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About ScottO

  • Birthday 09/06/1982

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    Santa Clara, CA

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  1. It's more fun when you can play with the numbers in the cells and see values change - trying Google Docs: https://drive.google.com/file/d/1KnMX-B4heFDJKhWd1EvtOXVVmKKI3-0b/view?usp=sharing Spreadsheets help me understand numbers. The table of percentages is interesting, but I want to know how they relate to each other and affect an ending balance outcome. I don't use it to predict the future, it's more for determining how hard to kick my present self for not contributing more in the past 😋 ^ that calculator is pretty cool.
  2. Changed from xlsx to xls, maybe that'll help. (I messed up the Real Estate return in 2001 in the previous spreadsheet too - I'll re-up it.) I look at fees as a guaranteed loss. The S&P 500 is going to perform the same way if I'm paying 2%, 1%, or 0% - so why lose? Sometimes I feel like this callan chart is used to baffle beginning investors. Originally I was introduced to it as "the jelly bean chart." Ranking asset classes in a table isn't super useful. The lesson I get from it is that returns aren't predictable from year to year, so don't believe anyone who says they can avoid pitfalls, because at the same time they may be avoiding gains and charging you all the while for that bad advice. It seems best to buy and hold low cost index funds for a long period of time. When I started investing in my workplace 403b through American Funds I had a guy who put me in a bunch of mutual funds with 5.75% front loads and like 1% expenses - terrible. All the good that a financial advisor could do by keeping me on track with my contributions, shielding me from bad decisions, or managing my portfolio, was completely undone by fund placement choices. jellybean.xls
  3. Low fees are a pretty good solution. Created a spreadsheet to help interpret the chart (see attached.) I stuck in 3 yellow cells to play with: Starting Amount, Annual Contribution, Fees S&P 500, 10k starting, 12k contributions... 0% fee $706,351 ending bal 1% fee $631,872 ending bal 2% fee 566,105 ending bal Then I started to mess around with rebalancing annually and % contributions, but I should get back to work... jellybean.xlsx
  4. Using MS Excel or Google Sheets would be pretty cool if you have access to computer equipment. Compound interest calculators are kind of neat: D2 = F1*(1+F3/12)^(C2*12) D3 = (D2+$F$2)*(1+$F$3/12)^12 Age 63, Year 2065 = $812,381.17 I used to joke around that all of our lives were just math problems which were solvable in excel... but then people would call me a nerd 😋
  5. ^ You could get a spreadsheet going to help determine where it's cheaper to keep what you plan to invest. Vanguard and Pension2 are pretty close if you've got 36k chillin', but things get more expensive with Pension2 as your account balance gets higher.
  6. Roth IRA usage/allocation is a separate topic than what I originally wanted to discuss, but for some people the liquidity of a Roth IRA is important and could be what gets someone started investing. We all have different investment goals, time horizons, financial situations, etc. Yes, there are drawbacks to the idea of not maximizing the tax benefit on earnings and overall opportunity cost, but if you can make someone feel comfortable enough to get in the habit of regularly putting money into an account and watching that money grow(even at a lower rate of return) that's good. Perhaps they rebalance later if their financial situation changes and the idea of using the account as an emergency fund is no longer applicable(or proven to be incredibly disadvantageous on a forum they are a member of 😋.) https://www.thesimpledollar.com/investing/when-and-how-to-use-your-roth-ira-as-an-emergency-fund/ https://www.investopedia.com/articles/personal-finance/040714/how-use-your-roth-ira-emergency-fund.asp https://www.nerdwallet.com/blog/investing/use-roth-ira-emergency-fund/ https://www.bogleheads.org/wiki/Roth_IRA_as_an_emergency_fund https://www.fool.com/news/2004/10/14/roth-ira-as-emergency-fund.aspx We have an emergency fund with 3-6 months expenses in the bank earning 1.65% APY, but the idea that some of that could be used toward a Roth contribution is something to think about instead of the 2020 contribution being $0. Bogleheads says if you're going to do it, don't consider the emergency fund a part of your overall asset allocation. It seems like it just becomes a matter of where your emergency fund is located/housed. I could also fund our Roths with taxable money - play a shell game to fund all available retirement accounts without having the earned income.
