Just read the book, now I need your help getting organized!

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ReeceBobby
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Joined: Fri Feb 22, 2019 2:06 pm

Just read the book, now I need your help getting organized!

Post by ReeceBobby » Fri Feb 22, 2019 5:34 pm

Hello everyone. Sorry for the long post. Thanks in advance to anyone that is able to trudge through it! I have just read the "Guide to Investing", it was a very enlightening read and depressing one at the same time. Had I only known 20 years ago what I know now. First, a few details about me: I'm 37 years old, I'm an Emergency Physician and I have been practicing for 4 years now. I am not married and do not have any kids. I wish I had some investing guidance growing up, but here I am, and I'm looking to make up for lost time. Like most physicians, I do have student loans, they will be paid off in 2 years, I am making large monthly payments on them at an interest rate of 4.5%(am trying to get my current employer to pay some of them off). The only other debt I have is a $200k mortgage at 4.5%. I have been working as an independent contractor the last 4 years, I contributed the max to a SEP IRA retirement account for 3 years, and last year opened a SOLO 401K account and also contributed the maximum. I'm going to ask a few questions, I appreciate any help you all can give me. Here we go:

1.) As stated above, I was a 1099 employee for 4 years, I contributed to the above accounts, I am now employed. Should/can I roll these accounts into one account? Should I leave them be and just contribute to my current 401K through my new employer? My SEP and Solo 401K are managed by a family members financial group, the fees are about $250 a year, which seems reasonable, but I am able to move them out of their control if it is believed that would be a better option.

2.) I've decided low cost mutual funds seems like the best route for retirement funds (outside of my corporate/tax deferred retirement accounts). I'm willing to be a little more on the risky side to try and make up for some lost time. I have a decent amount of money saved up that I would like to get invested ASAP. Would love to hear if you all think this is the best option for me.

3.) I would like my retirement investment accounts to be as low maintenance as possible. I'd prefer an account where I don't have to rebalance my portfolio every so often. I have been looking at Vanguards account that does this, and also Wealthfront. I have heard good things about Wealthfront and Vanguard and am wondering what the bogleheads think about it as a mutual fund portfolio manager. The more automated and reliable the better.

4.) Out of the scope of retirement options, but I am also curious about Whole life life insurance. I have term life insurance, and also $250k coverage for Whole life life insurance. I feel like I was pressured into this and also that it makes the broker more moeny than it does for me. Wouldn't this money do more work for me if it were invested with my mutual fund accounts instead of purchasing expensive whole life at a poor return rate?

5.) Any other advice any of you can give me is extremely helpful. I'm looking to get everything organized once and for all so that I can rest assured my money is making me money and that I'll be able to retire someday. THANKS!

Update: it appears as though all of my retirement holdings are in the holding below. Crazy how bad that 4th Quarter hit me! Wiped out almost 3 years of earnings in 1 quarter!
Image
Last edited by ReeceBobby on Sun Mar 17, 2019 8:19 pm, edited 4 times in total.

Stratotanker
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Re: Just read the book, now I need your help getting organized!

Post by Stratotanker » Fri Feb 22, 2019 6:29 pm

I'm sure the more seasoned Bogleheads will have plenty of sound advice to offer but I just wanted to recommend The White Coat Investor (who also contributes here from time to time) at whitecoatinvestor.com. The site offers an abundance of awesome physician-specific financial advice and articles. Physicianonfire.com is equally useful. Well worth checking both out if you haven't already done so.

Andrew321
Posts: 59
Joined: Sat Nov 10, 2018 11:10 am

Re: Just read the book, now I need your help getting organized!

Post by Andrew321 » Fri Feb 22, 2019 7:08 pm

Hi there,
I recommend reading the Three Fund Portfolio. If you're interested in maintaining a simple portfolio, that book gives you straightforward advice and options.
Best,
Andrew

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Taylor Larimore
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The Three-Fund Portfolio

Post by Taylor Larimore » Fri Feb 22, 2019 7:19 pm

I recommend reading the Three Fund Portfolio. If you're interested in maintaining a simple portfolio, that book gives you straightforward advice and options.
Best,
Andrew
ReeceBobby:

This is a link to the book on Amazon:

https://www.amazon.com/Bogleheads-Guide ... 1119487331

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

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Wiggums
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Re: Just read the book, now I need your help getting organized!

Post by Wiggums » Fri Feb 22, 2019 7:29 pm

With respect to your insurance question, term Insurance is usually preferable. You should not use insurance as an investment vehicle which may be the case with your whole life insurance policy.

If you truly do not want to rebalance your sample portfolio than a target date fund or life strategy fund May be right for you. Before you decide, I would encourage you to take a look at the three fund Portfolio First. This is a very simple portfolio that does not take much effort at all. In fact, most people look at it only once a year For rebalancing purposes.

miket29
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Re: Just read the book, now I need your help getting organized!

