My Investments

Before we dive deep into the world of invest­ments, I want to make clear I am not a finan­cial advis­er. What I write should not be tak­en for advice. I don’t even know if I’m doing this thing right!

That being said, I’ve received a few emails ask­ing me what I invest in, what my invest­ments look like, and what Bartholomew likes to eat for break­fast.

Rather than reply indi­vid­u­al­ly, I’ve promised a post that delves into the nit­ty-grit­ty details. But first… a bit of back­ground.

I was exposed to the stock mar­ket fair­ly ear­ly in life. My 5th grade teacher did a project where we “got” $100k to invest in what­ev­er stocks we chose. We checked the stock prices each day in the news­pa­per for a month. I think the win­ner won a can­dy bar. I didn’t come any­where near win­ning, but it was a great first les­son on the mar­ket.

Sev­er­al years lat­er, I remem­ber my mom and step­dad being furi­ous when their K-Mart shares became worth­less in the blink of an eye (Sears bought them out). That was an excel­lent teach­able moment and they answered all the ques­tions I had about the process. We also nev­er shopped at K-Mart or Sears again!

Then, of course, came my senior year of high school, bet­ter known as 2008 and the start of the Great Reces­sion. I was most­ly unaf­fect­ed as I had only cash to my name. I did have a small inher­i­tance from my grand­ma, but it stayed flat. Grab a pen­cil and draw as straight a line as you can imag­ine. That’s what my account bal­ance looked like. I have no idea what it was invest­ed in but I didn’t lose any mon­ey. I also didn’t see any gains in the recov­ery. That account became the basis for my tax­able invest­ment account sev­er­al years lat­er.

I trans­ferred that mon­ey over to a tax­able invest­ment account start­ed by my stepdad’s bro­ker after I dis­cov­ered MMM in col­lege and start­ed get­ting seri­ous about my mon­ey. I also start­ed a Roth IRA with the sec­ond pay­ment of my mil­i­tary sign on bonus around that time.

A short time after that, I start­ed my intern­ship and opened my 401(k). I didn’t get to put much in it, since I was “just” an intern. I am grate­ful, though, that not only were we allowed to open a 401(k), but we also got the match from Mega­Corp. When I start­ed with them full-time, I added an HSA.

That is the full breadth of accounts I have: 401(k), Roth IRA, Tax­able Invest­ment Account, and an HSA.

As for what that $110,893.83 is invest­ed in.….

I fol­low the JL Collins’ method of invest­ing: KISS. Keep It Sim­ple, Stu­pid. If you haven’t read The Sim­ple Path to Wealth or his Stock Series, you need to do that ASAP. It doesn’t have to be done all in one sit­ting. Take your time, real­ly read what he’s say­ing, and absorb it.

I invest in the best option pos­si­ble for the account. My 401(k) is with Fideli­ty, so I invest in their S&P 500 Index Fund, ER .01%. One of the best ben­e­fits of work­ing for a very large com­pa­ny is super low fees! At the very begin­ning, I also bought some bonds but quick­ly stopped doing that. It’s like, 99% Index Funds now. My HSA is through Wells Far­go, I think, and required a min­i­mum of $3k to invest. I get charged $7.99 per trade, so I con­vert the cash into shares of VTSAX twice year­ly. Not ide­al, but it’s triple taxed advan­taged so I deal with it.

My Roth IRA and tax­able invest­ment account are with my bro­ker at Baird. I have been mean­ing to move this account to Fideli­ty but haven’t got­ten around to it yet. One day.

Why Fideli­ty over Van­guard? It’s where my 401k and HSA are, so it’s more for the ease of my use than any oth­er rea­son. Fideli­ty and Van­guard have very com­pa­ra­ble fees nowa­days.

I use Per­son­al Cap­i­tal for the sole rea­son of track­ing my invest­ments. Mint isn’t very great at that, in my opin­ion. PC can’t track my 401k either, but at least it cre­ates less of a stink about it than Mint does. Plus, PC does this real­ly cool thing where it tells you what your asset allo­ca­tion is.

