The Bond Experiment: Return to VBTLX

Scientist performing experiment

Update by JL’s Team

JL has been receiving a lot of questions about holding VBTLX vs. VMRXX (cash) in today’s era of rising interest rates. We included his comment at the end of this post in our most recent newsletter and figured it would be helpful for the community to resurface this post. If you haven’t signed up for the newsletter, drop your email address in the newsletter signup in the sidebar or at the end of this post to receive a weekly email with new posts, ideas, and resources to help you on your financial journey.


After a somewhat hidden ~7 year experiment with other bond funds, I returned our portfolio to VBTLX.


Those of you who have read The Stock Series here on the blog, or my book The Simple Path to Wealth, know that I recommend two core funds:

  • VTSAX — Total Stock Market Index Fund
  • VBTLX — Total Bond Market Index Fund

Both these are Vanguard funds, and Vanguard is the only investment company I recommend for reasons discussed here.

Since these two funds might not always be available in the various tax-advantaged accounts offered by employers, alternatives are discussed here.

Buried more deeply in posts like Part XII: Bonds, and their comment sections, I shared the fact that for the past several years my personal bond allocation was held in funds other than VBTLX.

This information was buried for several reasons:

  1. Investing in these was an experiment.
  2. As an experiment, this was not something I was prepared to (and still don’t) recommend.
  3. But I wanted the information on the blog in the interest of full disclosure.
  4. By burying it somewhat deeply, I figured only those readers who took the time to thoroughly read (including the comments) and understand the principles here would find it.
  5. Those readers would be best able to decide for themselves whether following me down this particular rabbit hole made sense for them.
  6. Who knows what other sneaky stuff I’ve buried around here…


The Experiment

Specifically those other funds were:


Both are intermediate term corporate bond index funds.

At first glance, intermediate-term funds like these would seem an odd replacement for a total (short, intermediate and long term) fund like VBTLX. But with a total bond fund the short and long term bonds balance each other out and what you have is in fact an intermediate bond fund.

This experiment has been going on for about the past seven years, first with VFIDX and more recently with VICSX. The idea was to seek better yields with a little additional risk.

In this, it has been a splendid success. VFIDX has provided better returns and yields than VBTLX and VICSX in turn has done better than VFIDX.

To understand why I am now walking aways from them and returning to VBTLX, let’s first look at the underlining reasons as to why VFIDX and VICSX have outperformed and then let’s explore why we hold bonds in the first place.

The biggest difference in these funds is that VBTLX holds 64% of its portfolio in bonds from the US Government. VFIDX has less than 7% and VICSX virtually none.

In addition, for its corporate bonds, VFIDX reaches further down the quality ladder and VICSX further still. To be clear, these are not junk bond funds but their holdings are a bit less high quality than those of VBTLX. As we know from our bond post, in exchange for accepting more risk, lower quality bonds pay higher interest rates in order to attract investors.

Now because we always care about costs around here, let’s look at the Expense Ratios:

  • VBTLX — .05 ER
  • VFIDX — .10 ER
  • VICSX — .07 ER, plus a .25% purchase fee (Eek!)

While both VFIDX and VICSX carry higher costs, in both cases their increased yields covered these and then some.

This being the case, why would I turn my back on them now?


Why return to VBTLX?

It is important to realize that this outperformance has occurred during a period of time when falling interest rates and a stable economy has made for smooth sailing for bonds. Since defaults have been few, the risk/return balance has favored the lower quality, higher yielding choices. Indeed, a junk bond fund would have done even better.

Of course, we know some day the road will get rougher and that balance will shift. A price may well have to be paid for taking on that extra risk.

But the more important question is, Why do we hold bonds in the first place?

For those on The Simple Path described on this blog and in my book, it is to smooth the wild and volatile ride of stocks. We are not seeking performance from our bonds, we are seeking a counter-weight to our stocks.

From this perspective, VBTLX is the far better choice. The bond quality is higher and it holds government bonds. Both VFIDX and VICSX tie us to corporate bonds. That is, bonds issued by the same companies we own with our total stock market fund, VTSAX. In a major downturn some of those companies will be pushed to the wall. Some might even default on the bonds we hold from them at the same time their share prices a plummeting. Not a great counter-weight.

question mark

But what if…

But what if I don’t want to hold corporate bonds at all? Why not have a fund with only government bonds? Why not go that route?

You could, but for me VBTLX is in the sweet spot. For some, I will always be Too Hot, Too Cold, Not Pure Enough.

But what if the extra potential reward is worth the risk to you? Does staying in VFIDX and/or VICSX make sense then?

Perhaps, but there are better ways to improve performance. The easiest is to simply shift a greater percentage of your asset allocation to stocks. In a bull market VTSAX will soundly trounce both VFIDX and VICSX. Bonds are simply not a great asset choice for maximum performance.

If you want to dial up your performance/volatility, increase your stock allocation. Bonds are for ballast.

So while this experiment has been fun and has worked out nicely for me, the time has come to fold it up and return to VBTLX. Time to let my bonds perform the role I own them for: Smoothing the ride.


Crash coming?

So. Wait. 

JL is getting more conservative with his bond allocation. Is this his veiled warning to us the long-awaited crash is coming?


As I have said repeatedly on this blog, no one can predict the market.

Over the weekend one of the news programs I watched featured two highly credentialed stock market experts. Both hold high-level positions in top name Wall Street firms. One made the case the market is far over extended and on the verge of collapse. The other, that the market is in the very early stages of a continuing historic rise. Both were articulate and made compelling arguments. One might even be right. Or the host could have found a third to predict, with equally confident reasoning, that the market will go sideways for the foreseeable future.

Easy for you to say, JL. But I’m sitting on a lump sum in cash and this market is at historic highs…

As it happens, I too recently found myself with a substantial lump sum to invest. The lump sum went directly into VTSAX. I don’t like dollar cost averaging and this is how to invest in a raging bull. Although I do confess I half expected the market to collapse the next day just to spite me.

In fact, it was this lump sum investing chore that finally got me motivated also to move our bonds back to VBTLX, which I had been meaning to do for a while now. As long as I hold bonds going forward, this is where they will remain.


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    This is a perfectly timed article. My FIL just hit 60 and I am trying to convince him to pare back some of his risk and dip his toes into the water. I will definitely be showing him this article this weekend 🙂

  2. wendy says

    Thanks for the good explanation of the different bond buckets and bringing back to the reason to use bonds…

    After receiving your Chautauqua advice, I rolled two 401k’s and tiny pension from previous employers into my Vanguard rollover account…the second tiny pension is taking forever (sigh) to move but will hit in January. A modest percent of the money went into VBTLX and rest joined the bulk of my money in VTSAX. Even though I’m still in wealth acquisition phase, my personal risk allowance at my age says hedge a wee bit so there’s some nice boring bonds in there. It’s all simplified my book keeping as well!