Post by miket29 » Fri Feb 22, 2019 10:08 pm

you might also want to take a look at a forum set up for doctors https://www.whitecoatinvestor.com/forums/

mariezzz
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Re: Just read the book, now I need your help getting organized!

Post by mariezzz » Fri Feb 22, 2019 11:54 pm

Welcome. From your post, it sounds like you're doing a good job so far.

About #4: Why do you need life insurance if you're single with no kids? Are there any benefits to you while alive?
Without knowing the specific details of your policy, I won't give you any advice other than to consider those questions.

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Watty
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Re: Just read the book, now I need your help getting organized!

Post by Watty » Sat Feb 23, 2019 12:26 am

miket29 wrote:
Fri Feb 22, 2019 10:08 pm
you might also want to take a look at a forum set up for doctors https://www.whitecoatinvestor.com/forums/
+1

The emergency room doctor that runs that website is a regular poster here.
ReeceBobby wrote:
Fri Feb 22, 2019 5:34 pm
Should I leave them be and just contribute to my current 401K through my new employer? My SEP and Solo 401K are managed by a family members financial group, the fees are about $250 a year, which seems reasonable, but I am able to move them out of their control if it is believed that would be a better option.
If you dig into this don't be surprised if you find that there are all sorts of other fees like loads, 12-b1 fees, high costs, etc.)

We have only mixed business with friends and family a few times and it can be very awkward. I would plan on moving it even if they are doing a good job.

If they are really only making $250 a year from you they are likely losing money on your account anyway and will not be sorry to see your go.
ReeceBobby wrote:
Fri Feb 22, 2019 5:34 pm
) Out of the scope of retirement options, but I am also curious about Whole life life insurance. I have term life insurance, and also $250k coverage for Whole life life insurance. I feel like I was pressured into this and also that it makes the broker more moeny than it does for me. Wouldn't this money do more work for me if it were invested with my mutual fund accounts instead of purchasing expensive whole life at a poor return rate?
You got taken with the whole life insurance, time to cut your losses and move on. Consider it tuition in "the school of hard knocks" and over the next 40 years that lesson could pay off well.

The term insurance is less clear. Even though you don't have a spouse or kids there could still be someone like your parents that could be financially impacted if you died since you could be their safety net, especially if you are an only child or don't have a lot of responsabil siblings. For example if nothing else if they are financially secure then someday they may need to move to a nursing home and have someone manage their finances. It works best when a responsible kid can take care of the mechanics of that but if there is not a responsible kid then then they may need to hire someone to manage a trust for them and those fees can add up.

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ruralavalon
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Re: Just read the book, now I need your help getting organized!

Post by ruralavalon » Sat Feb 23, 2019 10:14 am

Welcome to the forum :) .

ReeceBobby wrote:
Fri Feb 22, 2019 5:34 pm
Hello everyone. Sorry for the long post. Thanks in advance to anyone that is able to trudge through it! I have just read the "Guide to Smart Investing", it was a very enlightening read and depressing one at the same time. Had I only known 20 years ago what I know now. First, a few details about me: I'm 37 years old, I'm an Emergency Physician and I have been practicing for 4 years now. I am not married and do not have any kids. I wish I had some investing guidance growing up, but here I am, and I'm looking to make up for lost time. Like most physicians, I do have student loans, they will be paid off in 2 years, I am making large monthly payments on them at an interest rate of 4.5%(am trying to get my current employer to pay some of them off). The only other debt I have is a $200k mortgage at 4.5%. I have been working as an independent contractor the last 4 years, I contributed the max to a SEP IRA retirement account for 3 years, and last year opened a SOLO 401K account and also contributed the maximum. I'm going to ask a few questions, I appreciate any help you all can give me. Here we go:

1.) As stated above, I was a 1099 employee for 4 years, I contributed to the above accounts, I am now employed. Should/can I roll these accounts into one account? Should I leave them be and just contribute to my current 401K through my new employer? My SEP and Solo 401K are managed by a family members financial group, the fees are about $250 a year, which seems reasonable, but I am able to move them out of their control if it is believed that would be a better option.
Whether you should rollover your old SEP IRA and solo 401k into your current employer's 401k plan depends almost entirely on the funds and expenses in your new employer's 401k plan, as compared to the investments you now have.

What funds are offered in your new employer's 401k plan? Please give fund names, tickers, and expense ratios. Are my additional fees charged?

What funds are you using in the SEP IRA and solo 401 401k. Please give fund names tickers, and expense ratios. Are there any additional fees charged?

Will you continue to have any 1099 income from some work on the side?

You can simply add this to your original post using the edit button.


ReeceBobby wrote:2.) I've decided low cost mutual funds seems like the best route for retirement funds (outside of my corporate/tax deferred retirement accounts). I'm willing to be a little more on the risky side to try and make up for some lost time. I have a decent amount of money saved up that I would like to get invested ASAP. Would love to hear if you all think this is the best option for me.

You are correct, broadly diversified index funds with low expense ratios are the best route. In a taxable account I usually think of:
1) Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04%; and
2) Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%.