  7. Alright, so Fidelity sounds like the best game in town for a 457 👍 Here's a look at all my holdings. Currently I don't feel too far from optimal in terms of asset allocation across accounts... (see attachment below) Since all the investments are in Vanguard funds, the only fee that was really bugging me was the .25% extra I pay for Pension2's administrative cost. The taxable account is an outlier that increases our stock allocation, but we aren't always contributing to it, so other accounts will outgrow it as a result of regular contributions. The majority of the management work is automated aside from transferring to the SDBA each month. So I'm probably 91% stock/9% bonds right now. My wife also has a 403(Fidelity), 401a(Fidelity) and a Roth IRA(Vanguard)... so many accounts... I think I did the SDBA just to have the (mostly) mirrored allocation across accounts. VTIAX wasn't available through Pension2, but it also opens up a ton more mutual funds. I've maxed the 403 for four years, the 457 for three years and Roth IRA for three years.
  8. I've read about the "whole portfolio" approach to allocation: https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts I see the point of it, but it's convenient to keep the same allocation in case we stop contributing to a particular account. This year we're uncertain about our income, so we may not contribute to all of the accounts we contributed to last year - 403b, 403b, 401a, 457, Rira, Rira, Taxable. I do like the idea of fixed income investments(bonds) in the Roth IRAs through, just in case they are needed as emergency funds. This year we're going to try to maintain contributing the max to the 457 and 403b. The 457 is much more attractive due to the withdrawal rules.
  9. I was able to transfer an American Funds IRA and 403b into my Vanguard 403b. The district did have to sign off on the IRA transfer, but the plan allowed it. The first institution I spoke with was Vanguard. They provided the forms that needed to be filled out. My American Funds broker didn't even realize I had transferred the money until he tried to set up a meeting with me and I told him I moved it =P
  10. Low-cost index funds are supposed to be the ticket for getting rich slowly. If you own a target date fund with Vanguard your money is spread across like 11,000 companies and like 20,000 bonds... I would say that's safer than putting your money most other places.
  11. +1 for Vanguard. Mathematically it's the optimal way to go. The only drawback is that you don't get a person who'll hold your hand through making elections and changes, but you should be able to find your own information(especially if you've already found this forum.)
  12. These are the options currently available to employees at our district: EBSG VALIC CalSTRS Pension2 Of the three, I use CalSTRS Pension2, but I'm looking for better options. Do you have any suggestions? Fidelity? Vanguard? Do you know the requirements for attracting those vendors? I've seen asset minimums mentioned in other threads. I'd like to know how to approach my employer to add better choices. Here's my current setup: CalSTRS Pension 2 allocation 10% VTSMX, 90% SDBA SDBA allocation 54% VTSAX, 36% VTIAX, 7% VBTLX, 3% VTABX Things I don't like: The .25% additional administrative fee. The complexity of utilizing the self-directed brokerage account... I need to maintain a 95%/5% balance between Pension2/SDBA. I had to call TD Ameritrade to set up a systematic mutual fund purchase(one time fee to set up, fee every time it is modified). I pay an additional $50 annually for the SDBA, but have access to admiral class Vanguard funds and a ton of other mutual fund options. I have to manually transfer funds from Pension2 to the SDBA each month prior to the systematic purchase. It's really hard for me to advocate for a vendor with additional costs and complexity, so I'm hoping there's an easier option somewhere out there. Thanks for reading.
  13. Pension2 irks me a little due to the .25% added administration fee on each investment option. It should be a flat fee rather than a % of my overall portfolio. I thought I could reduce the cost by using their SDBA(available for a flat $50 annual fee), but it looks like that is also hit by it. I'm really trying to encourage my district to work directly with Fidelity or Vanguard to reduce the cost and complexity of retirement investing.
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