Looking for Portfolio advice

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Topic Author
coffees4closers
Posts: 5
Joined: Fri May 20, 2022 10:12 am

Looking for Portfolio advice

Post by coffees4closers »

This is my first post so I'll just use the format Laura posted so as not to mess up anything :wink:

Emergency funds: 5 Months living expenses (~15k)

Debt: 210k mortgage at 2.5% 30year fixed

Tax Filing Status: Married Filing Jointly with Dependent Children

Tax Rate: 12% Federal, 10.6% State

State of Residence: Idaho

Age: 34 (I turn 35 next week)

Income: ~ 50k/year

Desired Asset allocation: xx% stocks / xx% bonds (open to suggestion)
My company doesn't offer a 401k or anything so all retirement planning is on me alone. My wife doesn't work and we haven't opened a roth in her name yet because I'm not able to max my own Roth at this time.

I'm just starting out with my Roth IRA (should have started 15 years ago). I have roughly $4,500 in a Roth and another $3,000ish that I *foolishly* invested in Titan and I'm trying to Roll over to my main Roth IRA.

The reason for my post today is to ask if this is a good mix to kind of "catch me up" and hopefully grow to something by retirement age (another 30 years out).
Here's my portfolio:
https://m1.finance/ZhyuhKuInZ9C
For those that don't have M1 it's basically this:
  • 70% is "Equities." Within that category is just 2 funds 80% to VTI and 20% to VXUS for some international
  • 10% is "conviction picks" which are just a small selection of stocks I like. Maybe this is a waste of my resources? It hold UUUU; AAPL; TSLA; VICI which I have some personal conviction in holding but I'm not a pro stock-picker and could be throwing money away...
  • 10% goes to "real estate" which is comprised of 80% VNQ and 20% VNQI (again for int'l exposure)
  • 10% is HFEA which I learned from here and I'm sure most of you are familiar. It's the traditional 55/45 for UPRO and TMF
With this portfolio and working toward a goal of depositing $6,000/year does this allocation seem like it can successfully grow over 30 years and become something worthwhile in retirement?

Thanks for taking the time to give advice and constructive criticisms :)
Last edited by coffees4closers on Mon May 23, 2022 3:08 pm, edited 1 time in total.
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retired@50
Posts: 12821
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Looking for Portfolio advice

Post by retired@50 »

coffees4closers wrote: Fri May 20, 2022 10:42 am Tax Rate: xx% Federal, xx% State (I'm not sure)
...
Desired Asset allocation: xx% stocks / xx% bonds (open to suggestion)
Welcome to the forum. :happy

You can refer to the following links to determine your marginal tax bracket. Use the taxable income from line 15 of your 2021 IRS Form 1040 when comparing to the tables in the linked pages.
Idaho: https://www.tax-rates.org/idaho/income-tax
Federal: https://www.nerdwallet.com/article/taxe ... x-brackets

As far as asset allocation goes, it's a very personal decision. Strangers on the internet shouldn't be making choices about your level of risk tolerance.
Some people find the Vanguard Investor Questionnaire helpful for determining an asset allocation they can live with over the long term.
See link: https://retirementplans.vanguard.com/VG ... Step=start

Quizzes like the one linked above try to tease out your feelings about risk and reward and your feelings about up and down stock & bond markets.

Also consider the asset allocation wiki page on Bogleheads: https://www.bogleheads.org/wiki/Asset_allocation

After you've learned your tax brackets and desired asset allocation, please edit your original post to include the new information by using the pencil icon in the upper right corner of your original post.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
annu
Posts: 1091
Joined: Mon Nov 04, 2019 6:55 pm

Re: Looking for Portfolio advice

Post by annu »

Possible to maybe invest in yourself, maybe training/certification that will help increase your income? Everything you do, saving, investment, is going to ber %age of your earnings, so if you have not looked into this probably a good idea....

I will recommend againts reits, in my personal experience they are nothing like real estate.
Also look into i bonds, very decent option, maybe you can move some of your emergency funds into i bonds.

And dont worry about catching up, that is how you can end up buying risky investments like Luna :shock:
But best thing you can do, explore opportunities to incease take home.

