[Editor's Note: This a guest post from a regular reader, Scott Moore, DO, MLS (ASCP). As a pathology resident at the University of Arizona, Scott Moore realized that he wasn't happy and tried to find out why. He switched to Dermatology in Scottsdale Arizona, but that experience only convinced him that teaching is where he finds his happiness. His dream job became available at his Alma Mater, so he made the difficult leap from medicine into academia. Now, he is the Professor of Clinical Chemistry and pre-medical advisor in the Department of Medical Laboratory Sciences at Weber State University in Ogden, Utah. This past summer Scott ran a brief “experiment” pitting Personal Capital against Vanguard. I have no financial relationship with Scott, but have Personal Capital as one of this website's affiliate marketing partners and invest lots of money with Vanguard. Enjoy the post!]
Introduction
Scott Moore, DO
I make no claim to be a financial academician. The vast majority of my money is made from my work in clinical pathology and I am just as well trained in finances as most of you who read this. Thanks to WCI, I understand that I have an unofficial second job. My financial education came from reading a few books, the WCI website, and by making a few costly mistakes (fortunately, these happened a while ago, when my investments barely eclipsed 5 figures and weren’t THAT costly in retrospect, even if they seemed to be at the time). There was a promotion for the first 3 months of Personal Capital (PC) free, so I decided to run a side by side comparison that all of you might be interested in. I tried to do this as scientifically and non-emotionally as possible. Tried, being the operative word there.
Vanguard vs Personal Capital Summer Investing Showdown
I was offered the first three months for free with PC, and took advantage of the opportunity. At the same time, I ran a side-by-side comparison as I invested the same amount in my Vanguard (VG) account. I allowed PC to invest my funds as they would a normal client. At the end of the trial period, I canceled my account, compared my returns in each account, and projected tax implications. The following graph shows just how similar of an investing philosophy VG and PC both have. I plotted the points every day, and nearly every market upturn and downturn was matched by a corresponding movement with the other holdings. 
Quality of Service
I then compared the “comprehensive financial advisory services” at PC and TIAA. TIAA offers financial services and support for teachers and is a benefit offered by my employer.
I felt that Personal Capital's service was acceptable, although they didn’t direct me or suggest anything new. I think this is a great service for people who have not done their continuing financial education and have no interest in managing their own money, but was of minimal value to me. It seemed superficial and scripted. With a company so large, it sort of has to be though. I didn’t feel that I received individualized advice. Each new idea that I presented to my advisor was rejected because “that’s not how things work here.” They do ask you upfront if there are any companies or sectors that you do not wish to support, and they will personalize your portfolio for you. This is one advantage that they have over mutual funds. For example, I’m not a coffee drinker, yet my mutual funds own Starbucks stock (so did my personal capital account). If I didn’t want to own that stock, then I could ask them not to buy it for me, which isn't the case with index funds.
The first time we met with the TIAA advisor, my wife and I pulled out our investing personal statement (thanks for the idea WCI); he was shocked. I guess that’s not something he sees every day. He actually told me during our last meeting that he probably learns more from me than I learn from him. This financial planner actually helped make sure that we had all of our financial ducks in a row. He caught a few things I had overseen in accounts that he didn’t technically have stewardship over; specifically, he helped us correctly set up our beneficiaries on our investment accounts. He was also a great sounding board for new ideas that I had. It was a very good experience.
This was in contrast to the PC representatives, who at times felt like pushy salesmen. PC assigns an investment advisor and a personal planner to work with you on your account; you would think that each client would get great advice by having two advisors, right?!? Unfortunately, I didn’t find that to be the case. Many times, they mentioned that they were giving me a “long-term” investment plan, insinuating that I didn't have a robust one to begin with.
Transfer Speed
The transfer to Personal Capital took 2 weeks and my transfer to Vanguard took 4 days (including Saturday and Sunday) to be completed. I just let my investments sit in VG earning me more money for the 2 weeks that it took for the transfer to be recorded at PC.
