Is this just too simple

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OldBallCoach
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Is this just too simple

Post by OldBallCoach » Sun Feb 10, 2019 3:48 pm

After reading a few of Mr Bogles books, reading as much as time allows on here and thinking about trying to keep things as simple as I can I have a few questions...

Emergency Funds...about 1.4M in cash
I have no debts
Married filing jointly
State for tax purposes FL Fed rate 37% Part time live in Northern Indiana on Lake MI
Age 64
Desired Allocation is 50/50
I am not really a fan of international to be honest but I am in it.

Home value is about 4.5 Million in Indiana and 1.8 in Florida. After retirement will keep about the same setup I think.

Pensions will be about 345K per year all totalled as I have worked in a few different locations and for a few schools.

Right now I am in Schwab Intelligent Portfolios with an average 55% equities/32% bonds, 13% cash blend. I am in about 24 different ETFs spread all of over the spectrum.
Wife and I have about 6.2 million in taxable and I have about 14.4 Million in tax advantaged accounts, mostly roll overs from the 403Bs at different locations. Wife has 2.8 Million in a roll over 403B. Wife is about 50/50 in Schwab funds.
We pay no fees at all to Schwab but with the minimal we get on our cash I feel like we really are paying them in a way.
I am considering putting all my taxable money in VTMFX and my tax advantaged into VWENX. Two funds which if I am reading the simulators right will work as well if not better than what I am doing now. I am not afraid of risk, I go for it on 4th and short kinda guy but I wonder if this is as simple as it seems...

I guess my question is this....is this really that simple? Even my Schwab advisor was hard pressed to tell my why their system was better...other than the free tax harvesting ( which I get but) I will have to do more research on the VTMFX tax questions but...
Thoughts?
Thanks in advance!!

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Sandtrap
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Re: Is this just too simple

Post by Sandtrap » Sun Feb 10, 2019 3:58 pm

VTMFX = Vanguard Tax Managed Balanced Fund Admiral Shares: Roughly 50/50 allocation.

VWENX = Vanguard Wellington Fund, Admiral: Roughly 34/60 65/35 (equity/fixed) allocation.
Last edited by Sandtrap on Sun Feb 10, 2019 7:17 pm, edited 2 times in total.
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02nz
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Re: Is this just too simple

Post by 02nz » Sun Feb 10, 2019 4:00 pm

You're right that basically you pay for Schwab's Intelligent Portfolio with the large cash balance, and for the size of your assets that's significant in absolute (if not in percentage) terms.

Simple is good. Instead of active funds, I'd probably use tax-efficient index funds/ETFs in the taxable account, maybe international too to get the tax credit, and put the bond portion in tax-advantaged accounts (preferably tax-deferred, to leave Roth space for higher-growth investments). You aren't going to run out of money even if the markets take a dive, so optimize for the purpose for which you're investing, be that inheritance, charity, or some combination of the two.

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Re: Is this just too simple

Post by straws46 » Sun Feb 10, 2019 4:04 pm

When you say the minimal you receive on cash my only recommendation would be to move all cash out of Schwab's cash and money market account to SWVXX, which is their higher yielding cash account. One day delay in getting in or out of it. Based on your sobriquet and your financial picture I assume you did more than teach.

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Sun Feb 10, 2019 4:12 pm

straws46 wrote:
Sun Feb 10, 2019 4:04 pm
When you say the minimal you receive on cash my only recommendation would be to move all cash out of Schwab's cash and money market account to SWVXX, which is their higher yielding cash account. One day delay in getting in or out of it. Based on your sobriquet and your financial picture I assume you did more than teach.
[Job description removed, see below --admin LadyGeek] ..and yes I am getting SOME interest at Schwab but 1.0-1.5 I kinda consider nothing after inflation and the like. Thanks for your kind thoughts!

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Re: Is this just too simple

Post by balbrec2 » Sun Feb 10, 2019 4:58 pm

Sandtrap wrote:
Sun Feb 10, 2019 3:58 pm
VTMFX = Vanguard Tax Managed Balanced Fund Admiral Shares: Roughly 50/50 allocation.

VWENX = Vanguard Wellington Fund, Admiral: Roughly 34/60 (equity/fixed) allocation.
VWENX Wellington Admiral, is 65/35

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Re: Is this just too simple

Post by willthrill81 » Sun Feb 10, 2019 5:23 pm

That allocation seems perfectly reasonable to me. I would sleep well at night with it.
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Re: Is this just too simple

Post by Sandtrap » Sun Feb 10, 2019 7:15 pm

balbrec2 wrote:
Sun Feb 10, 2019 4:58 pm
Sandtrap wrote:
Sun Feb 10, 2019 3:58 pm
VTMFX = Vanguard Tax Managed Balanced Fund Admiral Shares: Roughly 50/50 allocation.

VWENX = Vanguard Wellington Fund, Admiral: Roughly 34/60 65/35(equity/fixed) allocation.
VWENX Wellington Admiral, is 65/35
Typo
Thanks.
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Nate79
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Re: Is this just too simple

Post by Nate79 » Sun Feb 10, 2019 7:23 pm

You should look at the total bond and cash allocation together to understand your fixed income yield. In total the yield should be similar to a total bond market - don't focus just on the cash. Look at your portfolio in entirety.

