Thank you for any insights, suggestions, fingerwagging, hugs.
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Was this a bad move? If so, will there be any penalties tax or otherwise? Thank you so much for your help, I love your blog. Putting your grand in a TRF is just fine. Good move, if fact as I was just discussing with Ms. In fact, you could just stick with it, keep adding to it over time and call it a day. Is there a reason for this? There is, and here it is: Just wanted to thank you kindly for sharing your knowledge and experiences!
I am new to your blog, and have enjoyed reading random posts. Enjoyed your post on the Vanguard. I have been with them myself for more than 15 years. Every young person ought to read this article! Now, assuming they are around age 20 now, that they will retire at age 62 and that this investment will double every seven years on average:.
It could grow as illustrated above, tax free and free of tax when they withdraw it in retirement. But the comments are growing and I love the participation from readers!
See the link here: How do you keep them from not touching till they retire? Jim, Happily invested in Vanguard, Thanks for the great advice. You mentioned in a reply above from Steve exchanging a traditional IRA into a Roth IRA, Besides paying the taxes when you exchange is there any other drawbacks or pitfalls? Other than paying less taxes when withdrawing, when would this make since to consider or not? Are you planning a series or post about withdrawing assets to avoid the tax man?
Besides paying the taxes when you exchange is there any other drawbacks or pitfalls? Paying the taxes is it. This is a tough question with no easy answer.
What you want to do is pay taxes as late as possible but also at the lowest rate possible. My other motivation is that at Thank you for another helpful post. Are you holding bonds to limit your risk from market collapse, and in that case your bond and REIT holdings could allow you to recover? There are two main reasons to hold bonds: They tend to be less volatile than stocks and so owning them tends to reduce portfolio risk and makes for a smoother ride.
They are a deflation hedge. The price you pay is, typically, lower total returns over time. My guess as to the reason is that, assuming you are conscientious about rebalancing, over time this mix will give you the advantage of buying low and selling high while still holding a strong enough stock percent for maximum performance.
For more on bonds: I was told that I can only purchase through a broker gulp, more new scary stuff to learn. Then I was told I may be subject to more tax as it is an international fund. Why is nothing straight forward? Anyone have any thoughts on what is the ideal deposit rate to keep brokers fees as low as possible?
The good news, WM, is that you are moving slowly, asking good questions and gathering information before you act. Hopefully, with this blog, you now know what you are looking for.
Well, those two are basically at opposite ends of the stock universe. Both will go in and out of fashion, usually at opposite times.
This post is most welcome! Love your blog and your writing style. As a investing beginner I often get confused about the fund names, so this is really helpful. So after reading a number PF blogs I have been very keen to get some more international exposure. Vanguard really appeals, low fees and index based. It ticks all the boxes. So far so good, upward share price and a small dividend paid, so I plan to add to it in the near future, and will look at an ETF that tracks the World Share Market as well.
My question is — as a Kiwi is an ETF through the Aussy Stock Exchange my best plan of attack to or is here an easier way or should I say more direct way that I have missed? What did the transaction cost you? I buy shares through my bank. I have a cash management account so mostly I buy online. Here are the Brokerage fees they charge here in NZ. New Zealand Trades 0. And thanks for the great informational comment above. Very helpful addition to the data base here! To my understanding only dividends are taxed currently, do you have any further info?
Also, do you just accept the foreign exchange risk NZ dollar weak against AUS recently or do you go about it some other way? First, I want to Thank You for sharing your knowledge and experience regarding money and investing. Second, I have a couple of questions that you may know the answers to right off. I have a general investment account in which I have selected specific dividend stocks.
Overall the stocks have done quite well. Thank you in advance for your feedback. Yes, you can hold individual stocks in your IRAs, Roth and otherwise. If you currently hold these at another brokerage, Vanguard can help you transfer them. Once you are set up with Vanguard, you can buy and sell stocks thru them. But while you can do, whether you should is another question. Do you really want to own individual stocks?
