Based on GRS reader prompting, I’m continuing to learn more about asset allocation and rebalancing. I’m trying to decide what my portfolio should look like.
- I recently had a free consultation with a financial planner. I may or may not hire him to guide me on a regular basis.
- On Monday morning, I met with three representatives from Seattle Northwest. They patiently explained to me the nature of bonds — particularly municipal bonds.
- Today — at this very moment! — I’m meeting with my guy at Fidelity. He and I will discuss options on the equities (stocks) side of things.
Based on all of this info, I’ll piece together an investment plan. (I had hoped to have an investment policy statement by today, but it didn’t happen. That’s fine. I can take a few more weeks to do it.) And, of course, I’ll share my decisions with you when I make them.
In other news, are some of my favorite money stories this week from around the web:
Jodi Ettenberg, who writes at Legal Nomads, was one of last weekend’s speakers at the World Domination Summit (about which more on Saturday). During her presentations, Ettenberg shared a lot of great info about long-term travel. In fact, she shared too much for us to get it all down on paper. Fortunately, she compiled all of these tips and links onto one colossal page as a general resource. If you have any interest in exploring the world, bookmark her post on packing, budgeting, and tips for long-term travel. (I first mentioned Ettenberg last summer.)
A couple of weeks ago at GRS, Robert Brokamp wrote about tackling temptation. In his article, he mentioned the notion of ego depletion, and referenced a study on willpower that involved radishes and cookies. That study — and others like it — have led to new insights on the cycle of poverty. The New Republic recently wrote more about his in a piece called “Why can’t more poor people escape poverty? Psychologists have a radical new explanation.” Fascinating stuff.
Meanwhile, David over at Money Under 30 has a great post about when it’s okay to spend money. David stresses the importance of intentional saving and intentional spending. (His “intentional spending” is like my “conscious spending“.) “Financial planning is about balancing your needs and wants today with your needs and wants tomorrow,” David writes. “We commonly hear about people who neglect the tomorrow part, but if we’re not careful, it’s possible to neglect the today part, too. Both matter.” Amen.
Over at at Wise Bread, Darwin’s Money has listed ten ways to save time with batch processing. I’m a huge fan of batch processing. I’m not always good at implementing it, but whenever I can remember to group repetitious tasks, I do it — especially with personal finance tasks. (Bonus: This post includes a cat photo.)
Finally, here are links to a couple of recent interviews with me:
- On May 11th, I spoke with Chris Gaddis from WIOX in Roxbury, New York. Mostly we talked about budgeting.
- On May 19th, I did a video chat with Dustin from Fit Marriage. This interview isn’t about money — it’s about my fitness journey. (“This is dope!!” says J. Money from Budgets are Sexy.)
And that’s the round-up for this week…
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Just keep in mind that Seattle Northwest and Fidelity are securities brokers. The stuff they want to sell you is not likely to be the stuff you want to buy. Fidelity has great funds in their Spartan line of index funds. But their reps rarely push them or else they use them to counterbalance some other exciting sounding (expensive) platform. All the information you receive form them will be biased in the same way a Chevy salesman would be about Chevrolets.
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talking to the brokers is like asking your barber if you need a hair cut.Self educate and form your own opinions.The only one in this that has your best interests at heart is you. Good luck
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Whatever investment choices you make, I’d recommend sticking to the fundamentals:
First, always diversify, in deference to the old saying “Don’t put all your eggs in one basket.”
Second, regarding bonds, keep in mind that as interest rates rise, bond prices fall.
Third, always keep a percentage of your portfolio in cash, or cash equivalents (i.e. CDs). Cash will provide liquidity to grab a great deal when it arises, and/or for an emergency.
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JD do you read a young blogs? If yes, would love to invite you to read first few posts I put together so far in last couple of months since starting.
On asking for free advice, not sure if it’s more for keeping your money growing or for getting few ideas for posting in later posts? You seem enough knowledgeable already. Oh yes, I know, I know learning is a continuous process, need to learn unknown dimensions etc etc.. yes do share about what you gained.
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I’d just post your scenario and investment plan on the Boglehead forum.
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JD
I like Adam’s point of keeping some cash (or more) to go bargain shopping. I manage my own IRA and fall short on cash because I always want my money working; I’ve learned I could have made much more if I’d had some cash to bargain shop. It’s a GRS principle that even works in the stock market. Bruce also has my favorite best idea with just being a Boglehead and not worry about it. Bogleheads are a content bunch for the most part.
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@JD – Have you ever considered using a short-term bond fund instead of cash as your emergency savings? I’m kicking around the idea now with VBISX – it averages over 4% and the downside risk appears to be minimal. I just hate having a big chunk of money sitting around earnings 1% (getting eaten away by inflation). I’d keep a month’s worth of expenses handy in case of emergency, but put the rest in VBISX.
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As other have said, I’m not sure you will benefit a whole lot meeting with the investment “advisors”.
You have more than enough knowledge to pick your own portfolio, so just do it.
I’ve been guilty of over-analyzing in order to find the perfect asset allocation – now I don’t worry about it so much.
It sounds like you are a fairly passive investor. Figure out what percent equity vs bonds you want, how much US equity vs other countries and then just find the products that fit your goals.
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Munis are insolvent, just about every financial company with a Wall Street presence is heavily over-leveraged, and the stock market is rigged.
I have no idea how to save for the future in a climate like this. Check out ZeroHedge.com — especially this post: http://www.zerohedge.com/article/fractial-limit-order-buster-latest-market-manipulation-algo-gimmick — to see what you’re up against when it comes to “investing” in the market. The market right now is way overpriced compared with actual production in the US. When this house of cards falls (starting with muni bonds) it’s not going to be pretty.
IMO, it’s better to put your money into either precious metals, or choose individuals companies to invest in, based on each company’s individual numbers.
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Hey JD… Do you think there’s a sort of incongruence between a) advocating debt-free living; and b) buying municipal bonds? Bonds are debt. When you buy a bond, you enable a municipality to go into debt. It’s sort of like advocating not drinking alcohol, but then showing up at a frat party with enough tequila shots for everybody. Sure, you’re not technically drinking yourself, but you’re enabling everyone else to get drunk.
Plus, muni bonds just don’t make any sense to me. They seem like a scam. You buy a bond, and then when it matures, you basically pay YOURSELF back, with your own taxes, except the bulk of what you pay yourself back with (the principle) is paid back in nominal values, i.e. cheaper dollars that buy less due to inflation. Maybe I’m not getting it, but it just seems like a bad investment, a Ponzi scam, and a wee bit of hypocrisy all rolled into one. Thoughts?
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Remember, or rather Never Forget WPPSS or Whoops muni bonds. We are not even near the end of city, state, muni bond defaults, but the beginning. Read a quote that more money has been lost in bonds than ever in the stock market. A good bond fund maybe, actual muni bonds, not for the next 10+ years. Return of capital more than return on capital.
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