Holdings
Nearly all of the stocks that PC purchased were found in Vanguard's VTSAX, albeit at a slightly different percentage. This Total Stock Market Index Fund has a diversification advantage with 3,582 holdings as of March 2017 compared to PC’s strategy which is comprised of only 107 holdings. The major difference is that PC doesn't use weight-based market capitalization, rather they distribute your investments evenly amongst the 10 sectors, which they call “tactical weighting.” The sectors in my PC account varied from 10% by +/- 2, while my VG account varied from 10% +/- 7.
Investment Philosophy
PC's big selling point on “tactical weighting” was that with VG, you don’t have control over which individual stocks you own, and “bubbles” are created. When you have minimal exposure in energy, that not only means that you lose less if the stock goes down, but there is missed opportunity for growth. While that might be true, I don’t foresee that as a substantial issue and I think if it were a significant problem, then the mutual fund manager probably would rebalance the portfolio.
PC says they have a long-term investing strategy, but they still give all of their data based on the day-to-day change. The point of long-term investing is that the client should not be focused on the day-to-day change of their account balance, but rather the change over years. One can change the settings to view their graphs over the long-term, but the default setting is to view everything at the daily interval. This places a detrimental perspective in front of the client every single day. A long-term perspective might act as Lithium to stabilize PC investors’ ups and downs.
PC doesn’t claim to be passive, but they also reject the notion that they’re actively managing some of your investments. Somewhere in the region between active and passive is where this strategy lies. As far as I understand, there is a big algorithm that calculates when you are overvalued in a certain sector and tells your advisor to sell that stock to return back to the baseline of approximately 10% equity in each sector. They say that trades are made on your behalf nearly once every month or two to rebalance your portfolio. This is not a market cap weight based strategy, but instead, they call it tactical weighting and rebalance all the available sectors to approximately 10% of your portfolio. Having so many stocks, purchased nearly each month, gives them many opportunities to do tax-loss harvesting (TLH). PC’s big selling point is that “thousands of Vanguard investors are flocking to us, because when your sector weights are off, that is missed opportunity.”
Strengths of This Study
- These are my actual results over 3 months. I decided on May-July because I do not teach classes in the summer and could devote more time to perform the study properly.
- Used no-load index funds without tax-loss harvesting (TLH) for investing with VG in my competing taxable account.
Weaknesses of This Study
- This study only directly evaluated 3 months of investing with both companies during a bull market.
- The N of this study is just 1, but I would like to hear from anyone else who tried them out.
- I was unable to evaluate the variable of “bubbles” being formed in my market cap based funds.
- The benefits of TLH won’t be readily apparent until Feb/March 2018, but I don't expect them to be massive.
I give generously to charities, earn a very low physician wage by choice, and have 2 children with another tax-deductible bundle of joy coming in November (whom I would love even if she didn’t come with tax benefits). These factors don’t look as good on my paycheck, but bode very well for my happiness and tax bill. I agree wholeheartedly with WCI, that I want to pay everything that I owe, but don’t want to leave Uncle Sam a tip. Personal Capital’s case for saving 1% on TLH seems weak to me. It takes minimal effort to be able to TLH yourself, and even if you do it perfectly, the results are modest at best and is not the optimal strategy in every circumstance.
After a quick calculation of PC’s 0.89% yearly fee which is assessed monthly, you quickly realize that on a $100k account, you have to make up nearly $1k in tax savings to make up for it. According to my calculations, this marginal benefit was only seen above the 28% tax bracket (i.e. taxable income after deductions of more than $233,350 if married filing jointly). While many physicians exceed this tax bracket, there are many exceptions, myself included.
Conclusion: Personal Capital or Vanguard?
