Hello Bogleheads,
I recently moved assets from Edward Jones into my Fidelity account (that I had some funds in already). Though, the portfolio my advisor had me in was overly complex. In this post, I'm hoping to receive feedback on a couple of things. Mainly, I want to simplify to a three-fund portfolio, while making sure in the process of doing this I pay the least amount of taxes. Additionally, since I will be going into my Senior year of college next year, there are a couple potential strategies I thought of, on how to minimize my SAI on the FAFSA (legally of course). I have just finished reading "The Bogleheads' Guide To Investing' but still feel a bit overwhelmed and want to minimize my chance of making a mistake, so I am thankful for any feedback/advice you all have.
Emergency Funds: None
Debt: None
Tax Filing Status: Single
Tax Rate: 10% Federal, 3.5% State
State of Residence: WI
Age: 21
Desired Asset allocation: 95% stocks / 5% bonds
Desired International allocation: 20% of stocks
Approximate Size of Portfolio: 107k
For the portfolio information below (and for my approximate size number above), I am not including what I have invested in cryptocurrencies (Bitcoin/Ethereum/Litecoin). Which is approximately $3600. This is purely just for holding on to for fun, and is money I'm comfortable losing. Please let me know if I should be including this, and I will recalculate the percentages.
Current assets
Taxable at Fidelity
0.19% Cash
0.28% Vanguard Total Stock Market Index Fund ETF (VTI) ER: 0.03%
0.28% iShares Core International Aggregate Bond ETF (IAGG) ER: 0.07%
0.36% Pfizer (PFE)
0.54% iShares Russell 1000 Value ETF (IWD) ER: 0.19%
0.65% Uber (UBER)
0.78% Vanguard Growth ETF (VUG) ER: 0.04%
0.83% iShares Broad USD High Yield Corporate Bond ETF (USHY) ER: 0.08%
1.04% iShares MSCI EAFE Growth ETF (EFG) ER: 0.36%
1.07% iShares MSCI EAFE Value ETF (EFV) ER: 0.33%
1.09% iShares Core U.S. Aggregate Bond ETF (AGG) ER: 0.03%
1.10% iShares MSCI EAFE Small-Cap ETF (SCZ) ER: 0.40%
1.11% iShares Russell Mid-Cap Value ETF (IWS) ER: 0.23%
1.20% iShares Russell Mid-Cap ETF (IWR) ER: 0.19%
1.26% iShares Russell Mid-Cap Growth ETF (IWP) ER: 0.23%
1.69% iShares Russell 2000 ETF (IWM) ER: 0.19%
1.84% iShares S&P 500 Growth ETF (IVW) ER: 0.18%
1.96% Vanguard Value ETF (VTV) ER: 0.04%
2.38% Tesla (TSLA)
2.40% iShares Core Total USD Bond Market ETF (IUSB) ER: 0.06%
2.67% iShares Core MSCI EAFE ETF (IEFA) ER: 0.07%
3.60% Vanguard S&P 500 ETF (VOO) ER: 0.03%
3.61% Vanguard Large-Cap ETF (VV) ER: 0.04%
3.69% Schwab U.S. Mid-Cap ETF (SCHM) ER: 0.04%
3.82% Schwab U.S. Small-Cap ETF (SCHA) ER: 0.04%
4.02% Schwab U.S. Aggregate Bond ETF (SCHZ) ER: 0.03%
5.91% Vanguard FTSE All-World ex-US ETF (VEU) ER: 0.04%
6.52% iShares Core S&P Total U.S. Stock Market ETF (ITOT) ER: 0.03%
6.65% Schwab U.S. Large-Cap ETF (SCHX) ER: 0.03%
Roth IRA at Fidelity
29.85% Fidelity ZERO Total Market Index Fund (FZROX) ER: 0%
7.6% Fidelity ZERO International Index Fund (FZILX) ER: 0%
Questions:
1. Overall, to simplify my portfolio down to a three-fund (or two-fund depending on feedback to question 2) and to potentially raise capital regarding the stuff in questions 3 and 4, I'll plan to sell the long-term positions first (which is a majority of them, about 20-25k in capital gains), and hold on to the short-term positions until they become long-term. I hope to have something like VTI/VXUS in my taxable account (with possibly some fixed income), and then keep the FZROX/FZILX in my Roth IRA. Does this like a sound decent allocation?