Obvi­ous­ly, I’m a weeeee bit heav­i­ly weight­ed towards US Stocks. Not very sur­pris­ing when I invest the vast major­i­ty in VTSAX and my Fideli­ty S&P 500 Index Fund.

Cur­rent­ly, my invest­ments make up the vast major­i­ty of my net worth. I would like to think I’m pre­pared to weath­er a reces­sion, but I won’t know that until I actu­al­ly go through one. Since I’m so heav­i­ly weight­ed towards the US Mar­ket, I’d be par­tic­u­lar­ly sus­cep­ti­ble to any down­turn.

Hence, the rea­son I am diver­si­fy­ing my invest­ments and turn­ing towards real estate! Hav­ing at least one prop­er­ty in my port­fo­lio will help out a ton, so just imag­ine what 3–4 prop­er­ties will do for me! If I weren’t in a place to buy a prop­er­ty, I would invest in a REIT. How­ev­er, great deals are every­where around me and should only increase in a down­turn.

Cur­rent­ly, my invest­ments are most­ly in my 401(k). I will con­tin­ue to max it out each year since I’d be a fool to pass up that tax advan­taged space.

Uhhh, Gwen.… aren’t you doing just that by not hav­ing a tra­di­tion­al IRA?”

Kin­da. Shh. I’ll get there in a minute.

For now, enjoy a graph of what my over­all invest­ments look like:

Now that my attempt to dis­tract you with pret­ty pic­tures has failed, let’s revis­it that whole Roth vs. Tra­di­tion­al dis­cus­sion.

I like Roth’s for the ease of get­ting into the mon­ey. After 5 years, I can with­draw the con­tri­bu­tions (not the earn­ings!). This is super use­ful for some­body retir­ing ear­ly (i.e. me). Roth IRA’s also have the added ben­e­fit of no RMD’s when you hit 70 and aren’t taxed extra upon tak­ing the mon­ey out, since it was after tax mon­ey added in the first place.

I also think* my income will be low­er in retire­ment than it is right now. That lends itself to the Tra­di­tion­al IRA (plus my tax­es would be low­er with the deduc­tion), since I have a fair­ly high income now. I’m just not sure I’m under the thresh­old for the deduc­tion after my raise.

It would also thor­ough­ly com­pli­cate things in the future if I can get access to a mega back­door Roth before Con­gress revokes that loop­hole. Plau­si­ble, but prob­a­bly not going to hap­pen.

Final­ly, I don’t want to switch over because I’ve got a good set­up right now and don’t want to change it. I’d have to open a new account with Fideli­ty and rechar­ac­ter­ize my con­tri­bu­tions for 2016 and 2017.

So now that you’ve seen how my invest­ments are laid out, please let me know what you think in the com­ments!

*: That’s what the pro­jec­tions say any­ways. Who knows what could hap­pen!

Is there any­thing glar­ing that pops up? Any opti­miza­tions you would make? What do your invest­ments look like?

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43 thoughts on “My Investments

    • I am VERY for­tu­nate to have the vast major­i­ty of my invest­ments in the fund with the .01% fee. I like get­ting to keep more of my gains. Thanks for com­ment­ing!

    • VTSAX is life! I love know­ing we’re in rough­ly the same spot. Makes me feel a lot bet­ter to know you’ve got sim­i­lar stuff going on!

  1. Hey Gwen,
    Great post you are an inspi­ra­tion when it comes to per­son­al finance / sav­ing / retire­ment plan­ning for mil­len­ni­als. I did have one over­all ques­tion… doesn’t Mod­ern Port­fo­lio The­o­ry (MPT) show that diver­si­fi­ca­tion is the only free lunch in invest­ing? So some­one our age should at least hold devel­oped and emerg­ing mar­kets stocks at their mar­ket-cap­i­tal­iza­tion weight­ing (US 45% and ex-US 55% I believe)? And I think also a small allo­ca­tion to bonds, REITs, com­modi­ties / nat­ur­al resources, etc could improve risk-adjust­ed returns.
    Thanks,
    War­ren

  2. Gwen you can access your direct con­tri­bu­tions to a Roth IRA tax and penal­ty free at any time for any rea­son. It is the “con­tri­bu­tions” from the Roth con­ver­sion pipeline that are sub­ject to the five year rule.