One of the advantages of owning individual stocks is that you can decide to sell the losers when you chose for a tax deduction and to offset gains in others. You lose this advantage in an IRA. Dividends enjoy favorable tax treatment. Inside an IRA they will be taxed as regular income once you begin withdrawing them. As a US citizen, you can own a Roth regardless of where you live. Subject, of course, to the income restrictions on all Roths.
Unfortunately I do not live in the US, and the tax laws on investment are quite different here in Denmark compared to the US tax laws. What would you choose? My daughter is about to wind up her year studying in France with a return to Denmark to catch up with some of her Danish friends. As you know, I have no expertise in Danish or European investing options. All I can offer you is some general guidelines at to what I in your position would be looking for, and that would be something that closely matches this:.
What you are looking for is a broad based world stock index fund with the lowest cost you can find. Before spending money on an advisor, read the stock series on this blog, especially this one: Ask whatever questions you have here. After all that, if you still feel the need you can consult a fee-only advisor. You are in the process of learning to find your own way.
Keep saving your money while you do. The market will be there for you when you are ready. I have read every one of the posts on your blog and I have learned a lot from them already. Unfortunately some of the information I feel that we still need to really take the plunge is information on taxes and what would be smart in terms of our relatively complex Danish tax on investments.
Do those sound useful? It feels like really deep water if I should go out and try to compare other index funds to what Vanguard provides, because not only might they follow slightly different indexes, some also charge you fees for buying into the funds, withdrawing from the fund and god know what!
Even with the higher taxes on foreign investment funds, I am seriously drawn on to the simplicity of just having a Vanguard investment with a clear-cut recipe on what to do when reallocation and so forth. You just want to get close and for as little in fees and taxes as you can manage. Even seemingly small ones can hurt your returns significantly over time.
Too much trouble for me. You and your wife should not have to become investment pros! You are closer than you thing. That sounds like good news, that makes us a bit more optimistic. Also in the off chance that your daughter swings by Aarhus in Denmark and wants a tour-guide, feel free to contact us. Thanks for your very kind offer. You might have her email them and ask about it. Please let us know what you learn.
Yes, my wife is still a US citizen and she already has some funds at Vanguard. The problem for us is not to get Vanguard, as we can buy the Vanguard ETF versions of the funds you recommend, and I presume we could also open a new, joint account at Vanguard from Denmark.
The main problem is taxation, and if the taxation laws makes it a bad investments compared to more expensive Danish index funds which are taxed more leniently. That tax treatment makes quite a difference.
Having then already accounted for any gain or loss, would I be correct in then assuming when you did sell you Vanguard shares it would not be a taxable event? But then we would like to be FI before we hit the state pension age around I was quite convinced that it was so.
Do you have a link or a reference. The taxlaws unfortunately discriminates in favour of Danish funds, but you can read some more about it here: Also as James already recommended this fund, might be the best equivalent of the Vanguard funds mentioned on this site: If you want to get the Vanguard funds, you can open an account at Nordnet.
Still doing a guest post would require a bit more understanding and most importantly experience than I have at the moment, I think. Though if any other dane, more experienced in investment, would like to write a post, I would love to read and contribute if necessary. Passing this blog on to your friends is the highest praise of all. Since word-of-mouth is the only way readership spreads, I appreciate it! I have one major problem, though, which I hope you might be able to offer some reflections on:.
I happen to live in a country Denmark , which quite recently in , i think made some changes to the way taxations on investments are done. It used to be that you had to pay taxes on your profits when you realised them i. Likewise, if I loose money on my investments, the losses are tax-deductible. Intuitively, the final amount paid in taxes should be the same either way. If the market goes up, I need a steady income to pay my taxes the only other alternative is to withdraw money from my investments, to pay for my investments, which seems like a big no-no.
Also, tax-levels differ depending on my income level. Can you or anyone of your readers offer some advice given the circumstances described? No matter what, keep up the great work. I really enjoy reading this blog. As you already know, I am no expert in Danish tax law.
