Personal Investments • revisiting portfolio after 5yrs of life changes

Thanks again to all who helped us with our investment strategy almost 5 years ago (both directly through my post and indirectly through all the advice I’ve found by perusing the wiki & forum). It has been of tremendous value!

I wanted to check in again as a quite a few things have changed:

• Now have 2 young children, started 529s
• Now funding back-door roths
• Sold off investment real estate
• Paid off mortgage.. we had also reduced allocation to fixed income when we reduced that fixed debt

Other upcoming changes

• Soon, we will take a big pay decrease as higher-earning parent plans to stay home with kids, income will be about 35% of what it is now (for the currently foreseeable future).
• Will likely start tilting asset allocation a bit more towards bonds, given the other life changes

Questions:

1. We have 50K sitting in a checking account, basically earning 0 interest. The main reason for this is convenience. We don’t have to think much about cashflow or whether credit cards payments or checks will clear, etc. However, the amount is probably too large and we’d like to consider other strategies here. My spouse is eager to put this money in a HYSA, but based on what I’ve read MM funds seem to the better option. But then we lose the convenience of the checking account, which is really the whole reason for this bucket. If we are going to put the $ in the brokerage account, I’d rather just invest according to our current strategic asset allocation instead of putting it aside in a MM fund. But then, how do we deal with easily and automatically funding everyday outflows from credit cards and other payments? Here is what I am thinking… Keep the checking account. Schedule all credit card and auto bill payments so that they are at the beginning of the month. Paychecks come through at the end of the month. After money comes in and all the regular payments process, then invest the majority of the remainder so there is very little that ever sits in the account. Maybe keep a couple thousand in there, just in case. If we have a large unexpected payment come up, like an emergency house repair, we could wait until the next month if possible or sell brokerage funds. Is this a sound strategy? The other possibility that I’ve read here that intrigues me is using the Fidelity CMA as an account that serves most checking account needs while earning a bit more. However, none of my other accounts are with Fidelity, so this may add a little more complexity than desired.
2. Our HSAs changed owner, and we no longer have the option to invest in total stock market. I think I will just move some of our international allocation here instead. Does that seem reasonable? I liked having US stock here since it feels a little less risky than international, which is a nice feature for this tax-advantaged account, but maybe I’m overthinking.
3. For the new kiddos, we have started 529s, but still need to look into setting up a will and term life insurance. Anything else we should be thinking about?
4. Besides revisiting budget, making sure we still have insurance coverage, anything specific we should be thinking about when going from 1 income to 2?
5. Any other general feedback/recommendations are welcome

Thanks for any and all thoughts!!


Emergency funds: $50,000 in checking account
Debt: none
Tax Filing Status: Married Filing Jointly
Tax Rate: 37% Federal (will drop to 24% after income change), 4.95% State
State of Residence: Illinois
Age: low-mid 40s
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 40% of stocks
Portfolio Size: $3.5M


Current assets

Taxable
1% cash
33% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04%)
24% Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.12%)
401Ks
22% Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) (.14%)
4% Vanguard Total International Stock Index Fund Investor Shares (VGTSX) (.18%)
9% Vanguard Total Bond Market Index Fund Investor Shares (VBMFX) (.15%)
Roth IRAs
4% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04%)
HSAs
2% VANGUARD TOTAL STOCK MARKET IDX I (VITSX) (.03%) (this needs to be moved due to fund closure)
529s
1% Vanguard Total Stock Market Index 529 Portfolio (VSMPX) (.08%)


Contributions

New annual Contributions
$23,500 + 13,800 match = $37,300 401k #1
$23,500 + 13,800 match = $37,300 401K #2 (this will end soon due to employment change)
$8,550 HSA #1
$4,300 HSA #2 (this will end soon due to employment change)
$20,000 529s
$350,000 taxable (will be closer to 0 for some time due to income change)


