What we own and why we own it: 2018

So as not to keep you in suspense…

  • 76% = VTSAX
  • 23% = VBTLX  The Total Bond Market Index Fund.
  • 1% = Cash in  VMMXX.
  • A checking account at our local bank for ready cash and paying bills.

Back in the day…

Way back in June, 2011 I launched this blog. That month I put up 16 posts. Imagine. Now I might do that in a year. Guess I am getting lazy. Or more retired. Or just old.

Of those, the ninth was What we own and why we own it. It remains the sixth most popular of all time.*

It was published ten months before the Stock Series was even a glimmer in my eye. As such, in it I took the time to make the case for VTSAX which was then and is now my major holding.

It is interesting, to me anyway, to look back and see what we held then. It is also a reminder of how my own slow transition from active investing to indexing was entering its final stages. June 2011:

  • 45% = VTSAX
  • 25% = VBTLX  The Total Bond Market Index Fund.
  • 5% = Cash in  VMMXX.
  • 25% = Real Estate.  VGSLX  This is an Index Fund that invests in REITs (Real Estate Investment Trusts).
  • A checking account at our local bank for ready cash and paying bills.

Four Index Mutual Funds and a checking account.  Low cost, effective, diversified and simple.

But there was a bit more. I went on to say…

“I do still have a few other investments left in old 401k plans and from my many misguided attempts to pick stocks and fund managers.

“HAINX.  Harbor International Fund.  I own this in the 401k from the job I just left.  It is an actively managed fund and, as such funds go, it has relatively low costs.  It also has performed very well over the 5-6 years I’ve owned it.

“So, I got lucky.  But that’s what it is:  Luck.  Actively managed funds can and do outperform their indexes.  This one has for me.  But rarely for the long term.  Meanwhile, the higher expenses are always there.  Now that I can, I’ll be rolling this over to Vanguard.  It’s been a nice run.  No great hurry, but no sense pressing my luck either.

“CGMFX.  CGM Focus Fund.  This is a very aggressive fund run by Ken Heebner.  Heebner is a super-star fund manager and Focus was, a few years back, the best performing fund there was.  Or close to it.

“The last few years?  Not so much.  I’ve gotten killed in it.  Did Ken get stupid?  I doubt it.  Will he get his mojo back?  Who knows.  The take away here is fund managers don’t get any better or smarter than Heebner.  But the index has still left him in the dust.  Beating the index year after year is vanishingly hard, even for guys this good.

“I also have a very few dollars in a handful of stocks.  Not gonna name them ’cause it’s a bad idea to have them.  But I like to play.”

Those “cats & dogs” are long gone now and I unwound them as I described in this post. I also no longer bother with individual stocks, even to play. It is such a silly idea. I’d only invest an amount that would be meaningless if I lost it. That also makes it meaningless when I get it right. Even when it is a “ten-bagger” (up 10x your investment).

Writing this I got curious as to how CGMFX is doing. As always it is very volatile, but over the last 5 years it is up 29.30%. For that same period, VTSAX is up 69.59%.

For the same five years, HAINX is down -9.16%.

In addition to those odds and ends, also gone is VGSLX; for reasons I explain here: Stepping away from REITs.


Enough history. Where are we today? As you saw in the opening of this post and might have guessed, as of 2018 things are even simpler. Again:

  • 76% = VTSAX
  • 23% = VBTLX  The Total Bond Market Index Fund.
  • 1% = Cash in  VMMXX.
  • A checking account at our local bank for ready cash and paying bills.

Because the market has been climbing, this is slightly off our target of 75% VTSAX/25% VBTLX and VMMXX. But as I explain in the Asset Allocation post, we don’t obsess when these percentages drift. We rebalance once a year, on my wife’s birthday. The only exception would be if the market made a major move, say in the 20% range.

It is also worth noting, that our allocation reflects the fact that we are in the “Wealth Preservation Stage” as described in the asset allocation post. Or, at least we used to be.

The Wealth Preservation Stage simply means that our portfolio is supporting us and we have added bonds to smooth the ride.

But something remarkable has happened in the last couple of years. I have an income again.

