Money Matter

Financial reminders for the start of every year: Contributions to: Backdoor Roth. I-bonds? Property taxes (which I usually pay lump sum).

We are currently invested in Illinois 529’s Index Equity Portfolio. It’s expense ratio: 0.12% If we were to buy individual Admiral funds from Vanguard, the overall expense ratio would be: (57 * 0.04 + 36 * 0.11 + 7 * 0.12) / 100 = 0.07% This is surprising because I originally assumed the former to be cheaper.

Fund partners Recommendations from the web: Betterment. Schwab. Wealthfront. Bogleheads wiki. International total stock market: VTIAX/VXUS, VFWAX/VEU and IXUS. The former two are a perfect pair. Almost feels like they were made to be TLHed! US total stock market: VTSAX/VTI, SCHB and ITOT. Mutual fund vs ETFs Mutual funds: TLH only makes sense within Vanguard because other funds distribute capital gains, so not tax efficient. Only need one “exchange” transaction with Vanguard. Check if Schwab allows something similar with ETFs though. - Schwab doesn’t allow exchanges but does allow 1 trade with unsettled funds. ETFs: I can do everything in one place, i.e. my Schwab account. (Mutual funds, on the other hand, aren’t all available for free on one broker.) I can put limit sell orders. This alone might be the biggest reason to go this way because it won’t require me to track prices closely. Also, alerts. Resources https://www.bogleheads.org/forum/viewtopic.php?t=296553 - best clarification on strategy and how to handle the before part of wash sale rule.

Cost of Vanguard Target funds: 0.15% or $150 per $100k Cost of 4-fund approach through Vanguard Admiral funds: (53.8*0.04 + 36.1*0.11 + 7.1*0.05 + 3*0.11)*100000/(100*100) or $68 per $100k Total savings: $82 per $100k.