Best of luck
secondopinion
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Joined: Wed Dec 02, 2020 12:18 pm

Re: Looking for Portfolio advice

Post by secondopinion »

coffees4closers wrote: Fri May 20, 2022 10:42 am This is my first post so I'll just use the format Laura posted so as not to mess up anything :wink:

Emergency funds: 5 Months living expenses (~15k)

Debt: 210k mortgage at 2.5% 30year fixed

Tax Filing Status: Married Filing Jointly with Dependent Children

Tax Rate: xx% Federal, xx% State (I'm not sure)

State of Residence: Idaho

Age: 34 (I turn 35 next week)

Income: ~ 50k/year

Desired Asset allocation: xx% stocks / xx% bonds (open to suggestion)
My company doesn't offer a 401k or anything so all retirement planning is on me alone. My wife doesn't work and we haven't opened a roth in her name yet because I'm not able to max my own Roth at this time.

I'm just starting out with my Roth IRA (should have started 15 years ago). I have roughly $4,500 in a Roth and another $3,000ish that I *foolishly* invested in Titan and I'm trying to Roll over to my main Roth IRA.

The reason for my post today is to ask if this is a good mix to kind of "catch me up" and hopefully grow to something by retirement age (another 30 years out).
Here's my portfolio:
https://m1.finance/ZhyuhKuInZ9C
For those that don't have M1 it's basically this:
  • 70% is "Equities." Within that category is just 2 funds 80% to VTI and 20% to VXUS for some international
  • 10% is "conviction picks" which are just a small selection of stocks I like. Maybe this is a waste of my resources? It hold UUUU; AAPL; TSLA; VICI which I have some personal conviction in holding but I'm not a pro stock-picker and could be throwing money away...
  • 10% goes to "real estate" which is comprised of 80% VNQ and 20% VNQI (again for int'l exposure)
  • 10% is HFEA which I learned from here and I'm sure most of you are familiar. It's the traditional 55/45 for UPRO and TMF
With this portfolio and working toward a goal of depositing $6,000/year does this allocation seem like it can successfully grow over 30 years and become something worthwhile in retirement?

Thanks for taking the time to give advice and constructive criticisms :)
  • Nothing wrong with the the two funds here for the 70% of stocks.
  • The tilt to "real estate" is just a sector tilt of stocks. Another 10% in stocks.
  • The "picks" are stocks. Yet 10% more in stocks. You do not really have the financial stuffing to do this.
  • HEFA gives you effectively 15% more in stocks.
You are at 105% stocks and 15% in long-term bonds. Given that singleton stocks, unless it is a well constructed portfolio, have usually more volatility and beta to the market, you are really taking a bold stance on the stock market.

My recommendation:
  • Drop the singleton stocks for the VTI/VXUS mix. You obviously are not well positioned financially to try, and the picks suggest you do not know what you are really doing (a mixture of unknowns and too well knowns is a common thing of novices). Given how small of an amount you have, it is not even worth the time. Come back to it only when you have say $500k and you can risk $25k of it without much worry, and you have learned how to actually seriously pick stocks (and no, do not subscribe to a newsletter thinking that will help). When I used to do it, I had like 20 analytically selected stocks with reasonable caps; I discontinued it due to time and profit margin versus indexing (too little money could be invested).
  • Choose between the sector tilt and the HEFA argumentation. If you choose to do the sector tilt, remove the HEFA and hold EDV for the 10% instead. If you choose the HEFA, remove the sector tilt.
  • Or drop both and do a slightly more conservative portfolio.
In all honesty, you do not have the stuffing to afford all the present risks.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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retiredjg
Posts: 54082
Joined: Thu Jan 10, 2008 11:56 am

Re: Looking for Portfolio advice

Post by retiredjg »

Welcome to the forum. You are doing a lot of things right. There is room for improvement though. :D

Emergency funds: 5 Months living expenses (~15k)

Debt: 210k mortgage at 2.5% 30year fixed
These are both very good and some of the things you are doing right.