Investing in low-cost index funds is a feasible strategy to yield a substantially similar magnitude of success, without the additional costs. Personal Capital may have a marginal benefit for those who are taxed above the 28% tax bracket (i.e. taxable income after deductions >$233,350 for married filing jointly in 2017) AND for those who want a “hands-off” investment approach. One significant issue is that the investor will be paying this 0.89% fee even during market downturns and there is no possibility of getting that money back. As for me, I prefer to manage my own investments with a broadly diversified portfolio consisting primarily of low-cost index funds. My resistance to locking myself into this inevitable efflux of capital, which likely does not lead to higher returns, was well-founded in this scenario. I have closed my account, but am very glad that I tried this out for myself (for free) so that we all can learn from this experience.
[Editor's Note: Like many bloggers, I have an affiliate marketing agreement with Personal Capital so if you'd like to try out their software (free) or their advisory service (not free, at least after 3 months) I appreciate you using the links on this page. Unlike many bloggers, I don't think I've actually made much money from the relationship. I've written about the firm as part of my roboadvisor reviews here and here but the big issue is that pesky AUM fee. At 0.89% (3 times the price Vanguard charges for similar service and about what you can get a full-service advisor for) it is really a question of whether their method of sector weighting works better than just buying index funds or not.
The tax loss harvesting and advice you get may also have some value, but that's relatively small when juxtaposed against a 0.89% AUM fee. The Mint-like software also has value, but that is also available for free. So this comparison of whether this method is best is helpful, even if it is only a 90-day mini-study. The jury is probably still out on that question, but initial results aren't promising in a world where returns come and go but expenses are forever.]
What do you think? Have you used Personal Capital, Betterment, or other roboadvisors? What was your experience like? Did you compare them to anyone else? Comment below!
I agree with your comments. The .89% fee does not seem competitive for a robo advisor. Vanguard, Porfolio solutions , Schwab and other companies offer similar services for lower fees.
However, the PC account aggregator function which allows you to automatically view all your assets from all your accounts and allocates them In useful categories . This is an excellent feature of PC. This service is presently free and updates daily. For someone with multiple accounts in various platforms this Is fantastic. In 20 seconds you get a complete view of your investment status .
Not sure if any other financial service firms have a similar free option.
Fidelity offers a free tool called FullView which also aggregates accounts in one place . They also offer Planning tools to evaluate asset allocation and which run Monte Carlo simulations like PC does. Vanguard also offers this for free via Financial Engines(hidden away under the Account Maintenance section at VG). With Vanguard you can run the VG Portfolio Analysis (no Monte Carlo) for asset allocation or separately run Financial Engine’s analysis to get both allocation and Monte Carlo.
Nicely done, Dr. Moore. I’ve been using Personal Capital’s free investment tracking service for a couple years longer than I’ve been a blogger, but I never seriously considered the investing service.
Fees approaching 1% are simply too high for me. I did take the online meeting with an advisor out of curiosity, and their backtesting seemed to show a benefit to the tactical sector weighting, but even if there was, who knows if it will going forward. I would say three months is too short a time to really evaluate it, but I wouldn’t want to be paying the fees the 10 years it would actually take to make a decent comparison.
I also didn’t see which particular Vanguard funds you were invested in — you mention VTSAX, but I got the impression there were others. Small caps have done well lately, as have international stocks.
Glad you found a suitable career, and best of luck with the new bundle of joy due to arrrive this month!
-PoF
Thanks PoF!
Thank you for your blog posts as well, I found your site after I had found WCI and read a few good books, but have started doing the “4 physicians” evaluation to help me examine my choices. Thanks for that great tool!
You are correct regarding the other funds that I am in. VGSLX for real estate exposure, VSIAX for small cap tilt, VFWAX for small cap international exposure, VBTLX for a minor portion of my portfolio, VTIAX for primarily large cap international exposure, and the majority in VTSAX.
Best,
Scott
Interesting comparison thoughts – thanks for sharing.
In my experience, tax loss harvesting can be a bit more complicated than people think. Depending on your portfolio, avoiding wash sales rules can be tricky. Certainly not impossible, but takes some research.
