He goes on to list the investing books he has read. Mr. Larimore has read more investing books than I have read Dr. Seuss, Eric Carle, and Little Golden Books combined. Color me impressed.
What’s even more impressive than the number of pages he has digested is the fact that after reading a veritable library of investing books, his investing philosophy is incredibly simple. He is a staunch believer in the decidedly uncomplicated Three Fund Portfolio.
Who is Taylor Larimore?
Mr. Larimore is a 96-year old gentleman who may be best known for co-authoring the two published Bogleheads books, The Bogleheads’ Guide to Investing and The Bogleheads’ Guide to Retirement Planning. He is very active on the forum, with 26,684 posts and counting.
In addition to being a prolific reader and writer, Mr. Larimore is also a military hero. He was a paratrooper in the 101st Airborne Division who fought in Bastogne, Belgium in World War II’s famed Battle of the Bulge. He later helped capture Berchestgarden, the home of Adolf Hitler’s mountain retreat, and eventually marched in the Victory Parade on New York City’s Fifth Avenue.
Professionally, he worked as an insurance underwriter, IRS revenue officer, and held positions in the Small Business Administration and Housing Finance Authority in south Florida. Living near the water, he is an accomplished sailor and has been named the American Sailing Association’s “Instructor of the Year.”
I gawked at the lengthy list of books he has read, and marveled at the fact that all that information could be distilled into such a simple recommendation. I knew I wanted to write about it, but I wasn’t about to copy and paste his extensive list without permission.
One of the wonderful things about a community like the Bogleheads is that everyone who frequents the site is easily accessible. I sent Mr. Larimore a message introducing myself. I told him I had an idea for a post and I’d love to borrow his list. He replied within a matter of hours.
Not only did he kindly agree to allow me to use his list of books for this post, he also visited this site, and gave me the following endorsement and the permission to publish it here.
“I found your website to be interesting, informative, and filled with solid investment advice. I especially enjoy reading your “Sunday Best” articles.” -Taylor Larimore
Thank you, kind sir!
What is the Three Fund Portfolio?
The three fund portfolio is a simple portfolio of three passive index mutual funds.
- a total US stock market fund
- a total international stock market fund
- a total bond fund
That’s it. Mr. Larimore has done the hard work, so you don’t have to. I’m not saying you shouldn’t read any of the books that he has read, or any that I might recommend, but you can do a lot worse than buying and holding three funds.
How do you set up a Three Fund Portfolio?
It’s simple but you do have a few decisions to make. You need to decide on a fund family or do your best to replicate the three fund portfolio based on the funds available in your retirement accounts. Vanguard is an obvious choice (although no longer the lowest cost), but the Bogleheads wiki gives you options to create a three fund portfolio with nine other fund families, using mutual funds or exchange traded funds (ETFs).
You also need to decide on an asset allocation in terms of percentages. These will be based on your age, risk tolerance, and feelings towards international equities. Allocating one third of your portfolio to each of the three funds is one way, but you can set it up any way you want. For example, you could have 50% US total stock market, 30% total international stock market, and 20% total bond market, or any variation as long as the total is 100%.
What are some alternatives to the Three Fund Portfolio?
There are a number of additional “lazy portfolios” detailed in the Bogleheads wiki, which are variations of the three fund portfolio, sharing the common theme of investing in passive index funds holding many stocks and bonds. Some hold two funds, others have as many as nine.
What books has Mr. Larimore read?
This list is a couple years old already, and he has undoubtedly read more in the interim. Nevertheless, he steadfastly stands by his recommendation for a three fund portfolio.
