How to Invest in a Taxable Account

How to Invest in a Taxable Account | Live Q&A

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Күн бұрын

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Video Resources & Timestamps
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0:00 - Welcome to The Financial Freedom Show!
1:50 - What is "tax efficiency?"
9:52 - Rob's Re-Balancing quandary
13:34 - Passing HSAs to heirs (HSAs vs. Roth IRAs)
15:43 - Jeremy Grantham's dire prediction - skew to Int'l or USA sectors?
23:30 - Bengals going to the Super Bowl
23:44 - State taxable HSA in CA?
25:20 - Fund selections based on taxable vs. tax-advantaged
26:37 - NTSX (invests on margin) vs. VOO
30:20 - ETFRC.com - Fund Overlap tool
31:57 - I Bonds or VTSX as a first taxable fund?
34:04 - Cloning Super Investors?
36:13 - 50/50 split in Bonds? FXNAX & FIPDX
40:26 - Six-fund to Three-fund on Vanguard, which funds?
42:58 - Convert Cash to Three-fund at Fidelity
43:44 - Three-fund portfolio and the Bogleheads
44:53 - Canadian Portfolio question
47:27 - Rob's International equity percentage
48:37 - Wellington in a taxable account
51:34 - Covered-call ETFs for income
53:34 - Thrift Saving Plan question (migrate from... )
55:35 - SCHD, VTIAX in a taxable or Roth?
57:15 - Rob's preferred withdrawal strategy (in retirement)
59:00 - Rolling returns and back-testing, limits of historical data
1:00:51 - Patience and poorly performing securities
1:03:59 - FCNTX vs.FBGRX
1:06:44 - RMDs and Inherited accounts
1:08:15 - Total Market or three separate funds in taxable account
1:12:26 - How much is too much HSA?
1:14:01 - Financial anxiety
1:18:36 - Bond investing with coming Fed actions
1:20:26 - Rob's Super Bowl pick
1:22:17 - Why no Target Date Funds that are ETFs?
1:23:23 - Four-fund portfolio: VT, VTI, VOO, BND
1:26:33 - Three-fund to SWYAX (2045 TDF)
1:28:30 - Dividend ETF in taxable account
1:32:05 - Apple's percentage of S&P 500, issue?
1:34:20 - Back Door Roth question
1:35:21 - Does Rob have a pension?
1:35:41 - New Roth, which funds: SNXFX vs. SWPPX
1:38:46 - How to invest $100K, SCHD vs. VDELX
1:39:58 - Is the S&P 500 really a Blend?
1:41:11 - Where's Salty?
1:41:36 - Prioritize asset allocation targets vs. tax efficiency
1:43:22 - Balanced ETFs, AOK
1:45:05 - Resisting the urge to tinker with portfolio
1:46:29 - New investor question, repay TSP loan or invest?
1:47:35 - Robinhood and margin
1:47:54 - Asset allocation with rental properties
1:51:11 - Long term impact on taxes, with foreign dividends
1:52:19 - Covered-call investing for long-term retirement income
1:53:28 - Bond investing resources
1:53:50 - Index funds relative to other investments
1:54:38 - Inherited IRA (old rules), transfer pitfalls?
1:55:34 - Super Investors, pt. II
1:57:22 - Got burned by Vanguard TDF tax issue, what to do now?
1:58:57 - Passive income question, stocks or index ETFs?
2:00:45 - Understanding the spread in sports betting
2:01:52 - Mutual funds vs. ETFs
2:03:20 - Wrap-up
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Investing Tools
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My Book (Retire Before Mom and Dad): amzn.to/2MsRJ9B
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New Retirement (Retirement Planner): robberger.com/go/new-retireme...
Stock Rover: robberger.com/go/stock-rover/yt-
M1 Finance $30 Bonus (IRA & Taxable Accounts): robberger.com/go/m1finance-bo...
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Credit Cards & Banks
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Wells Fargo Active Cash (Cash Back): www.allcards.com/go/wf-active...
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U.S. Bank Visa Platinum (0%): www.allcards.com/go/usbank-vi...
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OnJuno (free checking): www.allcards.com/go/onjuno/yt-
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
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Пікірлер: 75

@iancho9587 2 жыл бұрын

Aside from the interesting and for me very educational content, the thing I truly appreciate is not asking for thumbs, likes or subscribes... Thank you very much for the personal time donated to the masses.

