Announcement

Collapse
No announcement yet.

Investment account portfolios

Collapse
X
Collapse
First Prev Next Last
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Investment account portfolios

    Here is the background: I'm 32 yo beginner investor. Just recent graduated from residency and I'm currently trying to become more financially literate since I did not have any education on this before (very thankful for discovering WCI ). I purchased the "Fire Your Financial Advisor" course and I'm currently working on my financial plan. I have a 401K with my new employer, HSA and a Roth IRA. I currently have $380K worth of student loans and plan to apply for PSLF (eligible date 7/2025). I plan on following Dr. Dahle's advice and save a student loan side fund (in a taxable account) until my eligibility for PSLF. My plan for asset allocation is as follows:

    - US total stocks 30%
    - Total International stocks 20%
    - Small value stocks 20%
    - REIT 10%
    - US total bonds 10%
    - International bonds 5%
    - Municipal bond 5%

    Here is the question: As I understand it, it is better to treat all of your investment accounts as one portfolio and not have repeated assets in individual investing accounts. This makes sense when all of the portfolio is directed towards one common goal (retirement). But what about in my case where the main goal of the taxable account is student loan payment and the goal for the other accounts is retirement? Should I implement only 1 portfolio that includes the taxable account or should I do 2 different portfolios.. one for retirement accounts and one for taxable account? Appreciate your wisdom.

  • #2
    Your time horizon for both goals is very different, so your AA should be different too.

    Whether you need 7 funds in a pslf side fund is another question.

    Comment


    • #3
      Originally posted by pierre View Post
      Your time horizon for both goals is very different, so your AA should be different too.

      Whether you need 7 funds in a pslf side fund is another question.
      Noted. Thanks for the input

      Comment


      • #4
        Since your student loan fund needs to be stable & available within the next few years, I'd invest it like an emergency fund. Stable value, little risk.

        You other accounts should, as pierre said be invested towards their goal.
        "Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

        Comment


        • #5
          Agreed. Your time horizon for possibly paying off your student loans is only 5 years away. In your taxable account you need to be pretty bond heavy to make sure you have the funds you need at the time you may have to pay. Also you may want to get rid of the REIT index fund in your taxable account. This is better in tax advantaged accounts because it's tax inefficient.

          Comment


          • #6
            Put all the ROTH contributions in Total Stock Index Fund Vanguard

            Comment


            • #7
              With a short time horizon I’d personally keep it simple with a 2 or 3 fund portfolio. I just can’t see throwing a small or reit tilt to an account when those are usually long term plays.

              Before you make any decisions try to figure out the probability of you getting PSLF, how much you expect to out into this account each year, the tax drag from tax inefficient asset classes, and how you’d incorporate this account into your total portfolio if it turns out you get PSLF. The mathematically correct answer, probability of various outcomes, and behavioral finance aspects all play an important role in determining what is ultimately best for you.

              Comment


              • #8
                Every goal that you’re saving for should have its own asset allocation depending on your time horizon and level of risk you’re willing to take based on that horizon. So separate portfolios

                Comment

                Working...
                X