I think the strategy discussed here is usable for you, but with some modification. Starting with the need to find funds equivalent to the Vanguard ones I discuss. I gather you are able to deduct losses against earned income, but not carry them forward to apply against future gains?
None of this should prevent you from retiring. But the difference would not deter me from investing. My only suggestion would be to try to pay any annual tax due from cash on hand, rather than selling shares.
Leave them to grow. I think I need to fully understand the Danish tax law in regards to ROI and explore my specific options in regards to suitable index funds. No deductions can only be carried on to future gains if you handle investments through a company, but no one no longer recommends doing that due to other aspects of the Danish tax laws…. I think you hit on the main reason some like ETFs. They are easy to trade.
Since frequent trading is just about the last thing I want to do, they hold no interest for me. VTSAX suits my needs perfectly. Do you think this is too high? Energy and Health, respectively. I am not a fan.
In choosing sector funds you are essentially trying to do the same thing as in choosing stocks: Both entail predicting the future, an un-winable game. Hello, I have some amateur questions. I hold some other Vanguard funds in my Fidelity account. If it is available through Fidelity, is there any disadvantage to purchasing it through there as opposed to opening a Vanguard account? In my Fidelity account I have my personal investment account and a rollover IRA, so I could transfer everything to Vanguard at some point.
No disadvantage other than it is a bit more cumbersome. But that reflects my temperament more than any financial advantage. Vanguard does not charge commissions for their ETFs.
Would that make it a good choice to DCA until you get about 10K worth to shift to the admiral shares? You could also do it only until you have 3k. It comes with no additional costs what so ever, and is of course always recomended for swedes looking to invest in an index fund. My question though, is this: My biggest concern would be that Avanza Zero focus on swedish companies only, and thats not a very big market compared to the US.
This would be my choice. Thanks for running such a great blog! Just a quick question as I was reading your blog and checking out Vanguard I recently opened an individual non-retirement account with them. To put it slightly differently, is there something that makes the former particularly less attractive? In most cases, the expense ratio of the ETF version is equal to the Admiral version, without the minimum initial investment level, of course.
One advantage investor shares offer is they convert automatically to admiral shares once you hit 10k. The expense for the investor shares is more than 3 times as the admiral shares or the ETF. Why pay 3 times the expense for the investor shares? Or is there any other reason? ETFs are fine as long as you watch the transaction costs and avoid the temptation to trade that they offer.
In return you get the lower ER. Hello there jlcollinsnh, i have a question for you. Its about how to invest in Vanguard from sweden. I do know of one way, but thought i could ask if you know a smarter way before i start investing it. I am a 29yr old swedish gentleman, with a pretty new found interest for saving up for an early retirement. Im very interested about investing thru the Vanguard Total Stock Market Index Fund But i am unsure about my options for doing it from sweden.
I know i can buy them over the market as a stock traded fund ETF. But im not sure if its the best way to get them for a person living in sweden. Having a hard time understanding the info i see over the internet here, i did find a vanguard site for sweden, however, they have nothing like the Vanguard Total Stock Market Index Fund, the closest is a european index fund with about different stocks. And thats not at all what im looking for. Found it at this link: From what i can se, the etf has an expense ratio of 0.
However, id have to pay a brokerage fee every time i buy into it. Brokerage-fees for buying american stocks is at Or would it possibly be better to buy every month, even though it bumps up the brokerage fee to 1. Couldnt find any info about it. I do know where to invest it, we have something called Investersparkonto here in sweden. Basically you dont pay any taxes on dividends, nor for the valueincrease if you sell off any shares later on, it gives you a lower tax then the others if your investments grow at a pace of more then 3.
Instead you pay a small tax thats around 0. Unfortunately I am completely unfamiliar with the nuances of investing in Sweden. But very possibly other readers will see your questions and join in with their ideas and experiences. First, you have identified the key problem with ETFs: The ones you describe are high for my taste. But if you are really going to hold them for the long term, this could work.