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Peter Foley
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Re: Is this just too simple

Post by Peter Foley » Sun Feb 10, 2019 8:49 pm

I would be in favor of simplifying greatly if it did not cost you a fortune in taxes.

You can create a 3-4 fund portfolio at Schwab if that helps with tax considerations. Schwab Total Stock Market, Schwab 1000, and the Schwab 500 index are all low cost diversified funds and they all track fairly closely. If you held some funds in each and the market went down you could tax loss harvest and move the proceeds to one of the other funds.

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Watty
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Re: Is this just too simple

Post by Watty » Sun Feb 10, 2019 9:26 pm

OldBallCoach wrote:
Sun Feb 10, 2019 3:48 pm
Thoughts?
You would seem to be in a situation where estate taxes will be a big concern especially if the money is invested and grows for a 20+ years before you die or if estate tax laws change for the worse.

I am not familiar with what Schwab does with their advisory services but from what you have said it does not appear that the estate planning impact is a focus of what they do.

If you manage it yourself you might also miss some estate tax planning opportunities.

You likely already have an estate planning lawyer but it might be worth considering if using a good fee only financial advisor that knows a lot about how to help manage your investments to minimize estate taxes and can work with your lawyer with that.

I hesitate to say it but people often post questions about complex annuities or life insurance as an investment and the response is typically something like "It is almost always a mistake." You could in the situation that is the exception to this statement since in rare situations complex investments like these, and carefully designed trusts, could make sense for estate planning purposes.

You might talk with your estate planning lawyer to see if they know a financial advisor that they would recommend. There is nothing inherently wrong with using a financial advisor as long as they have a fiduciary responsibility to you and their fees are transparent. I am not anywhere near that level of investing but my impression is that the fees should be less percentage wise as the size of the portfolio increases.

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Re: Is this just too simple

Post by LadyGeek » Sun Feb 10, 2019 10:48 pm

I removed some off-topic posts conjecturing on the OP's job description. This is an anonymous internet forum, and should remain so. Please stay on-topic, which are the financial aspects. Also see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 8:14 am

Watty wrote:
Sun Feb 10, 2019 9:26 pm
OldBallCoach wrote:
Sun Feb 10, 2019 3:48 pm
Thoughts?
You would seem to be in a situation where estate taxes will be a big concern especially if the money is invested and grows for a 20+ years before you die or if estate tax laws change for the worse.

I am not familiar with what Schwab does with their advisory services but from what you have said it does not appear that the estate planning impact is a focus of what they do.

If you manage it yourself you might also miss some estate tax planning opportunities.

You likely already have an estate planning lawyer but it might be worth considering if using a good fee only financial advisor that knows a lot about how to help manage your investments to minimize estate taxes and can work with your lawyer with that.

I hesitate to say it but people often post questions about complex annuities or life insurance as an investment and the response is typically something like "It is almost always a mistake." You could in the situation that is the exception to this statement since in rare situations complex investments like these, and carefully designed trusts, could make sense for estate planning purposes.

You might talk with your estate planning lawyer to see if they know a financial advisor that they would recommend. There is nothing inherently wrong with using a financial advisor as long as they have a fiduciary responsibility to you and their fees are transparent. I am not anywhere near that level of investing but my impression is that the fees should be less percentage wise as the size of the portfolio increases.
Thank you these are some excellent points...I have over the years spent time and money with fee based advisors, so called money experts and honestly I felt like a complete chump after I started reading more from Bogle on how much I have left on the table in fees, commissions, ect. I moved to Schwab a few years back and have felt like for the most part they have done a decent job and have saved me on taxes and commissions for sure...I still wonder after using the monte carlo programs if I am making as much as I can with the same or maybe even less risk. We do have a fairly comprehensive estate plan in place to help my children, grandchildren and also make some ( hopefully) decent donations to the programs that we believe in. We have always tried to save money and be frugal along the way but I am totally amazed as to how much we have probably wasted in hidden fees, commissions, and the like. So hence...moving forward trying to see if maybe just using those two simple funds might not be as simple as these multi fund platforms that every broker or advisor I meet with wants to suggest. About 75% start out with why an annuity is right for me...I quit listening fast..I usually get about 2-3 weeks of true down time a year so I am trying to jam as much in as I can...I appreciate all your advise and thoughts...And to the guy that called me a troll...you need to come to a game and hear what some people call me...LOL..and by the by..Spurrier and Knight both find more money in their sofa cushions that I have!

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Re: Is this just too simple

Post by michaeljmroger » Mon Feb 11, 2019 10:13 am

OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
We have always tried to save money and be frugal along the way
A $4.5 million house doesn't exactly fit my definition of being "frugal".

