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Personal Finance Advice and Education! (3 Viewers)
- Thread starter No. 16
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Long Ball Larry
Footballguy
Steve Tasker
Footballguy
Finally diving into my portfolio a bit with the Morningstar X-Ray. It's been awhile since I really took a long look at my asset allocation. I have a general idea where I'm at, but it's nice to see some hard numbers.
62% US equities / 17% foreign equities / 16% bonds / 4% cash (1% rounding, I guess)
Equities exposure - 81% US / 6% Euro (developed) / 4% UK / 3% Asia (emerging) / 2.5% Asia (developed) / 2% Japan / the rest miscellaneous
35% growth / 33% value / 30% core (2% rounding). Very very heavy focus on large cap - didn't realize this was so high, ~85%.
Average expense ratio = 0.25%....this is better than I thought it'd be, I have some pretty iffy options in my 401(k) that bring this number up above my Vanguard holdings. Comparison of a hypothetical similarly-weighted portfolio is 1.08%.
Any comments on this? I'm 30, fairly aggressive as I know I'm looking at a long-term time horizon here. I was aiming for (age - 10) in bonds so with the bonds + cash I'm about there.
62% US equities / 17% foreign equities / 16% bonds / 4% cash (1% rounding, I guess)
Equities exposure - 81% US / 6% Euro (developed) / 4% UK / 3% Asia (emerging) / 2.5% Asia (developed) / 2% Japan / the rest miscellaneous
35% growth / 33% value / 30% core (2% rounding). Very very heavy focus on large cap - didn't realize this was so high, ~85%.
Average expense ratio = 0.25%....this is better than I thought it'd be, I have some pretty iffy options in my 401(k) that bring this number up above my Vanguard holdings. Comparison of a hypothetical similarly-weighted portfolio is 1.08%.
Any comments on this? I'm 30, fairly aggressive as I know I'm looking at a long-term time horizon here. I was aiming for (age - 10) in bonds so with the bonds + cash I'm about there.
Judge Smails
Footballguy
I’m open to what I should do with it. My goal is to augment retirement saving 50-100K each year on top of retirement accounts in my money run years, which is now. Playing a bit of catch up. Also want to be liquid in case we want to take advantage of buying opportunity for vacation home. Loreto or Punta Mita.
Doctor Detroit
Please remove your headgear
I'm now 12% in cobalt and loving every minute of it!
-OZ-
Footballguy
I'd transfer some large US into foreign, especially emerging markets. Also more into US Small cap. I haven't reevaluated mine since the "market correction" but it was and probably still is around 45% US, 10% REIT, 15% bonds, 30% foreign with roughly 1/5 of my international in emerging markets. I'm moving emerging towards 1/3. US is split fairly evenly between large/small and value/growth.
When I'm 65, I plan to be 40% stocks, 40% bonds, 20% REIT / Real Estate. So for bonds, I'm using 40 - (65-age) = bonds (so for now, 40 - (65 - 40) = 15, instead of the usual rule of thumb. That's because I'll have two federal pensions (plus any SS) which will provide for our necessities. Your situation is probably different, using 110-age for stocks seems to be the popular choice.
Bogle and Buffett say don't bother with foreign investments (partly because you're already exposed internationally through the large US companies)
15%-25% foreign
70/30 with 1/3 in emerging markets
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BeTheMatch
Footballguy
The Z Machine
Footballguy
Yes, mine went up $230. Not sure what the net-net is when I do the full year taxes though.
NeverEnough
Footballguy
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Sand
Footballguy
Binky The Doormat
Footballguy
Bossman
Footballguy
we're talking dozens of dollars at stake here.
lol ... actually just bought 13 shares of amazon @ $20k. Wish I had this disposable income to invest in it 5 years ago.
The Bitcoin is very tempting ... but I just can't bring myself to invest in it. Another "woulda, shoulda, coulda".
