How do you allocate your taxable account? in general, but curious the board's thoughts on my situation as well as others' situations


I am mid-20's with a "decent" amount of extra money in my Schwab account. I am thinking this money will be like a 2nd tier of the emergency fund: essentially general long term investing. Money comes in through a 10% payroll deduction and selling company stock when it vests.

I don't want to be as aggressive as I am with my retirement savings which is 100% stock. Many articles I've read suggest a high allocation to bonds. But these plans are back tested against 40 years of falling interest rates. That doesn't sound like the future to me.

one thought:
40% stock
40% cash or bonds (thinking cash here now since they say rate hikes coming)
20% gold / commodities

right now i am mainly in cash, bought a little VOO during one of the last big dips.

I ha e essentially 4 investment accounts.
1) 401k -47%
2) Roth ira -22%
3) taxable account with family advisor -22%
4) taxable account that I play with - 9%

The first three accounts or 91% of my investing is all for retirement. The other 9% is my "make money to buy things" account.

I also have my e-fund in cash.

Are you happy with the advisor? What does he/she do? I've never had one but thought about it

Presley said:

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Are you happy with the advisor? What does he/she do? I've never had one but thought about it

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it is a family advisor. Someone my grandfather worked with who manages my grandmother's money, a portion of my parents retirement, my other grandparents retirement and several of my aunts and uncles. I have put money in an account they purchase funds out of and they charge me a small percentage every quarter.

It is a chuck of money that I can't touch so keeps it focused and disciplined.

Presley said:

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How do you allocate your taxable account? in general, but curious the board's thoughts on my situation as well as others' situations


I am mid-20's with a "decent" amount of extra money in my Schwab account. I am thinking this money will be like a 2nd tier of the emergency fund: essentially general long term investing. Money comes in through a 10% payroll deduction and selling company stock when it vests.

I don't want to be as aggressive as I am with my retirement savings which is 100% stock. Many articles I've read suggest a high allocation to bonds. But these plans are back tested against 40 years of falling interest rates. That doesn't sound like the future to me.

one thought:
40% stock
40% cash or bonds (thinking cash here now since they say rate hikes coming)
20% gold / commodities

right now i am mainly in cash, bought a little VOO during one of the last big dips.

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To me, the bolded areas conflict. I may misunderstand you.

Couple of things to consider:

you may be able to save some tax money if you wait to sell your vested stock - your HR or holder of the stock should have the tax rules on selling

with a decent cash flow and a tier 1 emergency savings, why do you feel the need to be so conservative with the tier 2?

My only taxable investment account: Vanguard Dividend Growth. Right now it is like the second tier of my emergency fund which sits in online high yield savings. The dream is to grow it to the point where I can use the dividends to pay my monthly bills. That's a long way off :/

What's the rest of your AA? Holding dividend focused funds in taxable isn't very efficient.

Harkrider 93 said:

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Presley said:

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How do you allocate your taxable account? in general, but curious the board's thoughts on my situation as well as others' situations


I am mid-20's with a "decent" amount of extra money in my Schwab account. I am thinking this money will be like a 2nd tier of the emergency fund: essentially general long term investing. Money comes in through a 10% payroll deduction and selling company stock when it vests.

I don't want to be as aggressive as I am with my retirement savings which is 100% stock. Many articles I've read suggest a high allocation to bonds. But these plans are back tested against 40 years of falling interest rates. That doesn't sound like the future to me.

one thought:
40% stock
40% cash or bonds (thinking cash here now since they say rate hikes coming)
20% gold / commodities

right now i am mainly in cash, bought a little VOO during one of the last big dips.

---

To me, the bolded areas conflict. I may misunderstand you.

Couple of things to consider:

you may be able to save some tax money if you wait to sell your vested stock - your HR or holder of the stock should have the tax rules on selling

with a decent cash flow and a tier 1 emergency savings, why do you feel the need to be so conservative with the tier 2?

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The conservatism here comes from a couple of factors
- plenty of risk (100% stock) in retirement accounts whose balance is ~2x my taxable. I see retirement as emergency fund tier 3 (last resort)

- the time horizon for these investments is a bit undefined, could be very long, could be short. Maybe I'll want to sell and buy a lake house in 10 years, or sell and invest in a real estate venture in 5 years. No idea at this point. I'm thinking I need a little less volatility in this account.