    And I think not want­i­ng to switch over because you have to set up a new account and rechar your con­tri­bu­tions is sil­ly. It’s easy to do. I rechar every year because I’m on the bor­der of the 15 and 25% brack­ets. I get that this is one rea­son of sev­er­al for you but I don’t think this should be a rea­son at all.
    Fiby recent­ly post­ed…I Have Unre­al­ized Long Term Cap­i­tal Gains!My Profile

    • I didn’t say it was a great rea­son.….. just one of the rea­sons I didn’t want to do any­thing with it lol

    • Thanks for the com­ment! I think my aver­age ER across all the funds is some­thing ridicu­lous like .05% lol

  3. I did a sim­i­lar stock mar­ket exer­cise in high school. For­tu­nate­ly we had the inter­net to check. I remem­ber it being freak­ing awe­some, but I can’t for the life of me remem­ber the mech­a­nisms of the exer­cise. Sighh.

    Bra­vo for diver­si­fy­ing with real estate prop­er­ties. Are you plan­ning to reach more inter­na­tion­al stocks to decrease risk?
    Mrs. Picky Pinch­er recent­ly post­ed…What I Did With My Rock­star #Giv­ing­CardMy Profile

    • The Inter­net was around, but not very wide­ly used yet. We only used it for “spe­cial” projects lol. This was in 2001, where we were using those trans­par­ent and bright­ly col­ored Macs in the com­put­er lab. Mine was teal!

  4. I’m with you on most of it, but I pre­fer 100% tra­di­tion­al for both 401k and IRA. The tax sav­ings allow me to invest more else­where than I would if I used Roth, so I think the ben­e­fit now out­weighs poten­tial future costs. I hope to do the whole con­ver­sion lad­der thing, but even if I can’t/don’t, I expect my retire­ment income to be com­pa­ra­ble to my cur­rent AGI (i.e. with deduc­tions from con­tri­bu­tions) or low­er, so I’ll either come out ahead or slight­ly bet­ter. Hope­ful­ly.

    I’m jeal­ous of your new prop­er­ty! That sounds like a phe­nom­e­nal FI move.

  5. I remem­ber my teach­ers run­ning a sim­i­lar ‘game’ in pri­ma­ry school. It’s actu­al­ly run by the Aus­tralian Stock Exchange (ASX) and you get $10,000 imag­i­nary mon­ey to trade a few month to see who comes out on top.

    The main thing I remem­ber was that by not touch­ing your mon­ey and just hold­ing that orig­i­nal $10k, you could end up some­where in the top 25%. The win­ners struck big on an oil com­pa­ny and came out with some­thing like $200k. Some of the ‘losers’ picked dif­fer­ent oil com­pa­nies and end­ed up with bare­ly $1 to their name.

    Prob­a­bly wasn’t the best learn­ing expe­ri­ence for my young impres­sion­able mind :p It took a lot to see the dif­fer­ences between stock pick­ing, index funds and straight up guess­ing!

    • It can still be dif­fi­cult to tell the dif­fer­ence some days! I’m glad I wasn’t the only one to get the stock mar­ket “expe­ri­ence” when I was younger.

  6. Thanks for shar­ing, Gwen! In Jim Collin’s book, he does men­tion that even though the VTSAX is with all U.S. com­pa­nies — many of those com­pa­nies run a glob­al busi­ness and you inher­ent­ly receive inter­na­tion­al expo­sure invest­ing in them.

