An Early Retiree Creates and Shares His Investment Policy Statement

SIS_IPS

Today’s guest post is from Robert @ Stop Ironing Shirts.  He recently declared early retirement from a 15 year career in finance.  Robert struggled with walking away from career paying $300,000+, an income level only achieved after ten plus years of on the job training after his undergraduate degree. He is married to a veterinarian who hung up her white coat a couple of years ago, and he recently recapped the process of giving his early retirement notice, sharing people’s […]

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What to Do with Suboptimal Assets in Your Portfolio

Kids receiving gifts

If you’ve got an ideal investment portfolio and you’re perfectly content with your asset allocation (the percentage of stocks and bonds),  your asset location (where those funds are located, ideally in the most tax-efficient manner) and the choice of assets you hold, this post is not for you. If, on the other hand, you are human and have made less than optimal choices in the past, or someone made them for you, I’d like to share some strategies you can […]

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12 Ways to Simplify Your Taxable Brokerage Account

My taxable account might be my favorite account. It holds about half of our retirement assets, is immediately available, and is more flexible than any other account we own. When I first opened one, I didn’t have a guide like this. I bought actively managed, tax-inefficient funds. I didn’t know what tax loss harvesting was. It was far from optimal, but at least I was saving and investing the leftover money after maximizing all of my tax-advantaged options rather than […]

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Don’t Forget To Do a Risk-Benefit Analysis When Investing

Risk_Benefit_analysis

A comment I see not infrequently on the forums and Facebook Groups I haunt goes something like this: “If you want $100,000 in retirement income, you don’t need $2.5 Million invested. Just invest $1 Million in crowdfunded / syndicated real estate and you can have $100,000 a year.” While it’s true that you can earn 10% and more in these deals, it’s also true that you can break even or lose money. The 4% rule (of thumb) is based on […]

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The Long-Term Cost of Investing in the Wrong Index Fund

RYSYX

Not all index funds are created equally. While they may follow similar indices in a similar manner, the costs involved can vary greatly. If you’ve invested in a simple three-fund portfolio or a variation with a quality, low-cost firm, you’ve probably got costs of well under a tenth of a percent. Would you believe there are companies chargin more than 1% per year for an S&P 500 fund? It’s true, and you can find them from big names like Wells […]

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Create Your Own Comprehensive Financial Plan

If you’d like to create a comprehensive financial plan, I can think of three good options. One: Work with a vetted fiduciary, fee-only financial advisor. You should come out with a sound plan, some understanding of what goes into the plan, and it will probably set you back a few thousand dollars. Two: Go it alone. Read books and blogs to learn everything you can about investment management, debt management, appropriate insurance, asset protection, etc… It will likely take the […]

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How to Avoid FOMO When Investing

FOMO road

With all this FOMO talk lately, you might mistake me for a millennial. FOMO! YOLO! See you at the Fyre Festival with all of my influencer friends! Or not. I’m a Gen-Xer, which is more of a ROLO generation. Not an acronym; it’s just the yummy chocolate and caramel candy that was among the far fewer options back when I was growing up. You could find a roll next to the Whatchamacallits. To be honest, I think of the rhyming […]

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7 Guidelines for Adding New Asset Classes to Your Portfolio

I know some intelligent people who invest in only one asset class. The VTSAX portfolio is well diversified, but is only diversified among the stocks of U.S.-based companies. Historically, the one-fund portfolio has performed well, with the occasional 30% to 50% drop. Don’t like the sound of that last part? You may want to consider adding an asseet class. The classic three fund portfolio gives you three asset classes, and a four fund portfolio (with the addition of Real Estate […]

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When Your Income Becomes Your Enemy

Sedona Mansion

What’s the first thing that comes to mind when you hear the question “How do you get rich?” You might envision someone winning the lottery or receiving a large inheritance, but the most common and likely response is something along the lines of “make a lot of money.” If you want to be wealthy, and don’t have a rich uncle or 1 in 100 million luck, you’re best off working hard and earning a boatload of money. Of course, earning […]

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Five Things That Need to be Said About Passive Income

Passive Income

Today’s Saturday Selection from Dr. Peter Kim is one of my favorites. It speaks to the truth about passive income, specifically the fact that “passive” can be a bit of a misnomer, particularly early on. My favorite form of passive income is the return I receive in both capital appreciation and dividends from my index fund investments. That’s about as passive as it gets. I also earn some passive income from investments in crowdfunded real estate deals. These are mostly […]

