Mistake buying too many Vanguard Mutual funds?

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Topic Author
boogs5150
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Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

Hi!
I think I went a little mutual fund happy in my Vanguard Brokerage acct but first up, I contribute 10% of my salary to my 401k and I max out a Vanguard Roth that was invested 100% in the TG2050 fund which has done pretty well but I recently sold 70% of that fund and exchanged it for VTSAX since it's more aggressive and I am only 32. I am willing to take the bigger risk.

Two weeks ago I got bored and opened a brokerage for my FIRE dreams or just early retirement dreams whatever age that falls. I know they want me max out my 401k but I want to focus on my brokerage. On 9/20/21 I bought the minimum investments of $3000 of VDADX Dividend Fund, $3000 of VFIAX Sp500, and $3000 of VTSAX Total Stock. My plan was to throw about $50 to each of these weekly so $150 a week but now I think I want to sell/exchange VDADX and VFIAX and roll it into VTSAX so I can pump that fund up faster with $150 a week. Is this a good idea? What kind of tax liability am I looking at? I assume I wont have much taxes since I have only owned these funds for like two weeks. Thanks a bunch!
Mike Scott
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Re: Mistake buying too many Vanguard Mutual funds?

Post by Mike Scott »

You should really consider how much you put in the 401k and more importantly what funds do you have there?
Your AA should be considered across all accounts.

You can take a look at your specific share prices but you probably won't owe any taxes on stock funds bought two weeks ago.
If you are going to do a brokerage account, you should probalby stick with VTSAX.
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arcticpineapplecorp.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by arcticpineapplecorp. »

It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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ruralavalon
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Re: Mistake buying too many Vanguard Mutual funds?

Post by ruralavalon »

boogs5150 wrote: Mon Sep 27, 2021 5:06 pm Hi!
I think I went a little mutual fund happy in my Vanguard Brokerage acct but first up, I contribute 10% of my salary to my 401k and I max out a Vanguard Roth that was invested 100% in the TG2050 fund which has done pretty well but I recently sold 70% of that fund and exchanged it for VTSAX since it's more aggressive and I am only 32. I am willing to take the bigger risk.

Two weeks ago I got bored and opened a brokerage for my FIRE dreams or just early retirement dreams whatever age that falls. I know they want me max out my 401k but I want to focus on my brokerage. On 9/20/21 I bought the minimum investments of $3000 of VDADX Dividend Fund, $3000 of VFIAX Sp500, and $3000 of VTSAX Total Stock. My plan was to throw about $50 to each of these weekly so $150 a week but now I think I want to sell/exchange VDADX and VFIAX and roll it into VTSAX so I can pump that fund up faster with $150 a week. Is this a good idea? What kind of tax liability am I looking at? I assume I wont have much taxes since I have only owned these funds for like two weeks. Thanks a bunch!
Slow down, don't change your investing plan every few days.

Think things thru before the you act, especially in a taxable brokerage account where you will create unnecessary income tax liability.

Follow these guidelines: Bogleheads® investment philosophy.

It's often better to coordinate investments among all accounts, treating all accounts together as a single unified portfolio.

I don't understand the aversion to making maximum annual employee contributions to the 401k. The annual contribution limit ($19.5k) is on a use-it-or-lose-it basis. If you skip a year of maximum annual employee contributions you cannot make it up in a later year.

What is your tax bracket, both federal and state? How much (in dollars) do you currently contribute annually to the 401k account?

The tax deduction and tax-deferral which come with using 401k accounts can be very valuable. You won't get to FIRE faster if you skip tax benefits.
Last edited by ruralavalon on Mon Sep 27, 2021 5:30 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Wiggums
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Re: Mistake buying too many Vanguard Mutual funds?

Post by Wiggums »

You will end up with a many lots if you buy weekly. In general, you want to full fund the pretax accounts first.
"I started with nothing and I still have most of it left."
Topic Author
boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

So basically I should roll the $3k of VDADX and $3k of VFIAX into VTSAX? I mean, is that what you would do? I doubt I'd owe too much in taxes since I think I have lost money the last two weeks but I don't understand all that hence why I was asking the experts on here. I don't see the Dividend fund taking off compared to other dividend funds out there and could hurt me on taxes since I am working still from my understanding. VFIAX is similar to VTSAX so I'd rather have the extra company's in VTSAX vs VFIAX. I just got too excited and purchased more funds than I should of and I now know that I would like to keep it as simple as possible without including someone to manage it. I'm not dumping as much as I want since there seems to be something brewing....
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celia
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Re: Mistake buying too many Vanguard Mutual funds?

Post by celia »

You don’t have too many funds, but you are making a mess by buying things on a whim without realizing what you are doing. You need a plan instead:

Investment Policy Statement

Feel free to post your plan here and we can help you improve it. THEN you can implement it by making thought-out decisions.

You will be much better prepared if/ when the markets do unexpected things since you will have a long-term picture in mind.
Topic Author
boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

I agree I was jumping the gun and need to settle a bit. I should have asked on here before!

Here is where I am:

32 years old
$70k Salary
$50k in Vanguard Roth-maxed every year. 75% in VTSAX and 25% in Target Date 2050
$9k in Vanguard brokerage. $3000k VTSAX, $3k VFIAX, and $3k in VDADX
$2500 in BOA HSA Account- Invested in Sp500 fund, plan on maxing out this year
$36k in 401k. 100% in stocks. SP500 and small cap
$6000 in Robinhood. 75% in crypto and 25% pick and choose funds for fun.
$90k in emergency/savings earning .05% (may be looing for somewhere to put this but I think we are in for a market dive in the next few months but who knows)
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ResearchMed
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Re: Mistake buying too many Vanguard Mutual funds?

Post by ResearchMed »

celia wrote: Mon Sep 27, 2021 5:44 pm You don’t have too many funds, but you are making a mess by buying things on a whim without realizing what you are doing. You need a plan instead:

Investment Policy Statement

Feel free to post your plan here and we can help you improve it. THEN you can implement it by making thought-out decisions.

