Some initial comments:
Mortgage
* All things being equal, I would stick with your historically low mortgage and simply pay as agreed
* The mortgage provides you with valuable benefits:
- Hedge against inflation
- Liquidity
- Leverage for further investments such as your financial independence
Asset Allocation
* Current Allocation: Does your current allocation match up with your actual risk tolerance? I would offer that given your age and many working years ahead of you, I would encourage you to consider whether 100% stocks would be more appropriate for you.
* Age-20 in bonds: Personally, not a fan of this type of thing for how much bonds one should have. Of course, it's fine if it works for you, I am simply asking you to assess why you have chosen it and makes sense for you.
* International: the general guidance is not less than 20% and no more than 40%. What you are doing is absolutely reasonable. Importantly, you must understand why you have chosen this allocation and are satisfied that the returns you receive are not guaranteed. There is a whole gigantic thread on this topic as some see no purpose for Intl as US has had better returns for quite some time now. Of course, the past is not the future and no one knows what it will look like in the future. For myself, I have a 20% allocation to International for the purposes of diversification and I am not bothered about whether or not some other investment may do better.
* Taxable: Are you maxing out all of your tax-advantaged space? I would not have any interest having a taxable account until I had maxed everything else that was tax advantaged (401k, Roth, HSA, Mega Backdoor Roth, etc.). For myself, I have yet to be able to max it all every year and thus have no taxable. Just something to consider.
* Target Date Funds: There is nothing wrong with target date funds if they suit your purpose. It is simple and easy to manage. Of course, you have to accept the allocation it provides based upon the target date. Again, if fine for you, then all good.
Annual Contributions
* No Roth? Personally, it took me many years before I could manage to max out pre-tax and also contribute to Roth. As mentioned, I would prefer to take those funds out of taxable and put it toward Roth.
Questions
Q1:
* Consolidating Accounts: usually a good move to help keep things simple and organized.
* Roth to VTI: makes sense.
Q2: The pursuit of optimization is alluring and can be never ending. I would not get too twisted up if something is less than ideal. However, it is important that the pursuit of optimization does not make you do things like start fiddling around with your portfolio in hopes of getting better returns by doing things like tilting or adding this or that "spice". Keep it simple and diversified and you will be just fine.
You are doing a great job and well on your way.
Best wishes.
Mortgage
* All things being equal, I would stick with your historically low mortgage and simply pay as agreed
* The mortgage provides you with valuable benefits:
- Hedge against inflation
- Liquidity
- Leverage for further investments such as your financial independence
Asset Allocation
* Current Allocation: Does your current allocation match up with your actual risk tolerance? I would offer that given your age and many working years ahead of you, I would encourage you to consider whether 100% stocks would be more appropriate for you.
* Age-20 in bonds: Personally, not a fan of this type of thing for how much bonds one should have. Of course, it's fine if it works for you, I am simply asking you to assess why you have chosen it and makes sense for you.
* International: the general guidance is not less than 20% and no more than 40%. What you are doing is absolutely reasonable. Importantly, you must understand why you have chosen this allocation and are satisfied that the returns you receive are not guaranteed. There is a whole gigantic thread on this topic as some see no purpose for Intl as US has had better returns for quite some time now. Of course, the past is not the future and no one knows what it will look like in the future. For myself, I have a 20% allocation to International for the purposes of diversification and I am not bothered about whether or not some other investment may do better.
* Taxable: Are you maxing out all of your tax-advantaged space? I would not have any interest having a taxable account until I had maxed everything else that was tax advantaged (401k, Roth, HSA, Mega Backdoor Roth, etc.). For myself, I have yet to be able to max it all every year and thus have no taxable. Just something to consider.
* Target Date Funds: There is nothing wrong with target date funds if they suit your purpose. It is simple and easy to manage. Of course, you have to accept the allocation it provides based upon the target date. Again, if fine for you, then all good.
Annual Contributions
* No Roth? Personally, it took me many years before I could manage to max out pre-tax and also contribute to Roth. As mentioned, I would prefer to take those funds out of taxable and put it toward Roth.
Questions
Q1:
* Consolidating Accounts: usually a good move to help keep things simple and organized.
* Roth to VTI: makes sense.
Q2: The pursuit of optimization is alluring and can be never ending. I would not get too twisted up if something is less than ideal. However, it is important that the pursuit of optimization does not make you do things like start fiddling around with your portfolio in hopes of getting better returns by doing things like tilting or adding this or that "spice". Keep it simple and diversified and you will be just fine.
You are doing a great job and well on your way.
Best wishes.
Statistics: Posted by invest4 — Wed May 22, 2024 8:21 pm
