Portfolio Review- Advice Appreciated!

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Topic Author
Havoner
Posts: 67
Joined: Mon Sep 14, 2020 8:44 pm

Portfolio Review- Advice Appreciated!

Post by Havoner »

Income: $200,000-$230,000 depending on bonuses

Expenses:$108,000
Including
20k in childcare
25k in house payments

Emergency funds: 6 month expenses

$220,000 15 year Mortgage @ 2.87%

Tax Filing Status: Married Filing Jointly
Tax Rate: 22% Federal, 5% State

Age: 33 years/ 31 years

Desired Asset allocation: 100% stocks

Current retirement assets
372,000

Taxable
Her ESSOP Stock
$7,000

His Roth 401k
$130,000 Vanguard Total Stock Market Index Admiral (.04)
$10,000 Employer Stock

His Roth IRA at Vanguard
$55,000 Vanguard Total Stock Market Index

His HSA at Vanguard
$5,000 Vanguard Total Stock Market Index (.04)

Her Roth IRA at Fidelity
$15,000 SP 500 Index (.05)

Her 401k at Fidelity
$125,000 U.S. Large Company Stock Index Fund (0.01)

Her 401k Transamerica
$25,000 SP 500 Index (.05)

Contributions

New annual Contributions
$19,500 his 401k (Employer match 4k)
$19,500 her 401k (Employer match 6k)
$7,000 his HSA
$6,000 his Roth IRA
$6,000 her Roth IRA

Available funds

Funds available in his 401(k) & HSA
Vanguard Mix

Funds available in her 401K
standard target date retirement accounts
Fidelity US Small/Mid Company Stock Index Fund(.045)
Fidelity LRG COMP STK INDEX (.01)
BOND INDEX (.02)
Multiple actively managed options

Statement:
Feels like we have made some good headway the last few years but would like to see more growth on our wealth outside of retirement accounts. Any advice is appreciated. Overall goal is to be FI in about 15 years so working is optional but will likely work until 55-60 just because we enjoy it.

Questions

1.Any other tips or tricks on getting ahead? Right now I think after saving the $58,000 for 16 years that when the kids go to school in 16 years we will have a paid for house and no daycare which drops expenses down to an inflation adjusted $58,000 at this point we would like to be close to financial independence at around 49/47.

2. Feels like I have alot of savings going towards retirement. Any thoughts on trying to save some up to get started with buying some smaller multifamily rentals?

3. Any suggestions on asset allocation? Does everything looks like it is in the right account?

4. What do you think would be the biggest trigger to accelerate wealth building over the next five years?
Last edited by Havoner on Sat Oct 16, 2021 9:45 pm, edited 2 times in total.
sycamore
Posts: 6309
Joined: Tue May 08, 2018 12:06 pm

Re: Portfolio Review

Post by sycamore »

Overall you look to be in great shape - a good income, reasonable expenses, and high saving rate. Congrats!

Your investment selections are top notch -- low-cost, passive, broad market index funds.
Havoner wrote: Sat Oct 16, 2021 3:27 pm Questions

1.Any other tips or tricks on getting ahead? Right now I think after saving the 58k for 16 years that when the kids go to school in 16 years we will have a paid for house and no daycare which drops expenses down to an inflation adjusted $58,000 at this point we would like to be close to financial independence at around 49/47.

2. Feels like I have alot of savings going towards retirement. Any thoughts on trying to save some up to get started with buying some smaller multifamily rentals?

3. Any suggestions on asset allocation? Does everything looks like it is in the right account?
1. Look into using a 529 for college savings. Not sure what you plan to contribute for child's college costs, but I assume something substantial? The tax savings of a 529 (over just investing the money in a taxable account) can be substantial. Some are concerned about "overfunding" or "locking up" money in a 529, but it's not an all or nothing approach. Maybe put $5k year into 529, another $5k into taxable.

One "trick" would be to use a leveraged fund but I think you should stick with plain unleveraged broad market stock funds; they're risky enough.

