Hello wise mustachians!
I am 42 years old, no debt other than my mortgage and have been saving reasonably for the past 15ish years. I have have used functional, though not optimal savings strategies: max out (when able) my 401k through my work and give the rest of my savings to a investment manager to deal with. As a result, I am probably paying too much in fees and also don't really understand where my money is/what my investments are.
I am looking for advice for the best way to move my money from the investment manager into accounts that have lower management fees but still allow me to have a very simple system. (eg, Betterment is more my style than Vanguard. And while I am housecleaning, I would also like to set up something to better track my spending.
**Note: I'm sure that for many of you, investing seems so easy, so straightforward, that it seems foolish to do anything other than Vanguard/rebalance it periodically yourself. But if you are going to give me that advice, then please take a moment to give more details that you think is necessary about the process. For example, MMM talks alot about 'Vanguard VTI', but when I look for that on the Vanguard website, I don't see just one VTI option. There is 'EFT (VTI)' and 'admiral funds', etc. And if there is anyone out there who really *hears* me when I say that I want more hand-holding and less 'rebalance it yourself', I would love to hear from you!**
Here are the basics of my current investments:
-$215k in 'folio balanced growth' (70%stocks/30%bonds) (taxed)
-$150k in Roth IRA 'BSWM SRI balanced growth' (70%stocks/30%bonds)
-$35k Roth IRA 'Hines Global REIT'
-$245 in 401k at work
Specific questions:
-What do I need to do to move my money? Do I have to sell everything, get cash and then reinvest somewhere else? If I go to betterment, for example, will they walk me through it?
-Are there tax consequences? or fees? or market timing to think about?
-I really need my new set up to be *simple*--I would like some hand-holding (probably in the form of good software with the option to occasionally talk to a person)
-for monitoring my money: Mint vs Personal Capitol vs You Need A Budget?
I think this is the level of instruction you're looking for (apologies if not)
1. Leave 401K money alone. Later on, come back and discuss the specific funds where the $245K is parked and we'll give further advice. But forget about this for 3 months or so.
2. Call Vanguard, and tell them you'd like to open TWO accounts and transfer money from another company. They can walk you through everything and do most of the paperwork for you, but here's what you should expect:
3. New Vanguard account #1: Roth IRA . Transfer both of your Roth IRAs into Vanguard's Roth IRA. Place 70% of it into VTSAX. (Index vs. Admiral just means whether you have enough in the fund to qualify for lower fees. Vanguard will choose automatically for you whichever one you qualify for). The other 30% in VBILX. None in Reit because you have a mortgage, so you're already diversified in real estate.
4. New Vanguard Account #2: Taxable Brokerage Account. Transfer $215K from your 'folio balanced growth" into VTSAX. ALL OF IT INTO ONE FUND. Yes, really. There is enough diversification in this fund that as soon as you try to diversify in your other accounts, you start diluting the diversification strategy that experts are using.
5. That's it. You're done. Do this today by making the phone call. I hate not knowing what to expect and want all of my questions answered before I pick up the phone, but they really are the experts and will walk you through all of this so painlessly. So just stop making excuses and get it done today. (or get it started today...the paperwork does have to be signed, mailed, etc. so it takes a few weeks to finalize)
Your specific questions:
1. Just do the steps above and they'll walk you through it.
2. Maybe. so what. just do it. you'll save money in the long run.
3. Getting all of your accounts in one place and with minimal funds makes life so much easier. I did this myself a few years ago and am making so much more money because I understand it now. Don't worry about software yet. Just get started and start looking at Vanguard's website.
4. I have used quicken for decades and I love it, but for seeing high-level progress and goals, I now just use a spreadsheet that I created myself. Come back to this and ask a separate question AFTER you have completed steps 2-5 above.