Don't be in too big a rush. First make an overall portfolio plan for all accounts, before making any new investments.


ReeceBobby wrote:3.) I would like my retirement investment accounts to be as low maintenance as possible. I'd prefer an account where I don't have to rebalance my portfolio every so often. I have been looking at Vanguards account that does this, and also Wealthfront. I have heard good things about Wealthfront and Vanguard and am wondering what the bogleheads think about it as a mutual fund portfolio manager. The more automated and reliable the better.
My own personal preference is Vanguard. I manage our accounts myself, but Vanguard does have an inexpensive Personal Advisory Service (PAS).


ReeceBobby wrote:4.) Out of the scope of retirement options, but I am also curious about Whole life life insurance. I have term life insurance, and also $250k coverage for Whole life life insurance. I feel like I was pressured into this and also that it makes the broker more moeny than it does for me. Wouldn't this money do more work for me if it were invested with my mutual fund accounts instead of purchasing expensive whole life at a poor return rate?
Find out what the surrender charges are on the whole life policy. Generally whole life insurance is not a good investment, use term life insurance instead for life insurance needs.

Do you have own occupation disability insurance?


ReeceBobby wrote:5.) Any other advice any of you can give me is extremely helpful. I'm looking to get everything organized once and for all so that I can rest assured my money is making me money and that I'll be able to retire someday. THANKS!
I suggest that you read one or two books on general investing. Please see the wiki article "Books: Recommendations and Reviews".

Also spend some time on the www.whitecoatinvestor.com website already mentioned.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Ben Mathew
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Re: Just read the book, now I need your help getting organized!

Post by Ben Mathew » Sat Feb 23, 2019 11:56 am

Welcome. You have received a lot of good advice. I'll add the following (copying from another post I made earlier):

When you're young, you should try hard to be in stocks as much as possible. It's the time for risk! Don't go bonds unless you have a very good reason for it. All of this may sound very irresponsible. But it's really not. That's because if you take on as much risk as you can responsibly handle when young, you can reduce risk in the later years when your portfolio is overweighted. This will reduce the lifetime risk of your portfolio. This is a powerful insight by one of the greatest economists of the twentieth century, and has been expanded upon by Ayres and Nalebuff in a very convincing book, Lifecycle Investing. Once you understand the idea, you will approach your financial decisions in a completely different way. It's a simple and powerful insight, and not enough people are aware and taking advantage.

Ayres and Nalebuff argue for taking on leverage when young. I feel that leverage is probably too hard to handle pyschologically, and require too much time and energy and discipline to manage responsibly. Also, it's expensive since we borrow at a higher rate than we get on our bonds. But I think that going 100% stocks in the early part of your career is pretty close to a no-brainer under most circumstances. Remember, you'll be reducing risk closer to retirement, and your lifetime risk will be lower. This article by Ayres and Nalebuff explains how it works. If you have any questions, I'll be happy to answer.

Dottie57
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Re: Just read the book, now I need your help getting organized!

Post by Dottie57 » Sat Feb 23, 2019 12:58 pm

I think having a portion of your portfolio in bonds is good. It lends stability to the portfolio. For OP I would say 10-20%.
If you are unsure about your reaction to a truly bad market, move the percentage f bonds up.

Sometimes it seems like people on the forum equate risk taking wth Courage. I don’t believe it is. I do believe a higher percentage in stocks is good for those who are younger.

The biggest chance of success is related to the percent of income saved. I consider 15% the very minimum for most people. Go higher if you want to retire earlier.

Tax differentiation is good (taxable - brokerage acct), tax-deferred (401k and IRA) and post tax (Roth). Don’t neglect taxable -I wish I had done mrewith this.

Ramp up savings and investing now and make sure to keep your expenses low.

You don’t need life insurance unless it is a small amount to pay for a funeral. Make sure you have a really good disability policy - extremely important!

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: The Three-Fund Portfolio

Post by ReeceBobby » Sat Feb 23, 2019 7:13 pm

Taylor Larimore wrote:
Fri Feb 22, 2019 7:19 pm
I recommend reading the Three Fund Portfolio. If you're interested in maintaining a simple portfolio, that book gives you straightforward advice and options.
Best,
Andrew
ReeceBobby:

This is a link to the book on Amazon:

https://www.amazon.com/Bogleheads-Guide ... 1119487331

Best wishes.
Taylor
Thanks for the recommendation, I'll get that one on the reading list ASAP!

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Sat Feb 23, 2019 7:42 pm

Thank you all for the replies so far!

I will definitely check out the "white coat investor". I have heard of it, but without knowing much about finances, I don't know what I don't know. Since you all approve of the underlying message I will definitely check it out!

I'm going to have to dive into the costs more. I will tell you that the website of the group that manages my retirement is genius. It makes it nearly impossible to find and track fees. Just upon looking at it more, it looks like the management fees are 0.5% per annum. I don't see any other fees but I will try and upload my statement to see what you all think.