    Merry Merry Happy Everything Jim!
    Best wishes to you and yours!

    • jlcollinsnh says

      Merry, Merry, Happy, Happy Everything to you and yours as well, Wendy!

      Great to here you came home from Chautauqua with info you could use 🙂

  3. Kane says

    thank you, Jim. You’ve reminded me why I own bonds. I’m going to follow your lead and move all into VBTLX. Thanks for all the guidance over the years. Changed my family’s future for the better. We’re on pace to be FI in two years.

  4. Dwayne says

    May I be the first one to…ahem…beg for a code to get Darrow’s Pro version.

    And with no intent of influencing, I’d like to wish you a Merry Christmas and Happy New Year as well

    • jlcollinsnh says


      As I am sure you can appreciate, I simply can not allow…

      –being first
      –influence peddling
      –holiday greetings

      …to influence my decision is such weighty matters.

      Still, I’m not about to punish you for them either. 😉

      First Code is yours, provided you respond to this email so I know you are still paying attention. 🙂

      • Dwayne says

        When it comes to you Jim…I’m always paying attention!

        As are my kids and anyone else I can convince to read your wonderful book.

        • jlcollinsnh says


          …you added flattery to the list. You are definitely getting a code!

          Email is on the way.

          Please report back to us on it if you are so inclined.


  5. Fritz @ TheRetirementManifesto says

    Ah, being sneaky binding those bond holding details in the fine print!!

    I’m considering a shift in my bond holdings from VWITX (~yr 6 maturity munis) to VFSTX (short term investment grade). Income drops next summer when I retire, combined with new tax code means Muni’s of less value to me after-tax. Getting nervous about 6 yr maturity w interest rate hikes.

    More ballast with short- or mid- maturities?

    • jlcollinsnh says

      More ballast with short, and less potential returns.

      I like to reward those who read deeply and carefully. 😉

  6. Matt says

    Jim, thanks as alway s for sharing your experience with us! Your insight is always very helpful to me. I have a few questions if you don’t mind.

    1. What was your stock/bond allocation before and after all the transactions you reference in this post?

    2. This market is at historic highs based on Shiller’s CAPE (it’s second highest in history at 32), all time high for the market cap to GDP ratio (“the Buffett Yardstick”), and Bogle’s adjusted Expected Returns Formula for the next 10-years is currently calling for less than 4% gross returns for equities (Note: the worst average annual returns in history over any 10-year period were 2.5%). I’m curious what you might change your stock/bond allocation to A. if the Shiller PE hit 45 as it almost did in 2000 and B. If Shiller’s PE dropped below 10 as it occasionally does. C. Do you think it’s wise to consider making weighting changes at times like these (PE of 45 or 10) or do you still see it as a fool’s errand to do so? Thanks again!

    • jlcollinsnh says

      Hi Matt…

      1. ~75/25 before and ~70/25/5 now with the 5% being some cash that has flowed in of late. I have some pending expenses that will use some of that and once I have a firm handle on those the balance, if any, will go into VTSAX.

      2. Under 10 and over 45 would be very extreme levels and would certainly prompt me to take a look. But I would be very slow to act on it, if at all, and very keen to understand what was behind it. But even then, just when you think you know what’s going on, Mr. Market makes you the fool.

  7. Josh Cook says

    Mr. Collins. I would love to try the paid version of Can I Retire Yet’s retirement calculate. I have tried the free version and am looking for a little more detail. BTW, I was able to convince both my daughters (11 and 13) to read your book. I enjoyed it and I think I was a great exposure for them. Thanks. Josh

    • jlcollinsnh says

      Prior experience with the basic version and indoctrinating your kids for the win! “Mr. Collins” didn’t hurt either. 🙂

      The third and final free Pro Code goes to Mr. Cook.

      Provided, of course, you respond to this comment and prove you are still paying attention.

  8. Jone says

    Hi Jim, I’m wondering if you have access to a Vanguard Municipal bond fund in your state? I live in PA and hold VPAIX in my taxable account. It serves a couple of purposes for me. Works as a portion of my bond ballast as well as a deeper “layer” of FU money.
    Other thoughts on munis
    Happy holidays to you and yours!

    • jlcollinsnh says

      Munis are for people who hold bonds in their taxable accounts and who are in high tax brackets. Only then does the lower interest rate they pay make sense.

      I hold ours in our IRAs and, where possible, that is my recommendation.

      But, sure, they work fine as ballast if they are otherwise the best choice for you.

      Enjoy the holiday!

      • Jone says


        Thank you for your thoughts!

        Munis offer a wide range of benefits, including attractive current income free from federal and, in most cases, state and local taxes; a high degree of safety with regard to payment of interest and repayment of principal; and a predictable stream of dividend income. In these ways they are similar to holding VBTLX in an IRA account.

        However, for very little additional risk you can increase your yield slightly and place munis in a taxable account where a “young” guy like me can actually use the funds if needed. By placing the munis in my taxable account, I not only enjoy the ballast effect of bonds with regards to equities, I can also enjoy fairly predictable current income, stable(-ish) principle, tax avoidance, and funds accessibility.

        Using Vanguard’s fund comparison tool for VBTLX and VPAIX there are some other interesting points to ponder:

        Overview VBTLX VPAIX
        Risk Potential 2 3
        Expense ratio .05 .19

        Average Annual Performance

        YTD 3.14% 5.14%
        1 Yr -0.13% 1.32%
        3 yr 2.62% 3.84%
        5 yr 1.97% 3.64%
        10 yr 4.22% 5.94%
        Since inception 4.24% 4.47%

        In each of the above comparative periods munis win. Scroll further down Vanguard’s fund comparison tool will show the after tax total return results. Again, munis come out ahead in each of the comparative periods.

        Notable differences in favor of VBTLX are three:

        Expenses: The muni fund is significantly more expensive than VBTLX. However, this is Vanguard so the cost is still quite reasonable.

        Average maturity: the average maturity of VBTLX is 8.4 years compared to 16.2 years for the PA bond fund. This is a pretty minor difference as we are talking about bond funds vice individual bonds.

        Size: VBTLX includes a significant chunk of national level US Treasuries. These are invested in by people and corporations all over the world. PA municipal bonds are issued by the governments and other authorized entities of the state of Pennsylvania. Thus, the tax base of munis is far smaller.