Binky The Doormat
Footballguy
Bossman ...you may want to spread that dough out across a few more areas unless that only represents less than 10% of your holdings there McScrooge Moneybags!!
mquinnjr
Footballguy
Read an article on WSJ the other day that a few small cap companies we're de-listed for holding BTC in investment assets and potentially being linked to pump and dump schemes. Made me 
, I think personally BTC is fine if it's a small relative play within your personal portfolio. A publicly traded company listing BTC as an asset is ridiculous, makes me wonder if GAAP would require BTC be listed before or after NCAA basketball futures in order of liquidity.
, I think personally BTC is fine if it's a small relative play within your personal portfolio. A publicly traded company listing BTC as an asset is ridiculous, makes me wonder if GAAP would require BTC be listed before or after NCAA basketball futures in order of liquidity.
Bossman
Footballguy
Indeed.
The rest is in Vanguard index funds ... small, med, large cap. Kinda dull but they're doing their job.
No bonds ... only because I'm not sure what the benefit is over the index funds. (less risk? not for me)
I own no other stocks but I believe in Amazon so I'm giving it a whirl.
wilked
Footballguy
Bossman
Footballguy
It is Amazon, they'll probably buy the stock back at whatever you paid for it...that's how good the customer service is
It's Amazon ... what's the worse that can happen?
I'm around the same age and think you should consider more small cap and foreign (particularly more emerging markets)
Sand
Footballguy
wilked
Footballguy
Sand
Footballguy
Good thread, and timely.
There is no good evidence the malaise for EM is getting better, and I'd argue from a macro point of view that our new tax regs will hurt EM GDP. All IMO.
-OZ-
Footballguy
On the bright side, if EM rises, your percentage may go up without you doing anything.
Seems to me the time to invest in something is before most others want to invest in it. I'm not going much over 10% but it's worth having in your portfolio.
STEADYMOBBIN 22
Footballguy
So at 40 the wife and I have fixed nearly all the damage we caused ourselves in our late 20s and managed to save about $50k.
Now that our credit scores are both over 700 we need to refinance a few things but not sure what’s the best approach. It should also be noted that I just changed jobs and took a bit of a pay cut on paper. I actually broke fairly even because I’m now able to drop off/pick up kids with my new job which “saves” me $1k/mo. in before/aftercare but that “savings” doesn’t show up on paper unfortunately.
1)Our mortgage interest rate is about 6%:
-Can we qualify for a lower rate?
-Who do we talk to, our own mortgage lender?
2)Credit cards:
-We both have two each and keep the balances at <30%. Is it possible to get the CC companys to lower our rates?
Now that our credit scores are both over 700 we need to refinance a few things but not sure what’s the best approach. It should also be noted that I just changed jobs and took a bit of a pay cut on paper. I actually broke fairly even because I’m now able to drop off/pick up kids with my new job which “saves” me $1k/mo. in before/aftercare but that “savings” doesn’t show up on paper unfortunately.
1)Our mortgage interest rate is about 6%:
-Can we qualify for a lower rate?
-Who do we talk to, our own mortgage lender?
2)Credit cards:
-We both have two each and keep the balances at <30%. Is it possible to get the CC companys to lower our rates?
Sand
Footballguy
1. The savings from the kid thing shows up in your bank account - that's all that matters.
2. Probably. There are lots of lenders that you can approach, and many have very low cost refinancing. If you are in the house for the next few years it will likely pay off (fees count and you can calculate the payoff point). If you're in it for a while you can save big - the longer you anticipate being in the house the more you should opt for a cost refinance rather than no cost. I'd hit this next week. Rates are going up. You can lop off 2% from your loan - that can be huge. If you move to 15 year it can be even lower (though #3 is way more important for your cash).
3. Probably not and it will affect your credit. Try to clear these. These interest costs buy you nothing and are the biggest wealth killer around.