@scole4545 2 жыл бұрын

This man is a God send. Thanks Rob I have learned so much from your Book and website as well as your many videos! I am 45 and started investing a couple of years back. Appreciate your guidance and your honest transparent advice.

@danceoutnow 2 жыл бұрын

Love your channel so much Rob. Just like the disclaimer I never use your videos to make financial decisions, but you've helped me a lot in the last year cut through the industry jargon and shown some of the questions to ask, which is infinitely more valuable. I treat my taxable account like a high savings accounts because my 401k and Roth are set to maximize returns. So I have 70% invested in Dividend stocks like KO and 30% invested in Vanguards tax protected Municipal bond fund. The goal is that even with dividends being taxed, it still has the ability to add shares over time (and I intend to hold KO forever), while the Municipal produces tax protected gains that are still better than the 1% savings accounts rates (though not by much at the moment). I hope to not have to touch it, but both of those stocks are also easy to sell with low share prices if I needed emergency cash as well.

@kevinn6482 2 жыл бұрын

Rob, I appreciate your videos and have learned so much from your content. Thank you!

@laserdrip 9 ай бұрын

Great content. Thank you for sharing your wisdom.

@kimappreciateslife Жыл бұрын

This popped up tonight after your livestream. Watching this on Dec 5th 2022! Lol, things have really changed big time! 😂

@ShaneVeltri 2 жыл бұрын

Loved the stories!

@politicscommentator 2 жыл бұрын

Hi Rob, thanks for bringing up a Q&A on investing with taxable account. Hopefully you will do another one. Just want a clarification, do you still think that index funds as mutual funds are still good investment option in taxable account?

@raymondpicardjr3069 2 жыл бұрын

Mr. Rob, thank you so much for your time and clarity in your videos. Also, are you going to continue to make videos after you RETIRE.

@alanzuckerman3972 2 жыл бұрын

Rob, Vanguard shows the after tax returns for their funds. This might help in placing certain funds in taxable accounts. The Vanguard Balanced Fund out performed the Tax Managed Balanced Fund on an after tax basis over meaningful time periods.

@danboruchowitz9803 2 жыл бұрын

Hey Rob, enjoy your channel. Question - is M1 Finance a good option for a taxable brokerage account? I believe there is no tax loss harvesting available, but it does cater for tax efficiency. Perhaps you could expand on whether it's a good option seeing as though the pies and rebalancing elements are attractive. Thanks!

@KahangLChan 2 жыл бұрын

Hi Rob. Please share your thoughts on owning bonds versus high dividend ETF's as an alternative. Thank you.

@Steven-se5jd 2 жыл бұрын

Would you be able to share your insight on bank wealth management/private banking vs index/robo-advisor?? I’ve been learning a lot from you and also do a lot of reading myself. But I am still relatively new to investing.

@jdmulloy 2 жыл бұрын

My one problem with ETFRC is that it only works with ETFs, not regular mutual funds. I wish I could also compare overlap between mutual funds, or an ETF and a mutual fund.

@paulw3495 2 жыл бұрын

If someone had an actively-managed Small Cap Growth fund in a taxable account, they might be subject to annual capital gains taxation. For example, JANVX, had about 12% of the portfolio value in capital gains for 2021. I understand this can be avoided by investing in a comparable index fund or ETF (VSGAX or VBX for example). My understanding was that Index funds are tax efficient because of low turnover. If VSGAX has a turnover rate of 24% (comparable to JANVX which has a 21% turnover rate), why has VSGAX produced no LTCGs over the past five years? Low turnover can’t be the only explanation as to why index funds are tax-efficient because VSGAX seems to have growth with a significant turnover rate but no capital gains. I appreciate the low-key informational focus of your channel.