        Notable differences in favor of VPAIX:

        Accessibility: Munis are typically held in a taxable account thus they can be tapped for whatever “emergency” happens to arise with little fuss and no (or very few) tax considerations.

        Performance: For very little additional risk or cost VPAIX yields an additional ~1.5% (+/-) year over year for the past many years.

        Source of income: While US treasuries are backed by the “full faith and credit of the United States,” municipal bonds are funded in similar manner. In both cases the issuing governments have the power to tax (or levy fees) on their constituents to ensure bond payments are made. Corporate bonds (the other significant chunk of VBTLX) do not have this power.

        So tax bracket considerations aside, I invest about 20% of my bond holdings in VPAIX in my taxable account. This slice serves primarily as typical ballast to stock gyrations; similar to any bond holding. However, given the location of the funds, I can tap into munis on that nasty day when the market crashes and I need a new motorcycle from the local dealership’s going out of business sale (or other emergency).

        While the money is in the muni bond fund the principle is relatively stable and the yield is better than most CDs and other bond funds (especially on an after tax basis). I can withdraw some or all of the funds without any penalties or tax considerations with the possible exception of some small capital gains. I also have the knowledge that I’m investing in projects that help my local infrastructure. I love you guys in the other 49 states, but I primarily drive on PA roads and my kids attend PA schools.

        • David says

          Jone, great points and I do the same as you except I’m in California so I hold VCAIX in my taxable account. I want to have a good chuck of money in my taxable account that I can take out at any time for larger purchases or emergencies but don’t want the volatility of only stocks. Thus, I keep VCAIX & VTSAX in my taxable account to get the benefits of both without the tax inefficiencies of keeping VBTLX in my taxable account.

          • Adam says

            In a taxable account, how are the dividends from VBTLX handled. Are they qualified or not, or partially qualified? I can seem to find this info anywhere on the Vanguard site.
            Thanks for any help!

          • jlcollinsnh says

            Hi Adam…

            Bonds and bond funds like VBTLX pay interest, not dividends. Typically interest is taxed as ordinary income.

        • DH says

          I think the performance numbers listed here are asset value, so those gains would be capital gains, and you’d pay normal taxes on them. The Yield value would be the important one for a tax-exempt bond fund.

          Looking at VBTLX and VCAIX today, I see SEC yields of 3.17% and 2.15% (respectively). So if you’re in California and your combined Federal + State marginal tax rate is higher than 32% (1 – (2.15%/3.17%)) then you should consider VCAIX instead of VBTLX if you want to hold bonds in a taxable account.

          (You could re-do the above analysis to include asset value appreciation. My non-experienced guess is that doesn’t make sense because the relative yields are probably more consistent (and predictive of the future) than asset value appreciation).

  9. Financially Free, Pharm.D. says

    Ha I was happy you addressed the question of a potential crash around the corner… My heart stopped for a sec and I almost thought everything I learned from you was a lie if all of a sudden you were predicting the market.

    That and the bitcoin article fakeout ????

  10. Jason@WinningPersonalFinance says

    Thanks for the update Jim. I appreciate you sharing the update of your experiment. As I’m still in the accumulation phase I’m mostly in equities. I’ll be sure to come back to this post when it’s time to reallocate more towards bonds.

    Good luck with the sales of the audio book.

  11. jean-marc lenoir says

    Love the audio book, and especially the readers voice. :). . also have a lump of cash and can’t see myself putting it in vtsax with a market so high. Maybe should go to vbtlx until it calms down.
    Also recommending everyone who has any interest in controlling their finance to your blog and book. Thank again for you great insight.

  12. Adam says

    I’ve been reading your blog for a few years now and am fully on board with the VTSAX strategy. If anyone asks me for investment advice I tell them “Vanguard’s VTSAX” and refer them to “The Stock Series” and “The Simple Path To Wealth”.

    Someone asked me a question that I haven’t been able to answer: If the market is expected to increase in the long run, why not invest in a leveraged bull ETF (such as TQQQ or UPRO)? The expense ratio is higher at around 1%, but the leveraged gains in the long run should more than offset this.

  13. Paul says

    Thanks for this Jim!
    Quick (unrelated) ebook-question: would you ever consider putting your ebook (as an epub file) in Apple’s iBooks store?

    I’ve bought the Kindle version, but epub’s are far superior in my eyes and converting the kindle version to an epub doesn’t work for me… (I can’t underline sentences in a converted version which is essential).
    I’d personally happily pay you $20,- for a perfect-working .epub version of the book and I have to think that goes for more people…

    Kind regards from the Netherlands

    • jlcollinsnh says

      Yours is a voice of wisdom and good sense.

      The higher returns only worked because the wind stayed at my back, and that was pure luck.

  14. WealthyDoc says

    Most of my assets are outside of retirement funds. Does anyone here remember what Jim recommends in that situation? Keep all bonds in retirement funds and stocks outside? I ended up with municipal bonds since I’m in the highest tax bracket.

    • jlcollinsnh says

      My suggestion is to keep bonds in tax-advantaged accounts where possible.

      Otherwise Munis are worth looking at, especially in the higher tax brackets. You should be fine.

  15. Tunisha Stewart says

    Thank you Jim for all of your wisdom and another great post! I have personally enjoyed your book and have shared it with my family. May I also have access to Darrow’s Pro version retirement calculator. Thanks a bunch!

  16. Stan says

    Good article. I am going to do some rebalancing myself.

    Pro code please. I cannot find a good retirement calculator that works for me so. . . Pro code pleeeaasssee. Thanks!

    • jlcollinsnh says

      Complimenting the article, plus taking action and already in the hunt for a retirement calculator for the win! Stretching out the word “pleeeaassee” didn’t hurt either. ????

      The third and final free Pro Code goes to Stan.

      Provided, of course, you respond to this comment and prove you are still paying attention.????

      • Financially Free, Pharm.D. says

        Mr. Collins! I see that this is the second time you’ve given out the 3rd pro code due to readers not responding. In the event Stan doesn’t respond, I’d like to throw my hat in the final drawing also.

        Happy New Year to you and your family!

        • jlcollinsnh says

          Looks like Stan is not paying attention and, since you are FF,PD…

          …the win passes on to you!

          Provided, of course, you are still paying attention and respond to this comment.

          Happy New Year!

  17. Roberto says

    Forgive my ignorance if I am asking a stupid question but is this
    related to what we are discussing here? And if yes how? Let me be clear, I’ll chose good old Jl advice over Greenspan’s any day (no I am not looking to hit you with favors or loan requests, don’t worry) and the reason is because it makes 100% sense to me and I understand it. So this is what I am looking for, to understand better. I thought bonds were for oldish, totally averse to risk, kind of folks, what is this crash talk now?