You will be much better prepared if/ when the markets do unexpected things since you will have a long-term picture in mind.
Welcome to Bogleheads!

Something else important is that whatever funds you do buy, regardless of the number, for a long term retirement plan, you need to HOLD the funds, and not sell them. Don't jump from fund to fund. There are many good funds, and BH members often prefer index funds. But once you select a fund and buy it, plan to hold it long term. Otherwise, you may end up noticing that a particular fund has gone down (it will happen to all funds at some pointS), and you may sell it *then* - which is precisely what you do NOT want to do, and certainly NOT based upon short term performance. (You'd likely jump to a fund that looked "better" - and this ends up being "buying high, and selling low". That's the opposite of "success".)

RM
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ososnilknarf
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Re: Mistake buying too many Vanguard Mutual funds?

Post by ososnilknarf »

boogs5150 wrote: Mon Sep 27, 2021 5:42 pm ... and I now know that I would like to keep it as simple as possible without including someone to manage it.
I highly agree with this statement, and in that spirit, I would highly recommend taking a look at this approach:
https://www.bogleheads.org/wiki/Three-fund_portfolio

If your 401k has appropriate funds to create a 3-fund or similar portfolio, then that is what I would do, until the annual limit is reached, rather than taxable brokerage accounts.

If you want, feel free to post questions about constructing a 3-fund portfolio from the available funds in your 401k. People here will gladly help with suggestions.
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Noobvestor
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Re: Mistake buying too many Vanguard Mutual funds?

Post by Noobvestor »

boogs5150 wrote: Mon Sep 27, 2021 5:06 pm exchanged it for VTSAX since it's more aggressive and I am only 32. I am willing to take the bigger risk.
Holding only US stocks isn't 'more aggressive' it's just more dangerous. What I mean by that is: you're taking uncompensated concentration risk by going all-in on one country. I realize it's tempting given recent returns, but you're talking about returns, not 'bigger risk' in the 'rewarded risk' sense.

You're tilting US, holding crypto, etc... all of which points to recency bias. Instead of hopping fads, slow down and stay the course. /2 cents
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
Topic Author
boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

I think I will chock it up and move VDADX and VFIAX into my VTSAX taxable brokerage fund and see what happens at tax time, I have only held all three funds for 2 weeks. Can't be talking more than $100 in income tax or whatever you call it...I have to make this move now at 32 instead of later in life. This way I can quit thinking so much about having multiple funds and just fund VTSAX like all the other FIRE people. I'm shooting for FIRE but not as early as some of these super stories you here of.
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ruralavalon
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Re: Mistake buying too many Vanguard Mutual funds?

Post by ruralavalon »

boogs5150 wrote: Mon Sep 27, 2021 5:48 pm I agree I was jumping the gun and need to settle a bit. I should have asked on here before!

Here is where I am:

32 years old
$70k Salary
$50k in Vanguard Roth-maxed every year. 75% in VTSAX and 25% in Target Date 2050
$9k in Vanguard brokerage. $3000k VTSAX, $3k VFIAX, and $3k in VDADX
$2500 in BOA HSA Account- Invested in Sp500 fund, plan on maxing out this year
$36k in 401k. 100% in stocks. SP500 and small cap
$6000 in Robinhood. 75% in crypto and 25% pick and choose funds for fun.
$90k in emergency/savings earning .05% (may be looing for somewhere to put this but I think we are in for a market dive in the next few months but who knows)
It is good to see that you currently contribute the annual maximum to an IRA, and currently use mostly very diversified index funds with very low expense ratios.

How much (in dollars) do you currently contribute annually to the 401k account?

How many months of basic living expenses would be covered by your "$90k in emergency/savings earning .05%"?

If your tax filing status single then it looks like you may be in the 22% tax bracket. I don't see a reason to skip a 22% tax deduction, or to miss out on the tax-deferred growth in a 401k.

You could sell the Robinhood crypto and the stocks in your "pick and choose funds for fun" account, and then increase your contributions to the 401k account.

That isn't Monopoly money you are having "fun" with, it's your future.
Last edited by ruralavalon on Mon Sep 27, 2021 6:19 pm, edited 1 time in total.
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retired@50
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Re: Mistake buying too many Vanguard Mutual funds?

Post by retired@50 »

boogs5150 wrote: Mon Sep 27, 2021 6:10 pm I think I will chock it up and move VDADX and VFIAX into my VTSAX taxable brokerage fund and see what happens at tax time, I have only held all three funds for 2 weeks. Can't be talking more than $100 in income tax or whatever you call it...I have to make this move now at 32 instead of later in life. This way I can quit thinking so much about having multiple funds and just fund VTSAX like all the other FIRE people. I'm shooting for FIRE but not as early as some of these super stories you here of.
It would appear that making quick decisions is what suits you.

This thread has only been open for a little over an hour, and you've already decided on a course of action. :shock:

Do you actually want to learn, or do you just want this particular episode to be over?

If you do yourself a favor and learn about investing, cost basis, income taxes, etc. you'll be a much more successful investor.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
H-Town
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Re: Mistake buying too many Vanguard Mutual funds?

Post by H-Town »

boogs5150 wrote: Mon Sep 27, 2021 6:10 pm I think I will chock it up and move VDADX and VFIAX into my VTSAX taxable brokerage fund and see what happens at tax time, I have only held all three funds for 2 weeks. Can't be talking more than $100 in income tax or whatever you call it...I have to make this move now at 32 instead of later in life. This way I can quit thinking so much about having multiple funds and just fund VTSAX like all the other FIRE people. I'm shooting for FIRE but not as early as some of these super stories you here of.
Not sure if you accept the advice about writing your own IPS. If not, try it.

I understand the excitement when you just got started. And trust me, it'll get boring. Set automatic investment. And just focus on increasing the amount of automatic investment every 6 months or at every pay raise.