2. I have no direct experience to share regarding real estate investments. But experiences of my family relative suggests it can be a very time intensive activity so be prepared for that. And for unhappy tenants.

3. Your desired asset allocation of 100% stocks is okay assuming you're mentally prepared for the inevitable stock market drop of 20, 30, or 50%.

Curious what the Bond fund (His Roth) was for ? Just checking that you do want to go from 85/15 (with the Bond fund) to 100/0.
tashnewbie
Posts: 4230
Joined: Thu Apr 23, 2020 12:44 pm

Re: Portfolio Review

Post by tashnewbie »

You’re doing well. Great savings rate. And you’ll have a lot more room after kids are out of daycare.

You said you have a total bond fund in his Roth IRA. Is that a typo? I would put a total stock market fund (VTSAX) there instead, if something else is there now.

Especially if you plan to retire early, Traditional 401k contributions will probably be better for him. See the traditional vs Roth wiki page for more information (along with many forum threads).
Topic Author
Havoner
Posts: 67
Joined: Mon Sep 14, 2020 8:44 pm

Re: Portfolio Review

Post by Havoner »

sycamore wrote: Sat Oct 16, 2021 4:37 pm Overall you look to be in great shape - a good income, reasonable expenses, and high saving rate. Congrats!

Your investment selections are top notch -- low-cost, passive, broad market index funds.
Havoner wrote: Sat Oct 16, 2021 3:27 pm Questions

1.Any other tips or tricks on getting ahead? Right now I think after saving the 58k for 16 years that when the kids go to school in 16 years we will have a paid for house and no daycare which drops expenses down to an inflation adjusted $58,000 at this point we would like to be close to financial independence at around 49/47.

2. Feels like I have alot of savings going towards retirement. Any thoughts on trying to save some up to get started with buying some smaller multifamily rentals?

3. Any suggestions on asset allocation? Does everything looks like it is in the right account?
1. Look into using a 529 for college savings. Not sure what you plan to contribute for child's college costs, but I assume something substantial? The tax savings of a 529 (over just investing the money in a taxable account) can be substantial. Some are concerned about "overfunding" or "locking up" money in a 529, but it's not an all or nothing approach. Maybe put $5k year into 529, another $5k into taxable.

One "trick" would be to use a leveraged fund but I think you should stick with plain unleveraged broad market stock funds; they're risky enough.

2. I have no direct experience to share regarding real estate investments. But experiences of my family relative suggests it can be a very time intensive activity so be prepared for that. And for unhappy tenants.

3. Your desired asset allocation of 100% stocks is okay assuming you're mentally prepared for the inevitable stock market drop of 20, 30, or 50%.

Curious what the Bond fund (His Roth) was for ? Just checking that you do want to go from 85/15 (with the Bond fund) to 100/0.
Thank you Sycamore! My mistake on the bond fund I corrected it. It is stock index funds at this point. You were reading my mind on the 529 accounts. Was a little on the fence and know it's a long way down the road but figured my children would like something there one day and I think splitting the difference gives some better flexibility there while also allowing me to take advantage of the tax sheltering. :sharebeer
Topic Author
Havoner
Posts: 67
Joined: Mon Sep 14, 2020 8:44 pm

Re: Portfolio Review

Post by Havoner »

tashnewbie wrote: Sat Oct 16, 2021 5:43 pm You’re doing well. Great savings rate. And you’ll have a lot more room after kids are out of daycare.

You said you have a total bond fund in his Roth IRA. Is that a typo? I would put a total stock market fund (VTSAX) there instead, if something else is there now.

Especially if you plan to retire early, Traditional 401k contributions will probably be better for him. See the traditional vs Roth wiki page for more information (along with many forum threads).
Thanks Tash,

Sorry that bond fund was a typo it is in a stock index. Yeah normally I lean a little more towards the Roth 401k and try to do a backdoor but this last year with everything going on figured the traditional route was better and then I don't need to do the backdoor Roth. In the future will probably be using the Roth more to help sock more a way in a tax sheltered fashion since I am running out of sheltered investment space. Thank you for the review!
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