Tax Filing Status: Married Filing Jointly with Dependent Children
Tax Rate: xx% Federal, xx% State (I'm not sure)

Income: ~ 50k/year
Your tax rate is very low - either bottom of the 12% bracket or top of the 10% bracket depending on some things we don't know.

To check, compare line 15 (taxable income) on your tax return to this chart http://www.moneychimp.com/features/tax_brackets.htm and then edit your original post with the correct information.


Before going further, it would be good to know if you are getting the saver's credit and the earned income credit on your taxes. If you are, it might be worthwhile to consider using traditional IRA instead of Roth IRA because you might get more of these tax credits.

Also, with kids and the child tax credits, you may be paying almost no tax at all. Would you mind sharing information about that?


Age: 34 (I turn 35 next week)
Desired Asset allocation: xx% stocks / xx% bonds (open to suggestion)
Since you are just starting out, you really have no idea what your tolerance for risk is. Just based on your age, I suggest you start your thinking in the neighborhood of 20% to 35% in bonds.


I'm just starting out with my Roth IRA (should have started 15 years ago). I have roughly $4,500 in a Roth and another $3,000ish that I *foolishly* invested in Titan and I'm trying to Roll over to my main Roth IRA.
Are you saying that the $3,000 in Titan is also in a Roth IRA?

The reason for my post today is to ask if this is a good mix to kind of "catch me up" and hopefully grow to something by retirement age (another 30 years out).
There is nothing you can do to get caught up. All you can do is save money on a regular basis, keep costs low, avoid making stupid mistakes. If you do those things, you will have something to rely on in your later years.


Here's my portfolio:
https://m1.finance/ZhyuhKuInZ9C
For those that don't have M1 it's basically this:
  • 70% is "Equities." Within that category is just 2 funds 80% to VTI and 20% to VXUS for some international
  • 10% is "conviction picks" which are just a small selection of stocks I like. Maybe this is a waste of my resources? It hold UUUU; AAPL; TSLA; VICI which I have some personal conviction in holding but I'm not a pro stock-picker and could be throwing money away...
  • 10% goes to "real estate" which is comprised of 80% VNQ and 20% VNQI (again for int'l exposure)
  • 10% is HFEA which I learned from here and I'm sure most of you are familiar. It's the traditional 55/45 for UPRO and TMF
I'm sorry, but the only things you need to keep to keep from all this are the Total Stock Index and the Total International Index.

Individual stocks are riskier than mutual funds. They are a bit of a gamble and you cannot afford that at this point. Even when you have more saved, individual stocks should not be more than maybe 5% of your portfolio (I suggest none). Besides, all those things are probably included in the total stock market index anyway.

You do not need the REITS. REIT stocks are included in the total stock and (I assume but never looked) in the total international index.

You certainly do not need the HFEA. Being new you probably have no idea that HFEA is not considered to be Boglehead type investing. Yes, I know there are many posts and you would have no way of knowing that, but leverage is more like gambling or speculation than investing. You cannot really afford this type of "investment".

Yes, there are Bogleheads who use leverage - I won't say there aren't. But you do not have the income or the savings to be dabbling in those types of things at this point. You need to have some cake underneath before you start on icing and sprinkles.
With this portfolio and working toward a goal of depositing $6,000/year does this allocation seem like it can successfully grow over 30 years and become something worthwhile in retirement?
I recommend that you do not use this portfolio. Use a straightforward simple portfolio of total stock, total international, and a good bond fund (maybe total bond index). You need to concentrate on how much you can save, keeping costs low, and not gambling with things that could cause you to lose money you cannot afford.

Yes, you can successfully grow a simple portfolio for 30 years and have something worthwhile. But you have to understand that the real driver of all this is how much you save (and keeping costs low).

There is no magic investment, no stock, no leverage, no nothing that will help you more than saving as much as you can and keeping your costs low. You are doing a good job of saving, but what you are investing in needs improvement in my opinion.
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retiredjg
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Joined: Thu Jan 10, 2008 11:56 am

Re: Looking for Portfolio advice

Post by retiredjg »

So...I looked up Titan.

I had thought you meant you bought stocks of a company called Titan. But no, it turns out Titan is an investment firm that charges high fees and offers it's clients some not very main stream investments. Including cryptocurrency.