Yeah, it'll get boring.
Time is the ultimate currency.
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boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

ruralavalon wrote: Mon Sep 27, 2021 6:17 pm
boogs5150 wrote: Mon Sep 27, 2021 5:48 pm I agree I was jumping the gun and need to settle a bit. I should have asked on here before!

Here is where I am:

32 years old
$70k Salary
$50k in Vanguard Roth-maxed every year. 75% in VTSAX and 25% in Target Date 2050
$9k in Vanguard brokerage. $3000k VTSAX, $3k VFIAX, and $3k in VDADX
$2500 in BOA HSA Account- Invested in Sp500 fund, plan on maxing out this year
$36k in 401k. 100% in stocks. SP500 and small cap
$6000 in Robinhood. 75% in crypto and 25% pick and choose funds for fun.
$90k in emergency/savings earning .05% (may be looing for somewhere to put this but I think we are in for a market dive in the next few months but who knows)
It is good to see that you currently contribute the annual maximum to an IRA, and currently use mostly very diversified index funds with very low expense ratios.

How much (in dollars) do you currently contribute annually to the 401k account?

How many months of basic living expenses would be covered by your "$90k in emergency/savings earning .05%"?

If your tax filing status single then it looks like you may be in the 22% tax bracket. I don't see a reason to skip a 22% tax deduction, or to miss out on the tax-deferred growth in a 401k.

You could sell the Robinhood crypto and the stocks in your "pick and choose funds for fun" account, and then increase your contributions to the 401k account.

That isn't Monopoly money you are having "fun" with, it's your future.
* I contribute about $7500 a year to my 401k, then my employer throws in about $3200

* I could live for a few years on that if I wanted (90k). Paying rent, food, insurance, cell, no debt. My bills are low.

* I did think about selling all of my robinhood stocks and crypto just so I would quit looking at it everyday. I've been buying COKE and Pepsi but I know owning VTSAX would also allow me to capture these companies as well so I'm all over the place I KNOW!

I may have a career change coming due to the state of the country and my plan was to take a year off and travel to places I have not been with money I have saved in my vacation fund then find a career I really like so work doesn't feel like work anymore.
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boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

H-Town wrote: Mon Sep 27, 2021 6:21 pm
boogs5150 wrote: Mon Sep 27, 2021 6:10 pm I think I will chock it up and move VDADX and VFIAX into my VTSAX taxable brokerage fund and see what happens at tax time, I have only held all three funds for 2 weeks. Can't be talking more than $100 in income tax or whatever you call it...I have to make this move now at 32 instead of later in life. This way I can quit thinking so much about having multiple funds and just fund VTSAX like all the other FIRE people. I'm shooting for FIRE but not as early as some of these super stories you here of.
Not sure if you accept the advice about writing your own IPS. If not, try it.

I understand the excitement when you just got started. And trust me, it'll get boring. Set automatic investment. And just focus on increasing the amount of automatic investment every 6 months or at every pay raise.

Yeah, it'll get boring.
I do plan on auto investing every week and have been for quite a few years. I did read about the IPS and I do have a small plan. I guess I am just waiting for someone on here to tell me to either start throwing money at all three brokerage funds or move the VDADX and VFIAX into VTSAX.
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dratkinson
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Re: Mistake buying too many Vanguard Mutual funds?

Post by dratkinson »

boogs5150 wrote: Mon Sep 27, 2021 5:06 pm Hi!
I think I went a little mutual fund happy in my Vanguard Brokerage acct but first up, I contribute 10% of my salary to my 401k and I max out a Vanguard Roth that was invested 100% in the TG2050 fund which has done pretty well but I recently sold 70% of that fund and exchanged it for VTSAX since it's more aggressive and I am only 32. I am willing to take the bigger risk.

Two weeks ago I got bored and opened a brokerage for my FIRE dreams or just early retirement dreams whatever age that falls. I know they want me max out my 401k but I want to focus on my brokerage. On 9/20/21 I bought the minimum investments of $3000 of VDADX Dividend Fund, $3000 of VFIAX Sp500, and $3000 of VTSAX Total Stock. My plan was to throw about $50 to each of these weekly so $150 a week but now I think I want to sell/exchange VDADX and VFIAX and roll it into VTSAX so I can pump that fund up faster with $150 a week. Is this a good idea? What kind of tax liability am I looking at? I assume I wont have much taxes since I have only owned these funds for like two weeks. Thanks a bunch!
I believe you are correct. It's a good idea to unroll your changes and make things simpler. The tax cost should be minimal.


I'm assuming you want to play a little to entertain yourself, and want to avoid problems....

Potential TLH problems. With TSM (VTSAX) in your tax-advantaged (TA) account and taxable account. This can potentially cause a problem if you plan to TLH (tax-loss harvest). Why? Assuming you've set both to automatically reinvest distributions, then ~2/3 (?) of the time you will be within a wash sale window as TSM pays quarterly distributions.
--Choose something else in TA that is not "substantially identical" to TSM in taxable. (TDFs are popular for a reason. I use LC in my TA because I want 100% stocks, and TSM in taxable.)
--Choose something else for taxable that is not "substantially to TSM in TA. (Recall SCHB may work as it may track a different index. You'll need to double-check.)
--Your choice.

Overlapping funds in taxable. S&P500 (VFIAX) is 80% of TSM (VTSAX/SCHB). One or the other (S&P500 vs TSM), you don't really need both.

Tax-inefficient investments. Dividend investing can be tax-inefficient. Recall past topics in which OP (original post, original poster) asked for help in undoing a dividend investing strategy.
Search: https://www.google.com/search?q=dividen ... rg%2Fforum


I'd recommend:
--Target Date Fund in TA (401k and rIRA). Set both to DD from salary---automate paying yourself first. Don't miss what you don't see.
--TSM in taxable. DD or handfed. Your choice.
--Period. Simple. Nothing to think about.

Read Swedroe's book on "Alternative Investments". Choose your battles for best chance to increase return tax-efficiently.