    Bot­tom line, you are off to a great start as a young mil­len­ni­al on your path toward FIRE!!!

  7. Hi Gwen!

    I’m try­ing to fol­low in your foot­steps and retire in my 30’s too. If you move the ROTH to Fideli­ty, IO sug­gest look­ing into the small cap or even bet­ter, small cap val­ue ETFS they offer com­mis­sion free. I believe the tick­ers are IJS, IJR and IJH. All three match the S&P 600 index (small cap instead of large cap with the S&P 500) and if you look at the returns com­pared to the S&P 500, they basi­cal­ly are the same but, the highs are high­er and the lows are low­er. You would still be all US but, riski­er asset class­es like small cap and small cap val­ue are per­fect for ROTHs!

  8. Nice job! You have WAY more in your 401(k) than I did at your age. I’m jel­ly.

    For keep­ing track of asset allo­ca­tion, I use my own spread­sheet. I go in once a month and enter all our invest­ments (not too com­pli­cat­ed since each of our accounts has only two or three funds in them). Then Excel out­puts a chart for me, and also com­pares it against my “Ide­al Asset Allo­ca­tion” and shows how far off I am. I re-bal­ance twice a year. And even my Ide­al Asset Allo­ca­tion is auto­mat­ed now because I made my Bonds % a func­tion of my age, minus 15, and the rest (Stocks, REIT, Lend­ing Club) cal­cu­late to get up to 100%.
    Norm recent­ly post­ed…Cheap­skate Analy­sis: What’s The Cheap­est Morn­ing Joe?My Profile

  9. Hey! We both grad­u­at­ed high school the same year!

    I’m sure we both wish we had the kind of mon­ey to buy prop­er­ties and stocks in 2008 as we do now. Ha!

    I tried going the ROTH IRA route and was heav­i­ly invest­ed in Van­guard (S&P500 index fund), which was fine, but I start­ed get­ting antsy when I saw my port­fo­lio do essen­tial­ly noth­ing over the course of a year. That’s when I stum­bled on all the online blog­gers includ­ing Jason Fieber, MMM, JMoney, etc. Long sto­ry short, I dis­cov­ered div­i­dends and how pow­er­ful that snow­ball can grow. Gives me the peace of mind of not car­ing too much what my prin­ci­ple is val­ued at, and instead focus on the div­i­dend pay­outs. Now I have a stan­dard invest­ment account spread out over 60 dif­fer­ent com­pa­nies from across all dif­fer­ent sec­tors, most­ly blue chips that pay out on aver­age 4% per year.

    I use Robin­hood for all my trad­ing, it’s amaz­ing. Free unlim­it­ed buy­ing and sell­ing. Yay! I wish I could do what you did with the triplex here in Vegas but looks like it’s a no go for now. :’(

  10. So Mr.Wow read The Sim­ple Path to Wealth (acci­den­tal­ly wrote Life first rather than Wealth which I guess works too!) and then he con­ve­nient­ly loaned it out to some­one at his work. Also con­ve­nient­ly he can’t remem­ber who he gave it to and hasn’t got­ten it back yet. Which means I have been wait­ing patient­ly for my turn to read it… Luck­i­ly, I took mat­ters into my own hands (well not real­ly, I just lucked out) and won a copy from 1500 days #ifi­nal­ly­won­some­thing. I’ve def­i­nite­ly missed the bus since I haven’t read it yet, but it is next up in my cue, as soon as it arrives. Can’t wait to read it!!

    • Good thing Mr. 1500 came through for you! Oth­er­wise I would’ve offered to lend you my copy 🙂 I got one from CMSE and prompt­ly gave it to the guy sit­ting next to me on the plane on the way home! haha!

  11. 20% in bonds at any age has a very sim­i­lar return to 100% stocks.

    Bonds tend to make mon­ey when stocks are los­ing mon­ey. They don’t off­set the loss­es in stocks, but they lessen the down­side. If stocks only went up, then 100% stocks would always win. But we know they don’t.

