolio.

Post by IlliniDave » Tue Aug 06, 2013 4:07 pm

Taylor Larimore wrote:Dave:
I was surprised in The Clash of the Cultures when Bogle mentioned currently owning shares of T Rowe Price.
Many investors, especially older investors, own funds that they would not buy today. This is because their funds were purchased long ago in taxable accounts. Exchanging now into a preferred fund would trigger large capital-gain taxes. Informed investors also know that capital-gains are eliminated if their funds are held until death. For these reasons, many investors are "stuck" with less than ideal securities.

Bottom line: It can be dangerous to copy someone else's portfolio.

Best wishes.
Taylor
Oh, I understand. I have no intention to rush out and buy shares of TRP or anything else of that nature, or imitate any any specific person. I just think it's hard for investors of a certain temperament to resist the urge to try things on the margins as it were. I'm like that myself, and I guess maybe I'm hoping that I'm in good or at least respectable company in being a little "human" when it comes to investing. I mostly tow the line, but I just can't completely set it and forget it. :(
Don't do something. Just stand there!

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Re: How to simplify and overcome Boglehead perfectionism?

Post by Taylor Larimore » Tue Aug 06, 2013 4:33 pm

Dave:

Boglehead investing is simple--but it is not easy.

The Boglehead Investment Philosophy

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: How to simplify and overcome Boglehead perfectionism?

Post by EternalOptimist » Tue Aug 06, 2013 4:40 pm

Also, we must give thanks to both the good and the bad as both will come and go.
"When nothing goes right....go left"

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Re: How to simplify and overcome Boglehead perfectionism?

Post by ruralavalon » Wed Aug 07, 2013 9:05 am

Default User BR wrote:People are making out that having a more complex portfolio is a huge investment in time. It's not. I have a spreadsheet set up to aggregate all the information. All I have to do is download or update spreadsheets for each account. That takes approximately ten minutes, and I have seven accounts at six custodians. That's much more than most.

If it's taking you a long time to manage your portfolio, then you're doing it inefficiently.


Brian
Spreadsheet? Too complicated. I use a pocket calculator I bought for under $5 at a Walgreens drug store :) .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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abuss368
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Re: How to simplify and overcome Boglehead perfectionism?

Post by abuss368 » Thu Sep 12, 2013 9:45 pm

Default User BR wrote:People are making out that having a more complex portfolio is a huge investment in time. It's not. I have a spreadsheet set up to aggregate all the information. All I have to do is download or update spreadsheets for each account. That takes approximately ten minutes, and I have seven accounts at six custodians. That's much more than most.

If it's taking you a long time to manage your portfolio, then you're doing it inefficiently.


Brian
I would try to simplify things to be more effective considering the seven accounts at six custodians. At the end of the day the only portfolio that works best is the one that is right for you.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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max12377
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Re: How to simplify and overcome Boglehead perfectionism?

Post by max12377 » Fri Sep 13, 2013 6:37 am

My simplicity: I use Vanguard's Portfolio watch and think it's great. I primarily check 2 things. My percentage of stocks/bonds and my percentage of stocks that are international. Oh wait.. I also check the big number at the top too.. (well, big in a relative sense.)

I throw money in when I can and keep a relatively conservative portfolio.

Love simplicity! Everything I do lately is an effort to reduce complexity so I can go read at a coffee shop in my free time or take a trip somewhere on a whim.

I should say that a key element of simplicity: I did unload a fairly complex investment recently that had a high expense ratio and high volatility. It kept me up at night and I just decided that I couldn't hold it long term for a questionable return and high risk of loss.

..My now ex-girlfriend. Bwahaha.. :beer


And love having the lawn service!

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Aptenodytes
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Re: How to simplify and overcome Boglehead perfectionism?

Post by Aptenodytes » Fri Sep 13, 2013 6:45 am

BillyG wrote:I don't understand the question. Becoming a Boglehead made my financial life a whole lot easier.

Instead of a gazillion accounts I consolidated to a few.

Instead of few zillion asset classes I know have four -- US stocks, International stocks, total US bonds, and TIPS.

Instead of too many IRA accounts, I consolidated those, and rolled over the pre-tax portion to 401(k)s so I could do a Roth conversion. And now I don't make and have to track dumb after-tax IRA contributions except for one back-door Roth annually.