Scratch the urge to reach for more yield on your bank accounts sitting fallow. How? Incorporate the "ABP by CC technique", to boost return to ~2%/yr, tax-free.

ABP by CC technique.
--Set your bills to be paid by (trusted) creditors' ABP (automatic bill payment) plans. Let them pull payments from your account.
--Set each ABP plan to be paid by cashback CC (2% Citi is popular) if possible, and from checking if you must.
--Set CC to be paid from checking.

Afterwards, your life will be simpler (creditors do the work to get paid), and your EFs will get a minimum-effort boost.


Welcome.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
H-Town
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Re: Mistake buying too many Vanguard Mutual funds?

Post by H-Town »

boogs5150 wrote: Mon Sep 27, 2021 6:35 pm
H-Town wrote: Mon Sep 27, 2021 6:21 pm
boogs5150 wrote: Mon Sep 27, 2021 6:10 pm I think I will chock it up and move VDADX and VFIAX into my VTSAX taxable brokerage fund and see what happens at tax time, I have only held all three funds for 2 weeks. Can't be talking more than $100 in income tax or whatever you call it...I have to make this move now at 32 instead of later in life. This way I can quit thinking so much about having multiple funds and just fund VTSAX like all the other FIRE people. I'm shooting for FIRE but not as early as some of these super stories you here of.
Not sure if you accept the advice about writing your own IPS. If not, try it.

I understand the excitement when you just got started. And trust me, it'll get boring. Set automatic investment. And just focus on increasing the amount of automatic investment every 6 months or at every pay raise.

Yeah, it'll get boring.
I do plan on auto investing every week and have been for quite a few years. I did read about the IPS and I do have a small plan. I guess I am just waiting for someone on here to tell me to either start throwing money at all three brokerage funds or move the VDADX and VFIAX into VTSAX.
It really doesn't matter. You can just leave those funds alone until you want to sell it to buy an engagement ring (or whatever your heart goes). You can sell it now and exchange into VTSAX if you want. It really does not matter, considering the amount of loss you'd realize and the tax bracket you're currently in.
Time is the ultimate currency.
Topic Author
boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

dratkinson wrote: Mon Sep 27, 2021 6:38 pm
boogs5150 wrote: Mon Sep 27, 2021 5:06 pm Hi!
I think I went a little mutual fund happy in my Vanguard Brokerage acct but first up, I contribute 10% of my salary to my 401k and I max out a Vanguard Roth that was invested 100% in the TG2050 fund which has done pretty well but I recently sold 70% of that fund and exchanged it for VTSAX since it's more aggressive and I am only 32. I am willing to take the bigger risk.

Two weeks ago I got bored and opened a brokerage for my FIRE dreams or just early retirement dreams whatever age that falls. I know they want me max out my 401k but I want to focus on my brokerage. On 9/20/21 I bought the minimum investments of $3000 of VDADX Dividend Fund, $3000 of VFIAX Sp500, and $3000 of VTSAX Total Stock. My plan was to throw about $50 to each of these weekly so $150 a week but now I think I want to sell/exchange VDADX and VFIAX and roll it into VTSAX so I can pump that fund up faster with $150 a week. Is this a good idea? What kind of tax liability am I looking at? I assume I wont have much taxes since I have only owned these funds for like two weeks. Thanks a bunch!
I believe you are correct. It's a good idea to unroll your changes and make things simpler. The tax cost should be minimal.


I'm assuming you want to play a little to entertain yourself, and want to avoid problems....

Potential TLH problems. With TSM (VTSAX) in your tax-advantaged (TA) account and taxable account. This can potentially cause a problem if you plan to TLH (tax-loss harvest). Why? Assuming you've set both to automatically reinvest distributions, then ~2/3 (?) of the time you will be within a wash sale window as TSM pays quarterly distributions.
--Choose something else in TA that is not "substantially identical" to TSM in taxable. (TDFs are popular for a reason. I use LC in my TA because I want 100% stocks, and TSM in taxable.)
--Choose something else for taxable that is not "substantially to TSM in TA. (Recall SCHB may work as it may track a different index. You'll need to double-check.)
--Your choice.

Overlapping funds in taxable. S&P500 (VFIAX) is 80% of TSM (VTSAX/SCHB). One or the other (S&P500 vs TSM), you don't really need both.

Tax-inefficient investments. Dividend investing can be tax-inefficient. Recall past topics in which OP (original post, original poster) asked for help in undoing a dividend investing strategy.
Search: https://www.google.com/search?q=dividen ... rg%2Fforum


I'd recommend:
--Target Date Fund in TA (401k and rIRA). Set both to DD from salary---automate paying yourself first. Don't miss what you don't see.
--TSM in taxable. DD or handfed. Your choice.
--Period. Simple. Nothing to think about.

Read Swedroe's book on "Alternative Investments". Choose your battles for best chance to increase return tax-efficiently.


Scratch the urge to reach for more yield on your bank accounts sitting fallow. How? Incorporate the "ABP by CC technique", to boost return to ~2%/yr, tax-free.

ABP by CC technique.
--Set your bills to be paid by (trusted) creditors' ABP (automatic bill payment) plans. Let them pull payments from your account.
--Set each ABP plan to be paid by cashback CC (2% Citi is popular) if possible, and from checking if you must.
--Set CC to be paid from checking.

Afterwards, your life will be simpler (creditors do the work to get paid), and your EFs will get a minimum-effort boost.


Welcome.
Thank you for spending the time breaking this down for me and thank you to everyone on here. I am sure you will here from me more but it's a shame I really can't give advice on here and just have to ask for it. Thanks!
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TxFrog
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Re: Mistake buying too many Vanguard Mutual funds?

Post by TxFrog »

+1 for advocating an Investment Policy Statement (IPS).