I wonder if the .25% fee from Betterment would be justified by their TLH+ feature alone. Not sure. As mentioned it could largely depend on the tax bracket.
“Have you used Personal Capital, Betterment, or other roboadvisors?”
I’ve used Betterment and Motif. Both are worth considering for non-DIY investors. They’re quite different though so the investor needs to know their investing style and what they hope to get out of the deal.
With Betterment’s recent addition of being able to message a CFP “for free” even on their low-cost plan… that could be a pretty big deal to many people. Having a real person added to the automation component is a very nice option.
Thanks for sharing. Congrats on the dream job and the new baby.
As you mention, your study has some weaknesses, but the qualitative piece reaffirms that I’m not going to change anything with my plan.
I would argue that this is definitely active management. Anytime an investor violates the concept of buying stocks in proportion to the weight assigned by the market, it is by definition active management. There is data that shows that momentum investing is profitable. In some ways, one could argue that the bread and butter index fund takes advantage of this. That is, one receives a higher proportion of higher market cap securities in relation to the way the market values them. Lastly, even if there is an advantage, an astute investor can now buy a Schwab index fund with an expense ratio of .03 percent. That is 29.6 times the cost, an expense that likely will not be overcome by the indexer’s advantage. At the risk of being too dramatic, this is an active fund disguised in passive clothing. It is one day past Halloween, and there is no room for costumes anymore!
I’ve been with Vanguard for about 20 years (since my first job post graduation.
A few years back I decided to give Personal Capital a try. I transferred a few accounts (total about $800K) into PC. Of course this all went very smoothly (transferring money in always does!).
My first annoyance was that they insisted that if I transferred in a bit more (maybe enough to get to $1M? I’m not sure) that they’d provide my wife and me each with a free iPad Mini to check the account. I loathe gimmicks. I don’t need a free toaster, and I certainly don’t need a free iPad Mini.
My study was not as detailed as yours; in my case I simply compared their investment to a hypothetical S&P 500 investment over the same time period. At the end of the year PC lagged by a 2-3 points (meaning, I suppose, that my little experiment cost me about $20,000). Perhaps over a different time period they would have won, I don’t know. The other problem I had is that with automated trading it’s very hard to prevent wash sales from occurring once I include my funds that weren’t at PC.
Getting my money out was considerably harder. After several phone calls with VPs (which means nothing; as far as I can tell, in the finance world, literally everyone is a “VP”, all the better to make the customer feel important). I had $750K out but they’d convinced me to leave the last $50K in just in case I decided to come back. But then they unlinked my PC account from the underlying investment account so I couldn’t see my remaining $50K! After a couple calls they couldn’t get that straightened out, so I transferred out the rest.
My verdict? I appreciate the innovation, but at the end of the day PC felt like a slightly less slick Merrill Lynch/Smith Barney/Whatever.
I have started using Vanguard’s Personal Advisor service. That’s a nice compromise for me. Very low cost, and they’re doing some of the work to allocate different types of investments based on the tax efficiency of each account, which I appreciate. I also appreciate that they didn’t offer me a free toaster.
Thank you for sharing your experience. This gimmicky pitch is similar to what I experienced, they always seemed to have ulterior motives in their conversation.
Great post. I use Personal Capital’s app/software to track my net worth and keep all of my different investments organized in one app. It is a great app and it is free to use. It takes a couple hours to set it all up appropriately but once set up is great to use.
They contacted my a couple times the first couple months trying to get me to use them, but after a short “no” on the phone, I now only get about 1 email from them every 3 months.
Great to see this comparison even if it is only over a 3 month time span. Very difficult to draw any conclusions as you would have to compare over 10-20 years, but you can definitely see trends!
Thanks,
I hear lots of nice things about the tracking software.