You pay the fee only once and again when you sell and then you have only the low Vanguard fees to worry about. If so, buying once rather than twice a month would cut your cost in half. You definitely want the USA as part of the mix. Unfortunately, there is an addition fee that brings the total to. Not great, but acceptable. Maybe sone of our readers has more insights? You misunderstood me, i thought of only buying every second month to keep the brokerage fees down.
The fee isnt flat, but to get a higher brokerage fee i would have to buy for somewhere around 15k a pop, unfortunally Im leaning to buying around half of my investments into the Vanguard Total Stock Market Index Fund, and keeping the other half on the swedish market. Here in sweden we have an index fund with 0. And the swedish stock market as a whole is to small for my tastes, dont want all my money on our pretty small home market. Very thankful for your reply, probably going to check out the global stock index fund too, se if its to my liking or not.
In Denmark the laws makes it very unattractive to buy into foreign funds like Vanguard, unless it is via your private pension-fund. So I setup a Nordnet account, picked my monthly amount and picked only the Danish fund that covered the above index, and let it run. Maybe you could use a similar setup if you want?
At least I would suggest you take a look at Nordnet and their monthly savings account setup. I think I have almost read every one of your posts in the past fortnight.
Absolutely love it all and have linked a bunch of friends too including my wife. So far you have taught me NOT to dollar cost average.
You have also taught me to keep it simple. Right now I am trying to choose between the following: Vanguard Index International Shares Fund: Thank you once again for your great blog. Your daughter is very lucky to have such an experienced parent. Thanks for the kind words and for passing the blog along to your friends and family.
It is reflected in your fund choices and the analysis of them. Too bad about the transaction costs, but they are low enough that you can live with them as a long-term investor. Since it does hedge currencies, you also get diversification on that front. There is a certain logic to that in that even when reinvested dividends are first paid. Perhaps the rule is the same where you are. Oh, and dollar cost averaging is all right as long as you understand it messes with your allocation and can work against you in a rising market.
But for some it is the help needed to ease into the market. Might be what motivated me to learn. As you know, I first posted that comment on another blog post of yours some time ago.
Must not let emotion make decisions! What makes it harder is watching the status quo all buy houses while we are left renting. My only concern is not being exposed to real estate in Australia. I did some research after reading your reply, you are indeed correct, dividend reinvestment is taxed — damn, they get you everywhere, right?!
Having read my stock series, you know investing in the market is a wild ride. If you and your wife are emotionally uncomfortable now while the market is been on a strong climb, how will you feel the next time it takes a steep drop? It is very, very important to understand — in you gut as well as your brain — that drops are a natural part of the process and to be expected.
I know nothing about the Australian housing market, but the last time I heard people around here worrying about being priced out of housing was rifght before our huge housing price collapse. Very informative and eye opening article. I am presently living in Dubai as a Canadian Expat. I was thinking of the following portfolio: But it is perfect if you are transitioning into the wealth preservation stage.
Lots more on this in the stock series: Too bad about the layers of fees, especially the Citi commission, but you are kind of stuck with them. So, what took you to Dubai and how are you enjoying it? I gather it is a remarkable place to see…. I will just have to manage. It is worth visiting at least once in your lifetime….
Just letting you know that I copy-pasted the stock series into a PDF document and uploaded it to my kindle. I am now reading, rereading and doing some more rererereading of the stock series. And so is the husband. The husband and I are almost ready to take the plunge.
A little hick-up in the dividend leakage department, though. We love the whole Vanguard cooperative system. We find it a bit scarier because of the lack of historical data. My husband would not prefer this, he likes diversification. You did reccomend the FTSE ex-US fund for investors who were interested in investing outside the US as well in your blogpost on international stocks https: I know I am being rather bold here in asking you a favour.
I hesitate giving specific advice to folks outside the USA because my knowledge of the nuances of investing in other countries is pretty much zero. That said, the basics still apply. If you can do business with Vanguard, do so as they are the only investment company out there that puts the interests of their customers first. Buy broad based index funds. One fund, huge diversification in the stock arena.
So those are the benchmarks. You can use them to evaluate the options you actually have available to you. I still have a couple of phone calls to make.