The Affluent Investor, DeMuth The Affluent Investor, Rapport Against the Gods, BernsteinAges of the Investor, BernsteinAll About Asset Allocation, Ferri All About Index Funds, FerriOnly Guide to Alternative Investments You'll Ever Need, Swedroe & KizerAmerican Sucker, Denby Asset Allocation, Gibson Asset Allocation, Arnott & FabozziAt the Crest of the Tidal Wave, PrechterBarron’s Guide to Investment Decisions, Sease Battle for the Soul of Capitalism, Bogle (Mis)Behavior of Markets, Mandelbrot & Hudson Beyond Stocks, MerrillBig Investment Lie, EdesessBillion Dollar Funds, Fosbeck Blackwell Guide to Wall Street, BlackwellB ogle on Mutual Funds, Bogle Bogleheads' Guide to Investing, Larimore, Lindauer, LeBoeuf Bogleheads' Guide to Retirement Planning, Larimore, Lindauer, Ferri, DoguThe Bond Book, ThauBusinessWeek Guide to Mutual FundsCan I Retire, Piper Capital Ideas: The Improbable Origins of Modern Wall Street, Bernstein Character Counts, Bogle Charles Schwab’s Guide to Financial Independence, Schwab Choosing an Investment Company, Seligman Clash of Cultures, Bogle Coffeehouse Investor, SchultheisCommonsense Guide to Mutual Funds, Rowland Common Sense Investing, VanNess Common Sense on Mutual Funds, Bogle Complete Idiots Guide to Investing, Koch, DeSalvo, KennonC omplete Idiot’s Guide to Retiring Early, Lee & Flewelling Contrary Investing for the '90s, Band Dun & Bradstreet Guide to Your Investments in 1999 Devil Take the Hindmost, ChancelloDevil's Financial Dictionary, ZweigDiversify, Perritt & Levine Discover the Wealth Within You, Edelman Donaghue Stratagies, DonaghueDon’t Count On It, BogleDow Jones-Irwin Guide to Mutual Funds, Rugg & Hale Dynamic Asset Allocation, PicernoDynamic Stock Market Analysis, Carney Elements of Investing, Ellis & Malkiel Enough, Bogle Essential Dictionary of Investment & Finance Eight Steps to Seven Figures, Carlson Economic Time Bomb, Browne ETF Book, Ferri Everything You’ve Heard About Investing is Wrong, Gross Fidelity Guide to Mutual Funds, Rowlands Fifty Ways to Mutual Fund Profits, Levine First Time Investor, Chambers & RogersForecasting Financial Markets, PlummerFour Pillars of Investing, BernsteinFund your Future, Stav & Buccieri Funding Your Future, ClementsGet Rich Slowly, Spitz Getting in on the Ground Floor, Leeb Great Mutual Fund Trap, Baer & GenslerGrow Rich Slowly, Underwood & BrownHouse that Bogle Built, Braham How a Second Grader Beats Wall Street, Roth How Mutual funds Work, Fredman & WilesHow to Buy Mutual Funds the Smart Way, Littauer How to Make Money with Mutual Funds, Markenstein How to Pick the Best No-Load Mutual Funds, JacobsHulbert Guide to Financial Newsletters, HulbertThe Incredible Shrinking Alpha, Swedroe & Berkin If you Can, Bernstein Index Fund Solution, Evans Index Funds, Hebner Index Mutual Funds, Maley Index Mutual Funds, Simon Index Your Way to Investment Success, Good & Hermansen Individual Investor’s Guide, AAIIIndividual Investor Revolution, CarlsonInflation Proofing Your Investments, BrowneInformed Investor, ArmstrongIntelligent Asset Allocator, Bernstein Intelligent Investor, Graham & ZweigIntelligent Portfolio, Jones Intermarket Technical Analysis, MurphyInvesting During Retirement, Vanguard Investing For Dummies, Tyson Investing For a Lifetime, Merriman Investing For a Lifetime, Browne Investing in Uncertain Times, NicholsInvesting Made Simple, Piper Investing Mistakes Even Smart Investors Make, SwedroeInvesting Strategies For the 21st Century, ArmstrongInvestment Titans, Burton Investment Fables, DamodaranInvestment Fundamentals, Gitman & JoehnkInvestment Guru’s, Tanous Investment Mistakes Even Smart Investors Make, Swedroe Investment Policy, Ellis Investments: An Introduction to Analysis & Management, Amling Investor’s