Does it bother you to enter the logins/passwords for every financial account you have? I worry about PC getting hacked…
Great post and it comes at a perfect time for me. Still a novice investor, I took the advice of WCI and PoF and use PC’s free app to track my investments. I’m still learning how to use it but is really is nice to see everything I have on one page. I’ve had the PC app for about 6 months and have probably had 3 or 4 calls from someone at PC and a handful of emails. I bit on the first call and listened to their pitch but if memory serves I didn’t have enough money in the accounts available to them. Just a few days ago they called again and wanted to check in. I was at work and didn’t have the time. They are starting to feel like pesky salesmen to me so I think I’ll ignore the next call. Still feel like I could use some formal advice but I don’t want to pay unnecessary fees. Working my way (painfully slowly) through basic investment books and determined to figure it out on my own. Thanks for the post!
+1 to PHR3DLY
I have never laughed at a WCI post before
OK, OK…….No toaster( I remember those days well )
Since I’ve got most of my funds with Vanguard I just use their website and the “Portfolio Analyzer” tool on it. Seems to work well for an overall portfolio snapshot except for the fact that you have to plug in your outside investments separately, and update them when you get reinvested dividends, etc.
Has anybody used this service? Is the free portfolio analyzer from PC much better than this?
thanks
My understanding is it is not only automated, but significantly better.
I use both Vanguards portfolio analyzer tool and Personal Capitals asset allocation software. PC is slicker and maybe a little more accurate if you have any individual stocks. The Vanguard version is very good too. These types of tools help you if you are interested in slicing and dicing your portfolio. They also help if you have some positions that you don’t want to sell because of gains.
All docs can and should be DIY investors!!
+1! Agreed!
Said by someone who hasn’t spoken to thousands of docs directly. Seriously, that statement is just out of touch. While I think most docs could be a DIY investor if they wanted to, it’s not going to happen. Ever. And that shouldn’t be the goal. If they want to do it themselves, they need to learn to do it well. If they’re not going to do it well themselves, we need to get them connected to someone who will do it competently at a fair price.
WCI, Great insight.
I think that there are two primary hurdles to overcome for physicians to become DIY investors; interest and time. Just like our patients are not all the same, neither are physician investors. Sometimes, our patient needs to feel accountable to and have a physical therapist’s guidance in order to regain adequate motion in their knee after an injury. Other times, the patient can learn or be taught the exercises, and do them by themselves with similar results.
Isn’t there a significant tax impact from churning through different stocks every month?
Tax harvesting is all well and good, but LTGC is almost universally lower than regular income taxes. He didn’t mention how much the portfolio changes from month to month, but it doesn’t sound like anything would be held for a year given the focus on day to day valuations.
Oops, LTGC => LTCG => long term capital gains.
From my research that I have done, they are offsetting the gains from the overweighted stocks they sell with the TLH that they perform. From all of my projections, this has not resulted in a net increase in portfolio value over time.
Like many, I am a fanboy of PC’s free tracker but my experience attempting to speak to the advisor they assigned me (yes, PHR3DLY, his official title was VP!) was the ultimate “sleazy used car salesman in leisure suit” disappointment: all sales pitch, no thoughtful portfolio advice.
I think the bigger issue is that by the time you find yourself reading the Bogleheads forum, WCI and PoF, you’ve become hooked on the gateway blogs to becoming a DIY investor.
My rookie mistake early on was leaving Merrill Lynch for the promise of Betterment, only to eventually leave Betterment a year later for an my current Vanguard portfolio.
If I could give one message to the newly minted docs reading this site, it’s to not sell yourselves short on your ability to manage your finances.
Instead of a temporary fling with the roboadvisor du jour, you’d be best served by putting everything into VTSAX for a year (which will inevitably constitute a key building block of your portfolio) and spending the year reading. By year’s end, there’s a high probability you’ll be smart enough to handle your own investments adeptly.
I don’t see that as a mistake at all. More like a half step forward, then you took the other half when you were ready. I think that was a great transition move. But maybe you can save a little hassle and maybe even some taxes and fees with your approach….assuming VTSAX has a better year than the diversified portfolio Betterment put you into.