Also, it may sound silly, but it may be a good idea to have an “amendment process” for your IPS. For example, if you read an investment book or paper/article and decide to increase the allocation of an asset class (ie. international stocks, REITs, etc.), wait six months before making the change.
Topic Author
boogs5150
Posts: 15
Joined: Wed Sep 22, 2021 1:04 pm

Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

Now I am confused a bit on what to do. I just exchanged my 100% Roth in TD 2050 fund and moved about 75% of it to VTSAX.
So Roth is $50k with 75% of it now being VTSAX and I was planning on leaving the TD fund alone and just throwing the 6k into VTSAX in the roth and seeing what the TD fund grows to in the future or maybe 50/50 of the $6000 max.

Since the roth is tax free I can play with that more than my brokerage and not be hit with any tax due at the end of the year correct? Maybe I should sell VTSAX in my roth and go back to 100% TD2050 like stated but then I feel like I am missing out on a ton of growth since TD funds don't seem to match the SP500, I would be missing a few percentage points being in a TD fund vs what VTSAX did last year.

Thoughts now are 100% back to TD2050 in my roth then roll VFIAX and VDADX into VTSAX in my brokerage and fund to the max! How does that sound? I know Vanguard TD2050 is heavily in Total Stock Market.


recap currently is
Roth is 75% VTSAX and 25% TD2050
brokerage is 33% VTSAX, 33% VFIAX, and 33% VDADX $9K
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anon_investor
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Re: Mistake buying too many Vanguard Mutual funds?

Post by anon_investor »

boogs5150 wrote: Mon Sep 27, 2021 7:15 pm Now I am confused a bit on what to do. I just exchanged my 100% Roth in TD 2050 fund and moved about 75% of it to VTSAX.
So Roth is $50k with 75% of it now being VTSAX and I was planning on leaving the TD fund alone and just throwing the 6k into VTSAX in the roth and seeing what the TD fund grows to in the future or maybe 50/50 of the $6000 max.

Since the roth is tax free I can play with that more than my brokerage and not be hit with any tax due at the end of the year correct? Maybe I should sell VTSAX in my roth and go back to 100% TD2050 like stated but then I feel like I am missing out on a ton of growth since TD funds don't seem to match the SP500, I would be missing a few percentage points being in a TD fund vs what VTSAX did last year.

Thoughts now are 100% back to TD2050 in my roth then roll VFIAX and VDADX into VTSAX in my brokerage and fund to the max! How does that sound? I know Vanguard TD2050 is heavily in Total Stock Market.


recap currently is
Roth is 75% VTSAX and 25% TD2050
brokerage is 33% VTSAX, 33% VFIAX, and 33% VDADX $9K
Go 100% VTSAX and chill.
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boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

anon_investor wrote: Mon Sep 27, 2021 7:24 pm
boogs5150 wrote: Mon Sep 27, 2021 7:15 pm Now I am confused a bit on what to do. I just exchanged my 100% Roth in TD 2050 fund and moved about 75% of it to VTSAX.
So Roth is $50k with 75% of it now being VTSAX and I was planning on leaving the TD fund alone and just throwing the 6k into VTSAX in the roth and seeing what the TD fund grows to in the future or maybe 50/50 of the $6000 max.

Since the roth is tax free I can play with that more than my brokerage and not be hit with any tax due at the end of the year correct? Maybe I should sell VTSAX in my roth and go back to 100% TD2050 like stated but then I feel like I am missing out on a ton of growth since TD funds don't seem to match the SP500, I would be missing a few percentage points being in a TD fund vs what VTSAX did last year.

Thoughts now are 100% back to TD2050 in my roth then roll VFIAX and VDADX into VTSAX in my brokerage and fund to the max! How does that sound? I know Vanguard TD2050 is heavily in Total Stock Market.


recap currently is
Roth is 75% VTSAX and 25% TD2050
brokerage is 33% VTSAX, 33% VFIAX, and 33% VDADX $9K
Go 100% VTSAX and chill.
I do like this statement haha
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anon_investor
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Re: Mistake buying too many Vanguard Mutual funds?

Post by anon_investor »

boogs5150 wrote: Mon Sep 27, 2021 7:26 pm
anon_investor wrote: Mon Sep 27, 2021 7:24 pm
boogs5150 wrote: Mon Sep 27, 2021 7:15 pm Now I am confused a bit on what to do. I just exchanged my 100% Roth in TD 2050 fund and moved about 75% of it to VTSAX.
So Roth is $50k with 75% of it now being VTSAX and I was planning on leaving the TD fund alone and just throwing the 6k into VTSAX in the roth and seeing what the TD fund grows to in the future or maybe 50/50 of the $6000 max.

Since the roth is tax free I can play with that more than my brokerage and not be hit with any tax due at the end of the year correct? Maybe I should sell VTSAX in my roth and go back to 100% TD2050 like stated but then I feel like I am missing out on a ton of growth since TD funds don't seem to match the SP500, I would be missing a few percentage points being in a TD fund vs what VTSAX did last year.

Thoughts now are 100% back to TD2050 in my roth then roll VFIAX and VDADX into VTSAX in my brokerage and fund to the max! How does that sound? I know Vanguard TD2050 is heavily in Total Stock Market.


recap currently is
Roth is 75% VTSAX and 25% TD2050
brokerage is 33% VTSAX, 33% VFIAX, and 33% VDADX $9K
Go 100% VTSAX and chill.
I do like this statement haha
Keep it simple. :beer
mrjohnanderson007
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Re: Mistake buying too many Vanguard Mutual funds?

Post by mrjohnanderson007 »

Keep in mind your taxable brokerage account is not tax efficient. VTSAX throws off dividends every year. I estimate for me the tax drag is .8% every year. When I'm making less then .3%

There is tax drag calculator out there you can play around with at physicianonfire.com

With your tax efficient accounts you can do roth conversion ladder to get access to some of that money for fire.

Something to ponder about...
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anon_investor
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Re: Mistake buying too many Vanguard Mutual funds?