    • jlcollinsnh says

      Hi Roberto…

      The idea is that interest rates are so low they can only rise from here and rising rates mean lower bond prices. The longer the term, the greater the risk. So if this is a big concern for you, short-term treasuries are your best bet.

      But as always, just because someone is predicting a crash doesn’t mean it will happen or what it will actually look like if it does.

      For more, read:
      and the link in Addendum #1

      • Roberto says

        Thanks, I have a to do list item that says “read jlcollinsnh entire website”, had I checked that out, I wouldn’t have embarrassed myself with this question 🙂

  18. Adam says

    Timely! I just rebalanced into VBTLX earlier this week — now at 25% VBTLX, 10% VTIAX, 7.5% VGSLX, 57.5% VTSAX. A little more complicated… but international equities have been treating me well for the last couple of years and I like a bit of exposure there.

    Planning for FIRE effective 2030, I projected our retirement accounts would be up 25% from 1/1/17 to 1/1/18. We’re wildly beyond that at 37%, so I figured I could comfortably shift a bit more into bonds just in case there’s a fire sale on stocks coming up. It’s a nice feeling.

    So many numbers. At her desk my wife is probably rolling her eyes at me so hard right now and wondering why.

    Season’s greetings to you and yours. Thank you for all you’ve done over the last year, for me and countless others!

    • jlcollinsnh says

      Hi Adam…

      Sounds like you are well on your way. Nicely done.

      Here’s to a healthy, happy and prosperous 2018!

  19. MrWow says

    Thanks for the sage advice. Interesting take. And it all goes back to understanding why you own certain things and staying true to that.

    I especially love your posts simply because I can hear you reading them to me in my head. Can you make a Siri voice over thing? So I can just have you read me everything?

    Most importantly, Happy Holidays to you and yours!!

    • jlcollinsnh says

      Hey Mr. Wow…

      I’d’ve thought you’d have enough of my voice in your head from Ecuador!

      Can’t read you everything (unless you can ink a deal for me with Amazon) but my book has an audio version now.

      Just the thing to lull you and Mrs. Wow to sleep. 😉

  20. Darrow Kirkpatrick says

    Agreed on the approach to bond allocation. I was about 50/50 stocks/bonds during the runup to my retirement in the early 2000’s. And the performance of bonds then was a nice tailwind, probably not to be repeated anytime soon. Now, I’m happy with that same allocation with an eye not on the performance of our bonds, but as a stable counter-weight to stocks for producing retirement income, as needed.

    And thanks Jim for mentioning my new retirement calculators!

  21. FIRECracker says

    “JL is getting more conservative with his bond allocation. Is this his veiled warning to us the long-awaited crash is coming?”

    You know your audience too well 🙂

    Agree that lower quality bonds with higher yields are tempting but not a good counter-weight, so thanks for letting us peek behind the curtain to see your bond allocation.

    Happy Holidays and chat soon!

  22. nadir says

    Great advice as always. Personally I’m 100% VTSAX as I’m still in the wealth accumulation phase and see no reason to “play it safe” by adding bonds.

    My question: Somewhere on this blog (maybe an article, maybe a comment) you toyed with the idea of going 100% VTSAX and accepting the “wild ride.” Is that still a possibility for you, or have you ruled it out? I’m just curious on your thoughts either way.
    Thanks and happy holidays!

    • jlcollinsnh says

      Hi Nadir…

      Still thinking about it. If I do, it will be for one of these reasons, or a combination of the two:

      1. The common wisdom is that once you reach a certain level of wealth you no longer have to “play the game” and you can step away from stocks and their volatility. This is somewhat the idea behind WARM:

      True enough but, as always, I look at it a bit differently. The greater your level of wealth the better you can withstand the volatility of stocks. This puts you in a strong position to go for performance. Plus, even at my advanced age, I am investing for the long-term. My wife will very likely survive me by a couple a decades and beyond that I am investing for future generations.

      2. In the last couple of years some of my business interests have begun throwing off cash such that we are no longer drawing on the portfolio. For now I am uncertain if or how long this might last. But if it starts to look sustainable, that would push me towards 100% stocks.

      • nadir says

        Thank you as always for the reply. Hopefully we will see a blog post on this topic if you decide to go all in at some point. Either way, thanks for explaining and happy Friday.

  23. Robert Finch says

    When the US gov’t defaults and it will your bonds will be worth (0). At the same time the Market will likely crash if not before.

    • jlcollinsnh says

      True enough on both counts, and on a worldwide basis.

      But if that is your expectation, Bob, the important question is where are you investing?

  24. Bill Muffi says

    We moved to 50% Bonds, 50% Stocks index funds several months ago.
    New money 50 % Treasury bond index fund.
    We have bought several copies of you book for gifts.
    Merry Christmas!

    • jlcollinsnh says

      Thanks Bill…

      …hope those who receive the books enjoy and benefit from them.

      Merry Christmas to you and yours and have a healthy, happy and prosperous New Year!

  25. JimH says

    I retired a couple of years at the ripe age of 57 because of accelerated savings, sticking to consistent investing through the global financial crisis of 2008-2009 and being cheap. Actually, my daughter says I’m not cheap, I’m economical. I shudder to think how much better off I’d be if I knew of the advice of Jim, MMM, Darrow Kirkpatrick and all the others 40 years ago.

    Jim’s book is awesome and if you haven’t read it yet, get it now. I’ve simplified my traditional and Roth IRA’s with the two primary funds of VTSAX and VBTLX. But, recently I chickened out and sold a little of the stock in the traditional IRA and have it in money market and CD’s. Why did I do this? Jim’s guest post by A. Noonan Moose got me to thinking of sleeping soundly through a market crash.

    And Jim you do NOT need to send me the code as I, after reading Darrow’s most recent post, purchased PRC Gold to help determine cash flow, Roth conversions, etc. Sorry Darrow but I wanted a desktop version.

    • jlcollinsnh says

      Hi Jim…

      Sounds like you’ve done just fine without us 😉

      Thanks for the very kind words on the book.

      Have a healthy, happy and prosperous 2018 and beyond!