Guide to Mutual Funds, Haslem Investor’s Guide to Fidelity Funds, Martin Investor’s Manifesto, Bernstein John Bogle and The Vanguard Experiment, Slater John Bogle on Investing, Bogle Jonathan Clements Money Guide 2015 Keys to Investing in Mutual Funds, Brouwer Kurt Brouwer’s Guide to Mutual Funds, BrouwerLate Bloomer Millionaires, Schullo & RobertsonLazy Person’s Guide to Investing, Farrell Lew Altfest Answers Questions About Money, Altfest Lies Your Broker Tells Your, Slater Little Book of Common Sense Investing, Bogle Little Book of Main Street Money, ClementsLittle Book of Safe Money, ZweigLive It Up Without Outliving Your Money, MerrimanMaking It in the Market, CrawfordMaking Money, Ruff Making Money With Mutual Funds, Blitzman & Renburg Making the Most of Your Money, QuinnMan in the Arena, Rostad Managing a Portfolio of Mutual Funds, Rutherford Market Timing With No-Load Mutual Funds, Merriman Marshall Loeb’s Lifetime Financial Strategies, Loeb Mathematician Plays the Stock Market, Paulos Millionaire in You, LeBoefMisbehavior of Markets, Mandelbrot Modern Mutual Fund Families, Anderson & Ross Money Dynamics for the 1990s, Van CasperMoney Game, SmithMoney Mantras, Singletary Money Talks: Quotes on Money & Investing, MaggioMoney Misery Madness, WeberMoney Matters, Strassel Morningstar Guide to Mutual Funds, Benz, DiTeresa, & KennelMugged on Wall Street, ChaseMulti-Fund Investing, Hirsh Mutual Fund Buyer’s Guide, FosbackMutual Fund For Dummies, Tyson Mutual Fund Portfolio Planner, Dorf Mutual Fund Superstars, DonoghueMutual Fund Switch Strategies, Hirsh Mutual Fund Wealthbuilder, HirshMutual Fund Switch Strategies, Boroson Mutual Funds: How to Invest with the Pros, BrouwerMutual Funds: Taking the Worry Out of Investing, RossNew Contrarian Investment Strategy, DremanThe New Finance, The Case against Efficient Markets, HaugenNew Game on Wall Street, Sobel New Money Masters, Train New Mutual Fund Investment Advisor, Dorf New Strategies for Mutual Fund Investing, RuggNew York Times Mutual Fund Guide, Gould No Load Mutual fund Guide, DonoghueNo Nonsense Finance, MoodyNo Loads, Kearis One Hundred Best Mutual Funds, Williamson Only Guide to Alternative Investments, SwedroeOnly Guide For The Right Financial Plan, SwedroeOnly Guide to a Winning Bond Strategy, Swedroe Only Guide to a Winning Investment Strategy, SwedroeOnly Investment Guide You Will Ever Need, TobiasOnly Other Investment Guide You Will Ever Need, TobiasOnly Proven Road to Investment Success, SenguptaOnly Retirement Guide You Will Ever Need, PetrasOutperforming the Market, Merrill Permanent Portfolio, Browne & Rowland & Lawson Personal Finance for Dummies, TysonPlanning for Retirement, Hallman Planning Your Retirement, Porter Portfolio Selections, MarkowitzPower of Passive Investing, FerriPracticing Financial Planning, Mittra Probability of Fortune, MilevskyProtecting Your Wealth, Ferri Prudent Investor’s Guide to Beating the Market, Bowen & ReinhardtPrudent Investor’s Guide to Beating Wall Street, Bowen & GoldiePrudent Speculator, Frank Quest For Alpha, Swedroe Random Walk and Beyond, JohnsonRandom Walk Down Wall Street, MalkielRandom Walk Guide to Investing, Malkiel Rational Investing in Irrational Times, SwedroeRetire Secure! For Same-Sex Couples, LangeRetire in Style, SolteszRetire Rich, Morse Retirement Challenge, ArmstrongRoad to Stock Market Success, HalpernRoadmap For Investing Success, Keck Safe Investing, SlatterSave Your Retirement, Armstrong & Brown Serious Money, Ferri The Simple Path to Wealth, Collins Smart and Simple Financial Strategies, QuinnSmart Money for the 90s, Money Magazine EditorsSmartest 401(k) Book You’ll Ever Read, Solin Smartest Money Book You’ll Ever Read, Solin Smartest Portfolio You’ll Ever