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Fund to hold onto forever
03-06-2015, 07:23 AM
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#1
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Recycles dryer sheets
Join Date: Dec 2014
Posts: 61
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Fund to hold onto forever
I'm cashing in a JS VUIL that DW and I took out when the kids were small. The mortality cost was small and it has actually grown nicely. But now the kids are grown with education paid for and I don't want to pay for life insurance anymore. It has a surrender value of $220,000 and I've paid in $120,000 in premium so I'm preparing to pay about $20,000 in taxes on the gain and investing the rest with Vanguard. (The only advice I have on life insurance is buy a lot of term and invest the difference yourself, but that's a whole different topic than my question and I think I'd be preaching to the choir.)
Here's my real question. My intent for these funds is to hold onto it forever and leave it in our estate, just like we would have used the Life Insurance cash value and death benefit. We should have enough other income where we don't need to tap into it or ever sell a share. I'd like to put it in a growth fund that doesn't generate a lot of taxable dividends, and just let it grow. (Kind of like a Berkshire Hathaway concept) I know diversification is important, but so is simplicity. If I had to do it today I'd put the whole $200,000 into Vanguard S&P 500 index fund and forget about it.
Any other suggestions ? Thanks.
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03-06-2015, 07:26 AM
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#2
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 121
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VTI.
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03-06-2015, 07:27 AM
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#3
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gone traveling
Join Date: Sep 2013
Posts: 1,248
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50% VXUS
50% VTI
Or Equivalent ETFs from Schwab....which I think have tiny bit smaller fees.
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03-06-2015, 07:41 AM
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#4
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 121
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Quote:
Originally Posted by eta2020
50% VXUS
50% VTI
Or Equivalent ETFs from Schwab....which I think have tiny bit smaller fees.
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Cheater. One fund. I picked VTI so they can work their way up the Vanguard perk ladder.
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03-06-2015, 07:51 AM
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#5
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Recycles dryer sheets
Join Date: May 2012
Posts: 90
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Or VT, Vanguard Total World. Is more expensive than buying two ETFs separately but is easier to hold just one and not to have to worry about rebalancing.
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03-06-2015, 07:59 AM
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#6
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Recycles dryer sheets
Join Date: Dec 2014
Posts: 61
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Thanks for the options, I wouldn't mind two funds - although I don't plan on rebalancing or creating any taxable event. I like the idea of some international exposure, but don't plan on it holding any bonds. It will become a tax bomb for me but the kids will get a stepped up basis when it's theirs.
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03-06-2015, 08:33 AM
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#7
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 121
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Quote:
Originally Posted by Del Q
Thanks for the options, I wouldn't mind two funds - although I don't plan on rebalancing or creating any taxable event. I like the idea of some international exposure, but don't plan on it holding any bonds. It will become a tax bomb for me but the kids will get a stepped up basis when it's theirs.
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Problem with international is you may lose out of the QDI tax treatment. You need to look into that first. Good luck.
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03-06-2015, 09:23 AM
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#8
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gone traveling
Join Date: Sep 2013
Posts: 1,248
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Quote:
Originally Posted by Del Q
Thanks for the options, I wouldn't mind two funds - although I don't plan on rebalancing or creating any taxable event. I like the idea of some international exposure, but don't plan on it holding any bonds. It will become a tax bomb for me but the kids will get a stepped up basis when it's theirs.
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I would not rebalance such purchase.
But this is what I would buy
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03-07-2015, 09:10 AM
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#9
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Pretty much what you mention:
Any S&P 500 tracker
Vanguard Total World (VT)
Vanguard VTI
Berkshire
Can also consider an accumulating fund (like IE00BFPM9N11 - note that that one is in EUR and based in Ireland, but something similar surely exists in the US).
If you are convinced in mid cap value VOE might also be useful. Or one of the Vanguard target retirement data funds.
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