@70qq 2 жыл бұрын

Thanks

@VietnamSteve 2 жыл бұрын

So happy I’m in an alternate geography. Retirement accounts can take $107k per annum so no need to use taxable accounts until you’re contributing $107k annually to the retirement account. And then you can bring forward three years of contributions. Struggling to hit the retirement account limits.

@dkc9875 Жыл бұрын

wow! where do you live? I have to accept money back if i contribute more than the 20K or so in my 401 k

@eusacadena2263 Жыл бұрын

Do u have or can u make video on rebalancing. In terms of interval to do it in various Accts ( hsa,401k, roth…) and talk about rollovers like employer hsa to broker hsa, what one time rollovers timing. Also hen choosing individual stock what bal sheet details is most important to review and what 5 u reviewed any why those. Thanks

@garyb711 2 жыл бұрын

Hey Rob! You stated that you goal is to be able to retire by withdrawing 3% or less each year. Did you reduce your income need by any social security you'll receive? If retiring early, how should someone approach deciding if a withdrawal rate greater than 4% is OK before social security kicks in? In my case, I think I'll be somewhere between 3.5% and 4% for about 7 years. If the market tanks, I could go over 4%. Once social security kicks in, I should be at 3% or less.

@rob_berger 2 жыл бұрын

My gut tells me you'll be fine. May gut is sometimes wrong. I'm not factoring in ss. I see that as a bonus. One tool you can use to model your situation is New Retirement.

@richardhead2318 2 жыл бұрын

What are your thoughts on the golden butterfly portfolio? Seems like it might be wise to substitute a muni bond etf (e.g.,MUB) for treasury ETFs in taxable accounts.

@greg5892 3 ай бұрын

Rob, do you know more these days about how NTSX works? It levers treasury futures for a 90/60 allocation of stocks to long term treasuries, effectively a 60/40 two-fund portfolio at 1.5x. The idea is to maximize the returns per unit risk and then dial up the risk to match a 100% equities portfolio. That increases returns over the 100% VOO portfolio except when treasuries and stocks are both dropping, which is true also of the 60/40 rather than being an effect of the leverage.

@ltmsimply 2 жыл бұрын

ROB . LMAO!!!! You are getting funnier and funnier. “The day when you die to get the last shot of morfine“ hahaha

@jasonhobbs2405 Жыл бұрын

I’m betting NTSX will beat VOO in Sharp ratio over the next 10, 20, and 30 years. It’s really a very well constructed and evidence based fund. Whether or not it beats in CAGR is a matter of where interest rates go.

@shawnnahass6886 2 жыл бұрын

Hello all remember with the tsp if u move the money before 59 1/2 from 401k to a IRA u will lose the advantage of not paying the early withdrawal penalty (10%) from age 55-59 1/2 which the 401k offers to your benefit that a IRA does not as long as u retire from your job at 55 where your current 401k is with.

@jmalaverri1 2 жыл бұрын

Hi Rob, thanks for this Q&A session. Do you own individual stocks in your taxable account? Do stocks like APPLE or Berkshire Hathaway (class B), for example, would be acceptable choices for a taxable account besides index funds?

@taitruong968 2 жыл бұрын

In my opinion they are high value stock, you probably won’t sell them. So ok for taxable account.

@jmc8076 8 ай бұрын

Late reply but in case others w/similar question read this any security/fund can be held in any acct but tax efficiency is the issue. Ideally talk to a good CPA and fee only advisor (if US Rob has list on his website) at least once to review all your holdings in context with YOUR goals and situation. Best of luck.

@jmc8076 8 ай бұрын

@@taitruong968 Depends on tax efficiency and tacking into account her situation. Both good CPA and fee only advisor at least once a year or at each major change in age or life situation would be ideal. Rob often suggests both. Obv based on budget.

@urbanart7325 2 жыл бұрын

I I do appreciate your KISS principle

@AlexYurchak Жыл бұрын

Question regarding HSA. Would your approach change if the HSA doesn't allow you to submit old receipts?

@BE2001 2 жыл бұрын

Sorry if I missed this. Are there ETF conversions available at Vanguard for the target retirement accounts that don't trigger a taxable event?