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Rebalancing Your Portfolio: Why, When, and How

You’ve decided on the perfect asset allocation for you. It matches your risk tolerance, preference for domestic versus international equities, and the numbers, as expressed in percentages, are perfect multiples of ten. You’ve got a spreadsheet to automatically track and calculate those percentages. 60, 20, 10, 10. It all adds up. Then the market does what the market does and it’s all fouled up. 58, 21, 13, 8. No!!!! All is not lost. You can rebalance. Dr. Jim Dahle explains […]

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How to Build a Real Estate Crowdfunding Ladder

Students of personal finance are familiar the concept of a ladder. So are roofers and firefighters, but that’s another matter, altogether. The idea of a financial ladder is to have a repeating source of cashflow, either in perpetuity or for a number of years until you circumstances will no longer require it (i.e. when RMDs kick in). Common ladders include CD ladders, treasury bond ladders, and the Roth conversion ladder. Dr. Peter Kim has an idea for a different kind […]

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The Reality of Real Estate Investing: It’s Not as Easy as It Seems

Destin_Real_Estate

Real Estate is often touted as an optimal path to wealth. Many people have done very, very well by investing in real estate. Of course, there are countless ways to invest in real estate. Today’s guest post comes from the spouse of a physician, Rachel Hernandez of Adventures in Mobile Homes. As you might guess, her trailer park adventures come not from living in mobile homes, but as an experienced real estate investor. The focus today is on single-family homes […]

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EquityMultiple: An Interview With CEO Charles Clinton

I’ve personally invested in a handful of crowdfunded real estate deals. I wouldn’t want to recommend investments to my readers that I wouldn’t be open to investing in, myself. One of those investments, which happens to be my first and largest to date, was with EquityMultiple. I like that they offer a variety of investment types (equity, debt, mezzanine debt), and as you’ll learn, perform extensive due diligence, passing on 90% of investments floated their way. I’m also a fan […]

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Calculating the Value of Your Backdoor Roth Contributions

I recently published a detailed article questioning the Marginal Value of the Backdoor Roth. I wanted to answer a simple question. “Is it worth doing?” The answer I came up with? Probably, yes. Unless you’ve got significant obstacles, namely a tax-deferred IRA in your name that you can’t easily roll over into an employer’s 401(k) or individual 401(k). Then, it’s not that big of a deal if you don’t. The thing is, in the first year that you do the […]

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Seven Money Matters I’m Horrible with and How I Deal with Them

Money Money Money

Today’s post comes from my WCI Network partner Passive Income MD. I think he’s pretty good with money, but he begs to differ. At least in some respects. He makes a great point in that just because we’ve seen success with money, it doesn’t mean we have all the answers or do everything right. I’ve weighed in on five money mistakes I choose to make and I’m sure there are more I have yet to discover. Dr. Peter Kim’s not perfect, […]

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Backdoor Roth IRA 2019: a Step by Step Guide with Vanguard

This year, I made my seventh pair of “Backdoor Roth” contributions with Vanguard. If you’ve heard of the Backdoor Roth IRA, that’s great! You’ve been paying attention. If not, I’ll give you a brief overview, and a number of links to additional articles with more complete descriptions of the history and important caveats. This post has been updated with fresh screenshots from my 2019 contribution and conversion, which were completed on January 3rd and 4th, 2019. I like to contribute […]

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Top 10 Financial New Year’s Resolutions to Make (and Keep) in 2019

Happy New Year! Have you made your New Year’s Resolutions yet? If you said yes, have you broken your New Year’s Resolutions yet? I usually wait until mid-to-late January to break mine, but I I’d like to give you some achievable New Year’s Resolutions that you can keep. Each of these ten items will help you improve your financial situation, and most of them are something you can do, check off the list, and move on. I’m not asking you […]

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Tax Loss Harvesting with Fidelity: A Step by Step Guide

When the stock market gives you lemons, make lemonade. In December of 2018, the markets have been delivering lemons by the truckload. We’ve seen a drop of about 7% in one week and most major indices for the US stock market are at or near bear market territory. While I don’t enjoy seeing six-figure sums disappear from my portfolio, I try to do the best I can with what I have. When I have an abundance of lots with losses, […]

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