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First year attending financial plan... thoughts?

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  • First year attending financial plan... thoughts?

    Stage of Life: 32 yo, first year attending in primary care practice Social Situation: Single
    Annual Income: $225K
    Net Worth: - $325K
    Tax Bracket: 35%
    State of residence: IL
    Insurance Policies:
    - Life insurance: $1.5M coverage divided in 2 term policies ($750K x 30 yrs and $750K x 20 years)
    - Disability insurance: $5K with Ameritas, + Group disability insurance through employer $5K
    - Malpractice with tail coverage (through current employer)
    - Condo insurance (bought a condo during residency that is currently on sale... one of my many financial mistakes), rent insurance (required by landlord) and auto insurance
    - High deductible health plan with HSA
    Debts:
    - Car loan: $10K (5.54%)
    - Mortgage: $41K (4%)
    - Federal Student loans: $380K (variable interest, average 6.38%), on PSFL with REPAY plan
    Assets:
    - Condo: Zillow value $52K
    - 3 month emergency fund: $15K (1.54%) in money market account
    - Employer 401K: $13K
    - Roth IRA: $25K
    - HSA: $1K available to spend and $1K in investments
    Investments:
    Current...
    • 401(k) - Prudential
      • Vanguard Target retirement 2050 fund investor shares (VFIFX): 100%
    • HSA - Health Equity (robo investing- aggressive)
      • VANGUARD EMERGING MKTS STOCK IDX INSTL (VEMIX): 13%
      • VANGUARD EXTENDED MARKET INDEX INSTLPLUS (VEMPX): 16%
      • VANGUARD REAL ESTATE INDEX INSTITUTIONAL (VGSNX): 13%
      • VANGUARD GROWTH INDEX INSTITUTIONAL (VIGIX): 14%
      • VANGUARD MATERIALS INDEX ADMIRAL (VMIAX): 13%
      • VANGUARD SMALL CAP INDEX ADM (VSMAX): 18%
      • VANGUARD TOTAL INTL STOCK IDX INSTLPLS (VTPSX): 13%
    • Roth IRA - SoFi (robo investing- aggressive)
      • SoFi Select 500 ETF (SFY): 60%
      • SoFi Next 500 ETF (SFYX): 7%
      • Vanguard small cal ETF (VB): 3%
      • Vanguard developed markets ETF (VEA): 22%
      • Vanguard Emerging markets ETF (VWO): 8%
    Future plan...
    • 401K
      • US total stocks- 30%
      • US total bonds- 5%
    • HSA
      • Total international stock- 30%
      • REIT- 10%
    • Roth IRA
      • Small value stock- 20%
      • International bonds- 5%
    • Taxable account (PSFL side fund)
      • Total stock market index fund- 40%
      • Municipal bond- 60%
    - Primary investment vehicles will be mutual funds, preferably within tax-sheltered accounts. Will use Index funds whenever possible
    - Favor passively managed investments over actively managed investments.
    - I will strive to achieve a real return of at least 5% per year
    - No asset class will represent less than 5% of my portfolio.

    Questions:
    1) I want to start a PSFL side fund (PSFL eligibility date 2025). Currently maxing my contributions for 401K, roth IRA and HSA. Should this money go in the money market account or a new taxable account? If taxable account, should I stay with SoFi (reason I picked this broker originally was because of low robo-advisor fees)? Still trying to get a handle on investing, not sure if I should continue with robo-advisors.
    2) I'm not sure what my overall asset allocation should be (especially when comparing taxable vs retirement accounts since they have different goals)? What do you think?
    3) Anything I'm missing that I should be doing differently?

    Thanks ahead of time.

  • #2

    Robo advisors are better than sneaky commission sales folk, or unintelligent advisors. But it’s not hard to manage your own portfolio. You’ve gotten a good start by coming to this forum. If you are committed to reading & learning, you’d be able to self manage your portfolio within a few weeks.

    What is your current “money market” account?

    No matter though, put your PSLF money into whatever you want.

    Different goal-ed money can have different asset allocations. If you will need the PSLF money “soon” I would say stay conservative. Mostly fixed income & stable value. Some equities if you are gutsy.

    Long term asset allocation should be based on your goals (as you stated), your risk tolerance, & how much money you need to reach that goal. That will determine the rate of return you need to achieve, & thusly how much equities you’ll need to have.

    You seem to have pretty efficient holdings to accounts setup. I don’t like to see that many different funds overall, I’m simple (possibly just dumb). I’d say 2 or 3 or 4 fund portfolio to keep rebalancing easy & avoiding analysis paralysis. But that’s just my viewpoint.
    "Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

    Comment


    • #3
      Originally posted by Cubicle View Post
      What is your current “money market” account?
      I have a money market account (pretty much a high yield savings account with some checking features) in CIT Bank. Not to be confused with money market fund which I also looked into.

      Originally posted by Cubicle View Post
      Different goal-ed money can have different asset allocations...
      I'm confused about asset allocation in this setting. If wanted to go for the taxable account, then I would have 2 separate portfolios correct? Retirement portfolio (401K, HSA, Roth IRA) and PSFL side fund portfolio (taxable account). I would want to keep my retirement portfolio aggressive (90/10) and my PSFL side fund portfolio conservative (20/80 maybe). Does it matter if I have repeated assets in both portfolios?