You have confirmed my suspicions about whole life life insurance. I will be cancelling it. I don't know if I can get the money I have contributed back or how that will work but I have felt this way for a while and I'm glad you are in agreement with me. I have the Term life because it is cheap, my Mom will most likely be somewhat financially dependent on me in the future so this was a reasonable option just in case. I 'm ok with eating the cost of this fee.

Topic Author
ReeceBobby
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Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Sat Feb 23, 2019 7:45 pm

Dottie57 wrote:
Sat Feb 23, 2019 12:58 pm
I think having a portion of your portfolio in bonds is good. It lends stability to the portfolio. For OP I would say 10-20%.
If you are unsure about your reaction to a truly bad market, move the percentage f bonds up.

Sometimes it seems like people on the forum equate risk taking wth Courage. I don’t believe it is. I do believe a higher percentage in stocks is good for those who are younger.

The biggest chance of success is related to the percent of income saved. I consider 15% the very minimum for most people. Go higher if you want to retire earlier.

Tax differentiation is good (taxable - brokerage acct), tax-deferred (401k and IRA) and post tax (Roth). Don’t neglect taxable -I wish I had done mrewith this.

Ramp up savings and investing now and make sure to keep your expenses low.

You don’t need life insurance unless it is a small amount to pay for a funeral. Make sure you have a really good disability policy - extremely important!
Thanks for the info. I'm definitely more of a saver than a spender so other than contributing the max to retirement, I'm definitely looking to put money in some taxable accounts(because this is my only choice I suppose). My goal is to retire as soon as possible but to also know that the money will be there when I need it, not taking some crazy risk hoping to strike it rich.

Topic Author
ReeceBobby
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Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Sat Feb 23, 2019 7:49 pm

Ben Mathew wrote:
Sat Feb 23, 2019 11:56 am
Welcome. You have received a lot of good advice. I'll add the following (copying from another post I made earlier):

When you're young, you should try hard to be in stocks as much as possible. It's the time for risk! Don't go bonds unless you have a very good reason for it. All of this may sound very irresponsible. But it's really not. That's because if you take on as much risk as you can responsibly handle when young, you can reduce risk in the later years when your portfolio is overweighted. This will reduce the lifetime risk of your portfolio. This is a powerful insight by one of the greatest economists of the twentieth century, and has been expanded upon by Ayres and Nalebuff in a very convincing book, Lifecycle Investing. Once you understand the idea, you will approach your financial decisions in a completely different way. It's a simple and powerful insight, and not enough people are aware and taking advantage.

Ayres and Nalebuff argue for taking on leverage when young. I feel that leverage is probably too hard to handle pyschologically, and require too much time and energy and discipline to manage responsibly. Also, it's expensive since we borrow at a higher rate than we get on our bonds. But I think that going 100% stocks in the early part of your career is pretty close to a no-brainer under most circumstances. Remember, you'll be reducing risk closer to retirement, and your lifetime risk will be lower. This article by Ayres and Nalebuff explains how it works. If you have any questions, I'll be happy to answer.
After reading the book, your post makes me nervous just reading it! That being said, I will definitely look into this more. I understand the concept, I think the only idea I'm not sure about is what you mean by "take on as much risk as you can responsibly handle". I'f I'm contributing to retirement, keeping an emergency fund on hand at all times, and the rest is going into taxable accounts, is that too much risk? Should I keep more in an emergency fund and less in taxable accounts if I'm going 100% stocks?

Dottie57
Posts: 5535
Joined: Thu May 19, 2016 5:43 pm

Re: Just read the book, now I need your help getting organized!

Post by Dottie57 » Sat Feb 23, 2019 8:35 pm

ReeceBobby wrote:
Sat Feb 23, 2019 7:49 pm
Ben Mathew wrote:
Sat Feb 23, 2019 11:56 am
Welcome. You have received a lot of good advice. I'll add the following (copying from another post I made earlier):

When you're young, you should try hard to be in stocks as much as possible. It's the time for risk! Don't go bonds unless you have a very good reason for it. All of this may sound very irresponsible. But it's really not. That's because if you take on as much risk as you can responsibly handle when young, you can reduce risk in the later years when your portfolio is overweighted. This will reduce the lifetime risk of your portfolio. This is a powerful insight by one of the greatest economists of the twentieth century, and has been expanded upon by Ayres and Nalebuff in a very convincing book, Lifecycle Investing. Once you understand the idea, you will approach your financial decisions in a completely different way. It's a simple and powerful insight, and not enough people are aware and taking advantage.

