How we are investing our money this year

financial planner. We have not finished the whole start-up planning phase, but we have decided what our asset allocation will be and what our accounts are. You’ll see how I invested my money last year here, but in summary:

  • 55% US stocks:
    • VIIIX: Vanguard Institutional Index Fund Institutional Plus Shares 0.02%
    • VIEIX: Vanguard Extended Market Index Fund Institutional Shares 0.12%
  • 20% International stocks:
    • VFWSX: Vanguard FTSE All-World ex-US Index Fund Institutional Shares 0.11%
  • 10% Small cap value:
    • VISVX: Vanguard Small-Cap Value Index Fund 0.2%
  • 8% REITs:
    • VGSIX: Vanguard REIT Index Fund Investor Shares 0.26%
  • 7% Bonds:
    • VBMPX:  Vanguard Total Bond Market Index Fund Institutional Plus Shares 0.05%
Now there is a “we”, and we have decided to follow our FP’s advice to go 100% equities to maximize growth. We moved all of M’s 4 accounts (mix of old work IRAs, 401(k)s into one solo-401(k) at TD Ameritrade. He had 1099 income in 2016 and the solo-K was opened in December 2016. TDA allows Roth 401(k) so we opted to make his 2016 contributions Roth (small amount though since his 1099 income wasn’t substantial). He had a small amount contributed to his W2 job’s 401(k) in 2016 but he became unemployed relatively early in the year. He also contributed to a Roth IRA for 2016 (his first time) as well this year, and he’ll do 2017 in short order. I’m still doing what I did last year – contributing the full $18,000 each to the 403(b) and 457(b) and $5,500 to a Roth IRA (already funded for 2017). I also have the option to do the “Mega Backdoor Roth IRA” (to be covered in a future post), but have not gone there yet. We don’t have a taxable account (yet). Our IPS with our FP has the following asset allocation:
  • 68% US stocks
    • 17% Large cap growth, 17% Large cap value
    • 17% Small cap growth, 17% Small cap value
  • 24% International stocks
    • 12% Large cap developed countries
    • 12% Diversified emerging markets
  • 8% US REITs
You’ll see that it’s not that different from my original, with the subtraction of bonds. There is no mid cap category since mid caps are a fuzzy category. In M’s solo-401(k), the details are:
iShare Core S&P Small-Cap 17% IJR
Vanguard Dividend Appreciation ETF 17% VIG
Vanguard FTSE Developed Markets ETF 12% VEA
Vanguard FTSE Emerging Markets ETF 12% VWO
Vanguard High Dividend Yield ETF 17% VYM
Vanguard REIT ETF 8% VNQ
Vanguard Small-Cap Growth ETF 17% VBK
  This account is managed by our FP. I still manage my work’s 403(b) and 457(b) and I’m still managing my Roth IRA at Vanguard, but I may let them manage the Roth IRA at some point. I also plan to open up my own solo-401(k) this year. My allocation is a little bit different than what our IPS states but not too far off:
Vanguard Institutional Index Fund (large caps) 40% VIIIX
Vanguard Extended Market Index Fund (small & mid caps) 20% VIEIX
Vanguard FTSE All-World ex-US Index Fund 12% VFWSX
Lazard Emerging Markets 12% LZEMX
Vanguard Small-Cap Value Index Fund 8% VSIAX
Vanguard REIT Index Fund 8% VGSIX
  The small cap and REIT funds are in my Roth IRA. The rest are in my 403(b) and 457(b). We will rebalance the accounts once a year. We have not fully decided how much we will put away for investments this year at this time. There are some moving parts right now making it challenging to project how much we will be able to put away outside of maxing out available tax-advantaged retirement pots. What is your asset allocation for 2017? Comment below.]]>


  1. Shillena on March 19, 2017 at 7:54 am

    Bonnie, how are you still able to contribute to your Roth IRA? Aren’t you phased out based on your income?

    • on March 19, 2017 at 11:40 am

      • Shillena on March 19, 2017 at 12:36 pm

        Ok makes sense now

  2. Mrs. Picky Pincher on March 19, 2017 at 11:22 am

    Looks like a nice investment plan to me! Unfortunately we’re still digging ourselves out of debt, so it doesn’t make much sense to invest heavily. We do, however, have a Roth IRA and a 401k with matching, so at least that’s something. Once we pay off debt we’ll overhaul our investment strategy.

    • on March 19, 2017 at 12:04 pm

      Not sure how much debt you have but so are we (well just me really).

  3. wallstreetphysicia on March 23, 2017 at 3:47 pm

    Solid asset allocation, Miss Bonnie. Sounds like you’ve found an asset allocation which works for you. I’m always a little leery about 100% stocks until you know you can handle it (i.e. lived through a major correction), but sounds like you’ve got a great financial advisor who can make sure you stay the course in tough market conditions.

    • on March 24, 2017 at 5:19 pm

      Leery due to behavior only or different investment philosophies? I have not been through a bear market, but not really worried either. And yes, I have someone to talk me off the ledge if need be :),

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