As I mentioned earlier, you already have some good habits. However, it is also seems like you are looking for shortcuts and get rich quick schemes, thinking that is what investing is all about. That's understandable because you don't know any better yet. You don't actually know what investing is yet.

I think it would be good for you to do a little reading about what investing is (or should be) all about. Both of the Boglehead books are very much oriented toward beginners and would likely be a good choice. There are others on the "reading list" but one of these is a good place to start.

There is also the Wiki, starting with the "Getting Started" section. Be sure to find and watch the videos in the Getting Started section.

https://www.bogleheads.org/wiki/Getting_started

The absolute most important thing you can do for your future is do your best in controlling and increasing how much you save. With your income and your responsibilities, that is going to be a challenge but you need to do your best at it.

If $6k a year is what you can do, do it consistently and do it wisely. Don't waste your time on things like Titan and HFEA as they are much more likely to let you down than to bring you any long term wealth.
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ruralavalon
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Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Looking for Portfolio advice

Post by ruralavalon »

Welcome to the forum :) .

Are 35 is not a late start, so don't be concerned about that. It's good to see that you have a reasonable emergency fund, and have no debt other than the mortgage note.

coffees4closers wrote: Fri May 20, 2022 10:42 amDesired Asset allocation: xx% stocks / xx% bonds (open to suggestion)
At age 35, married with dependent children, and just starting in investing I suggest about 20% in bonds or other fixed income investments (fixed income can include bonds, bond funds, I-bonds, CDs, savings accounts, a Stable Value Fund or Guaranteed Income fund, money market funds). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification".Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk";
2) Wiki article, "Asset allocation";
3) Morningstar (8/20/2019),"The Best Diversifiers for Your Equity Portfolio", link;
4) Morningstar (4/8/2020), "What's the Best Diversifier for Stocks?", link;
5) White Coat Investor (9/23/2016), "In Defense of Bonds", link;
6) Ben Carlson (8/2/2020), "Why Would Anyone Own Bonds Right Now?",link;
7) Morningstar (4/13/2021), "Which Bonds Provide the Biggest Diversification Benefits?", link; and
8) Age versus stocks graph, and Bogleheads' stock allocations bar graph and table.

Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk

coffees4closers wrote: Fri May 20, 2022 10:42 amMy company doesn't offer a 401k or anything so all retirement planning is on me alone. My wife doesn't work and we haven't opened a roth in her name yet because I'm not able to max my own Roth at this time.
I suggest two Roth IRAs, one for each of you at a low cost provider like Vanguard, Fidelity, or Schwab investing in just a few very diversified, low cost index funds.

You can contribute up to $6k annually in each Roth IRA. I suggest that you set up automatic contributions from your checking account every pay period to each Roth IRA, as much as you can afford.

coffees4closers wrote: Fri May 20, 2022 10:42 amThe reason for my post today is to ask if this is a good mix to kind of "catch me up" and hopefully grow to something by retirement age (another 30 years out).
The best way to catch up is to establish a high rate of contributions, rather than use a higher risk portfolio. You can contribute up to $6k annually in each Roth IRA.

The most important investing decision you can make is to establish a high rate of contributions, forum discussion.

Rather than the investments you now use I suggest a Three-fund portfolio. Use very diversified, low cost index funds like:
1) Vanguard Total Stock Market Index Fund (VTSAX) or the ETF share class VTI;
2) Vanguard Total International Stock Index Fund (VTIAX) or the ETF share class VXUS;
3) a good credit quality intermediate-term bond fund like Vanguard Total Bond Market Index Fund (VBTLX) or the ETF share class BND.