Ayres and Nalebuff argue for taking on leverage when young. I feel that leverage is probably too hard to handle pyschologically, and require too much time and energy and discipline to manage responsibly. Also, it's expensive since we borrow at a higher rate than we get on our bonds. But I think that going 100% stocks in the early part of your career is pretty close to a no-brainer under most circumstances. Remember, you'll be reducing risk closer to retirement, and your lifetime risk will be lower. This article by Ayres and Nalebuff explains how it works. If you have any questions, I'll be happy to answer.
After reading the book, your post makes me nervous just reading it! That being said, I will definitely look into this more. I understand the concept, I think the only idea I'm not sure about is what you mean by "take on as much risk as you can responsibly handle". I'f I'm contributing to retirement, keeping an emergency fund on hand at all times, and the rest is going into taxable accounts, is that too much risk? Should I keep more in an emergency fund and less in taxable accounts if I'm going 100% stocks?
You have already used a lot of leverage in getting your M.D. No need to use more leverage. To me all stocks is crazy - especially since you have not benn through a big bear market. Use age appropriate asset allocation. And invest a high percent of income.

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Sat Feb 23, 2019 9:31 pm

Andrew321 wrote:
Fri Feb 22, 2019 7:08 pm
Hi there,
I recommend reading the Three Fund Portfolio. If you're interested in maintaining a simple portfolio, that book gives you straightforward advice and options.
Best,
Andrew
Thanks I will check it out. If the board things that it would be worth the effort to rebalance every year or so rather than sit on accounts long term, I'm not opposed to this either. Thanks for the help.

Ben Mathew
Posts: 533
Joined: Tue Mar 13, 2018 11:41 am
Location: Seattle
Contact:

Re: Just read the book, now I need your help getting organized!

Post by Ben Mathew » Sun Feb 24, 2019 1:03 am

ReeceBobby wrote:
Sat Feb 23, 2019 7:49 pm
Ben Mathew wrote:
Sat Feb 23, 2019 11:56 am
Welcome. You have received a lot of good advice. I'll add the following (copying from another post I made earlier):

When you're young, you should try hard to be in stocks as much as possible. It's the time for risk! Don't go bonds unless you have a very good reason for it. All of this may sound very irresponsible. But it's really not. That's because if you take on as much risk as you can responsibly handle when young, you can reduce risk in the later years when your portfolio is overweighted. This will reduce the lifetime risk of your portfolio. This is a powerful insight by one of the greatest economists of the twentieth century, and has been expanded upon by Ayres and Nalebuff in a very convincing book, Lifecycle Investing. Once you understand the idea, you will approach your financial decisions in a completely different way. It's a simple and powerful insight, and not enough people are aware and taking advantage.

Ayres and Nalebuff argue for taking on leverage when young. I feel that leverage is probably too hard to handle pyschologically, and require too much time and energy and discipline to manage responsibly. Also, it's expensive since we borrow at a higher rate than we get on our bonds. But I think that going 100% stocks in the early part of your career is pretty close to a no-brainer under most circumstances. Remember, you'll be reducing risk closer to retirement, and your lifetime risk will be lower. This article by Ayres and Nalebuff explains how it works. If you have any questions, I'll be happy to answer.
After reading the book, your post makes me nervous just reading it! That being said, I will definitely look into this more. I understand the concept, I think the only idea I'm not sure about is what you mean by "take on as much risk as you can responsibly handle". I'f I'm contributing to retirement, keeping an emergency fund on hand at all times, and the rest is going into taxable accounts, is that too much risk? Should I keep more in an emergency fund and less in taxable accounts if I'm going 100% stocks?
The question would be what stock/bond asset allocation (AA) to hold in your retirement accounts, emergency fund, and taxable accounts. I recommend you consider holding 100% stocks in all of these accounts. That's unusual advice. But in reality, if there's a 50% drop in stocks tomorrow, and so you lose 50% of all of your accounts, it would still be a lot less money and a lot less pain than you would experience if there was a 50% market drop when you are 60 and holding a seemingly conservative 50/50 portfolio.

The key point is that even a 100% stock AA in the early part of your career is less stock exposure than a 50% stock AA when you are close to retirement. Because returns are almost uncorrelated across time, it's best to spread your stock exposure evenly across time to get the lowest risk for a given return. That would translate to a lot more than 100% stocks in the early part of your career (i.e. you'd be heavily leveraged). But leverage is hard to handle. If you're young and you've saved up $200K, and then leverage it up to $400K and the market drops 50%, you're left with $0 in your accounts. That's terrifying. But in reality, this is still a small fraction of your lifetime portfolio. You would have lost a lot more in the crash if you were closer to retirement and were holding a 50/50 portfolio. But it's hard to remember that when you're young and you've lost everything you've saved up till that point.

Leverage also brings out the gambling instinct in some people. They might be tempted to increase the bet after wins, or win back losses. The idea would be to stay boring with your leverage, handle losses with equanimity, calm in the knowledge that these are not big losses from a lifetime perspective. But it's hard to do it in the moment. 100% stocks is not nearly as hard to do. You don't even have to look at your accounts, or rebalance. Just keep contributing and let it ride.

Since you you are paying down your student loans and mortgage fast, and have a fairly safe future income stream, really ask yourself if you need to hold any bonds now in any account.

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Mon Feb 25, 2019 4:57 pm

Can someone help me post pictures? I'd like to post my current retirement portfolio but can't seem to figure it out. Thanks.