      Originally posted by Cubicle View Post
      I don’t like to see that many different funds overall, I’m simple (possibly just dumb). I’d say 2 or 3 or 4 fund portfolio to keep rebalancing easy & avoiding analysis paralysis. But that’s just my viewpoint.
      I hear ya on the smaller fund portfolio. By all means, I would prefer to keep things simple

      Comment


      • #4
        Originally posted by msaave1 View Post
        Stage of Life: 32 yo, first year attending in primary care practice
        Social Situation: Single Annual Income: $225K Tax Bracket: 35%
        -- you sure?
        Net Worth: - $325K
        State of residence: IL
        Insurance Policies:
        - Life insurance: $1.5M coverage divided in 2 term policies ($750K x 30 yrs and $750K x 20 years)
        - Disability insurance: $5K with Ameritas, + Group disability insurance through employer $5K
        - Malpractice with tail coverage (through current employer)
        - Condo insurance (bought a condo during residency that is currently on sale... one of my many financial mistakes)
        - High deductible health plan with HSA
        Debts:
        - Car loan: $10K (5.54%)
        -- fix that
        - Mortgage: $41K (4%)
        - Federal Student loans: $380K (variable interest, average 6.38%), on PSFL with REPAY plan
        Assets:
        - Condo: Zillow value $52K
        - 3 month emergency fund: $15K (1.54%) in money market account
        - Employer 401K: $13K
        - Roth IRA: $25K
        - HSA: $1K available to spend and $1K in investments
        Investments:
        • 401(k) - Prudential
          • Vanguard Target retirement 2050 fund investor shares (VFIFX): 100%
        • HSA - Health Equity (robo investing- aggressive)
          • VANGUARD EMERGING MKTS STOCK IDX INSTL (VEMIX): 13%
          • VANGUARD EXTENDED MARKET INDEX INSTLPLUS (VEMPX): 16%
          • VANGUARD REAL ESTATE INDEX INSTITUTIONAL (VGSNX): 13%
          • VANGUARD GROWTH INDEX INSTITUTIONAL (VIGIX): 14%
          • VANGUARD MATERIALS INDEX ADMIRAL (VMIAX): 13%
          • VANGUARD SMALL CAP INDEX ADM (VSMAX): 18%
          • VANGUARD TOTAL INTL STOCK IDX INSTLPLS (VTPSX): 13%
        • Roth IRA - SoFi (robo investing- aggressive)
          • SoFi Select 500 ETF (SFY): 60%
          • SoFi Next 500 ETF (SFYX): 7%
          • Vanguard small cal ETF (VB): 3%
          • Vanguard developed markets ETF (VEA): 22%
          • Vanguard Emerging markets ETF (VWO): 8%
        Future plan...
        • 401K
          • US total stocks- 30%
          • US total bonds- 5%
        • HSA
          • Total international stock- 30%
          • REIT- 10%
        • Roth IRA
          • Small value stock- 20%
          • International bonds- 5%
            -- No FI in rIRA
        • Taxable account (PSFL side fund)
          • Total stock market index fund- 40%
          • Municipal bond- 60%
        - Primary investment vehicles will be mutual funds, preferably within tax-sheltered accounts. Will use Index funds whenever possible
        - Favor passively managed investments over actively managed investments.
        - I will strive to achieve a real return of at least 5% per year
        - No asset class will represent less than 5% of my portfolio.

        Questions:
        1) I want to start a PSFL (PSLF......)side fund (PSFL eligibility date 2025). Currently maxing my contributions for 401K, Roth IRA and HSA. Should this money go in the money market account or a new taxable account? If taxable account, should I stay with SoFi (reason I picked this broker originally was because of low robo-advisor fees)? Still trying to get a handle on investing, not sure if I should continue with robo-advisors.
        - never used robo. dont plan to.
        - depends how much exact money you want to have in 2025. if another recession hits and you lose 30-50% of your 40% pile (like we just did), can you just cash flow it otherwise? or are you screwed?

        2) I'm not sure what my overall asset allocation should be (especially when comparing taxable vs retirement accounts since they have different goals)? What do you think?
        -- 90:10 for retirement is my general starting place for people.
        -- PSLF will be different as it has a different purpose.

        3) Anything I'm missing that I should be doing differently?

        Thanks ahead of time.
        20% to retirement. rest to savings.

        Comment


        • #5
          Thanks for the feedback Peds

          Comment


          • #6
            Insurance: Why life insurance? Unless you're supporting someone with your salary don't see why you need it; disability - make sure true own-occupation both individual and group policy

            PSLF side pot - personally I would invest it like its for retirement (i.e. aggressively) and not like you're going to need it in 5 years - if you think you're likely to need it in 5 years why aren't you paying off loans now? Think of it as an insurance policy that you probably won't need.

            If you're going to do robo-advisor for significant portion of your portfolio then do it for everything. Otherwise allocate as you are the rest of your funds.

            It would be easier to understand allocation if percentages were broken down as percentage of either the account or entire portfolio. I have trouble understanding what the percentages are.

            Comment


            • #7
              Originally posted by msaave1 View Post
              I'm confused about asset allocation in this setting. If wanted to go for the taxable account, then I would have 2 separate portfolios correct? Retirement portfolio (401K, HSA, Roth IRA) and PSFL side fund portfolio (taxable account). I would want to keep my retirement portfolio aggressive (90/10) and my PSFL side fund portfolio conservative (20/80 maybe). Does it matter if I have repeated assets in both portfolios?
              Not to me. It shouldn't for anyone. Unless I'm missing something.
              "Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

              Comment

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