Own, Solin Stock Market Logic, Fosback Stock Trader's Almanac, Hirsch Stocks for the Long Run, SeigelStory of Investment Companies, BullockStraight Talk About Mutual Funds, VujovichStraight Talk on Investing, BrennanStrategic Investment Timing, Stoken Successful Investing, Babson Successful Investing In No-Load Mutual Funds, PopeSuccessful Investor Today, Swedroe Successful No-Load Fund Investing, JacobsSurviving the coming Mutual Fund Crises, ChristensenTactical Asset Allocation, Dubois Take on the Street, LevittTeenage Investor, OlsenThink, Act, Invest Like Warren Buffett, Swedroe Thirty-Minute Money Solutions, BenzTiming the Market, WeissTriumph of the Optimists, DimsonTwenty-five Investment Classics, Gough Twenty-Five Myths You’ve Got to Avoid, ClementsUltimate Mutual Funds Guide, BorosonThe Unbeatable Market, RossUnconventional Success, SwensenUnveiling the Retirement Myth, OtarVanguard Retirement Investment Guide, VanguardWall Street Gurus, BrimelowWealth of Experience, Brennan & ClarkWealth without Risk, GivensWe’re Not in Kansas Anymore, UpdegraveWhat Wall Street Doesn’t Want You To Know, SwedroeWhat Works on Wall Street, ZweigWhere are the Customer’s Yachts, SchwedWhite Coat Investor, Dahle Why Bother With Bonds? Rick Van NessWhy Smart People Make Big Money Mistakes, BelskyWinning in Mutual Funds, SchabackerWinning on Wall Street, Zweig Winning the Losers Game, Ellis Winning With Bonds, Van Ness Winning With Index Mutual Funds, Tweddel & Pierce Winning with Mutual Funds, Editors of Money MagazineWinning with the Market, Sease Winning with New IRA’s, Zweig Winning Portfolio, FarrellWise Investing Made Simple, Swedroe Wise Investing Made Simpler, Swedroe Yes, You Can Achieve Financial Independence, Stowers Yes, You Can Time the Market, Stein & DemuthYes, You Can Supercharge Your Portfolio, Stein & Demuth Your Money and Your Brain, ZweigYour Money or Your Life, Cavuto Your Money or Your Life, Dominguez You’re Fifty. Now What? Schwab You’ve Lost It. Now What? Clements You’re Retired, Now What? Yolles
It was a lot of work to link all those books*. I can’t imagine how long it would take to read all those books. Based on the dates of some of them, I can say that the answer in Mr. Larimore’s case is several decades.
I may have many decades of retirement ahead of me, but right now, I don’t have the time to read dozens of books, let alone hundreds. I will gladly take the advice of a well-respected and well-read individual, and keep my portfolio simple.
Do I have a Three Fund Portfolio?
Not exactly. I have chosen to add REIT as an asset class for diversification, and my US stock allocation has a bit of a tilt to small and value stocks. Also, my funds are held in different account types, and holding identical funds in the taxable and tax-advantaged accounts could interfere with my ability to tax loss harvest without triggering a wash sale.
That being said, my portfolio is rather simple compared to most, and will likely become simpler when I graduate from my medical career and begin the early retirement phase of my life.
What’s your opinion of a three fund portfolio, or similar “lazy” portfolio? Do you like the simplicity, or do you see pitfalls? Let us know your thoughts below.
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For further reading on the three fund portfolio, check these out:
- He Has Read Over 250 Investing Books. He Recommends These Three Funds.
- From 28 Funds to 3: Simplifying to a Three Fund Portfolio
- A Vanguard Three Fund Portfolio Just Got Cheaper!
- Investing in a Three Fund Portfolio Across Numerous Accounts. Get the Spreadsheet!
- The Bogleheads Guide to the Three Fund Portfolio
52 thoughts on “He Has Read Over 250 Investing Books. He Recommends These Three Funds.”