ExitStageLeft
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Joined: Sat Jan 20, 2018 4:02 pm

Re: Just read the book, now I need your help getting organized!

Post by ExitStageLeft » Mon Feb 25, 2019 5:14 pm

ReeceBobby wrote:
Mon Feb 25, 2019 4:57 pm
Can someone help me post pictures? I'd like to post my current retirement portfolio but can't seem to figure it out. Thanks.
Most forum web sites require you to host the picture off-site. The old PhotoBucket site was popular until they demaned users pay for the formerly free service. http://imgur.com is the site I use. Once you have uploaded to your hosting site you can link to the image here. I'll follow up with directions.

ExitStageLeft
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Re: Just read the book, now I need your help getting organized!

Post by ExitStageLeft » Mon Feb 25, 2019 5:31 pm

To insert an image into a post, you click on the icon just above the edit box to Insert Image. It's the 9th button from the left. It will generate some text in the edit box that looks like this:

Code: Select all

[img][/img]
The easiest thing is to copy the image link into the clipboard, then paste it into the forum message edit box. It goes inside the first set of square brackets like so:

Code: Select all

[img=https://mark.trademarkia.com/logo-images/the-vanguard-group/logo-77708194.jpg][/img]
You can then preview your posting to make sure the image is visible.

Image

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Sat Mar 02, 2019 2:17 pm

ExitStageLeft wrote:
Mon Feb 25, 2019 5:31 pm
To insert an image into a post, you click on the icon just above the edit box to Insert Image. It's the 9th button from the left. It will generate some text in the edit box that looks like this:

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Thanks. I'm going to try this out.

Living Free
Posts: 215
Joined: Thu Jul 19, 2018 7:31 pm

Re: Just read the book, now I need your help getting organized!

Post by Living Free » Sat Mar 02, 2019 2:52 pm

ReeceBobby wrote:
Fri Feb 22, 2019 5:34 pm

1.) As stated above, I was a 1099 employee for 4 years, I contributed to the above accounts, I am now employed. Should/can I roll these accounts into one account? Should I leave them be and just contribute to my current 401K through my new employer? My SEP and Solo 401K are managed by a family members financial group, the fees are about $250 a year, which seems reasonable, but I am able to move them out of their control if it is believed that would be a better option.

2.) I've decided low cost mutual funds seems like the best route for retirement funds (outside of my corporate/tax deferred retirement accounts). I'm willing to be a little more on the risky side to try and make up for some lost time. I have a decent amount of money saved up that I would like to get invested ASAP. Would love to hear if you all think this is the best option for me.

3.) I would like my retirement investment accounts to be as low maintenance as possible. I'd prefer an account where I don't have to rebalance my portfolio every so often. I have been looking at Vanguards account that does this, and also Wealthfront. I have heard good things about Wealthfront and Vanguard and am wondering what the bogleheads think about it as a mutual fund portfolio manager. The more automated and reliable the better.
1. You should look into rolling the SEP into the Solo 401k and then AVOID rolling it into another type of IRA. Not having any traditional (or SEP) IRA will allow you to do the backdoor Roth IRA in the future. That is a slightly more advanced strategy but once you get comfortable with it you create an additional $6k per year of tax advantaged asset protected space. I've heard that not all Solo 401k providers accept rollovers so be sure to check out that feature before you start moving these accounts to different brokerages (I've heard that maybe fidelity and Etrade allow this but look into it)

2-3. Yes, low cost mutual funds are a good choice for your taxable/brokerage account. Specifically broad market stock index funds, using mutual funds or ETFs at vanguard or just ETFs if at another brokerage. I agree with ruralavalon that VTSAX and VTIAX are great choices - broadly diversified and tax efficient. You might need to put some extra bonds in your 401k if you do this to balance out the portfolio.

I dislike wealthfront or robo-advisors as they create complex portfolios that will then gather capital gains which can leave you stuck in their portfolio (you'd have to pay capital gains taxes to get out).

I'd not try to take too much risk to make up for lost time. You should be able to earn and save enough that all you need is market returns of a reasonable portfolio to reach your goal. The risk of trying to do better than that is that you may end up underperforming the market (I'm not very willing to take that risk myself). I'll be yet another forum member to recommend the 3 fund portfolio.

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Mon Mar 04, 2019 8:09 pm

Living Free wrote:
Sat Mar 02, 2019 2:52 pm


1. You should look into rolling the SEP into the Solo 401k and then AVOID rolling it into another type of IRA. Not having any traditional (or SEP) IRA will allow you to do the backdoor Roth IRA in the future. That is a slightly more advanced strategy but once you get comfortable with it you create an additional $6k per year of tax advantaged asset protected space. I've heard that not all Solo 401k providers accept rollovers so be sure to check out that feature before you start moving these accounts to different brokerages (I've heard that maybe fidelity and Etrade allow this but look into it)

2-3. Yes, low cost mutual funds are a good choice for your taxable/brokerage account. Specifically broad market stock index funds, using mutual funds or ETFs at vanguard or just ETFs if at another brokerage. I agree with ruralavalon that VTSAX and VTIAX are great choices - broadly diversified and tax efficient. You might need to put some extra bonds in your 401k if you do this to balance out the portfolio.

