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Re: Comments on Vanguard Financial Plan
Old 07-19-2006, 03:31 PM   #21
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Re: Comments on Vanguard Financial Plan

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Originally Posted by TromboneAl

One thing I got out of it is something I hadn't considered. He recommends a few actively managed funds in order to reduce volatility. That is, a managed fund might be less likely to move in lockstep with an index fund, and thus smooth out the changes.
Hmmm, he MIGHT be right if we were talking about highly concentrated funds like Clipper, etc...

Sadly, most active funds are just closet index funds with hundreds of stocks in them (and huge fees)

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Re: Comments on Vanguard Financial Plan
Old 07-21-2006, 03:40 PM   #22
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Re: Comments on Vanguard Financial Plan

I find BRKB to be a good way to somewhat diversify out of indexes, without concern about underperformance or fees.
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Re: Comments on Vanguard Financial Plan
Old 07-21-2006, 06:42 PM   #23
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Re: Comments on Vanguard Financial Plan

Good until Warren has a heart attack or decides to join the Gates Foundation full time...
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Re: Comments on Vanguard Financial Plan
Old 07-25-2006, 10:28 PM   #24
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Re: Comments on Vanguard Financial Plan

Your comments about the recommendations of the VG FP exactly match my own experience just this month. I follow Bob Brinker...have so for a decade...so I am not about to change my strategy to these recommendations...the expense ratios are greater for one point. I did the VG FP for education but haven't been enlightened...I like my own active-passive approach with timing as per Brinker's recommendations..
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Re: Comments on Vanguard Financial Plan
Old 08-01-2006, 02:30 PM   #25
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Re: Comments on Vanguard Financial Plan

It was my turn to have a phone consultation with VG FP this morning, and BTW my "plan" is essentially the same one TB-Al got, with same recommended funds, etc. Appears to be a standard recommendation for same basic plan/philosophy -- nothing much that is new, but at least is affirming, etc., that is, broadly diversified across array of low-fee indexed funds, etc.

One item, though, that I'd like any of you to chime in on == the Spending Methodology

At the beginning of this year '06, I switched over to receiving income/divids/int from our VG taxable account into our MM cash account in order to begin drawing that as operating income (as DH and I have both FIREd and receive no more earned income). We are spending from our local bank balance and will establish a regular VG stream of income at beginning of 07).

Anyway, Fin Planner advised that I return to divided reinvestment in order to enjoy DCA in purchasing periodic new shares, and draw our income needs once annually when we rebalance, etc. But since we will already be taxed on the divid. income, won't this just be opening us to additional taxation in the form of Cap. Gains when we rebal.? I had figured on receiving the taxable income for our spending needs (upon which we are taxed via 1099-DIV) and then trading funds/rebalancing to supplement that income only as needed.

I'll admit the DCA inherent in dividend reinsvestment has appeal, but aren't we just adding to tax activities by buying and then selling additional shares?

Your thoughts......

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Re: Comments on Vanguard Financial Plan
Old 08-01-2006, 02:41 PM   #26
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Re: Comments on Vanguard Financial Plan

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One item, though, that I'd like any of you to chime in on == the Spending Methodology
Seems to be a wash to me -- if you took the dividends as distributions to your expense MMF, it would simply allow you to make a slightly smaller sale-of-shares withdrawal annually to meet the difference. Either way, you pay tax on the dividends, and the total amount distributed is the same. Can't imagine any significant difference in the bottom line.
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Re: Comments on Vanguard Financial Plan
Old 08-02-2006, 05:24 PM   #27
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Re: Comments on Vanguard Financial Plan

True, we're going to be taxed on the divid income whether we spend it or reinvest it, but Cap Gain activity can be lessened by reducing the need to liquidate shares to provide income. Reinvesting to buy more shares and then selling them seems like churning to me, although I guess the volume wouldn't be so critical afterall.

Thanks for you input..
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Re: Comments on Vanguard Financial Plan
Old 08-02-2006, 09:32 PM   #28
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Re: Comments on Vanguard Financial Plan

I take the dividends and spend them, then at the end of the year reinvest what we didnt manage to spend.

I agree it cuts down on shares sold, unnecessary capital gains, and churn.

Maybe just a little, but fer chrissakes we jump through hoops to get an extra .25% on a MMF and then want to give that back in taxes?
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Re: Comments on Vanguard Financial Plan
Old 08-07-2006, 08:55 PM   #29
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Re: Comments on Vanguard Financial Plan

VG FP took the wind out of my sails!* Plugged back in after an all too short passage offshore to find my "personal" VG FP waiting for me.* Looked to be a cc. of TrAl's FP!* Follow-up call with VG CFP indicated an all "own the market" approach.* Too risky, says I.* Nice chat, and guess it was worth the zero cost.*

Will stick with my major portion of Malkiel's Random Walk recs. blended with some Bernstein Bibile Belt sermons picked up around here.* Reliable course set these last 8 years and helped me steer clear of yr 2000-1 TekWrek shoals.* Can anyone provide insight to the Morgan Growth rec by VG instead of SmCap Index and EmM Index nixed by VG FP?
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Re: Comments on Vanguard Financial Plan
Old 08-07-2006, 09:51 PM   #30
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Re: Comments on Vanguard Financial Plan

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Can anyone provide insight to the Morgan Growth rec by VG instead of SmCap Index and EmM Index nixed by VG FP?
The rationale according to the planner was the by adding an actively managed fund, you have less volatility. That is, the managed fund might zig when the index funds zag, and so you have less volatility.

That didn't quite do it for me.
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