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Hey, all! I’m new here. I’m looking to FIRE in 2 years, age 57. I’m charting out my desired allocation. I’ve tried to educate myself but am far from an expert.
I think I’m comfortable with 60/40 for the long haul, though I might have enough to go 50/50 and not sweat it (barring a bear in next 2 years, I should be at fatFIRE). I’m OK with divvying up stocks between US/foreign, but not so sure about foreign bonds. By “total bond fund” in this discussion, are you referring to US only, or global? And do those usually include what you would consider a good mix of TIPS and tax-exempt muni’s with usual gov’t stuff, or should I try to complicate my bond holdings a bit to get the mix of those I want? Or does that just start to unravel the simplicity model?
My planning chart is currently sitting at 35 US stock/20 int’l stock/40 US bond/5 REIT (4 fund).
That sounds like a reasonable plan, TJ.
A “total bond fund” in the U.S. owns U.S. bonds. From Vanguard’s VBTLX: “This fund is designed to provide broad exposure to U.S. investment-grade bonds. Reflecting this goal, the fund invests in U.S. Treasuries and mortgage-backed securities of all maturities (short-, intermediate-, and long-term issues).”
>a total US stock market fund
VTSAX isn’t bad, but there are better options among low fee vanguard funds. VTSAX has very low small cap exposure, but small cap tends to outperform large cap over time — and by a significant margin. There’s clearly some sort of herding effect happening with the popularity of VTSAX, because nobody’s bothering to simply look at the performance charts.
run the data on Portfolio Visualizer dot com, and 50/50 VIIIX/VIEIX has outperformed VTSAX.
do an equal 3-way split among Vanguard index funds for large cap/mid cap/small cap and it’s outperformed the VIIIX/VIEIX portfolio.
The elegance and simple ease of a total market index is not worth leaving tens of thousands on the table when I can get better growth with a different allocation of low fee indexes.
I don’t think the issue is that no one’s aware of the outperformance of small caps in the past, and small value in particular. That’s been well documented and Fama & French were awarded a Nobel Prize for their work demonstrating this.
From the post: “I have chosen to add REIT as an asset class for diversification, and my US stock allocation has a bit of a tilt to small and value stocks.”
Whether that alpha will continue to exist is a subject of debate, and obviously no one knows the answer. I do like ERN’s take on it.
Love this list. I got tired thinking about all the linking you had to do, but it was valuable for me. I found a bunch I haven’t read, but have now added to my list. Thanks!
I have been reading personal finance books since I was 15 years old. I am almost 50 now. I have read so many I would not even try to count them. Interestingly I also use a simple portfolio. I use two funds. VCN for Canadian equities and XAW for my all world excluding Canada. That’s it. Then I buy laddered fixed income for my bond portion. Instead of REITs I simply buy real estate.
For my children, I can not even be certain they have any interest in rebalancing. I have started using VGRO which has a total world stock and bonds asset allocation in a tax free investment account.
Extremely simple. Anyone can do this. No need to complicate something you have zero control over. (ie the stock market)
Very nice, Dr. MB. Simple is not only effective, but as you point out, much easier to manage.
Well, it’shard not to take advice from someone like that. I mean he has ready pretty much every book you would want to read on the subject (which by no means of itself makes him the one and only go to expert, but surely gives him merit). Some of the greatest things in life come in “three’s”!
You should own a small cap index fund as well as a small cap value as small cap has done better than any asset class historically
I can’t argue with that, and I do have both a small cap index and small cap value index in my own portfolio, but I love the simplicity of the three fund portfolio. I hope the small value premium continues to hold for the future, but of course, we can’t be certain it will.
And I have those three funds – kinda. Instead of VTSAX I have VFIAX (the S&P 500 Index Fund). Reason is I started way back in 1997 with it and it was very popular, so I stuck with it. Returns have been almost identical to VTSAX, so no huge deal.
Very nice, AF. I believe about 82% of The total stock market fund is the S&P 500 stocks. You’re just missing the 18% that is small and mid cap. Of course, they correlate about 99%.
