Author Topic: What to do with Charles Schwab money?  (Read 2695 times)

makstache

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What to do with Charles Schwab money?
« on: November 11, 2014, 01:50:20 PM »
So I recently received financial control of a currently 92k Schwab brokerage account from my father in law. It was money left over from my wife's college fund. It is now in a "World Stock" fund DGEIX with an expense ratio of .31%, and under a management company taking a bit less than 1% per year. Obviously I am going to break the relationship with the management company, but what should I do with the money? Keep it in DGEIX? Put it in SWTSX fund, SCHB ETF, or move it to Vanguard? Any other ideas?

In the past year, my wife and I are in good shape financially thanks to MMM. I am 31, she is 29. Including the Schwab account we have a bit over 200k invested towards FI. Mainly stock index funds in a 401k, 403b, and IRAs. We have no debt other than a 120k mortgage that we are aggressively paying off. By the end of this year, we will max out all our retirement plans.

Thanks for any advice.

DrF

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Re: What to do with Charles Schwab money?
« Reply #1 on: November 11, 2014, 02:22:14 PM »
From what I have seen, Schwab now has some of the lowest ETF/mutual fund fees in the business.

Buy some low cost index funds in agreement with your asset allocation (AA) and then just watch it grow.

superannuationfreak

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Re: What to do with Charles Schwab money?
« Reply #2 on: November 11, 2014, 06:51:29 PM »
How long has the fund been held?  It is possible there are large capital gains and so tax implications to watch out for if you sell.

In terms of the fund itself, it looks pretty good: http://us.dimensional.com/pdf/fact_sheets/global/global_equity_port_i.pdf
If you're happy to have that money in stocks it is a reasonably priced, globally diversified (~65% US, 35% rest-of-world) fund with a slight tilt towards small and value stocks. 

Particularly if there are any tax costs likely I would be more inclined to keep it (and adjust your retirement accounts if needed to meet your target asset allocation).  Being a DFA fund you will probably find you won't be able to add to it once the adviser relationship is terminated; you may still be able to reinvest distributions, or you could switch off reinvestment and invest the distributions in your other investments if you prefer them.

makstache

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Re: What to do with Charles Schwab money?
« Reply #3 on: November 12, 2014, 06:37:24 AM »
It has been held for quite some time. The Schwab website says there have been about $40k worth of gains. I didn't think about the capital gains possibility. I guess I'm still really new at investing. I'll probably just let it run and invest the dividends in a low cost index fund.