  26. Pierre says

    Hi, I’m 51 and try to figure out if I have enough money to retire soon, this tool seem to be well done to run simulations and it could probably help me, if you still have code I’ll appreciate.
    Thanks for work, I’m a big fan

    Happy holidays

  27. soundnlight says

    Hi Jim,
    I very much enjoy reading your blog, and it’s one of the few I really look forward too. Now, sparked by the last photograph of your column, I’m wondering whether you plan to remain at your beach house through the Wisconsin winter?! I grew up in Michigan myself, near Detroit, but away from the massive snow drifts along the water. I now live in Baltimore, where it’s comparatively warmer and sunnier. I remember those drifts can get high and windy! FWIW I’m on a slower track to FI. I could probably claim FI now if I moved to a cheaper locale and got rid of one of our cars…

    • jlcollinsnh says

      Hi SNL…

      This winter we are as the work on the place continues and our daughter is visiting. Longer-term, we’ll go back to the full time travel and spend a month or two here each year spring & fall. That will open it up for the lucrative summer rental season and allow us to flee each winter to someplace warm. Or at least not as cold. 🙂

  28. Teri says

    Thank you JL. I had been in VBLTX and have since changed to VBTLX after this article and checking the long term graphs on both of these. VTLTX has a higher return currently (along with higher costs) and has been worse. Like you said, bonds are for stability and VBLTX is not as stable as VBTLX.

    Merry Christmas & Happy New Year to your and yours.

  29. William says

    Hi there Mr. Collins – a big, great thanks to you and your willingness to share with and support the FI community. I’m a whippersnapping 26 years, and excited for how much my future has opened up as I improve my practices with money – currently at a 75% savings rate. I hand-wrote you a letter expressing my concerns about a soon-coming inheritance. Could I email you images of the letter? I want to ensure I am responsible with such a great gift, as responsible action provides me greater opportunity to improve others lives in the future.
    Cheers, William

    • jlcollinsnh says

      Hi William…

      Congratulations on your 75% savings rate. That bodes well for your handling of the coming inheritance.

      Unfortunately, I don’t provide personal consultations. However, if you read thru this blog and/or my book you’ll have an excellent idea of the advice I’d give. More importantly, the reasons behind that advice as well.

      Good luck!

  30. Matt says

    Hi Mr Collins–

    Appreciate you coming out with a full post here. I was the one who asked a question you answered on the ChooseFI podcast about this very issue.

    I have about $20,000 in a Coverdale account for each of my children, now age 15 and 17, for college. I had it all in the market (VTSAX of course) and then moved to a bond fund (VICSX) in August. I’m in the wealth preservation stage at this point. Would VBTLX be the best place to protect this principle or would cash be a better spot. Obviously the super low interest rates are a concern to me as it seems the only place they will go is up.

    Thanks for this series. I’ve read it all and all the comments at least twice. Grateful for all you do! Matt

    • jlcollinsnh says

      Hi Matt…

      Thanks for the Choose FI question and nice to see you over here.

      You are right to be concerned about interest rates. When they rise again it will be tough for bonds, especially if the rise is rapid. So cash is a bit safer, at least in the short term. Longer term, the value of cash is eroded by inflation.

      In short, there is no perfect solution but for the reasons I explain in the post for me VBTLX is the best choice.

  31. Crew Dog says


    Thanks for the PC Guide links, they look to be interesting reading.

    Wanted to add a military wrinkle to the discussion: We (Spousal Unit & I) followed rules-of-thumb about asset allocation (% stocks/bonds) UNTIL we reached military retirement. Once that guaranteed pension was locked in, we became much more aggressive with our allocation. In fact, after reading an article Doug Nordman wrote over at that referenced the book “Are You a Stock or a Bond?,” we decided that a military pension easily met all the same parameters as investing in bonds, so we transitioned to a nearly 100% equity position. [Your writings helped influence this decision too, of course! ;-)] Admittedly, this was an easier decision since we live well below our means and the pension itself covers all of our living expenses.

    I know not many folks have pensions these days, but I throw this out there as food for thought. Whatever path you take to get to FI, as you say, “The greater your level of wealth the better you can withstand the volatility of stocks.” In our case, the guaranteed income each month and our low overhead allows us to invest our other assets for growth, rather than income or preservation.

    • jlcollinsnh says

      Good point, CD…

      …pensions, military and otherwise, can serve the same role as bonds in a portfolio. Same goes for Social Security.

  32. Meg says

    Hi Jim,
    I want to open vanguard accounts (VTSAX) for my 2 teenagers (16 and 12) but I want to make sure that when they are on their own they can just take them over. These would be regular taxable accounts that will be started with saved gift money ($5k each) and I will add $200 per month to each and they will (ideally) just let them grow for 40+ years. When they are each on their own and take over each of their accounts, they will continue the $200/month deposit. So in other words, i want to make sure that they can just assume ownership of the accounts when they are adults and avoid having to sell the shares to open new accounts under their own names. Do you know if that’s possible? (A “seamless” transfer of ownership at the age of 22 or whenever they finish school). I’m guessing it would have to be a UTMA account to start because they are minors but can they must take them over when they are adults? BTW, i don’t care if it interferes with their financial aid eligibility when it comes time for college. We plan on funding their college out of pocket without any loans.

    • jlcollinsnh says

      Hi Meg…

      Great idea and definitely doable. We did exactly this for our daughter.

      Unfortunately, it has been awhile and I don’t remember the exact mechanics. As I recall, we used a UGTM account.

      I’d suggest you call Vanguard, explain what you want to set up and let them guide you.

      Of course, as I am sure you know, once they come of age it is their money and their call on whether it is left alone to grow or spent. 😉

      • Meg says

        I showed them a savings calculator and explained how money begets money and they are super STOKED about getting started. You’re right once they are of age they’ll be able to do what they wish with the money but my plan is by then they will be so conditioned to letting it grow and adding to it on a regular basis.

  33. Rica says


    My father-in-law wants to sell my husband and me his Florida condo for $1. He is worried about losing the condo to medical fees in the event of needing Medicaid to cover potential long-term care. He has made a good middle-to upper-middle class living, but is a big spender and has never saved any money for retirement.

    The idea is that we would take ownership but he and his wife (my husband’s stepmother) could still use it a few times a year throughout their lives. They are about 70 and perfectly healthy. But now we would pay the taxes and condo fees and also do the work of renting it out for 6 months a year (the maximum allowed) which currently more than covers the annual costs.

    On one hand, this is a roughly $125,000 value being given to us, which is nice. And the motivation is pure–protecting this asset from being eaten up by health care costs. On the other hand, this puts us on the hook for ongoing condo fees, taxes, and costs and/or the hassles of covering those expenses by renting the place out.