Sand
Footballguy
All true. I have some, but one thing that likely won't change about EM is that the beta is huge. It is good for a diversifier, but overweighting it can make for a choppy portfolio (for good or ill).On the bright side, if EM rises, your percentage may go up without you doing anything.
Seems to me the time to invest in something is before most others want to invest in it. I'm not going much over 10% but it's worth having in your portfolio.
dino259
Footballguy
Credit Cards first. Try to get these to a point where you just pay them off every month. No need.
For the mortgage refinance you have lots of options. You could try your current lender. I would suggest a local Credit Union. Any credit union with some size should be able to offer the same programs and may be slightly lower on closing cost. You should be able to compare a number of these before allowing them to run your credit.
Chadstroma
Footballguy
Being above 700 in credit scores and having some cash on hand helps you a lot. Congrats on getting there. It is impossible to say that you qualify or you don't without doing an application because there are just too many variables but from the extremely limited info you provided it sounds like you are in a good position.
You can always talk to who has your mortgage. Check rates with your primary bank and maybe some small banks or credit unions around you. It really is up to you. You can feel to PM me, depending on where you live I might be able to do something for you.
You can always call your CC co and ask. It doesn't hurt to ask. I had one of my CC rates lowered a number of years back by doing that. If that fails then you can shop around for a better CC. I would wait on that until after you deal with the mortgage though as that would be the priority. Ideally you want to get to the spot where you are not carrying a balance but paying them off in full each month.
Sullie
Footballguy
Yes! This cannot be stressed enough. You pay off those credit cards and then you get to a point where you make it exactly as a house payment or car payment whereby you only charge what you can pay off that month. So if your monthly ceiling is $1,000 allocated for credit card payment, then you only ever charge that or less per month. And then if it's a big purchase, something that's not an emergency (like living room furniture or what have you), something that cannot be paid off in a month then you save up for it, charge it and pay it off. I say that for a few reasons. First, mentally, it feels AMAZING because you will mentally feel like you conquered revolving credit card debt and you will be teaching yourself responsible spending. Secondly, I firmly believe when you save up your money and you finally have that money saved up, I believe it is one's natural instinct to shop for the best deal so as not to spend all that money you've worked so hard to save up, so you're teaching yourself another important lesson. Lastly, if all your credit cards are paid off at this point and YOU are the one shopping for the best credit card with the lowest rate and the best reward(s), then you will reap the reward from the CC (airplane miles, money back, whatever.)
I was in CC debt over 3 decades ago and I haven't been in credit card debt since. I developed a system that worked for me at that time (again it worked for me, I'm sure it's not for everyone) and then once I got the CC debt paid off I promised myself that I would never put myself in that position again and I haven't.
wilked
Footballguy
Credit Card debt is the most obvious and clear sign of financial irresponsibility. Sorry if that is harsh, but it's reality
Focus on a plan to pay off the credit cards fully within X months. It will have more meaning if you also 'sacrifice' something (think eating out, think cable, etc). You noted two cards each - once paid off get down to a single card each (I assume no annual fee). Don't justify using cards for points either - that is backwards thinking. Worry less about lowering your rate and more about carrying a $0 balance at the end of each month
I would shop your mortgage aggressively. Look for lenders here
https://www.redfin.com/buy-a-home/financing-your-home
Look for well-rated lenders, ask them for a quote. Get 3-4 and go with the one you like
Focus on a plan to pay off the credit cards fully within X months. It will have more meaning if you also 'sacrifice' something (think eating out, think cable, etc). You noted two cards each - once paid off get down to a single card each (I assume no annual fee). Don't justify using cards for points either - that is backwards thinking. Worry less about lowering your rate and more about carrying a $0 balance at the end of each month
I would shop your mortgage aggressively. Look for lenders here
https://www.redfin.com/buy-a-home/financing-your-home
Look for well-rated lenders, ask them for a quote. Get 3-4 and go with the one you like
SFBayDuck
Footballguy
I feel you, @STEADYMOBBIN 22. I got myself caught up in the last housing meltdown and will still be dealing with the ramifications of that until 2020. But last year I finally got back on top of my finances after a long haul, working my credit report back up in to the 725 range, maxing out my 401K for the first time, and most importantly getting rid of all debt by paying off my car and the credit cards. I did open up a new cash-back card with my bank that had a zero interest balance transfer deal, so while I was paying off the remainder of the debt I wasn't paying any interest. I'm now using that card for everything and paying it off every month - sometimes two or three times a month just because I start to get uncomfortable as the balance goes up. But now instead of paying interest every month, I've earned nearly $500 using my card since I opened it last year.
