New to PP

[Ugly_Bird]

Hello everybody,

Recently finished assembling my PP after a couple years of hesitation. Though it's being a bit slippery for the last month after the PP was implemented, I'm optimistic  .
Later, I will post the allocation funds and the structure for critique/advise. It was quite challenging to assemble from:
1) My 401k
2) My tIRA
3) My wife's 401k
4) Fidelity brkrg.

Best,

AB

[dualstow]

Welcome, Bird.

If you don't get a lot of replies tonight, it's only because the forum's been on the fritz for a couple of days and no everyone knows it's back.
Cheers.

[Mike59]

Welcome to the forum!  You're right, it's been a tough few weeks but hang in there, focus on allocation and not absolute losses, the overall portfolio does what it's supposed to do in the long run.

[Ad Orientem]

I will add my welcome to those already expressed. A quick note on PP's and your various accounts... 401Ks are a pain in the @$$. Based on purely anecdotal evidence, I'd guess that fewer than half are PP compatible, so don't freak out if you have trouble with them. It's not the end of the world. A lot of us just don't expend too much energy trying to jam the round HBPP peg into the square 401K hole. But who knows, maybe yours will be an exception.

[Ugly_Bird]

Thanks for warm welcomes everybody!

[Ugly_Bird]

I will add my welcome to those already expressed. A quick note on PP's and your various accounts... 401Ks are a pain in the @$$. Based on purely anecdotal evidence, I'd guess that fewer than half are PP compatible, so don't freak out if you have trouble with them. It's not the end of the world. A lot of us just don't expend too much energy trying to jam the round HBPP peg into the square 401K hole. But who knows, maybe yours will be an exception.

Yes, it took a bit of arm-twisting to fit both 401 plans in. As promised, I'll post the structure of my PP later when get a bit more time.

I was reading the forum for a while and saw at least two issues people have with 401k regarding PP:
1) suitable funds
2) rebalance

One is not that bad as it is common for the plans to include funds tracking S&P 500 pretty well. So it can be part of stock allocation.

In order to make the future rebalance easier, one should contribute to 401k only 1/2 of what this person can allow. And the other 1/2 accumulate as cash: e.g. SHY in brokerage account or cash in checking/savings account. When time comes to rebalance, there should be enough flexible cash to leverage purchase of TLT or/and IAU. Or add more stoks to brokerage if stocks tank. This is a general idea, wish I could describe it better. ;-)

What is a little disturbing to a PP that money are continuously added to 401k account with each pay check regardless if say stocks do well or not...But with 1/2 approach it should be ok I think.

AB

[sophie]

Ummm...I'd think twice before shorting your 401K in order to make it work as part of a PP.

If you're in the 15% tax bracket it might be defensible, but any higher than that and you're sacrificing a huge benefit.

It sounds like you're in the same boat that many of us are in with regards to 401Ks.  Some of us tried the square peg in round hole approach but eventually all of us gave up and ran a standard Boglehead portfolio in the 401K.  Sooner or later you'll change jobs, and you can roll it into an IRA or solo 401K and presto, it'll be part of your PP.

[Ugly_Bird]

Later, I will post the allocation of funds and the structure for critique/advise.

Here it is.

https://yadi.sk/i/X0_QE1ovfXBMy

Sorry, I could not figure out how to insert image into this message.

[dualstow]

Hi UgB.  Welcome to the forum!

Some non-portfolio stuff...

To display an image in your post, simply bracket the link in "img" tags like this:

   

Code: Select all

   [img]... [/img]

D'oh!  Doesn't seem to work with your image link!

I don't know much about this stuff, but I usually assume a shortlink like that (in this particular case, from Yandex, a.k.a. Russia's Google) will not work with img tags. They seem to work best when you can see an image extension like .jpg or .png at the end. There are others that work just fine without those extensions, but they are not shortlinks.  I think.  That image is called "capture.jpg" but the link doesn't contain "capture.jpg" at the end.

[sophie]

Desert, that's exactly what I tried to do.  It only works if you have enough savings in accounts outside the restricted 401K to handle rebalances, and enough after-tax contributions to keep the proportions stable.  I ran into problems when gold dropped.  Also many plans force you to compromise on the assets, eg using VUSTX for bonds or an intermediate bond fund for both long bonds and cash.

My PP includes multiple accounts with differing tax status.  It does seem like most people run a PP separately in each account which is certainly easiest, but I like having that extra layer of optimization available.  And it's kind of fun to run everything through the spreadsheet once a month.