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 10:33 am

michaeljmroger wrote:
Mon Feb 11, 2019 10:13 am
OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
We have always tried to save money and be frugal along the way
A $4.5 million house doesn't exactly fit my definition of being "frugal".
Well maybe it's not frugal to you and I get that..but we bought the property and cleaned up a giant mess...bulldozed the last building off the land and built our retirement house. We have about 2.8 M in the property and had it appraised last year by two different companies as being worth at least 4.5 or better...now...along the way to get to this point for the last 40 years or so I have worked 100 hour weeks, driven 100 dollar cars, saved every dime I could get, lived in 1 bedroom cheap housing so my family could stay at home while I worked. We have moved at least 10 times in my career and everytime bought a fixer upper and made good bank on it. 99% of the time I wear sweats issued by my employers...My idea of eating out is once in a great while I will get a subway sandwich. I brown bag it about 99.9% of the time...now...all of my kids have gone to college, grad school, professional school and my wife has worked full time in charity work or as an RN..Yep, now we spend some big money on our houses and buy nice cars, cars that we usually drive 300K or more miles...to me my wife deserves to build her dream home for our last house...so...your idea and my idea of frugal might not line up..I get that..should I live in a van down by the river perhaps to be frugal?

daheld
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Re: Is this just too simple

Post by daheld » Mon Feb 11, 2019 10:36 am

OldBallCoach wrote:
Mon Feb 11, 2019 10:33 am
michaeljmroger wrote:
Mon Feb 11, 2019 10:13 am
OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
We have always tried to save money and be frugal along the way
A $4.5 million house doesn't exactly fit my definition of being "frugal".
Well maybe it's not frugal to you and I get that..but we bought the property and cleaned up a giant mess...bulldozed the last building off the land and built our retirement house. We have about 2.8 M in the property and had it appraised last year by two different companies as being worth at least 4.5 or better...now...along the way to get to this point for the last 40 years or so I have worked 100 hour weeks, driven 100 dollar cars, saved every dime I could get, lived in 1 bedroom cheap housing so my family could stay at home while I worked. We have moved at least 10 times in my career and everytime bought a fixer upper and made good bank on it. 99% of the time I wear sweats issued by my employers...My idea of eating out is once in a great while I will get a subway sandwich. I brown bag it about 99.9% of the time...now...all of my kids have gone to college, grad school, professional school and my wife has worked full time in charity work or as an RN..Yep, now we spend some big money on our houses and buy nice cars, cars that we usually drive 300K or more miles...to me my wife deserves to build her dream home for our last house...so...your idea and my idea of frugal might not line up..I get that..should I live in a van down by the river perhaps to be frugal?
Frugality is relative to income. Relative to your income, I'd agree you've been plenty frugal. The fact that you have the assets that you do and you're here on an internet message board trying to learn and do more with what you have is admirable. You have the money to just set it and forget it, pay some financial advisor an astronomical management fee for minimal returns and you'd never even feel it. Kudos.

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Re: Is this just too simple

Post by dbr » Mon Feb 11, 2019 10:37 am

Frugality has nothing to do with Boglehead approaches to money management. Saving money is a question of living within ones means, but if those means are large then living within them might be large as well.

I don't have much to say about management of fairly large amounts of assets because I don't feel confident that I understand the issues. I would say the investment part is not much different for $10M than it is for $1M or less, but tax considerations and estate considerations justify professional advice. Professional advice comes from accountants and lawyers and not from investment salesmen.

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Re: Is this just too simple

Post by KyleAAA » Mon Feb 11, 2019 10:51 am

The Schwab portfolios contain fundamental indexed ETFs, which are essentially a form of light small value tilt (most of the time). It isn't quite comparable to the portfolio you propose. 13% cash for a retiree isn't horrible; think if it as a very short term bond. I'd be comfortable leaving it where it is. You aren't being ripped off.

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 11:06 am

dbr wrote:
Mon Feb 11, 2019 10:37 am
Frugality has nothing to do with Boglehead approaches to money management. Saving money is a question of living within ones means, but if those means are large then living within them might be large as well.

I don't have much to say about management of fairly large amounts of assets because I don't feel confident that I understand the issues. I would say the investment part is not much different for $10M than it is for $1M or less, but tax considerations and estate considerations justify professional advice. Professional advice comes from accountants and lawyers and not from investment salesmen.
Over the years I have had lawyers, accountants, agents and one thing that seems to be a common thread is that usually they dont give two seconds thinking about anything other than what they can get from me fees wise...I do have a great lawyer for my estate planning and thats been solid...but no one I have ever talked with has referred me to anything even close to a Boglehead type of investment platform. Its either TIAA Cref or American funds this or Wells Fargo funds that...anyway after sitting down and looking at 20 years worth of statements and taking 50-60 hours to really do the hard math I about had a melt down as to how much I probably wasted on fees, compounding lost, ect...anyway...thats why I have enjoyed reading about your thoughts and ideas going forward. I am meeting next week with my accountant and my Schwab rep to discuss my thoughts going forward...I dont want to pay a lot of taxes but I dont want to leave money on the table either...I think about how many times I ate left over pizza to save a buck, me and PBJ go a long ways back and how I paid that same buck to an investment firm that didnt even do half as well as the market. Am I am idiot for not seeing that then? Yea most likely I was...but I tell the guys I coach this...the only thing you can control today is what you do going forward...I cant fix the past but I be the I do a LOT better going forward..

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 11:20 am

KyleAAA wrote:
Mon Feb 11, 2019 10:51 am
The Schwab portfolios contain fundamental indexed ETFs, which are essentially a form of light small value tilt (most of the time). It isn't quite comparable to the portfolio you propose. 13% cash for a retiree isn't horrible; think if it as a very short term bond. I'd be comfortable leaving it where it is. You aren't being ripped off.
Thanks for your thoughts...I dont feel like Schwab has ripped me off...I just want to be sure that I am doing as well as I can going forward...when I use the portfolio simulations I find that the three fund Boglehead system comes out ahead of what I have now, so does the the other funds I mentioned. I just want my Schwab rep to explain it to me how their plan is better...if they cant I will stay at Schwab and just move what I can within their system...the customer service at Schwab has been outstanding and I dont plan on leaving them. Again, thanks for your help!!