OR you could simply use a single target date fund in each Roth IRA.

coffees4closers wrote: Fri May 20, 2022 10:42 amI'm just starting out with my Roth IRA (should have started 15 years ago). I have roughly $4,500 in a Roth and another $3,000ish that I *foolishly* invested in Titan and I'm trying to Roll over to my main Roth IRA.
Do you have a Roth IRA at M1Finance, plus another account? If so what kind of account is the other account? Or is it all in a Roth IRA?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
investuntilimrich
Posts: 235
Joined: Thu Jan 21, 2021 1:33 pm

Re: Looking for Portfolio advice

Post by investuntilimrich »

You have affordable housing but you need to increase the income. I would focus on whatever can be done to increase your income (what's the next position up in your field and why wouldn't you quality? Find the answer and close the gap or begin applying) and in the meantime it probably makes sense to put the spouse to work even if childcare limits the hours possible. I would steer away from risky picks given the current situation and focus on your long term goals. Already mentioned, I-bonds make a lot of sense right now for holding cash in excess of what you need for an emergency, get rid of any debt, keep funding your roth, hopefully your employer will add or next employer will offer a match. That you're putting away money despite all of this tells me you're probably already frugal, there may not be a lot of costs left to cut.
sailaway
Posts: 8215
Joined: Fri May 12, 2017 1:11 pm

Re: Looking for Portfolio advice

Post by sailaway »

There is no catching up, there is only adding in good new habits, like appreciating your emergency fund and building your Roth IRA. Great!

For a portfolio of <$10k, you are trying to do a lot with it. You are already leveraged into real estate, that is why you have a mortgage. Since you are currently holding more in cash than you have invested, it would be reasonable to put 100% of your IRA into VTI and VXUS and be done with it. If you aren't comfortable with that, choose a bond fund for a certain percentage. Better yet, buy ibonds. Do NOT empty your emergency fund to buy ibonds: you won't be able to access that money for the first 12 months.
Topic Author
coffees4closers
Posts: 5
Joined: Fri May 20, 2022 10:12 am

Re: Looking for Portfolio advice

Post by coffees4closers »

retiredjg wrote: Sun May 22, 2022 3:50 pm So...I looked up Titan.

I had thought you meant you bought stocks of a company called Titan. But no, it turns out Titan is an investment firm that charges high fees and offers it's clients some not very main stream investments. Including cryptocurrency.

As I mentioned earlier, you already have some good habits. However, it is also seems like you are looking for shortcuts and get rich quick schemes, thinking that is what investing is all about. That's understandable because you don't know any better yet. You don't actually know what investing is yet.

I think it would be good for you to do a little reading about what investing is (or should be) all about. Both of the Boglehead books are very much oriented toward beginners and would likely be a good choice. There are others on the "reading list" but one of these is a good place to start.

There is also the Wiki, starting with the "Getting Started" section. Be sure to find and watch the videos in the Getting Started section.

https://www.bogleheads.org/wiki/Getting_started

The absolute most important thing you can do for your future is do your best in controlling and increasing how much you save. With your income and your responsibilities, that is going to be a challenge but you need to do your best at it.

If $6k a year is what you can do, do it consistently and do it wisely. Don't waste your time on things like Titan and HFEA as they are much more likely to let you down than to bring you any long term wealth.
thank you so much for the input - yeah titan was a baaaaad choice :\
I'm gonna work a side job of sorts and see if I can't increase my income and work toward $6k/year in the IRA (as well as re-tool it for more of a 3-fund approach... someone reommended BND for the fixed income portion).

I appreciate the criticism coupled with the way forward! I knew this would be a good community to jump into, thank you :)
HomeStretch
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Re: Looking for Portfolio advice

Post by HomeStretch »

Consider splitting whatever you are able to contribute equally between Roth IRAs for you and spouse rather than contributing solely to a Roth IRA for one spouse.
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ruralavalon
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Location: Illinois

Re: Looking for Portfolio advice

Post by ruralavalon »

A good way to start learning the basics is Dr. Bernstein's free, short pdf book "If You Can.

Also read the wiki article "Bogleheads® investment philosophy", see the link I give below.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
coffees4closers
Posts: 5
Joined: Fri May 20, 2022 10:12 am

Re: Looking for Portfolio advice

Post by coffees4closers »

HomeStretch wrote: Mon May 23, 2022 12:40 pm Consider splitting whatever you are able to contribute equally between Roth IRAs for you and spouse rather than contributing solely to a Roth IRA for one spouse.
OH really!? What's the reasoning behind that? I was intending to fully fund 1 first before opening another.