Income returns

When the blog started back in 2011, it cost nothing to run and generated no revenue. Then, as it grew, new requirements meant spending money. Not wanting to be out of pocket, I started to look for ways to monitize it. These were modest, but so were the expenses. For 2014-15 this resulted in small losses I reported to the IRS. But the IRS gets itchy if losses continue too long. For that reason, and because costs continued to rise, I got more serious about seeking revenue.

Beginning in 2016, I reported a healthy profit and that has continued into this year.

Then, in June 2016, I published
I worked hard to give it a successful launch and it sold well out of the gate. Then, as I expected, sales began to drift down by year’s end. I figured it would just slowly fade away. Remarkably it hasn’t.

Instead, sales began to rebound and now are holding at a remarkably steady pace. Friends in the publishing industry tell me this is because “word-of-mouth” on it has taken on a life of its own. So far it has sold >50,000 copies across the print, Kindle and audio versions.

Between the blog and the book, our expenses are met and since 2016 we’ve not had to draw on the portfolio. Arguably, we are back in the “Wealth Accumulation Stage” and that would suggest a return to 100% equities with VTSAX. But, clearly, we haven’t. So, why not?

Why not 100% stocks?

Mostly, because these new revenue streams seem a bit unreal and I’m not convinced they will last. Plus, being in the “Wealth Accumulation Stage” implies (to replace bonds in smoothing the ride) saving and investing a healthy portion of one’s income. But we haven’t been. We’ve been spending ours, mostly on travel and Kibanda.

At the end of the last post, I shared with you the sources of income for the blog. 80% of that revenue comes from the top two, and those could disappear without warning. Even as I type, one or both might be sending me an email saying they wish to end our relationship. Or one demanding I write something for their needs and not yours.

While I don’t expect either to happen, either could and it would mean the end of that revenue flow. Given how fussy I am about who I support here on the blog, it wouldn’t be easy to replace them and, candidly, I might not bother.

As for the book, it has been a wonderful ride, but who’s to say how long it will last? While sales have been higher and have lasted longer than I ever expected, my guess is still that they will taper off over time. That’s me being cautious.

Publishing friends tell me there are two other, more optimistic, possibilities:

  1. Word-of-mouth will continue to grow and sales will actually expand.
  2. Some major influencer, think Oprah, will discover the book and propel it to stardom. If you know someone like that, please pass them a copy.

Both those are fun to daydream about, but are not a foundation upon which to build my allocation strategy.

So, it is the insecurity of how long these very nice income streams will last that keeps me holding bonds. Meanwhile, I’ve long since put the hard work in, and it is now…

I’m trying to relax and enjoy it.


*Top Ten Posts

  1. Why your house is a terrible investment
  2. How I failed my daughter and a simple path to wealth
  3. Stocks — Part I: There is a major crash coming!
  4. Stocks — Part IV: Portfolio ideas to build and keep your wealth
  5. Why you need F-you money
  6. What we own and why we own it
  7. About
  8. Stocks — Part II: The market always goes up
  9. Stocks — Part XVII: What if you can’t buy VTSAX? Or even Vanguard?
  10. Manifesto

Personally, I think Manifesto should be #1


Addendum 1: This is a great example of the right way to use and think about VTSAX

Addendum 2: The Path to 100% Equities

Addendum 3: Investing in a raging bull

I wrote that post in 2013 in response to all those insisting the market was then “due” for a fall. I’d say exactly the same today. As, in fact, The Wealthy Accountant just did in his post:

Where to invest your money when the stock market is overpriced


Fidelity’s new zero ER funds

Recently Fidelity came out with a couple of index funds touting a zero percent expense ratio (ER). I recognize a loss-leader come-on when I see one and so rolled my eyes and turned the page.

But then I started getting questions about it in the comments here on the blog. Sometimes it is hard for me to remember what is obvious to one person is not to the next. I have been surprised that anyone would care about these, and I have been wrong about that. Seems this has been a very successful move for them.

After fielding this a few times, I decided to summarize my take for those of you interested here.

There is, in my view, zero chance that FZROX or the others will maintain a 0% ER for 60 years (as one reader suggested). Or even six. These are loss leaders and loss leaders are short term hooks to lure in the suckers, er, investors.

Vanguard is structured to seek ever lower costs for its shareholders.