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Ben Mathew
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Re: Is this just too simple

Post by Ben Mathew » Mon Feb 11, 2019 11:23 am

OldBallCoach wrote:
Sun Feb 10, 2019 3:48 pm
I have about 14.4 Million in tax advantaged accounts, mostly roll overs from the 403Bs at different locations.
Really curious as to how you were able to accumulate $14.4 million in tax-advantaged accounts via 403B roll overs. Did you invest in individual stocks that took off? Stock options?

To address your situation:

- Yes, investing is very simple. But it's hard to realize that and stick to simple. There are a lot of people who will try to convince you that it is complicated, and that you need their expertise.

- Hold your bonds and stocks in separate funds instead of balanced funds. The 3 fund portfolio should be fine. For tax efficiency, hold bonds in tax-advantaged and stocks in taxable as much as possible. (See tax efficient fund placement)

- You don't need 24 different ETFs to build your portfolio.

- Don't rely on the historical returns to pick funds.

- Consider tax consequences of selling in taxable accounts before selling.

- Tax loss harvest in your taxable account.

- Leaving the taxable account to heirs will get them the stepped up basis at death.

- Consider converting tax-advantaged money intended for heirs to Roth IRAs which are not subject to RMDs and can be left to heirs, who can then stretch the tax benefits over their expected lifetime if they so choose. (See the stretch IRA technique)

- Consider gifting the annual gift tax exclusion amount ($15K in 2019) to your potential heirs to keep it out of your estate. You and your wife could each gift $15K, so the total is $30K per heir.

- Given your wealth and estate tax considerations, pay for advice from an estate planning professional (an attorney, not an investment manager).

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Re: Is this just too simple

Post by ModifiedDuration » Mon Feb 11, 2019 11:45 am

I hold the Chartered Financial Analyst designation and my first thought is that, especially in view of your net worth, you and your wife need to develop a Personal Investment Policy Statement, in order for the two of you to agree on and to clearly define your goals and objectives; what your return and risk requirements are; what your risk tolerance is; what constraints or special situations the two of you may have, etc.

Not doing this would be like a football coach going into a game without a game plan.

Just my two cents.

https://www.cfainstitute.org/-/media/do ... A006BE3D96
Last edited by ModifiedDuration on Mon Feb 11, 2019 11:55 am, edited 4 times in total.

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Re: Is this just too simple

Post by Randtor » Mon Feb 11, 2019 11:46 am

OldBallCoach wrote:
Mon Feb 11, 2019 11:06 am
the only thing you can control today is what you do going forward...I cant fix the past but I be the I do a LOT better going forward..
Well said.
Although I am not dealing in the same financial stratus as you, I have had the same issues with financial advisors who had me invested to their benefit, not mine. I did some back research this past week and came to the same conclusion... how dumb was I to trust the 'professional' advisor and not take a keener interest in my own financial future. So, I am the one to blame, not the advisor. I left a lot of money on the table too. "What's done is done, and can't be undone." BTW, I also have had my share of old cars, drafty houses, cold pizza for breakfast and PBJ!

I am now going through the transfer process started today of moving my assets, and reducing the clutter of around 50 investments, to 3 or 4. I am already breathing easier. Stay the path. I am so relieved to have found out about Mr Bogle and the sincere help available on this forum. Many thanks to all those that take the time and make the effort to generously offer their knowledge and advice.
"Whats done is done, and can't be undone"

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Re: Is this just too simple

Post by texasdiver » Mon Feb 11, 2019 11:55 am

OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
So hence...moving forward trying to see if maybe just using those two simple funds might not be as simple as these multi fund platforms that every broker or advisor I meet with wants to suggest.
Here is the error in your (and many other people's) thinking.

These are not simple funds. They are highly sophisticated instruments that allow you to own large swaths of the market at costs and with an efficiency that would have been inconceivable decades ago when people were forced to buy individual stocks through a broker. Either of these two funds on their own is as sophisticated (or more so) than many actively-managed multi-billion dollar institutional endowments.

Whether these are the right funds for your particular tax circumstances and desired asset allocation is not for me to say. But do not think they are "simple" or in any way unsophisticated.

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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 12:02 pm

texasdiver wrote:
Mon Feb 11, 2019 11:55 am
OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
So hence...moving forward trying to see if maybe just using those two simple funds might not be as simple as these multi fund platforms that every broker or advisor I meet with wants to suggest.
Here is the error in your (and many other people's) thinking.

These are not simple funds. They are highly sophisticated instruments that allow you to own large swaths of the market at costs and with an efficiency that would have been inconceivable decades ago when people were forced to buy individual stocks through a broker. Either of these two funds on their own is as sophisticated (or more so) than many actively-managed multi-billion dollar institutional endowments.

Whether these are the right funds for your particular tax circumstances and desired asset allocation is not for me to say. But do not think they are "simple" or in any way unsophisticated.
You are 100% correct...I guess what I was trying to say is owning these two funds could replace this giant 24 part fund puzzle that I am in now at a savings of cost with as good as or even better results...you are correct! Thanks!