Does it come down to time in the market > than fully funding 1 IRA and having another at 0?
Topic Author
coffees4closers
Posts: 5
Joined: Fri May 20, 2022 10:12 am

Re: Looking for Portfolio advice

Post by coffees4closers »

secondopinion wrote: Fri May 20, 2022 11:23 am
  • Nothing wrong with the the two funds here for the 70% of stocks.
  • The tilt to "real estate" is just a sector tilt of stocks. Another 10% in stocks.
  • The "picks" are stocks. Yet 10% more in stocks. You do not really have the financial stuffing to do this.
  • HEFA gives you effectively 15% more in stocks.
You are at 105% stocks and 15% in long-term bonds. Given that singleton stocks, unless it is a well constructed portfolio, have usually more volatility and beta to the market, you are really taking a bold stance on the stock market.
I see... I was under the impression REIT's offered diversification... in that I thought REIT's aren't closely correlated to the market in general.
secondopinion wrote: Fri May 20, 2022 11:23 am My recommendation:
  • Drop the singleton stocks for the VTI/VXUS mix. You obviously are not well positioned financially to try, and the picks suggest you do not know what you are really doing (a mixture of unknowns and too well knowns is a common thing of novices). Given how small of an amount you have, it is not even worth the time. Come back to it only when you have say $500k and you can risk $25k of it without much worry, and you have learned how to actually seriously pick stocks (and no, do not subscribe to a newsletter thinking that will help). When I used to do it, I had like 20 analytically selected stocks with reasonable caps; I discontinued it due to time and profit margin versus indexing (too little money could be invested).
  • Choose between the sector tilt and the HEFA argumentation. If you choose to do the sector tilt, remove the HEFA and hold EDV for the 10% instead. If you choose the HEFA, remove the sector tilt.
  • Or drop both and do a slightly more conservative portfolio.
Seems like (after reading through replies here) the best option for me is a 3-fund portfolio and adding more Bonds into the mix?
secondopinion wrote: Fri May 20, 2022 11:23 am In all honesty, you do not have the stuffing to afford all the present risks.
I'm realizing this painful truth... reddit r/LETFs steered me wrong! :oops:
HomeStretch
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Re: Looking for Portfolio advice

Post by HomeStretch »

coffees4closers wrote: Mon May 23, 2022 2:49 pm
HomeStretch wrote: Mon May 23, 2022 12:40 pm Consider splitting whatever you are able to contribute equally between Roth IRAs for you and spouse rather than contributing solely to a Roth IRA for one spouse.
OH really!? What's the reasoning behind that? I was intending to fully fund 1 first before opening another.

Does it come down to time in the market > than fully funding 1 IRA and having another at 0?
Opening and making a contribution to spouse’s Roth IRA starts the 5-year clock on an initial Roth IRA.

As far as equally splitting IRA contributions if you have <$12k to contribute, it is just my personal point of view that both spouses should have retirement savings in their own names. A stay at-home parent doesn’t receive a paycheck for their contribution to the family. An equal retirement contribution seems fair and reasonable (to me at least).
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ruralavalon
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Re: Looking for Portfolio advice

Post by ruralavalon »

HomeStretch wrote: Mon May 23, 2022 3:32 pm
coffees4closers wrote: Mon May 23, 2022 2:49 pm
HomeStretch wrote: Mon May 23, 2022 12:40 pm Consider splitting whatever you are able to contribute equally between Roth IRAs for you and spouse rather than contributing solely to a Roth IRA for one spouse.
OH really!? What's the reasoning behind that? I was intending to fully fund 1 first before opening another.

Does it come down to time in the market > than fully funding 1 IRA and having another at 0?
Opening and making a contribution to spouse’s Roth IRA starts the 5-year clock on an initial Roth IRA.

As far as equally splitting IRA contributions if you have <$12k to contribute, it is just my personal point of view that both spouses should have retirement savings in their own names. A stay at-home parent doesn’t receive a paycheck for their contribution to the family. An equal retirement contribution seems fair and reasonable (to me at least).
In my opinion if able to contribute only $6k or less annually it's simpler to use just one IRA.

