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Re: Total Stock Market
Old 09-08-2005, 04:05 PM   #21
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Re: Total Stock Market

I can only contribute $4000 to my retirement 2045 account because it is a Roth (have already maxed it out). I wanted to open a low cost taxable account (TSM).

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Re: Total Stock Market
Old 09-08-2005, 04:20 PM   #22
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Re: Total Stock Market

Originally Posted by geeman
Is this a good idea?
C'mon, Geeman, give us a break. *Lemme amplify Cut-Throat's very tactful comments.

You've developed paralysis by analysis into an art form. *You've put up over 70 posts on this board, another 50+ on the Vanguard Diehards board, and who knows how many other posts in what other places. *You keep asking us to tell you if you're doing the right thing. *We keep telling you to educate yourself and to make your own decisions as to what's right for you. *

Here it is one more time:
1. *Read Bernstein's "Four Pillars".
1a. *If step 1 doesn't work for you then read something off the Vanguard Diehard's list that discusses asset allocation.
1b. *(Optional) Use Vanguard Diehard's links to develop your "Investing Policy Statement". *Some investors think that helps them stay the course by referring to it in good times & bad.
2. *Use "Four Pillars" (and whatever other references you deem worthwhile) to decide on your asset allocation plan. *Keep it simple. *You've had enough suggestions and there are many ways to accomplish AA so you don't have to ask us whether or not your latest AA idea is any good. *Just put it together and move forward. *At this point progress is more important than perfection.
3. *DCA at least 10% of your paycheck into your AA. *Put in more if you have more. *Put the lump sums in NOW and stop waiting for all the planets to align.
4. (Optional) Rebalance every year or so to bring your AA back to its original plan, or adjust your DCA as necessary to bring the AA back into balance. *Don't try to tweak the AA if it's within 5% of your goal.
5. *Keep an eye on your current expenses and project your ER expenses. *Add in extra for an occasional new roof, a replacement car, replacement appliances, a kid's wedding, a fantasy vacation or two, or whatever. *You've noticed that ER expense budgets vary widely so as long as you're under $80K/year you're probably all right. *$24K/year seems to be the median number but it varies widely.
6. *When your retirement portfolio is 25x your annual expenses then you should be able to start your ER at a withdrawal rate of 4% of the portfolio, raised annually by inflation. *

Now go make your own decisions for a while and, when you complete step #5, tell us what you did. *If you're tempted to ask for our approval before finishing step #5, then reconsider whether or not you're one of the people who really should develop a close personal relationship with a paid financial advisor.

If you really don't care about the above and you just want to debate asset allocation and market timing endlessly and down to the fractions of a percentile, then I'd suggest RADDR's Market Theory & Investment Strategy board. *Don't confuse participation on that board with your own actual personal decisive action to implement your own investment & ER plans. *RADDR runs a good board and it can teach you a lot, but if you keep asking people to tell you what to do then it'll eventually generate a post like this.

You can buy a Porsche at 23 but it's not very compatible with the ER goal. *If the advice you're getting on this board doesn't match with the desires expressed in your first post, then you're on the wrong discussion board.

Once you start making your own decisions it'll get easier. *Good luck.


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Re: Total Stock Market
Old 09-08-2005, 04:50 PM   #23
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Re: Total Stock Market


Thanks for the in-depth response. I am going to the library to get Bernstein tonight. There are just so many options in terms of investments that it gets overwhelming. I guess posting here also becomes a bit counter productive due to the varying opinions from all of the responses. Iím sure you understand where I am coming from. Any how, Iíll lay low for awhile and Iíll check back and let you all know how everything goes.

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Re: Total Stock Market
Old 09-08-2005, 09:02 PM   #24
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Re: Total Stock Market

I might have some advice that can help you to get started with a taxable account at Vanguard. I recently started an asset class based portfolio allocation. I'm planning on having probably 6-7 index funds for the core of my portfolio. The way I'm going to do this is by building a $10,000 position in one index fund, then moving to the next and the next and the next until I get my target allocation. The index funds have a fee for balances under $10,000 at vanguard. Like you, I have other positions outside vanguard that will continue to grow (401k, IRA's, other taxable).

It will take me a number of years to reach my target allocation since I'm not putting all of my money into taxable investments. Put your money into TSM if that is what you want, then build that position to $10,000, and move to your next fund if that is what you want. Remember that your investing for ER is a marathon, not a sprint. You have to be willing to accept the fact that your going to have days where you lose $100 or $1000 or $10,000 (depending on how much you have invested). Those are paper losses.

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