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 12:08 pm

ModifiedDuration wrote:
Mon Feb 11, 2019 11:45 am
I hold the Chartered Financial Analyst designation and my first thought is that, especially in view of your net worth, you and your wife need to develop a Personal Investment Policy Statement, in order for the two of you to agree on and to clearly define your goals and objectives; what your return and risk requirements are; what your risk tolerance is; what constraints or special situations the two of you may have, etc.

Not doing this would be like a football coach going into a game without a game plan.

Just my two cents.

https://www.cfainstitute.org/-/media/do ... A006BE3D96
We have done all of the above in sitting down with Schwab....thats how we ended up in the Intelligent Portfolios program with the tax harvesting, ect...what I still find in my limited research is I can do ( I THINK ) all of the above with 2 Vanguard funds...I am looking forward to seeing what Schwab has to say when we meet....
And by the way my thinking has been for 40 years or so Everyone has a plan going in until someone hits them in the mouth...I feel looking back that perhaps I didn't have my best game plan in place and now that it's the fourth quarter I want to be sure I know what I am doing. Good teams find a way to beat you or make you beat yourself...I want to be sure I have my ducks in a row moving forward because I sure didnt in the first half so to speak. Thanks for your input and help!!

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Re: Is this just too simple

Post by aspirit » Mon Feb 11, 2019 12:21 pm

I received my RE license in the early-eighties, for my own purposes. Stats dictate 9/10ths of RE owners estimates are off on the upside estimating their properties.
I’ve exclusively purchased distressed RE.
There’s great advice above.
GOOD LUCK!
Time & tides wait for no one. A man has to know his limitations. | "Give me control of a nation's money and I care not who makes it's laws" | — Mayer Amschel Bauer Rothschild ~

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Re: Is this just too simple

Post by Wiggums » Mon Feb 11, 2019 12:26 pm

OldBallCoach wrote:
Mon Feb 11, 2019 12:02 pm
texasdiver wrote:
Mon Feb 11, 2019 11:55 am
OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
So hence...moving forward trying to see if maybe just using those two simple funds might not be as simple as these multi fund platforms that every broker or advisor I meet with wants to suggest.
Here is the error in your (and many other people's) thinking.

These are not simple funds. They are highly sophisticated instruments that allow you to own large swaths of the market at costs and with an efficiency that would have been inconceivable decades ago when people were forced to buy individual stocks through a broker. Either of these two funds on their own is as sophisticated (or more so) than many actively-managed multi-billion dollar institutional endowments.

Whether these are the right funds for your particular tax circumstances and desired asset allocation is not for me to say. But do not think they are "simple" or in any way unsophisticated.
You are 100% correct...I guess what I was trying to say is owning these two funds could replace this giant 24 part fund puzzle that I am in now at a savings of cost with as good as or even better results...you are correct! Thanks!
I agree

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Re: Is this just too simple

Post by KyleAAA » Mon Feb 11, 2019 12:45 pm

OldBallCoach wrote:
Mon Feb 11, 2019 11:20 am
KyleAAA wrote:
Mon Feb 11, 2019 10:51 am
The Schwab portfolios contain fundamental indexed ETFs, which are essentially a form of light small value tilt (most of the time). It isn't quite comparable to the portfolio you propose. 13% cash for a retiree isn't horrible; think if it as a very short term bond. I'd be comfortable leaving it where it is. You aren't being ripped off.
Thanks for your thoughts...I dont feel like Schwab has ripped me off...I just want to be sure that I am doing as well as I can going forward...when I use the portfolio simulations I find that the three fund Boglehead system comes out ahead of what I have now, so does the the other funds I mentioned. I just want my Schwab rep to explain it to me how their plan is better...if they cant I will stay at Schwab and just move what I can within their system...the customer service at Schwab has been outstanding and I dont plan on leaving them. Again, thanks for your help!!
Wellington Fund in particular has done better than one would have expected over the past 20 years. There's no guarantee it will continue to do so going forward. It's a fine fund, but I would not expect it to repeat over the next 20 years. Also, it's not apples to apples comparison because the funds you propose are more aggressive than your current portfolio and invest more in US stocks, which have just happened to be on a tear vs international the last 10 years. It would be shocking if they hadn't outperformed in the recent past.

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BolderBoy
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Re: Is this just too simple

Post by BolderBoy » Mon Feb 11, 2019 1:00 pm

OldBallCoach wrote:
Sun Feb 10, 2019 3:48 pm
I am considering putting all my taxable money in VTMFX and my tax advantaged into VWENX. Two funds which if I am reading the simulators right will work as well if not better than what I am doing now. I am not afraid of risk, I go for it on 4th and short kinda guy but I wonder if this is as simple as it seems...
Yes, it is that simple. But watch out for the taxes you may incur on selling off the non-retirement account to buy VTMFX.

With your level of assets a meeting with a tax attorney might be a good idea. To help minimize the tax hit and to set up an estate plan that will minimize inheritance taxes down the line.

You don't need a financial advisor sucking off a huge fee every year.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

texasdiver
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Re: Is this just too simple

Post by texasdiver » Mon Feb 11, 2019 1:09 pm

OldBallCoach wrote:
Mon Feb 11, 2019 12:02 pm
texasdiver wrote:
Mon Feb 11, 2019 11:55 am
OldBallCoach wrote:
Mon Feb 11, 2019 8:14 am
So hence...moving forward trying to see if maybe just using those two simple funds might not be as simple as these multi fund platforms that every broker or advisor I meet with wants to suggest.
Here is the error in your (and many other people's) thinking.