    If indeed my father-in-law does end up in asset shredding long-term care, this will turn out to have been a good way to save the condo. But if my father-in-law doesn’t end up in long-term care, we will have taken on a big burden many years earlier than necessary just to get something my husband would have ultimately inherited anyway. Or worse, if my father-in-law needs the money for something not covered by Medicaid, like in-home care or just other old age expenses, we could end up taking on 10 years of condo expenses/hassles only to feel obligated to sell the condo and give him all proceeds. Or maybe he’ll need to live there full-time instead of just vacationing there, rendering our “ownership” an expense without any benefits in terms of our own potential use of the condo.

    Do you have any thoughts on how to handle a situation like this? A) Should we do it? B) How should we talk to my in-laws about it?

    Thank you,


    • jlcollinsnh says

      Hi Rica…

      First, I have to start by saying I am ethically uncomfortable with strategies like this that seek to shift the burden of care and its cost from those who have resources to the rest of us taxpayers.

      That said, if you and your in-laws go this route be very careful that you understand the limitations of this approach. The government has guidelines designed to block such approaches. So do your research.

      It sounds like this is a vacation condo? If so, your in-laws are pushing you into being Airbnb-type landlords which is a part time job. You seem to have a pretty good handle on what this will entail. Run the numbers. With effort it could be profitable.

      Further, it sounds like they aren’t giving you the condo but only putting it in your name until/unless they need it or don’t.

      Again, it sounds like you have a good read on the deal. It would not be for me, but only you can decide if it is for you.

      As for how to talk to them about it…

      …decide first what you want to do and then say…

      …thanks, let’s do it or…

      …no thanks, it is not right for us.

      Good luck!

  34. snowcanyon says

    Random question for the crowd: I currently have all my bond funds in taxable due to poor choices in my 401k. My company just added VBTLX to my 401k options, so I’m going to add that. I have VBTLX and VWITX in my taxable account. I’d like to nix VBTLX in my taxable and switch to a different bond fund so that I can engage in tax-loss harvesting without running afoul of the wash-sale rule after adding VBTLX in my 401k.

    Any suggestions for a good alternative bond fund to replace my VBTLX and pair with VWITX in my taxable account? Thank you!

  35. Sonny Ruckstuhl says


    Just wanted to say thanks and happy new year!

    Look forward to meeting you one day.

    -Day before kindergarten

  36. Christopher Cerny says

    So, if bonds are to smooth the ride out, why not use short term treasuries rather than VBTLX and just less of them?

    • jlcollinsnh says

      That would work, but with interest rates so low it would be “dead” money.

      For me, VBTLX stokes the right balance of ballast and bit of interest while I wait.

      • Christopher Cerny says

        Would intermediate and long term bonds suffer greatly if we entered a long period of strong inflation?

        • jlcollinsnh says

          Interest rates tend to rise in response to increasing inflation and rising rates drive down bond prices.

          So yes, strong inflation = higher interest rates = lower bond prices.

          That said, the advantage of VTBLX is that it has bonds of all maturities and bonds acquired at many different times. So there is a steady flow of bonds reaching maturity creating new money to buy the new, higher interest rate bonds.

          But still, it too can be expected to take a hit with rising rates, especially if that rise is fast.

          • Mr Wheat says

            The risk to benefit ratio of VTBLX concerned me in early 2017 due to low interest rates, so after reading great articles on CDs from Harry Sit and Allan Roth I moved 2/3 of my VTBLX into 3% CDs with a low early withdrawal penalty and the other 1/3 into shorter duration VBIRX (kept for rebalancing). Time will tell if it was a good move, but after a year no regrets. If anything I keep wondering why I don’t move my VBIRX into a money market fund.

          • jlcollinsnh says

            Sounds like a good approach, if a bit more complicated; especially if you have laddered your CDs.

          • Hope says

            What is the term of your 3% CDs -where are you purchasing? Is 3% the max you have found? I wonder the same about cds versus the vanguard total bond fund. I believe the bond fund lost money last year if I’m not mistaken?

  37. Richard says

    I read your “if you can’t buy vanguard” article but I didn’t what I was looking for.
    My brokerage only allows me to buy Ishares commission free and they seem to have similar or better ERs than VG.
    Would you be ok with someone using :
    -ITOT instead of VTSAX (VTI)
    -IUSB instead of VBTLX (BND)
    Thank you JLC. Big fan

    • jlcollinsnh says

      Thanks Richard…

      …much appreciated!

      Both ITOT and IUSB closely replicate the same portfolios in VTSAX and VBTLX, so you should be fine with them. Just keep a close eye on the ERs. These can be changed at anytime and, unlike VG which is always seeking to lower costs, other investment firms have a strong financial motivation to raise them.

      Also, you can buy VG funds directly thru VG at no charge, so there is no reason to go thru a brokerage.

  38. TGM says

    What are your thoughts on using VBILX as a replacement for VBTLX? When comparing the two I see that VBILX seems to be VBTLX minus the MBS. VBILX has better 5 and 10 year returns, still retains good credit quality, has similar duration and performed better during 2008 than VBTLX. I am torn between the two but went with VBILX in place of VBTLX in my IRA. Your thoughts? (By the way, I really enjoyed your interview by the Mad Fientist. It changed my AA philosophy a bit.) Thanks.

    • jlcollinsnh says

      Hi TGM…

      VBILX should be fine if you prefer it.

      I prefer VBTLX for the slightly lower costs and because the performance is good enough (and not the reason I hold bonds). But this is splitting hairs. 🙂

      That interview was great fun to record, glad you enjoyed it too!

  39. Justin says

    I ended up going with VBTLX in 2017 when I shifted from 100% equities to something approaching 90% equities right now (basically “taking some profits”, or more uncharitably “timing the market 😉 ).

    A commenter on the blog suggested I should go with the short term corp bond fund that had a similar but slightly lower yield. The reasoning being that I can take on less interest rate risk, and I should basically ignore the credit risk that comes with going 100% corp vs a total bond index blend that’s mostly government bonds.

    I kind of shrugged and went back to the reason I want a 10% slice of bonds in my asset allocation. Stability. Something that is unlikely to drop significantly in the event of a strong economic downturn. Some dry powder, not to have to reinvest in equities in a downturn (which I might do) but rather to live on for a few years should the stock market tank.

    With the corp bond fund, I feel like a credit crunch or big recession could lead to bigger credit risk losses in the corp fund (which would be highly correlated with losses in the equities side of the ledger!). Which is exactly the kind of risk I’m seeking to avoid with my bond slice.

    And VBTLX is simple. I like simple.

    In other words, what you said 🙂

    • jlcollinsnh says

      Yeah, it pays to understand why you want to own an investment and how it fits into your goals. It is not just about the performance specs. 😉

      Thanks for checking in!