I have received calls from PC also. They quoted me 0.75% AUM. Now when I get a call from SF I just hang up or don’t answer.
Sounds like there might be room to negotiate that fee then (like usual.)
I did the complimentary session but couldn’t see enough value in giving up control and the fee. He did give me a few ideas on areas I was lacking and I was able to fix them on my own. He told me he wanted to offer me a job as I knew more than most people working for him…and I’m a pretty novice investor myself compared to many who weigh in on this site. So it wasn’t for me, although I appreciate the free ability to track everything in one account.
I’ve done my own little experiment for the past year with Betterment vs a self-managed account at Vanguard using a lazy 4 fund portfolio (VTSAX, VTIAX, VTABX, VBTLX). Both are in a 90/10 allocation. I consider myself a DIY investor, but honestly not that interested in tax loss harvesting.
Returns:
YTD returns at Betterment are 21% vs 15% at Vanguard. Not sure if I’m comparing apples to oranges as both accounts don’t have the exact amount in it, but just looking at percentages, I feel the yield alone is worth the 0.25% AUM fee.
TLH:
The first few months Betterment was able to TLH $12k on a $600k portfolio, but there’s been no movement since. I suspect it’s partly due to this bull market we’re in not providing a lot of opportunities, and the fact that TLH is easier to do in the first year of purchasing a fund. I’m able to carry over the losses into next year’s taxes (and maybe beyond) so still reaping the benefits there. Haven’t tried to TLH at Vanguard honestly.
Customer service:
I was able to set up an appt online at Betterment easily and the advisor gave me really solid, seemingly unbiased advice about wash sales. I’ve chatted w customer service at Vanguard a few times about rollovers, not necessarily investment advice and they’ve also been very useful.
Note about personal capital: I use their free investment tracker, but wasn’t sold on their FA service. Also thought the advisor was condescending and pushy but don’t want to generalize to the whole company. My other issue is their performance/returns chart on your outside investments seem to be inaccurate. Has anyone else had this issue?
I had the same issue with their performance estimations. In my experience, their returns seemed inflated, inaccurate, and left out pertinent details.
I signed up in the last month and noticed that also. I with my returns were as good as they seem to think they are!
Investment returns are a function of ones asset allocation and fees. Any comparison study should be at least 10-15 years in duration.
Great post. Can we get another post from the guest author regarding his decision to switch careers several times and its financial implications? That part of the post interested me more than the study.
Yes! I agree that it would be great to hear more about the author’s career path.
I’d be happy to write about my path, as long as there are enough people out there interested in hearing it. It is definitely unique with a few unexpected twists and turns.
WCI, if you are interested, let me know and I’ll draft something up.
https://www.whitecoatinvestor.com/contact/guest-post-policy/
as word of mouth spreads about the ability to be a DIY investor more will be doing it
Just look at the increase in assets in index funds since their inception
even .3% IS ALOT OF DOUGH TO ME
I agree. It’s a lot to me. But I know lots of docs who aren’t that worried about it.
I use both the account aggregator and the RIA service. Happy with both. The RIA gives good advice and knows he only has about 2% of my net worth and yet still doesn’t push for me to move more to PC.
As far as their tactical weighting, I haven’t checked this year but from 2014-2016 it was comparable to broader indexes. Tactical weighting isn’t directly comparable to any specific index so I just compare it to a number of indexes to ensure it is not far off.
As for fees comparisons them to a pure robo advisor is not applicable bc a robo advisor doesn’t give you a real person for investment advice. Comparing them to vanguard personal advisor is fair but when you compare you need to add back in the costs of the index funds. PC is still more expensive but not by as much.
If you’re happy with it, why only 2%? Seems like it wouldn’t be enough to make a difference.