    I like 20% bonds as the floor. Even if you are 20. Fol­low an Age in Bonds — 10 (or -5). Stick to inter­me­di­ate term, low cost “Total” bond funds. 100% stocks is awe­some when stocks are fly­ing. 8020 gets a sim­i­lar return when you fac­tor in the ups/downs that will hap­pen. Good luck!

  12. Cool to see your invest­ment allo­ca­tions. Thanks for shar­ing.

    Maybe I’ll share my Per­son­al Cap­i­tal screen shot like that some day on my blog. It’s BIG-time real estate heavy. I’m like 15% stocks and 10–15% cash and the rest rentals and notes against real estate. But my retire­ment account por­tions are like 50:50 stocks and real estate. I’ll be mov­ing towards a high­er stock allo­ca­tion over time, but I con­sid­er myself more of a val­ue investor who “puts all my eggs in a few great bas­kets and watch­es those bas­kets like crazy!” And they’re pro­duc­ing a bunch of income that I get to live off for now, so not com­plain­ing about that:) I like Jim Collin’s sim­ple, broad­ly indexed style strate­gies a lot, too. Makes a lot of sense to me.

    • I look for­ward to see­ing what your chart looks like! As some­one who would also like to get into the crazy awe­some bas­kets… why ques­tion what works best for you!?!

  13. my senior year of high school, bet­ter known as 2008”

    Man, I feel so old now. Thanks for that 😛

    And yeah, I remem­ber those mock stock mar­ket projects in high school. Super eye-open­ing but back then I had no idea what a ter­ri­ble idea it was to own indi­vid­ual stocks and had nev­er heard of index­ing. They real­ly need to start teach­ing that in schools.

    Anyhoo…thanks for shar­ing your invest­ments! I agree with you that every­one needs to read JLCollin’s blog and books, because with­out the freak­ing God­fa­ther of FI, who knows where we’d all be. Hears to you, JL! *rais­es glass*.

    Your invest­ments are def­i­nite­ly more aggres­sive than ours, but giv­en your age (again, I can­not empha­size enough how old you make me feel) and the fact that you’re in the accu­mu­la­tion phase, it makes sense.

    Hap­py invest­ing!

    • Haha sor­ry! It wasn’t my aim to make any­one feel old.… it just hap­pens 🙁 Hap­pens a lot at work too!

  14. Great invest­ments Gwen, I guess we share the same grad­u­a­tion year 🙂

    We are aim­ing sim­i­lar asset allo­ca­tions (aside from split­ting between Cana­da and US) and it seems super appro­pri­ate for some­one in the accu­mu­la­tion phase like us.
    Xyz recent­ly post­ed…Dude, Where’s my Returns?My Profile

  15. Thanks for shar­ing your invest­ment pic­ture. Like you, I’m also a “.…weeeee bit heav­i­ly weight­ed towards US Stocks.” Noth­ing inher­ent­ly wrong with that though. My focus has been on indi­vid­ual div­i­dend pay­ing stocks but I can appre­ci­ate see­ing funds in a long term port­fo­lio as well. Nice job!
    DivHut recent­ly post­ed…My Best Invest­ments And TradesMy Profile

  16. Great post, and not just because of the kind words and links in my direc­tion.

    You are amaz­ing and kudos on the remark­able, and remark­ably ear­ly, start. So glad to have met you at Chau­tauqua and that we didn’t mur­der you as your rel­a­tives expect­ed. Even with your cow fix­a­tion.

    Regard­ing this: “I would like to think I’m pre­pared to weath­er a reces­sion, but I won’t know that until I actu­al­ly go through one. Since I’m so heav­i­ly weight­ed towards the US Mar­ket, I’d be par­tic­u­lar­ly sus­cep­ti­ble to any down­turn.”

    At your point on the curve, you should be hop­ing, pray­ing and sac­ri­fic­ing chick­ens for a nice, major, huge, deep mar­ket plunge. 🙂

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