Fidelity is structured to seek maximum profits for its owners, which means raising ERs whenever possible.

Plus, FZROX and the other zero fee funds still have operating expenses. Fidelity is just shifting those expenses to the holders of their other funds. I have an ethical issue with that. Not to mention a practical one if I owned one those other funds.

One last thing that likely no one but cranky old geezers like me even know or care about:

Back in the 1970s and early 1980s, when indexing was new and struggling for acceptance, Fidelity led the effort to strangle the concept in its crib. They even ran ads personally attacking Jack Bogle and calling index investing “un-American” which is, of course, the same as saying giving your customers a better product at a lower cost is un-American. That takes some hard bark.

Bogle, in turn, had the ads framed and mounted on his wall. A badge of honor.

Clearly, they recognized the threat indexing represented to their very profitable (to them) traditional high fee mutual funds. Those are where their hearts still lie. They’d kick indexing to the curb the moment they thought they could get away with it.

Something to think about when making a long-term investment.

This is the post I should have written…


…but Jim wrote it first, and better.


Recent Interviews & Projects

Playing with FIRE documentary

Talk at Google

Bigger Pockets Money Show: JL Collins Edition




Next month, October, we head to Greece for Chautauqua. So very excited! Both weeks have long been sold out. But if you want to add this to your bucket list, please feel free to put yourself on the:

Here’s what it is all about:

Millennial RevolutionChautauqua: Come Join the Family   (This is a brilliant post with all the details!)

1500 Days to FreedomMeet some awesome people… (Another brilliant post, this one with dinosaurs!)

ChooseFI — Oh, the Places we will go   Chautauqua in the words of the speakers who will be in Greece. There is nothing quite like hearing the voices behind the words.

Also, be sure to listen to this incredible episode with Travis Shakespeare.  Travis is a master story teller and, among other things, he shares how the FI movement fits into the cultural fabric of America and its traditions of rugged individuals charting their own course.

Mad FientistMoney Talks panel discussion at Chautauqua UK  Attendees discussing FI and also a great inside look at the Chautauqua experience.

JL CollinsGreece 2018 Mount Olympus 


The Happiest Teacher, who happens to live in Dubai at the moment, teaches us about

The Cult of Consumerism


I’ve joked that we bought Kibanda because I needed more aggravation in my life. Turns out, that’s a real thing:

The case against optimization


Haters gonna hate and we are always going to be the odd ones out…

The Case Against FIRE


JD Roth takes us for a ride in his way-back machine:

FI circa 1957


Icarus and Free Will


The coming Singularity…

and my pal Shilpan’s take on it…

The New Age


Mr. Franklin makes a killing in silver mining in the old West. Mr. Franklin takes his fortune to England where his ancestors came from.  Mr. Franklin enters high society. Oh, and Mr. Franklin was also a member of the Hole-in-the-Wall gang.

Kinda like a more interesting version of Downton Abbey.


This is a beautifully written novel that tells the story of, and the stories around,  the creation of a sacred Native American drum and its journey from tribal origins in Minnesota to a collector in New Hampshire and back again. If that sounds boring, let me mention there are starving and freezing children and hungry wolves and not even in the same story.


Whitehead is a gifted story teller and writer and his tale of escape from slavery is a page turner. Characters are extremely well drawn. Be warned: This is the tale of slavery up close and it is frequently brutal.


Old Post

Every now and again I get a comment on an old post. It is always nice to see those getting some attention and it is fun, for me anyway, to re-read them. Maybe you too. Here’s one:

Travels with “Esperando un Camino”


Kibanda Hummingbird

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Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.
  • Vanguard.com


      • Life Before Budget says

        I completely love the book. My wife and I purchased it back when it first came out and it is a pretty simple and no-nonsense investing guide. Investing really isn’t too difficult if we stick to index funds:) I use Fidelity low-cost index funds instead of Vanguard, but that is mainly for the great customer service that I have always had with Fidelity. I’m sure that the actual funds are very similar. Anyways, I have always enjoyed your blog since I found it a few years ago! About one month ago, I started my own personal finance blog. Feel free to check it out if you have a free minute or two:)
        P.S.: “The Singularity is Near” is a pretty incredible book! That must have been a great talk.