A portfolio of:
VTI 50% (exp ratio .04%)
VUSX 30% (exp ratio .11%)
BND 20% (exp ratio .05%)
is pretty hard to beat. YTD return is something like 14% It is 80:20 though, pretty aggressive
a 60:40 (40, 20, 40) portfolio would be 11% YTD. I hold a more complicated 60:40 portfolio and I’m getting about 11.5% . My portfolio is a little more expensive though, like I said hard to beat.
I’m over 250 too. It helps to have been retired for over 25 years. My “fixed” income is about 2.5 times current expenses, I feel I have “enough”, and invest over half my income in VTSAX & VWALX at a (16/84) allocation. I like the floor approach discussed in Retirement Portfolios by Zwecher. Following Bogle my investments are US focused, tax efficient, and still not used for any retirement expenses. My investments are for the unexpected and, knock-on-wood, have done well through the past black swans.
Strong work! I don’t think anyone would argue that you don’t have Enough, or more than Enough, with fixed income more than double your annual spending.
I have not read Zwecher’s book (or anywhere near 250), but it sounds like you subscribe to the concept of not playing the game once you’ve already won. 84% bonds — would you happen to be 84 years old?
I believe there is a four fund portfolio as well.
Yes, adding REIT or other alternative investment gives you the 4 Fund portfolio, one of my “lazy portfolio” favorites.
So is ER still a good idea with this recent downturn in the markets? Should one wait till the market has gone back up or is more stable. For example when stocks are not as over valued?
I’m 48 now and close to 4 mil if I count rental property.
This recent downturn has decreased my aggressive portfolio by about 5%. I wouldn’t be at all surprised if it dropped 10% or 20%. Most years see a correction of 10% at some point. A couple bad days don’t concern me.
Also, withdrawal rates of 3% to 4% have been backtested and work out even when retiring at the worst times.
If I was planning to withdraw 4% and had a 50-year time horizon, I might be hesitant to retire in this bull market, the 3rd longest in history.
I’m shooting for 40x to 50x expenses, and most people will rightfully say that’s overkill. It is, but I’m not at all desperate to leave my job, and I should be able to go from 25x to 40x or 50x in about five years. For me, that’s a good tradeoff.
50x? So 2% to 2.5% (40X). That would mean you need 4 mil to get 100K. After taxes that would be anywhere between 80 to 90 K. So around 7 to 7500 per month. That seems a bit low. I guess with part time work and later SS it works out.
Personally I’m getting tired of the risk of medicine and the headaches that come with it. But if I could find something I enjoyed with less risk I could go another 10 to 12 years.
On another note. If you have some cash some time this week would be a good week to buy.
I did some exchanges today, tax loss harvesting in my taxable account. I’ll receive my biweekly direct deposit and will be buying on Friday.
Only time will tell if now is the time. If we have a quick rebound, then yes. If this is the beginning of the bear market that’s been widely predicted starting in about 2011, maybe not. I’m no market timer. I’ll DCA and invest monthly, and take what the markets give me.
My goodness that’s a lot of links! Very cool that Mr. Larimore is so hip with technology. I’m also slowly turning away from my active stock picking days – simply don’t have the time anymore. “Lazy” may be the way to go!
Keep up the good work!
No doubt. I had that “it seemed like a good idea at the time” moments when I was less than halfway through that task.
And yes, as others have noted, he is very responsive. I actually messaged him initially sometime in the wee hours as I was up thanks to the pager. He had responded by 0800.
Keep up the good work yourself!
Wow, what work to get those books linked! Impressed. Like wealth building, you have to put in some serious work to get the results.
We like simple. My 401k is two funds, a total US stock market and a bond fund. Mrs. PIE 401k would be the same if it was not for the choices available to her in her 401k. She has 4 funds that essentially maps to the two fund lazy portfolio. Our taxable is four funds that we are tidying up into what will be a two or three fund approach. We buy into the concept of major US companies having international exposure anyway so don’t have a distinct international fund. Jim Colins has written at length on this.
At separation from service and FIRE in two years, we will roll over our 401ks into Vanguard where our taxable account sits.
As has been discussed in other forums recently, we would be happy to take 5-6% returns. That is all we need to protect our assets and align with our SWR of < 4%.