I dislike wealthfront or robo-advisors as they create complex portfolios that will then gather capital gains which can leave you stuck in their portfolio (you'd have to pay capital gains taxes to get out).

I'd not try to take too much risk to make up for lost time. You should be able to earn and save enough that all you need is market returns of a reasonable portfolio to reach your goal. The risk of trying to do better than that is that you may end up underperforming the market (I'm not very willing to take that risk myself). I'll be yet another forum member to recommend the 3 fund portfolio.
Wow, thanks so much for taking the time to answer all of my questions. I do have a few other questions thought!;) As far as my retirement accounts are concerned, I am no longer contributing to the SEP. I think I was wrong earlier and actually have a Roth 401k plan currently, it is set up so there is a standard 401k distribution that I can contribute about $36k to a year, and a 401K Roth that I can contribute about $18k to. These I contributed to last year, should I continue this type of plan if possible? I am now considered an employee and also have an employer sponsored plan I CAN contribute to if I want. I believe they will match up to $10k but I only plan on using this account to get my employer match, the rest I would like to keep in my current accounts. Am I still eligible to contribute to my Roth 401k if I am no longer a self employed independent contractor?

Oh and I just got the 3 Fund book from Amazon and will be starting to read it tomorrow!

Living Free
Posts: 215
Joined: Thu Jul 19, 2018 7:31 pm

Re: Just read the book, now I need your help getting organized!

Post by Living Free » Mon Mar 04, 2019 9:29 pm

ReeceBobby wrote:
Mon Mar 04, 2019 8:09 pm
Living Free wrote:
Sat Mar 02, 2019 2:52 pm


1. You should look into rolling the SEP into the Solo 401k and then AVOID rolling it into another type of IRA. Not having any traditional (or SEP) IRA will allow you to do the backdoor Roth IRA in the future. That is a slightly more advanced strategy but once you get comfortable with it you create an additional $6k per year of tax advantaged asset protected space. I've heard that not all Solo 401k providers accept rollovers so be sure to check out that feature before you start moving these accounts to different brokerages (I've heard that maybe fidelity and Etrade allow this but look into it)

2-3. Yes, low cost mutual funds are a good choice for your taxable/brokerage account. Specifically broad market stock index funds, using mutual funds or ETFs at vanguard or just ETFs if at another brokerage. I agree with ruralavalon that VTSAX and VTIAX are great choices - broadly diversified and tax efficient. You might need to put some extra bonds in your 401k if you do this to balance out the portfolio.

I dislike wealthfront or robo-advisors as they create complex portfolios that will then gather capital gains which can leave you stuck in their portfolio (you'd have to pay capital gains taxes to get out).

I'd not try to take too much risk to make up for lost time. You should be able to earn and save enough that all you need is market returns of a reasonable portfolio to reach your goal. The risk of trying to do better than that is that you may end up underperforming the market (I'm not very willing to take that risk myself). I'll be yet another forum member to recommend the 3 fund portfolio.
Wow, thanks so much for taking the time to answer all of my questions. I do have a few other questions thought!;) As far as my retirement accounts are concerned, I am no longer contributing to the SEP. I think I was wrong earlier and actually have a Roth 401k plan currently, it is set up so there is a standard 401k distribution that I can contribute about $36k to a year, and a 401K Roth that I can contribute about $18k to. These I contributed to last year, should I continue this type of plan if possible? I am now considered an employee and also have an employer sponsored plan I CAN contribute to if I want. I believe they will match up to $10k but I only plan on using this account to get my employer match, the rest I would like to keep in my current accounts. Am I still eligible to contribute to my Roth 401k if I am no longer a self employed independent contractor?

Oh and I just got the 3 Fund book from Amazon and will be starting to read it tomorrow!
Do you mean that you had a Roth Solo 401k? I don't see how you could have contributed that much to it otherwise (I also don't understand the standard 401k "distribution" and $36k per year - is this the employer contribution to the solo 401k that you made?). Generally traditional would be preferable to Roth on a physician income so that you can defer taxes from your highest marginal rate. If you are an employee now this year without self employment income then I don't think you're eligible for a solo 401k contribution any more (i'd recommend you look into this further as I'm not too familiar with these plans). So you might be able to invest only in your employers 401k/403b this year, and you'll only be able to do the $19k + employer match (and if your plan allows in service rollovers and after tax contributions you could look into the mega backdoor Roth).

I asked specifically about the SEP with regards to possible future backdoor Roth IRA conversions/contributions. Regardless of if you're still contributing, if the SEP IRA still exists it will interfere with your backdoor Roth IRA plans.