I agreed to put some money into it in 2014 for two reasons:
1. See if their pitch for getting slightly better returns with less risk was as accurate as their “back tested” claims (without putting a large percent of my funds there) and
2. Have access to an RIA when I wanted to discuss something
Since I wrote above, I rechecked how my account with them is doing this year. Net of it is that for 2014-2016 I was slightly ahead of a broad market index. YTD in 2017 I am trailing a fair amount (I suspect this is directly due to equal sector weighting, and confirms the authors experience earlier this year).
All in all, I don’t value them enough to pay them AUM fees on my whole portfolio, but they provide enough value for me to pay their AUM fee on the portion I do have with them.
Had they demonstrated a significant year on year excess return consistently, I probably would have allocated more to them.
That’s actually pretty brilliant- you get access to an advisor for chump change. I mean, 1% of 2% isn’t a very high fee!
????
Congrats on your upcoming bundle of joy! She probably will no longer be “tax deductible” unless the tax reform doesn’t happen. And since you almost definitely make too much for the child tax credit, she will have no impact on your taxes.
Nice blog post. I find it amazing how you could find time to do this type of comparison. I guess you have real passion for it.
I invest in Vanguard and Fidelity low cost mutual funds. I am a DIY person in finances (thanks largely to WCI and books). My opinion is that at the end of day the differences between the different investment philosophies out there, (namely tactical weighting, TLH, value vs dollar averaging, etc,) amount to a very small amount of money in regards to the time involved applying them. It is as simple as putting your money in low cost index funds, have your personal investment plan and let it ride. That is what gets you the most bang for your time.
I do use Personal Capital for their mint like feature. But I have not even though about using any of their advisors. I could say that they know less than half of the regular readers (meaning for years) on this forum. But more important than that, they care less about your money than you do.
JF
1. I used Wealthfront for about a year and a half because I liked the allocation better, and turned on the TLH feature. It was fantastic! Until we decided to use the money to purchase an acreage. I think we will have more short term gains at tax time than we would have if it had sat at Vanguard in mutual funds like the majority of my taxable investing thankfully did. Waiting to find out for sure. I haven’t seen this aspect of using roboadvisors discussed anywhere.
2. A third, and our, solution to docs managing their own investments. Have the stay-at-home spouse be the family CFO. I have substantially more time to stay up on the learning curve, and more interest. A fantastic mental change of pace after dealing with kids and dishes.
2 is a good idea, but rare I think. Part of it is interest, and part of it is the fact that the person working outside the home cares far more about when the family becomes independent of that job!
U only need 6-8 stocks or 3 ETFs. Buy, hold, don’t sell until u need and u will be much more tax efficient! If I had put all of my money in brka in 1980 and not listened to advisors, I’d be hugely rich. Thank goodness I put a lot in brka and am pretty rich!!! 40g – 281g!
I disagree that investing in individual stocks, much less just 6-8 of them, is a good idea.
https://www.whitecoatinvestor.com/uncompensated-risk/
I can think of a 3 ETF portfolio that is reasonable though.
https://www.whitecoatinvestor.com/150-portfolios-better-than-yours/
I had seriously considered giving Personal Capital a try but after talking to them I don’t think “tactical weighting” makes any sense, comparing to the “total stock market” indexes.
The problem is, who defines how many sectors are out there? Who decides to which sector a company belongs to? Why Google = Technology but Amazon = Consumer Cyclical and Tesla = Auto Manufacturers? They start with a premise that all these companies are classified correctly, the sectors are accurately defined and they behave independently, thus, investing equally in each is the way to go. I think this is a deeply flawed premise.
Good article, however I always find it hard to take financial advice from people who have children on purpose. Especially three. What a waste of time and money! And for what? That’s over $1 million worth of children. Yet he feels no need to justify this insane, absolutely unneeded expense. Besides that it’s just reckless. A physician should know better about the risks that a new life is going to be subjected to. My father died of COPD, my mother of Parkinson’s, my brother from opiate addiction. I wouldn’t subject a new person to those very real possible fates.
This definitely qualifies as one of the top 5 most bizarre comments ever left on this site. I can’t quite tell if you’re serious.
Hmm … still scratching my head as well.