      • Mark says

        Hi, May I ask if I have my 401k rolled over into the vtsax in a traditional IRA but I choose to fully fund my Roth IRA and therefore am not able to add to the vtsax IRA, is it ok, or maybe dumb, to open another vtsax in my brokerage and fund it with as much as I can??

        Mark Minneapolis

    • jlcollinsnh says

      I’m no expert on blogging, Matt. In fact, when I’ve gone to FinCon and listened to the presentations it seems I have done most everything wrong.

      Back in 2011 someone pointed me to WordPress and I just followed the prompts. I recall it being pretty easy.

      Then I just started posting stuff I wanted to archive for my daughter when she was ready. Plus I sent a link to family & friends just in case they were interested. Mostly, they weren’t.

      And here we are.

  1. FIRECracker says

    “Some major influencer, think Oprah, will discover the book and propel it to stardom. If you know someone like that, please pass them a copy.”

    Sure, the next time I see Oprah, I’ll tell her you said “hi”. 😛

    Teehee. This reminds me of the time Bryce’s cousin asked for a copy of our children’s book so she could keep it on the shelf at her office (her and her hubby have their own dental practice in L.A and are dentists to the stars–like Weird Al, Sylvester Stallone, the producers of “2 Broke Girls”, etc). So far, no bites 😛 I guess stars are too busy to read children’s books.

    But hey you got your own personalized e-mail from John Bogle, so for us money nerds that’s better than being on Oprah 🙂

    • jlcollinsnh says

      Word is, after all your media stardom, Oprah is just hoping she’ll have the chance to meet you.

      Maybe that’s my in…

      …let her know I know you…

  2. Amy says

    Thank you for this. As my husband and I retired this year at the age of 55 (not as young as other FIREees!). As someone who worked in institutional finance for 25 years, personal allocation is different. You have to think with your head and not with emotions.
    Your book is amazing and I have bought many copies to share. I keep giving my copy away and will need to get more.
    Thanks for what you have done.

  3. vorlic says

    Mr Collins, as far as I can tell, you deserve it all! I’ve been telling everyone I think will listen, plus many I think won’t, or can’t, or both. You never know what will land and what will not.

    I think I have finally got there with my Dad, who is, in so many ways, a monk. And a damned hard-to-get sceptic. I think I inherit a lot from him.

    Nice hummingbird. We promised our daughter a budgie for her eighth birthday next month. It’s one thing she has been asking for, repeatedly. A few months ago, she said

    “I don’t want more toys, because keeping them tidy is soooo much work!”

    All the very best.

    • vorlic says

      And may I also ask for your prayers:

      I keep getting tempted by the idea of January 2020 OTM put options on NASDAQ:TSLA

      just yankin’ yer chain

    • jlcollinsnh says

      When I was a kid we got a parakeet (budgie).

      Our cat was fascinated and went after the bird every chance it got. But we kept shooing it away. Finally the cat gave up and just ignored the bird.

      Or so we thought.

      Till weeks later, one morning at breakfast, we heard a squawk and a crash. We rushed in to find the patient, crafty cat dining on budgie (parakeet).

      We all own January 2020 OTM put options on NASDAQ:TSLA. Duh.

  4. Sharon says

    We are in retirement. My husbands pension and both of our SS covers all of our monthly expenses. We only have 150K, but we are Not drawing from it. And, we would add to when hubby starts working again.
    Currently we are 93% (143K)in VTSAX and 7% (10K) in a MoneyMarket Account.
    My husband is going to pursue an encore career, up to the $17k/yr he’s allowed while on SS (he’s only 62) but hasn’t started working yet.
    We own two homes and have net worth around 500K
    We currently DO NOT have any money in VBTLX

    Given this scenario, would you add VBTLX? or when would you suggest to add VBTLX?

    • Adam says

      I’m not a Jim Collins, but but it seems to me like SS and your husband’s pension easily take the place of the security offered by bonds. Might as well keep it VTSAX and take all the gains you can. Congratulations on making expenses work 100% within your retirement income!

  5. George Kalopisis says

    Because of a recent article where Bogle states that Vangaurd has gotten too big I’m being told by a close financial planner friend not to put all my investments into Vangaurd. Any validity to this?