2. Regarding asset allocation. If I had an emergency fund, I would feel comfortable putting 100% (with 20% international) of my assets into stocks. Granted I'm 21, so I haven't witnessed many huge crashes (except COVID). But my general mindset when I see the stock market crash/drop a lot, is that it's on a good sale (granted if it's for buying a well-diversified index fund). Is it ok to have 5% of my allocation be for fixed income (thinking of bonds, maybe another thing is better for my situation?) solely for the purpose of having something I can sell if I need to cover for an emergency. Or should I just sell some long-term positions in my taxable account for 3-6 months of living expenses, and move that into a HYSA, and have 100% equities in my portfolio at Fidelity?
3. Back in 2022 my mother had paid approximately $18k for 2 trimesters of my freshman year at college. This was due to the stock market being down, and she didn't want me to have to sell my positions then. Since the stock market has recovered, and I will be graduating soon, it came to my mind that I should pay this back. The FAFSA form is due within the next month or so, and this will be the last time I will be filling it out. I'm wondering if while I'm selling some of my positions to restructure my portfolio to my desired asset allocation, would this be a good time to give her back the $18k (also it would be under the 19k gift tax amount)? The reasoning for this, is that then that $18k would be listed under her assets on the FAFSA, which would weigh less. This could reduce my SAI (Student Aid Index). However, my college is considered a gap school, which means they do not guarantee that the financial aid provided will cover all of the direct costs billed to students. So, it's possible doing this might not provide any additional financial aid for me.
4. I will need about $24.5k ($12.2k each semester) to cover next year's cost for college. I should be able to cover $9k for the fall semester from my summer job/internship earnings. Therefore I would need to pull around $3k for the fall semester, and $12.2k for the spring semester from my assets. Therefore, I am wondering when I should move the money I will need into something more stable. Additionally, with the FAFSA in mind. I'm wondering if it's worth opening up a 529 with Edvest right now and moving the $15.2k I'll need into their fixed income option (yield is 3%). By doing this, someone had mentioned that "As long as you are consider a dependent student for FAFSA purposes (note from me: I am) - and note this is NOT the same thing as dependent for tax purposes - the 529 counts as a parent asset even if owned by the student. I didn't dig deep enough for find an official source but here's a non-official (but I believe credible) one: https://finaid.org/savings/accountownership/." Which could lower my SAI, and additionally it has the tax benefits of: "100% tax-deferred growth and Wisconsin taxpayers can reduce their state taxable income by up to $5,000 per beneficiary, per year for married/joint filers."
I recently moved assets from Edward Jones into my Fidelity account (that I had some funds in already). Though, the portfolio my advisor had me in was overly complex. In this post, I'm hoping to receive feedback on a couple of things. Mainly, I want to simplify to a three-fund portfolio, while making sure in the process of doing this I pay the least amount of taxes. Additionally, since I will be going into my Senior year of college next year, there are a couple potential strategies I thought of, on how to minimize my SAI on the FAFSA (legally of course). I have just finished reading "The Bogleheads' Guide To Investing' but still feel a bit overwhelmed and want to minimize my chance of making a mistake, so I am thankful for any feedback/advice you all have.
Emergency Funds: None
Debt: None
Tax Filing Status: Single
Tax Rate: 10% Federal, 3.5% State
State of Residence: WI
Age: 21
Desired Asset allocation: 95% stocks / 5% bonds
Desired International allocation: 20% of stocks
Approximate Size of Portfolio: 107k
For the portfolio information below (and for my approximate size number above), I am not including what I have invested in cryptocurrencies (Bitcoin/Ethereum/Litecoin). Which is approximately $3600. This is purely just for holding on to for fun, and is money I'm comfortable losing. Please let me know if I should be including this, and I will recalculate the percentages.