The results which might be interesting for European index investors and the decision we eventually made and why will be published here: For more, readers might also want to check out her fine post here: I am constantly recommending it to friends and family as we all try to wrap our heads around the mysterious world of investing. This is what is offered as fare as Vanguard goes: Any onsite would be great appreciated.
Thanks for the great blog! It will give you a bit of bonds to smooth the ride and rebalance automatically for you. Thanks for the kind words and for passing the blog on to your family and friends. Thanks for the great information and quick response! We all want that F-you money.
Do either make more sense for someone aiming for early retirement? The Mad Fientist is brilliant and well worth reading. He even has a guest post here that made it into my Stock Series: The former is all stocks and therefore a bit more aggressive.
He turned me on to your website and got my gears turning in terms of smarter investment strategy. Thanks for the stimulating and helpful information. My question is similar to the ones OrionX has outlined above. I am 33 years old and have the same K portfolio options listed in the initial question. Basically, you have created your own Target Retirement fund with those four. As long as you rebalance each year, it is a great approach.
Keep in mind, rebalancing can be tough. Basically it entails selling your winners to buy your losers. Hard to do psychologically. But very important for that mix to work for you long-term. Thanks for the reassurance and for pointing me back to the post on International Stocks. The overall picture is starting to become more clear. We have rolled over everything we could to Vanguard and maintain our Roth IRA there too, but sadly half our retirement has to remain with others. My consultant was fantastic and both educated me as well as put me on a plan and strategy that we feel comfortable with and we understand.
One question please — do you feel the need to move some of your bonds to the short term bond fund? Thank you again for a wonderful blog.
Most people have to use other than Vanguard in their k and similar plans. You just have to work with what you have, looking for low cost index funds among the choices.
Most plans have them. This includes bonds of all maturities. Are these index funds? Only the last one is an index fund. The idea is that you get diversification and automatic rebalancing, but the ER expense ratio is a bit higher.
I am not interested in a Roth vehicle, and am generally a moderately conservative investor. Any direction will be greatly appreciated. Just had a couple of questions. I have a few places where I can still cut, but being married to someone who, to put it delicately, is not saver, makes things a bit difficult.
I am fortunate to have a pension that would just about cover monthly expenses, assuming I retire in 5 years. The plan is to let the b keep building no more contributions after 62 for another 5 years or more.
Your stock series is so thorough, yet so easy to understand, that it has inspired me to study even more. Thanks for all your efforts…you are appreciated more than you know. Like you I used to fool around with individual stocks and what to do with them now depends on how you feel about them. Just keep maximizing your contributions as long as you can.
Once there you might consider slowly rolling it into a ROTH for the long term tax advantages those offer. Just be careful not to convert too much at once which would push you into a higher tax bracket.
Would you recommend starting right now with the ETF or saving 3k as fast as possible in order to get started in Investor shares? Once at 3k do you then recommend going to investor shares?
The problem is that each of these has a minimum investment of 3k. The one exception is their Star fund or the Target Retirement Funds: I wrote about these here:. Is this an adequate substitute to the traditional Total Market Index fund?
The Total Stock Market Index. Ever the same low. Great to be able to invest in it. I am incredibly appreciative to have stumbled across all of this, especially at a younger age. Prior to today my company only had one index option in our k. Guess who talked me into that? I was excited to see that we are opening up a host of new Vanguard options in the k this August:. Appears to simply be a change in name. Not my real question though, should I keep going with the Vanguard or switch to one of my the newly added funds, specifically: Am I thinking correctly?
As you suspect, simply a name change. If you want some international, this would be my choice. You have helped redirect and clarify my thinking immeasurably over the last year. I cannot thank you enough. He foresaw the housing crash, helping his firm dodge losses that plagued Wall Street. In some markets, home prices have fallen by half or more since Investors have started to buy up houses and condos, in some instances paying entirely in cash.
The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased. Last year, more than half of all transactions were made entirely in cash, according to a recent report in The Wall Street Journal.