  40. CR or BZ Bound says

    Boy howdy Jim; keep up the great work!

    Just in case a pro version is still out there… thought that I would at least try.

  41. george says

    hello jim —
    given the current (7/12/18) rate environment, where do you put excess taxable non equity investment money? thanks in advance

    • jlcollinsnh says

      Hi George…

      Assuming by “non equity investment money” you mean money you are saving to spend on something in the future like a house, car, emergency; regardless of the low interest rate I keep mine in VMMXX (money market fund) and our bank savings account. It is about having the money instantly available. Everything else is in VTSAX or VBTLX.

  42. David Z says

    Hi Jim,

    Loving your blog and inspired to make the change from gut-wrenching volatility to simplicity. Simplicity is beautiful!

    First, I will cut to the chase with my question: given that CD rates have improved over the last year or so (and look to get even better with looming rate hikes), don’t CDs beat a bond fund for stability and return at this point in time?

    If I look at VBTLX, the average annual returns as of 6/30/2018 for 1yr are -0.53% (yikes!), 3yrs are 1.67%, and 5yrs are 2.22%. I spoke to a Vanguard rep about this, and he said these figures would include any interest.

    Not so good!

    But if I look at current CD tares as of today ( August 21, 2018) I see that the current 1yr return is 2.35%, 2yrs is 2.80%, 3yrs is 3.0% and 5yrs is 3.35%

    Not extraordinary but much better, and a guaranteed return at that.

    So again my question: at this point in time, with more interest rate hikes coming soon, WHY WOULD ANYBODY INVEST IN BOND FUNDS?

    Please help! I have searched the internet and have not gotten a good answer anywhere!

    And thank you for your wonderful blog,

    • jlcollinsnh says

      Hi David…

      Thanks for pinging me. I thought for sure I had answered your question. Guess I only thought about answering it. 😉

      What attracts you about CDs is exactly what attracted me to those other bond funds as I describe in the post above: a better return. But, as I also say in that post, I don’t hold bonds for return. I hold them for ballast. I can get better long-term returns simply by increasing my allocation to VTSAX.

      That said, there is nothing wrong with using CDs for ballast instead. They have the advantage, as you note, of greater interest rates that are locked in.

      However, if rates continue to rise, you will be stuck with those now lower rates until the CD matures. The bond fund, as it is always buying new bonds as cash rolls in and old ones mature, will follow the rates up.

      Just like they will follow the rates down when that happens. 😉

      One final point. When you say “with more interest rate hikes coming soon” you are really saying that you are hearing “gurus” claim rates are going to rise. Sometimes gurus are right in predicting the future. More often they are wrong. 🙂

      • David Z says

        So true! I understand things a bit better now. And I appreciate the reply, Jim— of all the millions of financial blogs, yours is the one that really resonates.

  43. Jeffrey Perez says

    I just discovered my girlfriend had an annuity sold to her which is now capped at 12k and cannot be added to any further so now it just hopes for very minimal interest bumps. I was wondering what is the best way to get her money out of this vehicle and into something we can contribute further too and continue growing?
    Any help here would be greatly appreciated.
    Thank You,


    • jlcollinsnh says

      Hi Jeff…

      I consider annuities to be such a horrible option and would never own one, I have spent zero time figuring out how to unwind them.

      Two suggestions:

      –Reach out to Vanguard about transferring the annuity to them and your options once it is there.

      –My pal Darrow,, has written about them extensively. Check out his posts.

      Good luck!

  44. Jim C says

    Very nice article and notes! Just to follow up this line of reasoning, would you consider a slightly shorter duration (given rising rates) — and potentially higher quality (to avoid ALL credit quality issues)? Thanks! – jim

    • jlcollinsnh says

      Thanks, Jim.

      Sure, you could do that. But this is the Simple Path designed for the long-term with its ever changing conditions.

  45. Hope says

    Who has the best paying CD’s/highest rates right now for 2, 3, and 5 year? it seems to me that those might be a good alternative to bonds right now. It looks like the total bond fund at vanguard had a loss last year? Can someone explain to me with rising rates why the total bond index fund went down? And in a rising rate environment, I assume this will continue to happen?

  46. JC Webber III says

    Why not go with TIPS (VTAPX) for both the counter weight effect of bonds plus the inflation protection? That’s what I’m doing instead of VBTLX.

    • jlcollinsnh says

      VTAPX has a slightly higher ER and a slightly lower yield than VBTLX and, for inflation protection, I have VTSAX. VBTLX provides deflation protection.

  47. Bill says

    I just finished the Simple Path to Wealth (and gifted some copies!). I’m all in with the advice, except worried about the bond part, since the bond market seems to be so screwy in the last year or two with inversion, etc. At this time it seems that maybe it’s better to just sit on my 2% Ally account for that guaranteed return rather than put that money into VBTLX?

  48. Jeanie says

    I just discovered your blog and am really enjoying it. I just getting started with Vanguard with a Roth and want to do VTSAX and VBTLX as you recommend. I notice they offer them as a mutual fund or ETF. Which one would be better? thanks.

  49. Casey says

    JL, do you still happen to have any random “pro” codes available for the “Can I Retire Yet?” website? Merry (early) Christmas 2019!

    USAFperio (Casey)

  50. Nate says

    JL, after reading The Simple Path I was planning on retiring this year maintain a 75/25 split VTSAX/VBTLX. Now I’m hearing a lot of chatter about interest rates and bonds.

    Is this simple approach relevant? I hope to enjoy 20 years of retirement and look at my investments only 3-4 times a year.

    Love your book, I’ve had 3 friends read it as well.

  51. Joseph says

    Good Evening Mr.Collins,
    For some time now I have been following your methods and they have truly changed my life. I have read The Simple Path to wealth along with this post. One of the things you mentioned was that in the wealth preservation phase hold VBTLX to smooth the ride. Looking at the data and performance history It appears that the performance of the fund is operating at a negative. what am I not understanding? perhaps interest paid out by these funds is not included in that number. My question is why would one prefer to keep money in VBTLX over cash? from my understanding, both are subject to inflation.

    Thank you so much again, we may never meet but, as someone in my twenties, you have changed my life and are one of my personal heroes.

    • Mike says

      I had the same question. Using VBTLX as a hedge to VTSAX when equities suffer drops seems to make sense only in a stable or decreasing interest-rate environment (I think…sorry, trying to make sense of it all). In an increasing interest-rate environment, it seems both VBTLX and VTSAX have lost value like in the current env (March 2023).