Available funds

Funds available in 401Ks
Various target date / target risk funds
Domestic Stock Funds
Vanguard 500 Index Fund Investor Shares (VFINX) (0.14%)
Vanguard Diversified Equity Fund (VDEQX) (0.35%)
Vanguard Equity Income Fund Investor Shares (VEIPX) (0.27%)
Vanguard Explorer Fund Investor Shares (VEXPX) (0.45%)
Vanguard Extended Market Index Fund Investor Shares (VEXMX) (0.19%)
Vanguard FTSE Social Index Fund Admiral Shares (VFTAX) (0.14%)
Vanguard Growth and Income Fund Investor Shares (VQNPX) (0.35%)
Vanguard Growth Index Fund Investor Shares (VIGRX) (0.17%)
Vanguard Large-Cap Index Fund Investor Shares (VLACX) (0.17%)
Vanguard Mid-Cap Growth Fund (VMGRX) (0.37%)
Vanguard Mid-Cap Index Fund Investor Shares (VIMSX) (0.17%)
Vanguard Selected Value Fund (VASVX) (0.43%)
Vanguard Small-Cap Growth Index Fund Investor Shares (VISGX) (0.19%)
Vanguard Small-Cap Index Fund Investor Shares (NAESX) (0.17%)
Vanguard Small-Cap Value Index Fund (VISVX) (0.19%)
Vanguard Strategic Equity Fund (VSEQX) (0.17%)
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) (0.14%)
Vanguard U.S. Growth Fund Investor Shares (VWUSX) (0.3%)
Vanguard Value Index Fund Investor Shares (VIVAX) (0.17%)
Vanguard Windsor Fund Investor Shares (VWNDX) (0.42%)
Vanguard Windsor II Fund Investor Shares (VWNFX) (0.34%)
International Stock Funds
Vanguard Developed Markets Index Fund Investor Shares (VDVIX) (0.17%)
Vanguard Emerging Markets Stock Index Fund Investor Shares (VEIEX) (0.29%)
Vanguard European Stock Index Fund Investor Shares (VEURX) (0.24%)
Vanguard Global Equity Fund (VHGEX) (0.42%)
Vanguard International Growth Fund Investor Shares (VWIGX) (0.42%)
Vanguard International Value Fund (VTRIX) (0.39%)
Vanguard Pacific Stock Index Fund Investor Shares (VPACX) (0.23%)
Vanguard Total International Stock Index Fund Investor Shares (VGTSX) (0.18%)
Bond Funds
Vanguard GNMA Fund Investor Shares (VFIIX) (0.21%)
Vanguard High-Yield Corporate Fund Investor Shares (VWEHX) (0.22%)
Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX) (0.2%)
Vanguard Intermediate-Term Bond Index Fund Investor Shares (VBIIX) (0.15%)
Vanguard Intermediate-Term Investment-Grade Fund Investor Shares (VFICX) (0.2%)
Vanguard Intermediate-Term Treasury Fund Investor Shares (VFITX) (0.2%)
Vanguard Long-Term Bond Index Fund Admiral Shares (VBLAX) (0.07%)
Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX) (0.21%)
Vanguard Long-Term Treasury Fund Investor Shares (VUSTX) (0.2%)
Vanguard Short-Term Bond Index Fund Investor Shares (VBISX) (0.15%)
Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX) (0.2%)
Vanguard Short-Term Treasury Fund Investor Shares (VFISX) (0.2%)
Vanguard Total Bond Market Index Fund Investor Shares (VBMFX) (0.15%)
Short-Term Reserves
Vanguard Cash Reserves Federal Money Market Fund Admiral Shares (VMRXX) (0.1%)

Funds available in HSAs
Various target date / target risk funds
Stock
VANGUARD TOTAL STOCK MARKET IDX I (VITSX) (.03%) CLOSED FUND
VANGUARD EXTENDED MARKET INDEX INSTLPLUS (VEMPX) (0.04%)
VANGUARD INST INDEX INSTL PLUS (VIIIX) (0.02%)
VANGUARD SMALL CAP INDEX ADM (VSMAX) (0.05%)
VANGUARD TOTAL INTL STOCK IDX INSTLPLS (VTPSX) (0.08%)
VANGUARD EMERGING MKTS STOCK IDX INSTL (VEMIX) (0.1%)
VANGUARD GROWTH INDEX INSTITUTIONAL (VIGIX) (0.04%)
VANGUARD MID-CAP VALUE INDEX ADMIRAL (VMVAX) (0.07%)
VANGUARD SMALL CAP VALUE INDEX ADMIRAL (VSIAX) (0.07%)
VANGUARD VALUE INDEX ADM (VVIAX) (0.05%)
VANGUARD FTSE SOCIAL INDEX ADMIRAL (VFTAX) (0.14%)
VANGUARD MID CAP INDEX ADMIRAL (VIMAX) (0.05%)
Bond
VANGUARD TOTAL BOND MARKET IDX INSTLPLS (VBMPX) (0.03%)
VANGUARD INFLATION-PROTECTED SECS I (VIPIX) (0.07%)
VANGUARD SHORT-TERM BOND INDEX ADM (VBIRX) (0.07%)
VANGUARD SHRT-TERM INFL-PROT SEC IDX ADM (VTAPX) (0.06%)
VANGUARD TOTAL INTL BD IDX ADMIRAL (VTABX) (0.11%)
VANGUARD ULTRA-SHORT-TERM BOND ADMIRAL (VUSFX) (0.1%)
Alternative
VANGUARD MATERIALS INDEX ADMIRAL (VMIAX) (0.1%)
VANGUARD REAL ESTATE INDEX INSTITUTIONAL (VGSNX) (0.11%)

Funds available in 529s
Various target date / target risk funds
US Equity
Vanguard Total Stock Market Index Fund (VSMPX) (0.08%)
Vanguard Institutional Index Fund (VIIIX) (0.08%)
DFA US Large Cap Value Portfolio (DFLVX) (0.305%)
T. Rowe Price Large-Cap Growth Fund (SMA) (0.415%)
Ariel Fund (ARAIX) (0.765%)
Vanguard Explorer Fund (VEXRX) (0.425%)
DFA US Targeted Value Portfolio (DFFVX) (0.375%)
International Equity
Nuveen International Equity Index Fund (TCIEX) (0.11%)
DFA International Small Company Portfolio (DFISX) (0.475%)
Fixed Income
Vanguard Total Bond Market Index Fund (VBMPX) (0.09%)
Dodge & Cox Income Fund (DODIX) (0.495%)
Vanguard Total International Bond Index Fund (VTIFX) (0.13%)
Vanguard Short-Term Inflation-Protected Securities Index Fund (VTSPX) (0.1%)
Baird Short-Term Bond Fund (BSBIX) (0.385%)
Real Estate
Vanguard Real Estate II Index Fund (VRTPX) (0.14%)
Sustainable Investment
Parnassus Core Equity Fund (PRILX) (0.695%)

Statistics: Posted by OnTheRoad — Mon Jan 06, 2025 2:01 pm — Replies 0 — Views 87

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