Investors buying at current prices are looking for deals, or so-called bottom fishing. They typically like to pay entirely in cash or with a relatively small loan to speed up transactions. That can be vital for an investor wishing to lock in a deal fast. If this is a turn in the market, then it might make sense to go out and buy a home. Plan to Stay Put Buy and hold. So to cover the costs of buying and selling, and what could be a prolonged recovery, plan to own for more than 10 years, explains Jack Ablin, chief investment officer at Chicago-based Harris Bank.
Also remember that borrowing money to buy a house can still be risky. Home Buying Without a House There are other ways to benefit from a real-estate rebound than directly buying a house. Such investments include stocks, mutual funds or exchange-traded funds. Unlike homes, which typically cost tens of thousands of dollars, these financial investments can be made in smaller amounts and typically are easy to sell. Larson says although new homes are oversupplied, home builders might benefit from a rebound as the situation rights itself.
Rather than pick individual stocks, he says, it probably makes sense for small investors to pick broader investments that hold many different stocks.
Sadly I am parting with bank bonds today. Not much upside above par on a short term bond. These two junkers you most likely thought would be BK by The junk bond market and investment grade market is overbought, munis are getting closer to fair value. And stocks and commodities are overvalued short term. As long as you maintain fiscal sanity and like the house you live in, just go ahead and do it.
The worst are those who look at a house as a financial investment, where the sale will make or break their future finances. Love how these articles are written as if a seismic shift has taken place. Wait, be patient and take the listing price with a grain of salt.
Furniture at retail has a ghastly markup. Plus its fun to search around for unique pieces. Thanks, but I also think that there is some bug or logic in the algorithm that tilts trades toward the stop loss point. Shore, thanks for posting the Christie article. Causes only satisfy fsl.
Anyways, I have a soft spot for fat guys who have been teased and look like all my brothers and who would roll their eyes and moan when they eat my spaghetti and meatballs. Look to major historic events and read interview transcripts. Really think about the impact in retrospect, and have an appreciation for the roles each individual will play in the results.
New Jersey Real Estate Report. Homeownership goes the way of the Hula Hoop Posted on February 28, by grim. Fewer in US Deem Homeownership a Safe Investment Homeownership as an investment is no longer the rock-solid foundation for the American Dream it once was, according to a survey released on Monday by the firm the government created in the s to promote homeownership. This entry was posted in Economics , National Real Estate. February 28, at 5: Only 1 in 4 Got Mortgage Relief Just one in four of the 2.
From Bloomberg, hat tip Chi: Supply Homes in the foreclosure process sold at an average 28 percent discount last year and may continue to drive down U. From the LA Times: Homeownership begins to lose its luster Meredith Carr and Vince Melamed are just the sort of couple whom real estate agents have always counted on to buy a home.
From the NY Times: The higher premium applies to F. February 28, at 6: Confused In NJ says: February 28, at 7: Bernie may be a sociopath but he knows a ponzi scheme when he sees one;.
February 28, at 8: Talk to Rich Gorde or Nelson Ferreira at: Ferreira Construction 31 Tannery Rd. Branchburg http: The penultimate Marc Faber rant: Thsi is even better then watching Stat punch the weak BS Lebitch brought to the rim last night. Fuzzy little bears…with enhanced production qualities: And you wonder why Montclair leads Essex county on tax increases.
Was yesterday Selection Sunday? Comrade Nom Deplume says: Did I make money? Yes, but I am leaving too damn much on the table. I was making a joke…. More like virgins grim says: Real esrate not safe?
What is NOT to like about an investment which: Good points- close to the ocean, close to rt 18 and Parkway. Prices are falling in Oakhurst like everywhere else. Here are the last 3 sales. Get my email address from Grim. Juice, You think the Europeans would actually get their hands dirty by leading an occupation force i. Ket, The other thing is that, while the Europeans have a decent-sized military force, when combined, they lack the airlift capacity and expediationary experience tht we have in abundance.
Shore 59 You have to start sometime.