sophie wrote: ↑Thu Apr 14, 2016 9:30 pm
Also, in case your PP is spread across multiple types of accounts: I treat additions to retirement accounts differently than taxable additions. For retirement accounts, I split new money into the three volatile (non-cash) assets equally. Taxable additions either go into cash or physical gold. When I hit my limit of taxable cash, I'll switch and start putting cash into retirement accounts (particularly tax-deferred), and gold and stocks in taxable.
Reviving an old thread here because I really like Sophie's advice quoted above but have a few questions on how to apply it in my circumstances.
I just started a new job where I'll be maxing out my 401k each year. The offerings are actually not all that bad—I can get everything except Gold, where there is virtually no option. For reference (Golden Butterfly):
- VFIAX -- Large Cap Blend
- VSIAX -- Small Cap Value
- VLGSX -- Long-Term Treasuries
- VSGDX or Cash with a 0.55% APY -- Cash -- can't decide on which is better. Thoughts?
I also have an IRA, Roth IRA, and Taxable account, all with Schwab so I've got flexibility outside of the 401k, which I'm thinking could help. Currently, I have all of my gold in the taxable account.
Right now, I'll be adding funds primarily to my 401k and I'm not sure how to spread the money when trying to achieve the balance Sophie mentioned above. I'd really like to keep it at 20% for each asset class and be done with it but the 401k doesn't have Gold.
So, here's my preliminary thought: (though it is a bit complicated and I'd love to hear what others do in similar scenarios)
- Have paychecks split automatically between non-gold assets (25% each for LCB, SCV, LTB, Cash).
- Sell enough of each of the above assets in my IRA (Schwab) to buy Gold in the IRA such that each asset had the same added amount.
For example, say I have a $1000 paycheck. $250 would go into each of the non-gold assets in the IRA. I would then sell $50 of each of those assets in the IRA and purchase $200 of Gold. So, I'd be left with each asset having increased by $200.
The math certainly works (unless I'm missing something) but it is complicated. Any other suggestions? I'm not at all wedded to having those specific assets in the 401k either and am open to suggestions about some other mix that would make more sense.
One final alternative that I thought of is to have the same setup as above in which the auto-deposit goes into my 401k split evenly between non-gold assets ($250 each using the example above) and then purchase $250 of gold in my taxable account. I'd have to see if this fits in my budget first but it's definitely the easier of the two approaches I could think of.