[l82start]

[img width=600]https://leto5f.storage.yandex.net/rdisk ... default=no[/img]

had to click on image and get to here https://leto5f.storage.yandex.net/rdisk ... default=no  then drag and drop image from there into the [img ] brackets

[Ugly_Bird]

had to click on image and get to here

Thank you! I'll try to figure better way of sharing images.

[rickb]

had to click on image and get to here

Thank you! I'll try to figure better way of sharing images.

There's a nice little tutorial at http://gyroscopicinvesting.com/forum/ot ... #msg104524

[Pointedstick]

had to click on image and get to here

Thank you! I'll try to figure better way of sharing images.

https://imgur.com/

[Ugly_Bird]

[img width=600]https://leto5f.storage.yandex.net/rdisk ... &rtoken=87[/img]

I'm sure Sophie had a crystal ball. My wife has changed her job a week ago. So, we can roll over her 401k into IRA. Would it make sense to open the IRA account with Fidelity? Rollover from Fidelity to Fidelity should be simple.

It is exciting as her 401k is about 30% of our PP. Now we will have more flexibility.

[sophie]

Congrats!!  My crystal ball is in the shop now but I'm glad it worked :-)

You might want to consider rolling your wife's 401K to a solo 401K rather than a rollover IRA.  That's because if you ever want to do a back-door Roth contribution, pre-tax money in a traditional or rollover IRA will screw it up.  Also there are rules on IRA rollovers that you'll want to read carefully - once you put the money in there you can't move it anywhere else for a year.  Call Fidelity, they will make it easy to set up and also answer your questions.

If you have self-employment income of any kind, a solo 401K is an invaluable tool.  It lets you increase the amount you can contribute pre-tax above the standard limits for employer plans, and it's a great way to shift contributions from a PP-unfriendly employer 401K to one where you have complete control.  I love doing that...and as a bonus, I don't have to worry about paying estimated tax.

[ochotona]

Solo 401k, awesome. 

[fi50@fi2023]

Hello all!  I am new to PP. I am generally a Paul Merriman "Ultimate Buy and Hold Portfolio" investor.  However, I was drawn to PP by the obvious wisdom of holding all 4 "buckets" rather than simply a diversified international stock portfolio.

I jumped in last week as follows:

VTI 25%
VGLT 25%
VGSH 25%
Gold coins 25%

Based upon both books, Browne's archives, and comments on this board, I am wondering whether individual 30 year bonds are best going into a rising rate environment vs. the above bond fund.  Craig was negative on Vanguard's long term Treasury fund in his book, but the current fund prospectus shows that many of Craig's concerns are no longer present in the Vanguard offering (i.e. includsion of mortgage backed securities, etc.).

One other question:  Anyone see a problem with using the Paul Merriman "Ultimate Buy and Hold" index funds (http://paulmerriman.com/vanguard/) for the 25% stock portion or is it more "faithful" to PP to use VTI or its equivalent?

Thanks all.  Looking forward to getting to know you.

JLH

[hoost]

One other question:  Anyone see a problem with using the Paul Merriman "Ultimate Buy and Hold" index funds (http://paulmerriman.com/vanguard/) for the 25% stock portion or is it more "faithful" to PP to use VTI or its equivalent?

For simplicity's sake, I would suggest sticking with VTI.  Managing and figuring out how to rebalance will be a challenge if you're running all of those funds.  I imagine the expenses would also be higher.  That said, if you went that direction, you'd want to stick to the Aggressive options, as the others seem to include bonds.

[fi50@fi2023]

Thanks Hoost!  Yeah, I only use the aggressive option for my 25% stock portion.  The expenses are all low since they are all Vanguard funds.

[Dieter]

One other question:  Anyone see a problem with using the Paul Merriman "Ultimate Buy and Hold" index funds (http://paulmerriman.com/vanguard/) for the 25% stock portion or is it more "faithful" to PP to use VTI or its equivalent?

For simplicity's sake, I would suggest sticking with VTI.  Managing and figuring out how to rebalance will be a challenge if you're running all of those funds.  I imagine the expenses would also be higher.  That said, if you went that direction, you'd want to stick to the Aggressive options, as the others seem to include bonds.

TrevH on Bogleheads had a simplified 'Ultimate' portfolio of four stock funds: Large Balanced, Small Value, International Large Value, International Small Balanced.

[fi50@fi2023]

Thanks for passing that alone.  I really appreciate it.