@rob_berger 2 жыл бұрын

No. They don't have ETF target date funds.

@captainnitrousx1331 2 жыл бұрын

Rob your the best and I have learned a lot about investing but I do have one question! Rob is there maybe a chance someone added something more than just coffee in that cup for tonight's show?

@victorcardenas4 2 жыл бұрын

Love your videos, sir. Hopefully Vanguard don’t send you a “cease and desist” letter.

@thanhdang2546 2 жыл бұрын

What is the issue with Vanguard Target funds. Why did they distribute large long term capital gain tax last year? Thanks.

@jimgrant1776 6 ай бұрын

How can I watch when the video is live? I would I know when it would occur?

@joannfahey8423 2 жыл бұрын

I like your regular videos. These live streams are way too long. It seems to encourage rambling.

@Micahpickles 2 жыл бұрын

I have good insurance through my employer. Can I still open a HSA?

@pgbtomas 2 жыл бұрын

Which do you prefer SPY oldest among index trackers, expense ratio 0.09%, average spread 0.00% , SFY same 500+ holdings, expense ratio 0.00%, average spread 0.09%, VTI has 4,000+ holdings, expense ratio 0.03%, average spread 0.01%, VT has 8,000+ holdings, expense ratio 0.08%, average spread 0.01% ? (to be applied in the 3 fund portfolio if given a choice to replace VOO). Hope you can read this question. Thank you

@rob_berger 2 жыл бұрын

They are all great funds. For me, I would use VTI for my U.S. Stock allocation. I like to control the U.S. vs. Int'l allocation, which VT wouldn't allow me to do.

@pgbtomas 2 жыл бұрын

@@rob_berger thank you so much for answering.

@diggin420 2 жыл бұрын

TSP is easily managed online, but they restrict withdrawal and force difficult actions for retirement age. Always better to move to a public broker.

@hectorrubio1012 2 жыл бұрын

Hi Rob, what is the best time to rebalance a portfolio in a taxable account, when the market is down or up. I'm pretty new to investing.

@dandonofrio8701 2 жыл бұрын

I’m curious of the same

@rob_berger 2 жыл бұрын

I think there are two reasonable approaches. One would be to rebalance once a year at the same time, regardless of whether the market is up or down. The other is to rebalance when your actual allocation has moved away from your planned allocation be a pre-defined amount. I've covered this in a video on Opportunistic Rebalancing.

@hectorrubio1012 2 жыл бұрын

@@rob_berger I appreciate it.

@alrocky 2 жыл бұрын

@@hectorrubio1012 If in taxable account do not auto-reinvest dividends / capital gains - use that money to rebalance.

@paulacothren3591 2 жыл бұрын

@@alrocky yes!

@barnhillcreations 4 ай бұрын

What is your take on the income factory strategy? Is it the same as its to complicated? Div

@123jochi 2 жыл бұрын

Another 2 hours of no chess puzzles. At least you mentioned the word chess this time.

@chrisvild1263 8 ай бұрын

What about BRK ? Does that have zero income ?

@lw9936 2 жыл бұрын

@Rob Berger, Can we buy I bond from Retirement accounts or Roth IRA account? thanks

@rosemarybrandl7895 2 жыл бұрын

I have notice that for the most part, Vanguard does not have capital gains on their 500 Index and Total stock market funds. However, Fidelity does. Why this this?

@Asstronauts93 6 ай бұрын

I want my money before 59 1/2. Simple as. Taxable is right for me

@Valencia-27 2 жыл бұрын

👍

@wbcoll01 2 жыл бұрын

Pepsi for sure.

@nbatra 2 жыл бұрын

Would you convert VTSAX to VTI or VITSX to save on expenses.

@alrocky 2 жыл бұрын

0.04% ER VTSAX Vanguard Total US Stock Market Admiral Shares 0.03% ER VTI Vanguard Total US Stock Market ETF 0.03% ER VITSX Vanguard Total US Stock Market Institutional Shares $5 Million Initial Purchase The 0.01% ER is negligible so performance virtually indistinguishable. There are more important considerations that affect your portfolio. At Morningstar > Performance > Returns > 15 years returns