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Old 03-19-2017, 04:14 PM   #4326
n00b590
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Re: General investing questions, newbie queries and thoughts megathread

Do you expect your capital gains tax rate to be lower in the future? Deferring the tax indefinitely is nice, but it's especially nice if you expect to see your tax rate go down as well. It's definitely worth running the numbers to get a better idea though. I'm guessing if you assume emerging markets will outperform the banks by 2% over a significant time frame, it would be worth rebalancing.
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Old 03-20-2017, 11:03 AM   #4327
Kazuya
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Re: General investing questions, newbie queries and thoughts megathread

Yeah, no I'll always be in the top tax bracket. Okay I'll run the #'s this week, it'll be a good exercise to do regardless to learn how big X actually has to be (not sure it's as big as 2%, but I'll see what happens under a few different scenarios)
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Old 03-20-2017, 08:14 PM   #4328
n00b590
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Re: General investing questions, newbie queries and thoughts megathread

Assuming 20 year time frame and the average gain on your current positions is 100%, then X is ~0.5% if my math is right.
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Old Yesterday, 07:48 PM   #4329
Snoop Todd
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Re: General investing questions, newbie queries and thoughts megathread

I have a decent amount I would like to invest, but I'm paralyzed by my options. I've spoke with a financial advisor who recommended several different mutual funds. I ran these by a couple friends in finance who said they were decent options, but I was better off managing my own money and investing in index funds and/or ETFs. This seemed somewhat daunting to me.

I wasn't sure what to do and have put off making a decision, but I really want to sort this out. My inclination is to simply invest in the recommended mutual funds for the short to medium term because I understand that option the best. I don't want to be too hands on with these investments, but I also don't want to be irresponsible with my money and take the lazy option.

Perhaps there's another option I'm not considering. Anything to point me in the right direction would be appreciated. Let me know if I haven't given enough relevant info.
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Old Yesterday, 11:56 PM   #4330
cannabusto
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Re: General investing questions, newbie queries and thoughts megathread

It's not daunting. Just call Vanguard and ask for a 3 fund portfolio and you're good to go. They'll guide you through the details.

Google around on the 3 fund portfolio and you'll get a sense of what it is, similar options, and all that. It's essentially exactly what your friends told you to do.

You can go even simpler and just choose a target date fund. For example, say this was retirement money and you expected to retire in 30-35 years. You could put it in a target date 2050 fund that is aggressive now and becomes more conservative as you age. It becomes more conservative as you age because a market crash is actually a big deal then. These sorts of funds are generally composed of index funds.

Last edited by cannabusto; Today at 12:03 AM.
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Old Today, 09:44 AM   #4331
jalexand42
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Re: General investing questions, newbie queries and thoughts megathread

Yep, you could easily open a vanguard account and throw it all into a Target Date 2060 fund for now.

Then, go read this book:

https://www.amazon.com/Bogleheads-Gu...dp/1118921283/

After that, you can get more advanced with what you are doing if you want. If you're a reader and want some comfort, devour the book first and that will give you more comfort about what you are doing.

Feel free to post the mutual funds you are getting recommended. My default assumption is that recommendations from an advisor will probably be crappy high fee options compared to index funds, but who knows.
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Old Today, 10:40 AM   #4332
unfrgvn
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Re: General investing questions, newbie queries and thoughts megathread

+1 to the previous two posts. I know it can be daunting, but it really isn't hard.

Quote:
Originally Posted by jalexand42 View Post
My default assumption is that recommendations from an advisor will probably be crappy high fee options compared to index funds, but who knows.
Agreed. Even if the funds are relatively decent having an advisor is an unnecessary expense for someone in OP's position.
Here is a table on what a 2.5% advisor / mutual fund fee would cost an investor over the long term. I think it is pretty eye opening.
http://www.pbs.org/wgbh/pages/frontl...c/tyranny.html
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Old Today, 11:23 AM   #4333
sierramist
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Re: General investing questions, newbie queries and thoughts megathread

When people say "they spoke to their friends in finance", what does this mean? I ask because I know people who are quite successful in corporate finance, but know absolutely nothing about personal finance. Most of these people are successful because they have at least a bit of an inflated ego, and won't say I pay 2% to x to manage my money so I have no idea what looks good or doesn't look good. These are also the same people that "knew" a correction was coming 2 years ago so decreased their contributions downward. Just my 2 cents.
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Old Today, 01:32 PM   #4334
blah45
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Re: General investing questions, newbie queries and thoughts megathread

Quote:
Originally Posted by cannabusto View Post
It's not daunting. Just call Vanguard and ask for a 3 fund portfolio and you're good to go. They'll guide you through the details.

Google around on the 3 fund portfolio and you'll get a sense of what it is, similar options, and all that. It's essentially exactly what your friends told you to do.

You can go even simpler and just choose a target date fund. For example, say this was retirement money and you expected to retire in 30-35 years. You could put it in a target date 2050 fund that is aggressive now and becomes more conservative as you age. It becomes more conservative as you age because a market crash is actually a big deal then. These sorts of funds are generally composed of index funds.
I just converted my Vanguard Roth target date 2055 to the 3 fund portfolio and was very easy to do. You do have to manually balance unlike 401ks. Buy the ETFs until you can afford the admiral shares. Total stock market VTSAX (65%) International Stock VXUS (35%) and total bond BND (5%).
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