Three fund portfolio?

MathWorks cJ8oNw
Mar 15 28 Comments

Finally getting my feet wet and starting to learn about investment (long overdue, money has been rotting in the bank).

I was thinking about just following Bogleheads three fund portfolio approach where you invest into VTSAX, international index fund and bonds fund or whatever. Planning on dumping 90% of my savings into the portfolio since I am young, single and without debt. Going to use Vanguard. Once I read a couple of books, maybe I will start investing directly into stocks with 5~10% or something.

Any thoughts, concerns or advice?

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TOP 28 Comments
  • Amadeus Trick2g
    I would suggest you put your money in a robo investor like betterment. They do automatic tax loss harvesting which will save you a ton f money on taxes every year. Also it rebalances your portfolio automatically over time to account for lesser risk exposure as you grow old. It’s a great hands off approach to investing.
    Mar 15 20
    • Facebook vlMg30
      The “catch” is the extra AUM fees roboadvisors charge. If your portfolio is small or you’re just getting started, sure, go for it. But TLH is not hard to do yourself.
      Mar 15
    • Broadcom Ltd. / Eng cr$&fe
      I wud avoid wealthfront. Their TLH buys direct indexing. If u want to leave the platform - u will have a bunch of individual stocks to manage. I also don't know if cost basis will be carried over to new brokerage
      Mar 15
    • Broadcom Ltd. / Eng cr$&fe
      Stick with 3 fund or buy target retirement if u don't want to manual rebalance. TLH has limited benefits over the years when your cost basis is low
      Mar 15
    • MathWorks cJ8oNw
      OP
      I am lost in the sea of weird terms I do not understand - I think I better start with just the famous 3 funds or 2 funds portfolio. Am I supposed to just sign up on Vanguard and get rolling?
      Mar 15
    • Facebook vlMg30
      Yup!
      Mar 15
    • Broadcom Ltd. / Eng cr$&fe
      Go to wealthfront, answer their questionaire, evaluate your risk and they will spit out the % us stock, %international stock, %bonds. Buy those or similar fund in vanguard. U can simplify their recommendation to 3 funds
      Mar 15
    • MathWorks cJ8oNw
      OP
      I actually just took the vanguard questionnaire and got 80% stocks 20% bonds, 0% short term reserves. Thinking 40% VTSAX, 40% VTIAX, 20% VBTLX.
      Mar 15
    • Broadcom Ltd. / Eng cr$&fe
      Great! If u are in high tax bracket avoid bonds in taxable account. The interest is tax'd as income. U can hold bonds in tax deferred or buy tax empt bonds like Muni in taxable account
      Mar 15
    • MathWorks cJ8oNw
      OP
      Thanks everyone for the advice. Does having 401k in Schwab complicate any of this, assuming I want to use Vanguard for index funds/ETFs investment?
      Mar 15
    • Facebook vlMg30
      Not really. It could swing your asset allocation if it’s invested in something wonky, but if it’s just a target date fund it’s likely a similar breakdown to what you’re doing here.
      Mar 15
  • Amazon PIPorGTFO
    You are on a good path. Just do a 3 funds portfolio depending on your risk appetite. Rebalance once a year or with contributions. The most important thing is to put the money in early and as often as possible
    Mar 15 3
    • MathWorks cJ8oNw
      OP
      Yeah I am already late by a few years, kicking myself for being ignorant/nonchalant about this. Better late than never though I guess.
      Mar 15
    • Oracle lHEA77
      How old are you / yoe?
      Mar 15
    • Amazon PIPorGTFO
      Don't kick yourself. The best time to plant a tree was thirty years ago. The second best time is today. I also started late, but it doesn't matter this is not a sprint, it's a marathon
      Mar 15
  • LinkedIn dandilo
    Good start. Don’t listen to suggestions like robo-advisors. Read more details on investing basics here, highly recommended, in line with 3-fund portfolio: www.firetobiz.com/investing-basics
    Mar 16 2
    • Broadcom Ltd. / Eng cr$&fe
      Very good summary of bogglehead philosophy - thanks for sharing.
      Mar 17
    • Broadcom Ltd. / Eng cr$&fe
      I have done betterment. The TLH has more than paid for their fees for the next 10 years - however their rebalance has cost me in taxes😥. My 1099B from them is 20 pages long with 30 trades on each page !!!!
      Mar 17

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