These are not simple funds. They are highly sophisticated instruments that allow you to own large swaths of the market at costs and with an efficiency that would have been inconceivable decades ago when people were forced to buy individual stocks through a broker. Either of these two funds on their own is as sophisticated (or more so) than many actively-managed multi-billion dollar institutional endowments.

Whether these are the right funds for your particular tax circumstances and desired asset allocation is not for me to say. But do not think they are "simple" or in any way unsophisticated.
You are 100% correct...I guess what I was trying to say is owning these two funds could replace this giant 24 part fund puzzle that I am in now at a savings of cost with as good as or even better results...you are correct! Thanks!
Your 24 part fund puzzle is mostly going to duplicate the holdings of one or two index funds. All you ultimately gain by all that complexity is some tilts in one direction or another, many of which are probably not even intentional and just a consequence of holding a whole bunch of overlapping funds. ESPECIALLY if your overall portfolio is put together in different pieces at different times by different people. By simplifying your holdings you are actually making it much less likely that you accidently tilt and duplicate holdings in directions that you don't intend.

I don't have anywhere near the size of your holdings. But when my portfolio was in the low 6 figures I had over a dozen funds, most of which were just random bets. Now that we are into seven figures I'm down to three and that is only because I can't consolidate any further.

Where your circumstances differ from many on this forum is that you have large taxable holdings and need avoid unnecessary taxable events and have to consider tax efficiency. For most of us who have the bulk of our portfolios in tax-advantaged retirement accounts, we can move funds around at will without paying any attention to taxes.

bltn
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Re: Is this just too simple

Post by bltn » Mon Feb 11, 2019 4:32 pm

OldBallCoach wrote:
Mon Feb 11, 2019 11:06 am
dbr wrote:
Mon Feb 11, 2019 10:37 am
Frugality has nothing to do with Boglehead approaches to money management. Saving money is a question of living within ones means, but if those means are large then living within them might be large as well.

I don't have much to say about management of fairly large amounts of assets because I don't feel confident that I understand the issues. I would say the investment part is not much different for $10M than it is for $1M or less, but tax considerations and estate considerations justify professional advice. Professional advice comes from accountants and lawyers and not from investment salesmen.
Over the years I have had lawyers, accountants, agents and one thing that seems to be a common thread is that usually they dont give two seconds thinking about anything other than what they can get from me fees wise...I do have a great lawyer for my estate planning and thats been solid...but no one I have ever talked with has referred me to anything even close to a Boglehead type of investment platform. Its either TIAA Cref or American funds this or Wells Fargo funds that...anyway after sitting down and looking at 20 years worth of statements and taking 50-60 hours to really do the hard math I about had a melt down as to how much I probably wasted on fees, compounding lost, ect...anyway...thats why I have enjoyed reading about your thoughts and ideas going forward. I am meeting next week with my accountant and my Schwab rep to discuss my thoughts going forward...I dont want to pay a lot of taxes but I dont want to leave money on the table either...I think about how many times I ate left over pizza to save a buck, me and PBJ go a long ways back and how I paid that same buck to an investment firm that didnt even do half as well as the market. Am I am idiot for not seeing that then? Yea most likely I was...but I tell the guys I coach this...the only thing you can control today is what you do going forward...I cant fix the past but I be the I do a LOT better going forward..
OldBallCoach
It seems as though you've made a good living for years, been careful with your spending and your lifestyle, and have accumulated a very nice nest egg through your relative frugality. Congratulations.
With your history of careful spending, and your asking here how to best save financial management costs, and your efforts to research self management of your funds, I do believe you have the heart of a Boglehead. Glad you re here.
I believe that the simplified approach to managing 20 million dollars is just as appropriate for that amount as it is for managing 2 million dollars.
In your position, I would try to put all of my taxable account that I can into the Vanguard Total Stock Market Fund. That will allow growth with minimal taxable income subject to dividend tax rates. I wouldn't t have any bonds, or funds with a bond component, in my taxable accounts. I would have the opportunity to put all the bonds I wanted in my 401K. The less realized income you have to receive each year from your taxable accounts the better. Fixed income funds and stock funds needed to reach a 50% stock allocation in the tx deferred accounts. When you have to start taking RMD s from your retirement plans, you ll be glad to have the lightly taxed index funds in the taxable accounts.
I think you ll do fine with a 50/40/10 asset allocation. Your situation is especially secure because by living a relatively modest lifestyle, you can afford to safely withdraw 2% from your retirement and probably have a nice step up in your spending. There s no sense in continuing to grow your legacy with ongoing frugality defined as spending less than 2%.. At least, that s the way I would look at it.
Thanks for your participation. Seeing a wide range of economic circumstances makes this forum more interesting and useful.

zubinh
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Re: Is this just too simple

Post by zubinh » Mon Feb 11, 2019 4:56 pm

If you do decide to sell off the Intelligent Portfolios, you may be able to mitigate some of the tax hit.

On the SIP closure form it will give you the option to "keep the securities". Transfer all of the ETFs to a regular brokerage account at Schwab. You can then sell the ETFs that don't have a substantial unrealized gain. Hold on to the ones that do (they are probably US large Cap ETFs with low expense ratios anyway). Ask your rep at Schwab to give you some free trades so that you don't pay commissions on the sales.