Post by anon_investor »

mrjohnanderson007 wrote: Mon Sep 27, 2021 7:48 pm Keep in mind your taxable brokerage account is not tax efficient. VTSAX throws off dividends every year. I estimate for me the tax drag is .8% every year. When I'm making less then .3%

There is tax drag calculator out there you can play around with at physicianonfire.com

With your tax efficient accounts you can do roth conversion ladder to get access to some of that money for fire.

Something to ponder about...
As equity mutual funds go, VTSAX is among the most tax efficient. How are you only making 0.3%? Last year alone VTSAX had over 19% return even factoring in your personal tax drag.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by mrjohnanderson007 »

anon_investor wrote: Mon Sep 27, 2021 7:56 pm
mrjohnanderson007 wrote: Mon Sep 27, 2021 7:48 pm Keep in mind your taxable brokerage account is not tax efficient. VTSAX throws off dividends every year. I estimate for me the tax drag is .8% every year. When I'm making less then .3%

There is tax drag calculator out there you can play around with at physicianonfire.com

With your tax efficient accounts you can do roth conversion ladder to get access to some of that money for fire.

Something to ponder about...
As equity mutual funds go, VTSAX is among the most tax efficient. How are you only making 0.3%? Last year alone VTSAX had over 19% return even factoring in your personal tax drag.
I think you read what I wrote wrong
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anon_investor
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Re: Mistake buying too many Vanguard Mutual funds?

Post by anon_investor »

mrjohnanderson007 wrote: Mon Sep 27, 2021 8:21 pm
anon_investor wrote: Mon Sep 27, 2021 7:56 pm
mrjohnanderson007 wrote: Mon Sep 27, 2021 7:48 pm Keep in mind your taxable brokerage account is not tax efficient. VTSAX throws off dividends every year. I estimate for me the tax drag is .8% every year. When I'm making less then .3%

There is tax drag calculator out there you can play around with at physicianonfire.com

With your tax efficient accounts you can do roth conversion ladder to get access to some of that money for fire.

Something to ponder about...
As equity mutual funds go, VTSAX is among the most tax efficient. How are you only making 0.3%? Last year alone VTSAX had over 19% return even factoring in your personal tax drag.
I think you read what I wrote wrong
Sorry, what did you mean then? :confused
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boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

I didn't do any damage exchanging VFIFX 75% of my roth for VTSAX in my Roth did I? Someone said something about a wash sale.
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arcticpineapplecorp.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by arcticpineapplecorp. »

boogs5150 wrote: Mon Sep 27, 2021 8:31 pm I didn't do any damage exchanging VFIFX 75% of my roth for VTSAX in my Roth did I? Someone said something about a wash sale.
1. A wash sale would only apply to a taxable acct, not a retirement acct which a Roth IRA is.
2. A wash sale only applies when you sell an investment (in taxable acct) within 30 days before or after buying the same or substantially identical investment.

since vfifx is a target date retirement fund (not 100% US total stock market fund) and vtsax is a 100% US total stock market fund, they're not the same, nor substantially identical.

https://www.bogleheads.org/wiki/Wash_sale
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boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

Sounds like I may have to pay someone to do my taxes this time around. I usually do them myself but since I'm adding a Vanguard brokerage account and the Robinhood brokerage I may need one.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by anon_investor »

boogs5150 wrote: Mon Sep 27, 2021 8:42 pm Sounds like I may have to pay someone to do my taxes this time around. I usually do them myself but since I'm adding a Vanguard brokerage account and the Robinhood brokerage I may need one.
Turbo Tax can handle it. I use the download version of Turbo Tax Deluxe (if you use the online version you need to pay extra for Turbo Tax Premiere).
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ResearchMed
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Re: Mistake buying too many Vanguard Mutual funds?

Post by ResearchMed »

boogs5150 wrote: Mon Sep 27, 2021 8:42 pm Sounds like I may have to pay someone to do my taxes this time around. I usually do them myself but since I'm adding a Vanguard brokerage account and the Robinhood brokerage I may need one.
I think you should seriously SLOW things down for now.
Don't add any more funds. Don't sell anything, unless you think you have made a horrible mistake, and chances are that you have not done that.

Then step back and do some reading.

If you don't understand the major tax consequences of various financial decisions (buying/selling for now), then you may end up causing yourself extra taxes. "Someone to do your taxes" will be able to do just that... do your taxes. But they won't be able to "fix" any decisions you already made that have had negative tax consequences.

There just isn't any need to hurry like you seem to be doing.
It's great to be enthusiastic! Channel that enthusiasm into some reading so that *you* have a better idea of what your financial goals are (more than "more money"... HOW to accumulate that money in the most efficient and reasonably safe fashion), and how to implement them in this stage of your life.

You are 32 and mentioned you can take some risk. You can also take some time to figure out what your plans are.
Jumping around from temporary plan to next temporary plan will likely end up being costly.

RM
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Re: Mistake buying too many Vanguard Mutual funds?

Post by mrjohnanderson007 »

anon_investor wrote: Mon Sep 27, 2021 8:22 pm
mrjohnanderson007 wrote: Mon Sep 27, 2021 8:21 pm
anon_investor wrote: Mon Sep 27, 2021 7:56 pm
mrjohnanderson007 wrote: Mon Sep 27, 2021 7:48 pm Keep in mind your taxable brokerage account is not tax efficient. VTSAX throws off dividends every year. I estimate for me the tax drag is .8% every year. When I'm making less then .3%

There is tax drag calculator out there you can play around with at physicianonfire.com

With your tax efficient accounts you can do roth conversion ladder to get access to some of that money for fire.

Something to ponder about...
As equity mutual funds go, VTSAX is among the most tax efficient. How are you only making 0.3%? Last year alone VTSAX had over 19% return even factoring in your personal tax drag.
I think you read what I wrote wrong
Sorry, what did you mean then? :confused
If I make 100k a year the tax drag is .8%. If I make 30k a year the drag is .3%
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anon_investor
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Re: Mistake buying too many Vanguard Mutual funds?