  6. Stephen A. Schullo says

    If 100% stocks is too aggressive, 76% is still way too aggressive for most people over 60 years old, retired and need the money. Heck, 100% would be an appropriate allocation for those that are leaving their nest egg to charity or their descendants. Read your great book and listened to your podcast with Tim and have not heard a rationale except the usual explanation about feeling comfortable and understanding equity risk at any age (and similar to most financial advisers is that they hate the age rationale). In my book review, I asked the question of why does the author take an incredible risk at his age. Please don’t tell me it has nothing to do with age, because it does. I may have a decade left in my life and I would never invest 76% in my portfolio in the total stock market index because of the usual rationale that you need equities for growth (my stock-bond split is 30%/70% and I got 9.0% return last year! and decent returns since 2008 which I only lost 11.8%, got 13.0% return in 2009 for example). I have growth and I do not take excessive risk. For little ole me, 76% is excessive. I get decent returns, and I am ready when the market takes another dive.

    • Sharon says

      Hi Steve,
      You only have 30% in VTSAX? and 70% in VBTLX? We have very little retirement saved, (as I commented above) and sure don’t want to lose it.
      We are just 62 (hubby) and I’m 55. We will not need to draw on our monies for ~10yrs.
      Sure wish this was easier to know what to do.

      • Stephen A. Schullo says

        Hi Sharon,
        You and hubby could take more risk than my 30% equity allocation. But the key is will you stick with your stock-bond allocation when Mr. Bear comes into town? This is difficult because it is about emotions. But when you wrote “sure don’t want to lose it” is telling. A terrible plan is to bail while the market is tanking. Set up an allocation now to prepare for Mr. Bear, and stick with it. I have had the good fortune of living through two of the biggest and baddest stock market crashes in history, and still retired with a comfortable nest egg. Have you experienced a market downturn?

    • jlcollinsnh says

      Hi Steve…

      As I discuss in the Stock Series post on asset allocation and in the book chapter on the subject, one’s choice on this is very personal. And your points to Sharon, for instance, are well taken.

      It is also a matter of perspective. Here’s mine:

      I am not investing this money for just my lifetime. I am investing thinking seven generations out. https://en.wikipedia.org/wiki/Seven_generation_sustainability

      I no longer think of it as my money to be invested just for my lifetime. And I am teaching my daughter that, whatever part of it comes to her, it is not hers either. She is merely the custodian of it for the next generations. And it will be her responsibility to teach her heirs the same.

      In a practical sense, this means she (and I) can enjoy the fruits of the portfolio, but we must always be tending it for the future.

      In your comment you mention you might have a decade left in your life. My guess is that I have about the same, so we have that in common.

      But it also sounds as if our intentions are very different. For you, it seems that will be the extent of what you expect of your investments. That being the case, your 30/70 allocation should be just fine. In fact, for that goal I might even consider this approach: 

      But I should point out to others, allocations that hold less than 50% in stocks cannot support the “4% rule” withdrawal rate as described here: https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/

      BTW, thanks for your Amazon review of my book!

      • Stephen A. Schullo says

        Hi JL,
        Here are the returns for the last decade on my 30/70 portfolio. Yeah, the 4% rule works great if the market remains positive with a risky 50%/50% allocation.
        Of course, I would have gotten better returns with 50/50, but I would have lost a lot more too in 2008. Fortunately, I do not have to “catch up” by an overly risky portfolio, 50% IMO is way too risky for me. I have “enough.”

        30% stock/70% bonds:
        2007 5.20%
        2008 -11.9
        2009 13.90%
        2010 10.60%
        2011 2.50%
        2012 10.00%
        2013 6.90%
        2014 6.00%
        2015 0.005%
        2016 5.90%
        2017 9.00%

        Along with this returns I also I saved about $225,000 in costs alone the past 11 years. My VG portfolio is just .07 basis points. I have been a DIYer since the early 90s because of the hideous annuity monopoly in the 403(b) world with k12 school districts.
        Have a great day,

        • ATM says

          Good point Steve, you pick your assets allocation base on your own dawdown tolerance, which IMHO is the right method.