Enjoy reading your stuff. Please keep it up.
Yeah, Ctrl-C and Ctrl-V got a serious workout on the old keyboard.
I see you’re also on board with the “lazy” portfolio. The international stock question is a good one. John Bogle himself has said you can go without. There’s a current 4-page thread on the topic on the Boglehead forum.
I imagine I’ll be doing the same, rolling the 401(k) over to a Vanguard IRA where I’ll be able to make Roth conversions annually. I’m lucky to have Vanguard fund options in my tax-deferred accounts with Transamerica.
Thanks for the link. And perhaps not surprising, the take on it by Taylor Larimore is high quality. I feel fine about not going with international fund(s).
Great post. Taylor Larrimore is my favorite Boglehead. His posts inspire me all the time, especially as it concerns simplicity. Following his investment gems on the Bogleheads Forum, I have read over 100 investing books in the last 3 years. One of the remarkable things I learnt from him was that he never checks his rate of return on his investments. According to him, he just captures the market with his index funds and accepts their return. So he has no need to track his personal returns as he will do nothing with that information. That blew my mind. I adore Mr. Larrimore….and he always has time to send private messages to fellow Bogleheads (he has sent 3 to me personally when I had some private questions). He reminds me of that quote: “Simplicity is the ultimate sophistication”
You’ve given yourself quite an education! At that pace, you could knock out every book on this list within a decade. Of course, you probably don’t need to revisit those from the eighties and nineties, but there are new books (and new editions) being released all the time.
I still like to track my personal returns (using Personal Capital) to know my net worth and look for tax loss harvesting opportunities. When I’m retired and presumably in great financial shape, perhaps I’ll pay less attention to the day-to-day fluctuations.
It’s great to hear you’ve had pleasant interactions with Mr. Larimore. His advice seems to be spot-on. I hope I’m half as sharp in 52 years. Or at least pulsatile. 🙂
>According to him, he just captures the market with his index funds and accepts their return. So he has no need to track his personal returns as he will do nothing with that information.
the risk of this plan is that he’s never noticed that VIEIX has outperformed VTSAX
Do you honestly believe he doesn’t know this?
VIEIX, the extended market index, is a portion of VTSAX, the total stock market. About 18%.
He already owns every single stock in VIEIX.
I am a big advocate of the lazy portfolio. I only use two of the funds (I believe I’m too young to use bonds, as my investment horizon is so long). Once I get closer to FIRE, I’ll reevaluate that position. I tend to stress over the details, so investing in individual stocks or real estate with tenants, is just NOT for me. Have to find what helps you sleep at night while also helping you accomplish your financial goals.
I’m with you, Fervent Finance. I’ve been an accidental landlord on a couple places that we moved away from, and it can be more hassle than it’s worth (especially long-distance as we were). Individual stocks would involve far too many little decisions about when to buy or sell, capture gains, or cut your losses. Not my style. I’ve got better ways to spend my time.
I’m all about a lazy portfolio (that I can watch/manage) rather than paying the big fees! How cool that he returned your message and checked out your site. Thanks so much for sharing the book list too! I am sure readers will love that!
Me, too, Vicki!
I think “lazy” is a bit of a misnomer. You still need to be willing to do it yourself, including rebalancing and learning enough to trust that you are indeed doing yourself a favor. I like that others including Mr. Larimore have done exhaustive research and settled on such a simple, repeatable approach.
Wow. More books to read!!!!
Taylor Larimore is the man responsible for convincing me to adopt the 3 Fund Portfolio. Glad to see another Bogglehead here and what a nice post singing Mr. Larimore’s praises.
Glad to hear it, Biglaw Investor. This morining, he added this article to the 31st page of the Three Fund Portfolio thread. Lots of good resources and articles on Page 1.
My vanguard funds consists of a large cap and small cap instead of the total market fund so that I have a bit more discretion between the two. And then the third vanguard fund I item is the international one and the majority of my investments are held in these three. I don’t own any bonds or bond funds so my portfolio is a bit more aggressive in that respect. I’m a big fan of these three funds and I will continue to put a bigger chunk of my money in them going forward.