Post by anon_investor »

mrjohnanderson007 wrote: Mon Sep 27, 2021 9:23 pm
anon_investor wrote: Mon Sep 27, 2021 8:22 pm
mrjohnanderson007 wrote: Mon Sep 27, 2021 8:21 pm
anon_investor wrote: Mon Sep 27, 2021 7:56 pm
mrjohnanderson007 wrote: Mon Sep 27, 2021 7:48 pm Keep in mind your taxable brokerage account is not tax efficient. VTSAX throws off dividends every year. I estimate for me the tax drag is .8% every year. When I'm making less then .3%

There is tax drag calculator out there you can play around with at physicianonfire.com

With your tax efficient accounts you can do roth conversion ladder to get access to some of that money for fire.

Something to ponder about...
As equity mutual funds go, VTSAX is among the most tax efficient. How are you only making 0.3%? Last year alone VTSAX had over 19% return even factoring in your personal tax drag.
I think you read what I wrote wrong
Sorry, what did you mean then? :confused
If I make 100k a year the tax drag is .8%. If I make 30k a year the drag is .3%
If you make $30k a year wouldn't the tax drag likely be near zero since after deductions you would likely be in the 0% cap gains tax bracket?

In any case the tax drag on VTSAX in taxable is among the lowest of all BH approved equity mutual funds.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by TropikThunder »

boogs5150 wrote: Mon Sep 27, 2021 7:26 pm
anon_investor wrote: Mon Sep 27, 2021 7:24 pm
boogs5150 wrote: Mon Sep 27, 2021 7:15 pm
Thoughts now are 100% back to TD2050 in my roth then roll VFIAX and VDADX into VTSAX in my brokerage and fund to the max! How does that sound? I know Vanguard TD2050 is heavily in Total Stock Market.


recap currently is
Roth is 75% VTSAX and 25% TD2050
brokerage is 33% VTSAX, 33% VFIAX, and 33% VDADX $9K
Go 100% VTSAX and chill.
I do like this statement haha
It’s sad but not surprising to me that you had to ask three times whether you should keep VFIAX and VDADX before you got an answer. IMO, I would not have bought either of them in a taxable account if you were also going to buy VTSAX. VFIAX is just the biggest parts of VTSAX as you correctly said above, and like you, I’d rather have the rest of total market instead of just the biggest 500. Plus, dividend funds aren’t a good choice in taxable because the dividends get taxed, and if you’re just reinvesting them anyway, then you’re paying taxes for no reason. So I would have just bought VTSAX and called it a day (well I would have bought some VTSAX and some VTIAX Int’l but that’s for another thread).

As for your Roth, you are correct that there is no tax liability for making changes within an IRA. All the money you put in a Roth has already been taxed, and it won’t be taxed when you withdraw it, regardless of what you do with it inside the Roth between now and then. The downside to making a lot of changes though is you can get bit by market timing and performance chasing bugs (oh! S&P500 dodo better last year, I should switch back!).

As far as fund choices in the Roth, the TD2050 fund only has about 10% bonds. So in the Roth, bonds are only 2.5%, and in your accounts overall they’re barely 1%. At 32, I don’t see the point of investing in bonds in the first place, and if you only have 1% you may as well just ditch the TD fund and go all VTSAX in the Roth.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by exodusNH »

boogs5150 wrote: Mon Sep 27, 2021 5:06 pm Hi!
I think I went a little mutual fund happy in my Vanguard Brokerage acct but first up, I contribute 10% of my salary to my 401k and I max out a Vanguard Roth that was invested 100% in the TG2050 fund which has done pretty well but I recently sold 70% of that fund and exchanged it for VTSAX since it's more aggressive and I am only 32. I am willing to take the bigger risk.

Two weeks ago I got bored and opened a brokerage for my FIRE dreams or just early retirement dreams whatever age that falls. I know they want me max out my 401k but I want to focus on my brokerage. On 9/20/21 I bought the minimum investments of $3000 of VDADX Dividend Fund, $3000 of VFIAX Sp500, and $3000 of VTSAX Total Stock. My plan was to throw about $50 to each of these weekly so $150 a week but now I think I want to sell/exchange VDADX and VFIAX and roll it into VTSAX so I can pump that fund up faster with $150 a week. Is this a good idea? What kind of tax liability am I looking at? I assume I wont have much taxes since I have only owned these funds for like two weeks. Thanks a bunch!
If you max out the 401k contributions and take the standard income tax decision, you wind up at about $38k of income. At that level, you can tax gain harvest about $2k of long-term capital gains at 0% or $2k of short-term gains at 12%.
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Re: Mistake buying too many Vanguard Mutual funds?

Post by ruralavalon »

It's great that you live well within your means, are debt free, and use tax-advantaged accounts investing mainly in very diversified index funds with very low expense ratios. You are doing a a lot of things right.

Slow down, take your time, there is no rush. Just because someone makes a suggestion doesn't mean you should immediately act. The suggestions are just ideas for you to consider.

Promise yourself that you will not make any more changes until at least a week or two has passed and until you have developed an overall plan to follow.

You can begin by educating yourself. I suggest that you read Dr.Bernstein's free, short, pdf book "If You Can". Also read Bogleheads® investment philosophy. Those are a quick ways to learn the basics.


boogs5150 wrote: Mon Sep 27, 2021 8:31 pm I didn't do any damage exchanging VFIFX 75% of my roth for VTSAX in my Roth did I? Someone said something about a wash sale.
No damage, exchanging between funds inside tax-advantaged accounts does not create any tax liability.

What funds are offered in your employer's 401k plan? In particular what target date, allocation or balanced funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios. With that information we can offer ideas on what investments to use in your employer's 401k plan.

It's often better to coordinate investments among all accounts, treating all accounts together as a single unified portfolio.


boogs5150 wrote: Mon Sep 27, 2021 5:42 pm I just got too excited and purchased more funds than I should of and I now know that I would like to keep it as simple as possible without including someone to manage it. I'm not dumping as much as I want since there seems to be something brewing....
Keeping it simple is an excellent idea in my opinion.