Beyond your employer sponsored plan, (possible) backdoor Roth IRA, (possible) HSA (if you have qualifying high deductible health plan), your other options are basically investing in a taxable brokerage account and paying down debt (or doing something else like real estate rental properties), or some other alternative that I don't know about and/or would not consider reasonable

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: The Three-Fund Portfolio

Post by ReeceBobby » Wed Mar 13, 2019 8:25 pm

ReeceBobby wrote:
Sat Feb 23, 2019 7:13 pm
Taylor Larimore wrote:
Fri Feb 22, 2019 7:19 pm
I recommend reading the Three Fund Portfolio. If you're interested in maintaining a simple portfolio, that book gives you straightforward advice and options.
Best,
Andrew
ReeceBobby:

This is a link to the book on Amazon:

https://www.amazon.com/Bogleheads-Guide ... 1119487331

Best wishes.
Taylor
Thanks for the recommendation, I'll get that one on the reading list ASAP!
Thank you so much for all of your insight and sharing it with all of us so willingly. I read the "Three fund portfolio". According to the book, the VTSAX, VBMFX,VGTSX are the 3 funds you would recommend with a distribution of stocks/bonds/international that I am comfortable with. is this correct?

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Wed Mar 13, 2019 8:30 pm

Living Free wrote:
Sat Mar 02, 2019 2:52 pm
Do you mean that you had a Roth Solo 401k? I don't see how you could have contributed that much to it otherwise (I also don't understand the standard 401k "distribution" and $36k per year - is this the employer contribution to the solo 401k that you made?). Generally traditional would be preferable to Roth on a physician income so that you can defer taxes from your highest marginal rate. If you are an employee now this year without self employment income then I don't think you're eligible for a solo 401k contribution any more (i'd recommend you look into this further as I'm not too familiar with these plans). So you might be able to invest only in your employers 401k/403b this year, and you'll only be able to do the $19k + employer match (and if your plan allows in service rollovers and after tax contributions you could look into the mega backdoor Roth).

I asked specifically about the SEP with regards to possible future backdoor Roth IRA conversions/contributions. Regardless of if you're still contributing, if the SEP IRA still exists it will interfere with your backdoor Roth IRA plans.

Beyond your employer sponsored plan, (possible) backdoor Roth IRA, (possible) HSA (if you have qualifying high deductible health plan), your other options are basically investing in a taxable brokerage account and paying down debt (or doing something else like real estate rental properties), or some other alternative that I don't know about and/or would not consider reasonable
[/quote]

I was an independent contractor with an LLC so I was able to contribute a significant amount more to my tax advantaged retirement accounts because I was an employee of my own corporation. I think I was confused when I was explaining my current retirement portfolio. Basically, I can contribute to a Roth 401k $18,5 a year and $32K to a 401K. Now I am no longer an independent contractor and am employed so I will be stuck with the $18,5k +employer contribution. Warning, this is all new to me so I may or may not be correct in how I am explaining/understanding this. Rest assured I do have a very capable and honest CPA who does my taxes and keeps me out of harms way.

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Taylor Larimore
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Re: Just read the book, now I need your help getting organized!

Post by Taylor Larimore » Wed Mar 13, 2019 9:18 pm

Post by ReeceBobby » Fri Feb 22, 2019 5:34 pm
Hello everyone. Sorry for the long post. Thanks in advance to anyone that is able to trudge through it! I have just read the "Guide to Smart Investing"
ReeceBobby:

I searched Amazon and could not find the book. Can you give a link?

I suspect that you mean: The Bogleheads' Guide to Investing. Let us know.

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

Topic Author
ReeceBobby
Posts: 12
Joined: Fri Feb 22, 2019 2:06 pm

Re: Just read the book, now I need your help getting organized!

Post by ReeceBobby » Sun Mar 17, 2019 8:22 pm

Taylor Larimore wrote:
Wed Mar 13, 2019 9:18 pm
Post by ReeceBobby » Fri Feb 22, 2019 5:34 pm
Hello everyone. Sorry for the long post. Thanks in advance to anyone that is able to trudge through it! I have just read the "Guide to Smart Investing"
ReeceBobby:

I searched Amazon and could not find the book. Can you give a link?

I suspect that you mean: The Bogleheads' Guide to Investing. Let us know.

Thank you and best wishes.
Taylor
Yes, I meant the "The Bogleheads guide to investing", I must have put the "smart" in there on my own. Thank you so much for all of your insight and sharing it with all of us so willingly. I read the "Three fund portfolio". According to the book, the VTSAX, VBMFX,VGTSX are the 3 funds you would recommend with a distribution of stocks/bonds/international that I am comfortable with. is this correct?

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Wiggums
Posts: 415
Joined: Thu Jan 31, 2019 8:02 am

Re: Just read the book, now I need your help getting organized!

Post by Wiggums » Sun Mar 17, 2019 8:25 pm

Here’s a link to Taylor’s books

[url] https://www.amazon.com/s?k=boglehead+guide [\url]

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