          For Mr Collins, as he stated above , that he has other incomes from the book and the blog and doesn’t need to withdraw any money from his Retirement Fund , So he can afford to take more risk and overweight stock.
          I consider assets allocation percentages as the shoes size .. there is no general rule for everyone regardless age, spending pattern or wealth. it is related to your drawdown tolerance no more no less, and whether you have second source of income.

  7. Kane says

    I plan on giving my children each a copy when they’re ready. So there’s a future revenue boost -the children of your readers.

  8. cv says

    Hi Jim

    Thanks to your advise and blog my household has been FI since the beginning of the year. Here’s how things stand as of today.

    me (40 y.o) working FT (not for money). Salary 100k+/year
    hubby (10 years younger) in last year PhD Mec-Engineer. Salary 30k/year while in school, anticipated to start work July 2019. Starting salary estimated 80-100k/year first year
    Condo paid off. 220k
    Vanguard (our own investment, 100% VTSAX) 650k
    Cash (rainy day fund) 15k
    my company retirement fund: (unfortunately mandatory Fidelity, but 100% low cost index fund) 300k
    Annual expenditure (if no donation) $18000

    Our question is, when exactly to start allocating to vanguard bond index? I will be working FT for probably for the next 3-5 years, unless we are blessed with a little one or two, then I may pull the plug on my work any time. Hubby expected to provide for the family starting next summer. We may upgrade to a more “permanent” home in the future.

    Thanks for your input

    • jlcollinsnh says

      Well done cv…

      …You’ve set yourselves up very nicely!

      As you know, just because you are FI doesn’t mean you HAVE to stop working. It just means you can do whatever you want.

      Being FI is also not the measure of when to add bonds.

      Bonds replace the ride-smoothing cash flow from your earned income to your investments once you stop working. As you are not planning to stop working and you have an awesome savings rate, you are still very much in the Wealth Accumulation Stage.

      See: https://jlcollinsnh.com/2014/06/10/stocks-part-xxiii-selecting-your-asset-allocation/

  9. The Measure of a Plan says

    Always a pleasure to read your work Jim. I still need to pull the trigger on unwinding a couple of cats and dogs. They represent a few percentage points of my portfolio and I know I should get rid of them, but I’ve been lazy. And I’m hesitant to incur the capital gains.

    PS — I hope your wife gets another birthday gift in addition to the re-balance 🙂

      • The Measure of a Plan says


        I recently took some work off of my own plate and built a spreadsheet for my SO for her to manage her own portfolio. She now does the re-balancing calculations on her own and executes the trades.

        If that doesn’t count as a stunning birthday gift…

  10. fi_fi_fi says

    Thanks for the update. Also, I want to thank you for the book. It was very easy to read, and it was great at explaining the complex topics.

  11. Parag says

    Hi Jim,
    Your blog really inspired me to go onto the investment path in mutual funds. Thanks for all your work. As I am getting ready to invest in Vanguard funds, I keep wondering what’s the real difference between Vanguard Vs Fidelity low ER funds especially when Fedility came up with a few zero fees funds. You also could point me to a blog post on thos topic that I may have missed. Thanks again!

  12. Jared says

    Jim, your blog and book are awesome, and I really enjoy your humor and writing style. No doubt you’ll continue to see many good things coming from your writing for the foreseeable future. I’ll be the opposite of humble for you.

  13. Earl Alderson says

    Hi Jim, Thanks for the work you have done that has helped me better understand my finances. My wife and I will be retiring in December after 32 years working for a college. We have been investing with TIAA in our 403b. My current plan is to stay with TIAA and put 70 percent in TIEIX there version of a total equity index fund covering 2852 holdings, and 30 percent in TIAA Traditional Annuity. The Traditional returns a guaranteed 1 percent, but has returned between 3 and 4 percent historically. I also have the option to invest with vanguard through TIAA, but only in VIMAX, VSMAX,VTIAX. My question is, do you think I should just roll my 403b into Vanguard? Thanks for your opinion! Earl

  14. Mike says

    Great info. Can’t remember if I told you. Your book was so empowering in learning to manage my own money. Money managers don’t like talking about Indexes. Your book was so helpful that I gave copies to the three kids and their partners. Thanks again.