Instead of trying to figure out which asset classes I should use for my investments and investing all the time and research that go into that, I simply go with my asset allocation and rebalance periodically, primarily with new money.

I now receive only a few investment statements instead of a gazillion that I would have to file in different places.

For me the Boglehead life is much much simpler.
I agree. The topic should be retitled "How to simplify and achieve Boglehead perfectionism." Simplicity is one of the two core tenets of Bogleheadism (I'd call the other one rationality), so if you find yourself veering away from simplicity you aren't become more perfectly Bogleheadish but rather less so.
[edited to correct a confusion of who said what]

yogesh
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Re: How to simplify and overcome Boglehead perfectionism?

Post by yogesh » Fri Sep 13, 2013 8:43 am

One of the long weekends set a goal for consolidation. My fear was complexity thriving for prrfectionism.
I ended up with 4 goals -> 4 Funds with Auto-Rebalance -> Just file taxes yearly ...

- Emergency: Limited Tax Exempt
- Retirement: Target Date Index
- College: Target Date Index
- Home/Car: Tax Managed Balanced
Emergency: FDIC | Taxable: VT | Retirement: TR2040

scone
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Re: How to simplify and overcome Boglehead perfectionism?

Post by scone » Fri Sep 13, 2013 8:46 am

I haven't totally overcome perfectionism, or procrastination-- 2 sides of the coin, in my view. But I did simplify our investments quite a bit, so my DH can carry on if I croak. For example, I used to have a bond fund "colllection" with GNMA, PTTRX, VIPSX, and several others. Now it's just Stable Value, a Total Bond clone, and short Treasuries. After we retire, I will probably convert all the bonds to 5 year Treasuries (right now the structure of the 401k makes that impossible).

I simplified stock funds, going all indexed. To do that, I had to sell Wellesley and Wellington, which pained me, because these are fine funds. But now there are no mysteries about what is going on, and I know why I hold each fund. And even better, my DH understands the rationale. FWIW, it goes like this:

5% S & P 500
5% Russell 2500
5% Large Cap Value
5% Small Cap Value
5% ACWI ex-US
5% International Small Cap

That's it, just 30% stock, no Reits, no emerging markets, no frontier, no gold. The small caps are about as adventurous as I care to get.

For day to day money, my DH and I share one checking account, and use the debit card for almost everything. The on-line banking software tracks expenses for me, and gives a handy pie-chart to tell me where the money is going. I don't enter anything. We are also accumulating "extra" money that will probably go to a CD or maybe a muni fund.

A lot of Bogleheads say you should write an IPS and then execute. I didn't do that-- it took a few years of thrashing, experience, experimentation, and iteration before I could clearly articulate what I wanted to do. Ironically, I only feel ready to write the IPS now. At this point, I could, and probably should, walk away and let time do it's thing. But I'm not quite ready to do that. Maybe it's fear that the world will fall apart if I don't keep an eye on it constantly, along with a desire to see what my "creation" will do. I don't know. I'm not at the Zen master level yet, I'm a work in progress.
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore

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Re: How to simplify and overcome Boglehead perfectionism?

Post by cflannagan » Fri Sep 13, 2013 9:34 am

Went with Trev H's philosophy of paring down many funds/etfs to a couple, and still largely capture what "Ultimate Buy and Hold Strategy" is trying to do. For equities, I hold 25% each in VTI, VXUS, VBR, VSS, and for bonds, 80/20 split for nominal/inflation protection. Used to have REITs in this picture (10% of equities), but couldn't easily fit it into our tax-advantaged space without sacrificing something else, so we decided REITs had to go and is out of the picture. Feel much better now about all etfs in equity side simply needing to have equal allocations. Not sure about 50/50 for nominal/inflation yet, but maybe I'll move into that direction.

Already have lawn service for the last 3 years. Our lawn looks great.

Thinking of hiring housecleaner once a month to really clean our house.

EVERYTHING is autopay for our bills, including reward cards. The only thing I have to pay attention to is bills from Kohl's and Beall's, which I haven't figured out yet if I can autopay for those.

Hold 3 rewards cards: Penfed, Chase Freedom, and Amazon. Will get 4th if we think of traveling more (a travel rewards card).

Using services like PersonalCapital or Yodlee to monitor every single transaction from our multiple accounts (investment accounts, banking accounts, etc).

Smile as our net worth go up over long term (Yodlee & PersonalCapital will show that).

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