      Considering the above, when interest-rates are rising, would it make sense to move from VBTLX and start buying short-term US treasury securities (T-Bills)? I suppose one could also move into the Vanguard Money Market funds, but not sure if they are subject to state and local taxes where as T-Bills are not subject to state and local taxes.

      It would be great if you or any of the other readers who understand these things better could comment. Thank you very much in advance!

      Best Regards,

    • jlcollinsnh says

      Hi Joseph (& Mike)…

      First, thanks for your very kind words!

      As for bonds, the first thing to understand is that the market price of a bond moves in inverse to interest rates. That is, rates go up — bond prices go down. Rates go down – bond prices go up. And, yes, bonds are hurt by inflation.

      Given that the Fed has been dramatically raising rates over the last year or so, it is not surprising that the share price of bond funds has dropped. The more long term bonds those funds hold, the greater the drop.

      VBTLX, which holds bonds of all maturities dropped ~10% last year. VMRXX, as a money market fund holding exclusively very short term instruments, dropped not at all.

      If you held individual bonds you would either have to hold till maturity and accept the below market interest or sell and take the loss.

      The beauty of holding bonds in a fund like VBTLX is that not only does the fund hold bonds of all different maturities, but at any given time a number of bonds in the fund are reaching that maturity and are being paid off. This provides cash to buy the newer, higher yielding bonds.

      This is true of VBTLX, which as a total bond market fund is essentially an intermediate-term bond fund (the short-term and long-term bonds balance each other out), and of a short-term money market fund like VMRXX or T-Bills.

      Since a short-term fund will react much more quickly to interest rate moves, then yes VMRXX’s rates moved up more in step with the Fed’s increases. But remember the same will happen when rates decline.

      VBTLX will adjust more slowly, but it will adjust as those old bonds mature and new bonds are purchased. And, since I hold it for the long-term, this is why I don’t worry about its short-term share decline. Especially remembering that the speed with which the Fed has raised rates is very rare.

      Were you to graph the response for VBTLX and VMRXX to interest rates, you’d see a smoother, longer curve in the former and a sharper, steeper, starter one in the latter.

      For more, read Part XII, and the related posts, in the Stock Series.

      As I say, with investing you don’t get to chose to avoid risk — you only get to chose what sort you prefer. 😉

      • Mike says

        Thank you so much for the reply! Much appreciated and more importantly THANK YOU for putting this together (even though it was for your daugher, the Universe had a very different plan for it!) 🙂

        I haven’t finished reading the entire stock series and maybe getting ahead of myself, but I am very curious in regards to the “bucket” where one can buy more shares as the market drops or do you consider the VBTLX as the bucket to move funds from into VTSAX?

        The other point that comes to mind is what’s been going on with the Japanese Stock market. It crashed in 1990 and still hasn’t come back to its original levels. What are your reflections on that? Could the US market enter a multi decade phase like that?

        • Mike says

          Ignore my multi-decade question above. I just got my answer in part xxxi! 🙂

          (thank you once again!)

          Still trying to grasp the concept of bonds as ballast… Its a WIP!

          So far my understanding is this:
          1. Normal interest environment (fed interest rate appropriate for targeted 2% inflation rate):
          – Stocks generally go up.
          – Bonds prices meander a bit up and down, but keep paying interest.
          – Strategy:
          if stock market goes down, use any profits (interest at least) to purchase more stock by portfolio reallocation back to original.

          2. Low/Falling interest rate (fed interest rate close to 0)
          – Stock market generally goes up
          – Bond prices also go up, but not much interest.
          – Strategy:
          if stock market goes down, use any profits (sell bonds) to purchase more stock by portfolio reallocation back to original.

          3. High/Rising interest rate (fed interest rate much higher than targeted 2% inflation rate)
          – Good chance stock market will fall as its much expensive for companies to borrow.
          – Bond prices will also fall as interest rates are rising, but bond interest rate payments will go up.
          – Strategy:
          Once the Fed stops raising interest rates (likely because inflation has stabilized), watch for inflation to show declines (perhaps 3 in a row?). This will likely be the trigger Fed to start decreasing the Fed interest rates. Reallocate portfolio to buy stock from bond interest payments.

          Yes, I know I am trying to sort of time the market a bit (a fools proposition), but I am trying to understand this bond ballast business a bit more (at least in my puny brain) and make sense of it!

          Best Regards,

  52. Molly says


    Two questions:

    If I am taking the risks on the equity side, why not invest in Intermediate Treasury fund instead of Total Bond?

    Do I also need TIPS to smooth out the ride?

    Thank you for your generosity in sharing your investing wisdom. Molly

  53. Murray says

    What are your thoughts on VTINX? I appreciate the fund of funds approach that provides just enough diversity that I’m looking for. My current allocation – 90% VTINX and 10% VSIAX for that little performance shot in the arm. Thank you.

  54. Sarah says

    Hi there! I am almost through your Path to Simple Wealth book and it has already changed my life! Thank you for making it, well, simple. I came from a family that never talked about money. I naively accepted too much in student loans that is now around $180,000. More importantly, I am almost 40 and have never learned how to manage my money. Embarrassing, I know. But now I have twin girls and I’m gonna do better for them.

    In the beginning of your book you say if you have debt below 3% pay slowly. I have about 16k in credit card debt (a series of unfortunate events- water heater, transmission, leak in the house, etc). I’ve transferred it all to a 0% card. Should I prioritize building up my VTI or paying down that debt right now?

    Thank you for everything! Your daughter is a lucky girl- and I will surely give my daughters your book and talk to them about money!

    • Sarah Wood says

      I wanted to write more here in case you read this and can offer some advice.

      Just like you wrote in your book- I feel like a total slave to money. I worry with all my student loan debt- there is no escaping. I went to undergrad and grad school to be a teacher- only to quickly learn I would never be FI on a teachers salary. My husband is a teacher too. But now I work a desk job that pays a lot better. It’s alright.

      I often have to pretend my student debt doesn’t exist- otherwise I have crippling anxiety about it. I pay my monthly payments- and will be “forgiven” after 25 years of payments. I’m ten years in.

      I guess my greatest priority now is paying off that 0% credit card debt- building up savings- and contributing to VTI. I have about 3 months of living expenses saved up- wanting to build that up.

      I wish I had gotten a handle on thing earlier. While I know it’s never too late- it does feel a lot like catchup. I am sad a disappointed in myself. I wish I could give my girls more experiences- some vacations etc. but things always feel tight.

      Any guidance it much appreciated. I love your book and am making changes- I just hate that I am that person you warned about. I am a slave to money.

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