gl
gl
STEADYMOBBIN 22
Footballguy
On the credit cards, I guess I falsly assumed it’s better to have a little bit on them rather than pay them off completely each month, which is something we can do going forward. It’s, not much, we’re talking about less than a grand total between all 4 cards.
STEADYMOBBIN 22
Footballguy
Thanks so much for all the replies.
Why would it be better to have a little bit on them vs paying them all the way off?
wilked
Footballguy
I've heard it before...bit of an urban myth. Might have made its way from the idea of buying a car (better to have a loan and demonstrate regular payments than pay it all cash).
Realistically though it's all nonsense
wilked
Footballguy
STEADYMOBBIN 22
Footballguy
Just did.
Reminds me of something I noticed about a month ago when I purchased my truck... So I use Credit Karma to keep (a rough) idea on how I’m doing and dammit if they don’t update that thing once a week, noting that a debt increased by $4 but if you pay off a credit card in full like Indis then, that doesn’t show up for weeks!
STEADYMOBBIN 22
Footballguy
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Chadstroma
Footballguy
For credit score purposes it does help to have a small balance on the cards but it really does not matter that much in the big picture of things. Once you are in mid 700's of credit score it mostly is just for ego to have anything higher.
The best advice when dealing with cards is to use them and pay in full on a rewards card. If you can not consistently do that then don't use them. The only other school of thought on them is don't use them at all- but I find that silly and assumes that everyone is unable to manage the use of them taking full advantage of all they offer and paying off monthly.
But yes pay them off.
Chadstroma
Footballguy
Credit scores are just numerical formulas to express credit worthiness. What they want to see is that you are capable of "managing" your money. If you have credit cards but never use them then you are not "managing" them. A small balance on the cards actually helps show that you are capable of handling credit. Having credit cards and not using them just not show that as much. But we are talking about a couple of points if so. And in general the formulas are intentionally mysterious so no one games the system. The highest score I ever saw, the customer did not have any credit card balances but numerous credit cards, a recent paid off term loan (car) and the only other debt was his mortgage.
Bossman
Footballguy
dino259
Footballguy
This is correct. If you payoff the statement balance every month, I believe they just report the statement balance.
culdeus
Footballguy
It varies by vendor, but if your statement balance and payment due date are pretty far off then you might report a higher utilization.dino259 said:
What you carry balance wise is not super important. You want to show a little utilization and remain smooth over time. On a large overall CL you become a flight risk to some banks and they might want you to move CL in the event you open up a new card.
Bob Sacamano
Footballguy
ghostguy123
Footballguy
Speaking of this paying or not paying full balance for credit cards.....I tend to pay my credit card online 2 sometimes 3 times a month. If I have something like an $830 balance I will pay it off (probably $800) while I am still using the card, since I use the card basically every day for something. I don't think I ever pay the actual balance on the statement, I just pay whatever the balance is when I happen to look at it. I never pay interest on it, and I never seem to be using more than 5-10% of my available credit which I had thought was a good thing, but I always have SOME balance on the card.
Wouldn't paying your balance once at the end of the month put you (many people not everyone) is a situation where they might be using a high percentage of their available credit would negatively affects their credit score?
Wouldn't paying your balance once at the end of the month put you (many people not everyone) is a situation where they might be using a high percentage of their available credit would negatively affects their credit score?
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