If you want to stick with Schwab but still invest in VTMFX like I do, you can buy VTMFX at Vanguard and then submit a Schwab Transfer form to transfer the fund to Schwab. No Fee.

I understand Schwab's rationale for including cash in the intelligent portfolios but what Schwab needs to explain is why that cash isn't in one of their higher yielding money market funds.

Good Luck

bltn
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Re: Is this just too simple

Post by bltn » Mon Feb 11, 2019 5:39 pm

OldBallCoach

I did have a question after reading your initial post. The 300k+annual pension that you mentioned. Is that in addition to to you tax deferred accounts or is that the proceeds from those accounts? If those are pensions from additional company or state plans, how secure are those plans?

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 6:13 pm

My pension as well as my wife's pension are in addition to our tax deferred accounts. I believe that the pensions should be secure... State Universities I think are fine, one from a private university which I am sure is secure and the last one is from the NFL and I think that one is pretty solid...My wife has a small pension from State University that is fine. One never knows these days about pension liability funding but I believe we are blessed in that area. One thing about athletic program contracts is that payments are often put into deferred compensation to make it look like some programs are way more profitable than they actually are IMHO...just one guys take...Cheers!

bltn
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Re: Is this just too simple

Post by bltn » Mon Feb 11, 2019 7:19 pm

I understand now.
I believe that 2% annual withdrawals from retirement funds have been referred to here as "bullet proof".
As Jack Bogle has always advised, keeping investments simple works fine. And simple makes it easier for one to take care of his own investments.
With your estate planning advice, I believe you ll do fine.

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Mon Feb 11, 2019 8:20 pm

aspirit wrote:
Mon Feb 11, 2019 12:21 pm
I received my RE license in the early-eighties, for my own purposes. Stats dictate 9/10ths of RE owners estimates are off on the upside estimating their properties.
I’ve exclusively purchased distressed RE.
There’s great advice above.
GOOD LUCK!
So I called my kids one day to see how they liked the new house that they and their Mom had picked out to buy...( I was rarely involved in this portion of decision making I was too busy at work ) and my daughter said..."Well at least in this place there is no caulk outline of where the police found the body so I think it will be fine!" We always seemed to try and find the worst house in the best neighborhood with the best school system..my wife was beyond amazing in making us money on these deals...Divorce, death, job transfers, defaults, those were what she always looked for..."You cant win on the job if you are not winning at home! "

DTSC
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Re: Is this just too simple

Post by DTSC » Mon Feb 11, 2019 10:38 pm

Obviously you worked very hard and saved very hard too. Congrats!

Only comment/question is how to keep your kids and grandkids from being spoiled when they eventually inherit your estate.

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OldBallCoach
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Re: Is this just too simple

Post by OldBallCoach » Tue Feb 12, 2019 8:04 am

DTSC wrote:
Mon Feb 11, 2019 10:38 pm
Obviously you worked very hard and saved very hard too. Congrats!

Only comment/question is how to keep your kids and grandkids from being spoiled when they eventually inherit your estate.
Well I am not sure that one can do much from the grave so we have tried to teach our children by example and so far for the most part so good. 4 out of 4 are college grads, three are grad school grads or professionals ( PA ) and one wild child is a teacher/coach! So...we only have three grandkids and they are very young but we expect that our kids will use whatever funds we leave them to make the world a better place. I have looked at restrictive measures in our trust and all that but honestly I am just not a fan of that. I dont think for a second that people outside our family ever have our families best interests at heart as much as the family itself does. We also gift certain programs each year and will do so in our estate.

We have had a few family meetings on what will happen when we assume room temp, who gets what, who is in charge, and most importantly why staying tight as a family is important to all of them....they get it...We all met with our estate planning attorney and everyone is crystal clear as to what the plan is...if you dont agree you better speak up...and a couple did and we addressed it to everyones relief I think. We also review the plan once a year at what we all call the state of family address and chili cook off party. Who says you cant mix business and food?

I dont think you can do much more than that without a bunch of suits running the deal and frankly...and I know this may sound bad...but I think my kids will do ok...they have been raised right, made some mistakes in the world, learned from the F ups, and get how the REAL world works. My kids also know how to work hard, how to play hard, and how to come to each others defense when it gets tight out there...when you have people planting for sale signs in your yard cause they want your dad to quit or get fired you learn fast the world is not always easy...LOL..but the best thing to do then is to take pictures standing by the sign as a group flipping the bird...LOL...So...long answer but all I think I can do is teach my kids the right things to do and stand behind them when they mess up and teach them again...repeat until you go home to your final resting place.

If anyone has a better plan my wife and I are always open to suggestions!

KingRiggs
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Re: Is this just too simple

Post by KingRiggs » Tue Feb 12, 2019 8:10 am

OldBallCoach, you seem to have your stuff together, both financially and life priorities.

As a fellow Hoosier, if I ever run into you, I’d be proud to buy you a beer and listen to your stories...

Best of luck going forward!
Advice = noun | Advise = verb | | Roth, not ROTH

DTSC
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Re: Is this just too simple

Post by DTSC » Tue Feb 12, 2019 10:30 am

OldBallCoach wrote:
Tue Feb 12, 2019 8:04 am
DTSC wrote:
Mon Feb 11, 2019 10:38 pm
Obviously you worked very hard and saved very hard too. Congrats!