When able to contribute more than $6k annually, then it makes sense to use two IRAs.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
coffees4closers
Posts: 5
Joined: Fri May 20, 2022 10:12 am

Re: Looking for Portfolio advice

Post by coffees4closers »

ruralavalon wrote: Sun May 22, 2022 4:20 pm Welcome to the forum :) .

Are 35 is not a late start, so don't be concerned about that. It's good to see that you have a reasonable emergency fund, and have no debt other than the mortgage note.

coffees4closers wrote: Fri May 20, 2022 10:42 amDesired Asset allocation: xx% stocks / xx% bonds (open to suggestion)
At age 35, married with dependent children, and just starting in investing I suggest about 20% in bonds or other fixed income investments (fixed income can include bonds, bond funds, I-bonds, CDs, savings accounts, a Stable Value Fund or Guaranteed Income fund, money market funds). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification".Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk";
2) Wiki article, "Asset allocation";
3) Morningstar (8/20/2019),"The Best Diversifiers for Your Equity Portfolio", link;
4) Morningstar (4/8/2020), "What's the Best Diversifier for Stocks?", link;
5) White Coat Investor (9/23/2016), "In Defense of Bonds", link;
6) Ben Carlson (8/2/2020), "Why Would Anyone Own Bonds Right Now?",link;
7) Morningstar (4/13/2021), "Which Bonds Provide the Biggest Diversification Benefits?", link; and
8) Age versus stocks graph, and Bogleheads' stock allocations bar graph and table.

Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk

coffees4closers wrote: Fri May 20, 2022 10:42 amMy company doesn't offer a 401k or anything so all retirement planning is on me alone. My wife doesn't work and we haven't opened a roth in her name yet because I'm not able to max my own Roth at this time.
I suggest two Roth IRAs, one for each of you at a low cost provider like Vanguard, Fidelity, or Schwab investing in just a few very diversified, low cost index funds.

You can contribute up to $6k annually in each Roth IRA. I suggest that you set up automatic contributions from your checking account every pay period to each Roth IRA, as much as you can afford.

coffees4closers wrote: Fri May 20, 2022 10:42 amThe reason for my post today is to ask if this is a good mix to kind of "catch me up" and hopefully grow to something by retirement age (another 30 years out).
The best way to catch up is to establish a high rate of contributions, rather than use a higher risk portfolio. You can contribute up to $6k annually in each Roth IRA.

The most important investing decision you can make is to establish a high rate of contributions, forum discussion.

Rather than the investments you now use I suggest a Three-fund portfolio. Use very diversified, low cost index funds like:
1) Vanguard Total Stock Market Index Fund (VTSAX) or the ETF share class VTI;
2) Vanguard Total International Stock Index Fund (VTIAX) or the ETF share class VXUS;
3) a good credit quality intermediate-term bond fund like Vanguard Total Bond Market Index Fund (VBTLX) or the ETF share class BND.

OR you could simply use a single target date fund in each Roth IRA.

coffees4closers wrote: Fri May 20, 2022 10:42 amI'm just starting out with my Roth IRA (should have started 15 years ago). I have roughly $4,500 in a Roth and another $3,000ish that I *foolishly* invested in Titan and I'm trying to Roll over to my main Roth IRA.
Do you have a Roth IRA at M1Finance, plus another account? If so what kind of account is the other account? Or is it all in a Roth IRA?
I was gonna reply to each segment of your post with my response, but you pretty much nailed it (and me) in every point. I've updated my original post with my tax bracket, and I'm now going with a 3-fund strategy that you and many others have suggested and ditching the eccentric picks.

Plus your point about worrying less about catch up and focusing more on contributions and saving really rings true. My priorities have been off it seems :greedy
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retired@50
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Re: Looking for Portfolio advice

Post by retired@50 »

coffees4closers wrote: Fri May 20, 2022 10:42 am Tax Rate: 12% Federal, 10.6% State
State of Residence: Idaho
Are you certain about the state of Idaho income tax rate?

According to the table I linked earlier, the max rate was 6.92%.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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