Current assets
Taxable at Fidelity
0.19% Cash
0.28% Vanguard Total Stock Market Index Fund ETF (VTI) ER: 0.03%
0.28% iShares Core International Aggregate Bond ETF (IAGG) ER: 0.07%
0.36% Pfizer (PFE)
0.54% iShares Russell 1000 Value ETF (IWD) ER: 0.19%
0.65% Uber (UBER)
0.78% Vanguard Growth ETF (VUG) ER: 0.04%
0.83% iShares Broad USD High Yield Corporate Bond ETF (USHY) ER: 0.08%
1.04% iShares MSCI EAFE Growth ETF (EFG) ER: 0.36%
1.07% iShares MSCI EAFE Value ETF (EFV) ER: 0.33%
1.09% iShares Core U.S. Aggregate Bond ETF (AGG) ER: 0.03%
1.10% iShares MSCI EAFE Small-Cap ETF (SCZ) ER: 0.40%
1.11% iShares Russell Mid-Cap Value ETF (IWS) ER: 0.23%
1.20% iShares Russell Mid-Cap ETF (IWR) ER: 0.19%
1.26% iShares Russell Mid-Cap Growth ETF (IWP) ER: 0.23%
1.69% iShares Russell 2000 ETF (IWM) ER: 0.19%
1.84% iShares S&P 500 Growth ETF (IVW) ER: 0.18%
1.96% Vanguard Value ETF (VTV) ER: 0.04%
2.38% Tesla (TSLA)
2.40% iShares Core Total USD Bond Market ETF (IUSB) ER: 0.06%
2.67% iShares Core MSCI EAFE ETF (IEFA) ER: 0.07%
3.60% Vanguard S&P 500 ETF (VOO) ER: 0.03%
3.61% Vanguard Large-Cap ETF (VV) ER: 0.04%
3.69% Schwab U.S. Mid-Cap ETF (SCHM) ER: 0.04%
3.82% Schwab U.S. Small-Cap ETF (SCHA) ER: 0.04%
4.02% Schwab U.S. Aggregate Bond ETF (SCHZ) ER: 0.03%
5.91% Vanguard FTSE All-World ex-US ETF (VEU) ER: 0.04%
6.52% iShares Core S&P Total U.S. Stock Market ETF (ITOT) ER: 0.03%
6.65% Schwab U.S. Large-Cap ETF (SCHX) ER: 0.03%
Roth IRA at Fidelity
29.85% Fidelity ZERO Total Market Index Fund (FZROX) ER: 0%
7.6% Fidelity ZERO International Index Fund (FZILX) ER: 0%
Questions:
1. Overall, to simplify my portfolio down to a three-fund (or two-fund depending on feedback to question 2) and to potentially raise capital regarding the stuff in questions 3 and 4, I'll plan to sell the long-term positions first (which is a majority of them, about 20-25k in capital gains), and hold on to the short-term positions until they become long-term. I hope to have something like VTI/VXUS in my taxable account (with possibly some fixed income), and then keep the FZROX/FZILX in my Roth IRA. Does this like a sound decent allocation?
2. Regarding asset allocation. If I had an emergency fund, I would feel comfortable putting 100% (with 20% international) of my assets into stocks. Granted I'm 21, so I haven't witnessed many huge crashes (except COVID). But my general mindset when I see the stock market crash/drop a lot, is that it's on a good sale (granted if it's for buying a well-diversified index fund). Is it ok to have 5% of my allocation be for fixed income (thinking of bonds, maybe another thing is better for my situation?) solely for the purpose of having something I can sell if I need to cover for an emergency. Or should I just sell some long-term positions in my taxable account for 3-6 months of living expenses, and move that into a HYSA, and have 100% equities in my portfolio at Fidelity?
3. Back in 2022 my mother had paid approximately $18k for 2 trimesters of my freshman year at college. This was due to the stock market being down, and she didn't want me to have to sell my positions then. Since the stock market has recovered, and I will be graduating soon, it came to my mind that I should pay this back. The FAFSA form is due within the next month or so, and this will be the last time I will be filling it out. I'm wondering if while I'm selling some of my positions to restructure my portfolio to my desired asset allocation, would this be a good time to give her back the $18k (also it would be under the 19k gift tax amount)? The reasoning for this, is that then that $18k would be listed under her assets on the FAFSA, which would weigh less. This could reduce my SAI (Student Aid Index). However, my college is considered a gap school, which means they do not guarantee that the financial aid provided will cover all of the direct costs billed to students. So, it's possible doing this might not provide any additional financial aid for me.
4. I will need about $24.5k ($12.2k each semester) to cover next year's cost for college. I should be able to cover $9k for the fall semester from my summer job/internship earnings. Therefore I would need to pull around $3k for the fall semester, and $12.2k for the spring semester from my assets. Therefore, I am wondering when I should move the money I will need into something more stable. Additionally, with the FAFSA in mind. I'm wondering if it's worth opening up a 529 with Edvest right now and moving the $15.2k I'll need into their fixed income option (yield is 3%). By doing this, someone had mentioned that "As long as you are consider a dependent student for FAFSA purposes (note from me: I am) - and note this is NOT the same thing as dependent for tax purposes - the 529 counts as a parent asset even if owned by the student. I didn't dig deep enough for find an official source but here's a non-official (but I believe credible) one: https://finaid.org/savings/accountownership/." Which could lower my SAI, and additionally it has the tax benefits of: "100% tax-deferred growth and Wisconsin taxpayers can reduce their state taxable income by up to $5,000 per beneficiary, per year for married/joint filers."
Statistics: Posted by EvanInvests — Tue Feb 04, 2025 6:41 pm — Replies 0 — Views 140