Only comment/question is how to keep your kids and grandkids from being spoiled when they eventually inherit your estate.
Well I am not sure that one can do much from the grave so we have tried to teach our children by example and so far for the most part so good. 4 out of 4 are college grads, three are grad school grads or professionals ( PA ) and one wild child is a teacher/coach! So...we only have three grandkids and they are very young but we expect that our kids will use whatever funds we leave them to make the world a better place. I have looked at restrictive measures in our trust and all that but honestly I am just not a fan of that. I dont think for a second that people outside our family ever have our families best interests at heart as much as the family itself does. We also gift certain programs each year and will do so in our estate.

We have had a few family meetings on what will happen when we assume room temp, who gets what, who is in charge, and most importantly why staying tight as a family is important to all of them....they get it...We all met with our estate planning attorney and everyone is crystal clear as to what the plan is...if you dont agree you better speak up...and a couple did and we addressed it to everyones relief I think. We also review the plan once a year at what we all call the state of family address and chili cook off party. Who says you cant mix business and food?

I dont think you can do much more than that without a bunch of suits running the deal and frankly...and I know this may sound bad...but I think my kids will do ok...they have been raised right, made some mistakes in the world, learned from the F ups, and get how the REAL world works. My kids also know how to work hard, how to play hard, and how to come to each others defense when it gets tight out there...when you have people planting for sale signs in your yard cause they want your dad to quit or get fired you learn fast the world is not always easy...LOL..but the best thing to do then is to take pictures standing by the sign as a group flipping the bird...LOL...So...long answer but all I think I can do is teach my kids the right things to do and stand behind them when they mess up and teach them again...repeat until you go home to your final resting place.

If anyone has a better plan my wife and I are always open to suggestions!
It really looks like you've got your stuff together. Your kids obviously saw how hard you worked and are hard workers themselves, so they'll be fine. Your grandkids might not have seen you work so hard, so the best you can do is to stick around as long as possible and cruise around in your 15 year old luxury car. Maybe set up an trust for future generations - just for education - so they can't blow it on cocaine and cars. Good luck!

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OldBallCoach
Posts: 153
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Re: Is this just too simple

Post by OldBallCoach » Tue Feb 12, 2019 11:32 am

DTSC wrote:
Tue Feb 12, 2019 10:30 am
OldBallCoach wrote:
Tue Feb 12, 2019 8:04 am
DTSC wrote:
Mon Feb 11, 2019 10:38 pm
Obviously you worked very hard and saved very hard too. Congrats!

Only comment/question is how to keep your kids and grandkids from being spoiled when they eventually inherit your estate.
Well I am not sure that one can do much from the grave so we have tried to teach our children by example and so far for the most part so good. 4 out of 4 are college grads, three are grad school grads or professionals ( PA ) and one wild child is a teacher/coach! So...we only have three grandkids and they are very young but we expect that our kids will use whatever funds we leave them to make the world a better place. I have looked at restrictive measures in our trust and all that but honestly I am just not a fan of that. I dont think for a second that people outside our family ever have our families best interests at heart as much as the family itself does. We also gift certain programs each year and will do so in our estate.

We have had a few family meetings on what will happen when we assume room temp, who gets what, who is in charge, and most importantly why staying tight as a family is important to all of them....they get it...We all met with our estate planning attorney and everyone is crystal clear as to what the plan is...if you dont agree you better speak up...and a couple did and we addressed it to everyones relief I think. We also review the plan once a year at what we all call the state of family address and chili cook off party. Who says you cant mix business and food?

I dont think you can do much more than that without a bunch of suits running the deal and frankly...and I know this may sound bad...but I think my kids will do ok...they have been raised right, made some mistakes in the world, learned from the F ups, and get how the REAL world works. My kids also know how to work hard, how to play hard, and how to come to each others defense when it gets tight out there...when you have people planting for sale signs in your yard cause they want your dad to quit or get fired you learn fast the world is not always easy...LOL..but the best thing to do then is to take pictures standing by the sign as a group flipping the bird...LOL...So...long answer but all I think I can do is teach my kids the right things to do and stand behind them when they mess up and teach them again...repeat until you go home to your final resting place.

If anyone has a better plan my wife and I are always open to suggestions!
It really looks like you've got your stuff together. Your kids obviously saw how hard you worked and are hard workers themselves, so they'll be fine. Your grandkids might not have seen you work so hard, so the best you can do is to stick around as long as possible and cruise around in your 15 year old luxury car. Maybe set up an trust for future generations - just for education - so they can't blow it on cocaine and cars. Good luck!
So what do you have against farmers and factory workers? Kidding...we put money away for the grandkids already but we have told our kids that it is up to them to save and make the kids work to go to school, or learn a trade or whatever they do. I don't think that college is a right or that all kids should go to college. My daughter who is a PA married a welder and my son in law learned to weld in the Army and that man makes a terrific living. Hard worker and smart as a whip. My kids all worked part time in college or were athletes on scholarships...either way they worked for their education. Sure I got discounts if they went to a school where I worked but I have found over the years that kids tend to not value things that are given to them but will work their ass off for a grade if THEY paid for the class. I am not saying that I didnt bail them out a few times when they didnt have enough to pay tuition or fees or books...I did...but over all they did ok and when I talk with them about it they mostly agree...LOL..mostly...

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