One way to keep it as simple as possible is to use target date or similar funds in both your Roth IRA and in your 401k account.

Using target date or similar funds seems to inoculate the investor against behavioral errors and so produce higher investor returns. Morningstar (8/15/2019), "Mind the Gap 2019", link.

This could help you avoid the tendency to make too many changes on a whim ("jumping the gun") as you seem to be doing, and let you settle down.

Please add any new information to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

You could copy and paste the new information you have given in other posts into your original post, so that its easy for people want to help you to see the full picture.

Here is a format you could use: Asking Portfolio Questions.


boogs5150 wrote: Mon Sep 27, 2021 5:06 pmTwo weeks ago I got bored and opened a brokerage for my FIRE dreams or just early retirement dreams whatever age that falls. I know they want me max out my 401k but I want to focus on my brokerage. On 9/20/21 I bought the minimum investments of $3000 of VDADX Dividend Fund, $3000 of VFIAX Sp500, and $3000 of VTSAX Total Stock. My plan was to throw about $50 to each of these weekly so $150 a week but now I think I want to sell/exchange VDADX and VFIAX and roll it into VTSAX so I can pump that fund up faster with $150 a week. Is this a good idea? What kind of tax liability am I looking at? I assume I wont have much taxes since I have only owned these funds for like two weeks. Thanks a bunch!
boogs5150 wrote: Mon Sep 27, 2021 5:48 pm I agree I was jumping the gun and need to settle a bit. I should have asked on here before!

Here is where I am:

32 years old
$70k Salary
$50k in Vanguard Roth-maxed every year. 75% in VTSAX and 25% in Target Date 2050
$9k in Vanguard brokerage. $3000k VTSAX, $3k VFIAX, and $3k in VDADX
$2500 in BOA HSA Account- Invested in Sp500 fund, plan on maxing out this year
$36k in 401k. 100% in stocks. SP500 and small cap
$6000 in Robinhood. 75% in crypto and 25% pick and choose funds for fun.
$90k in emergency/savings earning .05% (may be looing for somewhere to put this but I think we are in for a market dive in the next few months but who knows)
boogs5150 wrote: Mon Sep 27, 2021 6:32 pm* I contribute about $7500 a year to my 401k, then my employer throws in about $3200
At age 32 the maximum annual employee contribution to a 401k is $19.5k. The employer match does not count toward that employee limit, it's extra.

I suggest that you stop your $150/week ($7800/year) contributions to the taxable account, and increase the contributions to the 401k account.

boogs5150 wrote: Mon Sep 27, 2021 6:32 pm* I could live for a few years on that if I wanted (90k). Paying rent, food, insurance, cell, no debt. My bills are low.
It is great that you live well within your means. That gives you a lot of flexibility in your life and enables you to have a high rate of contributions to investing.

Establishing a high rate of contributions is the most important investing decision you can make, forum discussion.

A high rate of contributions and better use of tax-advantaged accounts will get you to your FIRE dreams sooner.

You could safety add some of that $90k to investing or use it for your travel plans or career changing moves.

boogs5150 wrote: Mon Sep 27, 2021 6:32 pm* I did think about selling all of my robinhood stocks and crypto just so I would quit looking at it everyday. I've been buying COKE and Pepsi but I know owning VTSAX would also allow me to capture these companies as well so I'm all over the place I KNOW!
That is a good thought. I suggest selling the crypto and Robinhood stocks, and closing the Robinhood account. Stop playing at investing and be serious.

That money can be added to investing or use it for your travel plans or career changing moves.

boogs5150 wrote: Mon Sep 27, 2021 6:32 pmI may have a career change coming due to the state of the country and my plan was to take a year off and travel to places I have not been with money I have saved in my vacation fund then find a career I really like so work doesn't feel like work anymore.
In addition have you considered further education or training to enhance your career move? Increasing your earning capacity can have can have a large impact on both how soon you reach your FIRE dreams, and on your job satisfaction.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
pkcrafter
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Re: Mistake buying too many Vanguard Mutual funds?

Post by pkcrafter »

Ruralavalon has provided an excellent post. :!:


I second his suggestions. :thumbsup


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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boogs5150
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Re: Mistake buying too many Vanguard Mutual funds?

Post by boogs5150 »

Thanks for the info everyone. I see a lot of opinions on here but that allows me to form my own. I am in the process of selling $3k of VDADX and throwing it into VTSAX. After that it's just VFIAX and VTSAX in my Taxable. I suppose I will roll VFIAX into VTSAX next. This is what I have gathered from the post. Thanks again! I am sure I will have more questions. :happy
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dratkinson
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Re: Mistake buying too many Vanguard Mutual funds?

Post by dratkinson »

I should have included this above, but forgot... just too much to remember.


Warren Buffett won a 10yr, $1-million dollar bet against 5 hedge fund companies. He did it by following the advice you'll learn here. In all of the news articles, over the bet's many years, you should understand 3 lessons... never mentioned in any news article.

This method:
--Is simple. (Anyone can learn/use it... to outperform the majority of financial advisors.)
--Takes a long time to work. (WB was behind in bet's first year, but significantly ahead a decade later.)
--No one who wants our money will tell us about it. (Not FAs, nor the financial media dependent upon FA ad revenues. In fact, it's in their best interest to get/keep us excited/dependent upon them to chase next "hot" thing. Best to avoid FAs/financial media.)

Search for WB's bet: https://www.google.com/search?q=warren+ ... 0+year+bet

Bottom line.
--The simpler (more boring) our investments, the better our expected outcome. (More likely to avoid buy-high/sell-low schemes.)
--The #1 determinant of investment return is AA (asset allocation): stocks should return more than bonds, but our retired self needs some safe bonds---retirement depends using both at the right times. (We're not WB trying to max expected bet outcome.)
--Tax-advantaged dollars grow faster than taxed dollar---fill TA space first, after high-interest debt paid and EF established. (Our retired self will thank us.)
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
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