      • Tracyl-5 says

        Probably a silly question, but I just want to make sure…
        Is the SEC Yield/Compound Yield how much interest you make on that money in a year? So, if I had a savings account earning 1%, would I be better off moving it into VMMXX or VMRXX for the 2+% yield those make?

        • jlcollinsnh says

          Not silly at all, Tracy…

          …and in fact I looked both up just to be sure.

          SEC Yield, per Vanguard:

          “A yield for non-money market funds that’s based on a formula mandated by the Securities and Exchange Commission. It approximates the yield an investor would receive in a year by assuming that bonds in the portfolio are held to maturity, all income reinvested, and all fees and expenses factored in.”

          Compound Yield, per Vanguard:

          “The interest earned on the original principal invested and also on the interest earned in previous periods.”

          The first is, I think, pretty clear. The second maybe less so. Basically it means the interest earned on the money you put in plus the interest that interest earns.

          So, yes, 2% in the MM fund is more than 1% in the savings account.

          • Tracyl-5 says

            Thank you for the education! That’s really good to know. I think I’ll have to move my emergency funds to one of those Vanguard Money Market accounts!

  15. Bonnie says

    I clicked on some links in this post to older ones and noticed that I couldn’t find a date associated with a post. This makes it difficult to put the post in context. Would you consider adding the date of the post to each post?

    • jlcollinsnh says

      Thanks John!

      You can find a link to my post on leaving REITS in the one above. It is Part XXII in the Stock Series.

  16. Valley Dan says

    Hi Jim,

    Just want to say thank you for so much great info written in such an entertaining and readable style. I happily spread the word to family and friends. Great stuff!

  17. HeadedWest says

    Thanks for providing post hoc validation for my own investment choices!

    I’m looking forward to your recap of the Olympus Chautaqua. With two 14-month olds to tend to, my wife and I won’t be taking any FI-themed vacations, or any vacations involving long flights, anytime soon. But we have considered retiring in the Katerini area after they grow up… I don’t know of any other area with the combination of scenery, food and kind people that Greece offers. And the cost of living frees up more money for charitable contributions, if the retiree is so inclined.

  18. Dave in Chi says

    Thanks for the update Jim. I’m giving your book to a few folks as Christmas gifts so I’m doing my part to keep your dough coming in. 🙂

    Riddle me this – do bonds really make sense anymore? We’re FI but not RE, sitting at 80/20 (similar to yourself). Our cash yields about 2-3% with some credit union accounts I have which also have zero risk, whereas neither of the bond funds I’ve been using (VBTLX and VTINX [70% bonds to 30% stocks]) have consistently hit 2% over the past 5 years. We have no problem leaving a growing pile of emergency cash alone. Given this scenario, and assuming that we keep with the 80-20 split going forward (20 going to cash instead of bonds), doesn’t it make more sense to keep the newer 20% in cash?

    • jlcollinsnh says

      You make an interesting point, Dave…

      …and one I have actually been thinking about.

      In fact, the revenue from the book and blog we haven’t spent I have just been letting build up in the MM fund. I’ll probably continue to do so for now.

      But what I have in VBTLX will stay there, unless I take the leap to 100% stocks.

      The reason is, that my choice of VTSAX and VBTLX is being based on holding them forever. Even those times they might not be the perfect vehicle for a bit.

      You are fine holding your 20% in cash for now and you can always move it later.

  19. Scott Pepper says

    Hi Jim, Retired 7 years now and loving it! Recently passed 60, and I’ve given in to a bit more conservatism and have gone 50/50 VTSAX and VBTLX (from my previous comfort level for decades of 70/30). I did it even though our living expenses are causing us to withdraw only 3.5% of our savings annually, so I guess I’m probably partly giving in to the constant “the market is going to crash any day now!!!” hype. Anyway, that’s not my real “question”, I’m sleeping better and that’s fine. My question is about the poor performance of VBTLX ( and all bond funds) over the past few years, and (not coincidentally) rising interest rates for CD’s and Money Market (VMMXX) funds (roughly 3% and 2.1% returns now, respectively), and wondering if that’s something you ever consider, taking on higher cash positions if a decent rate is guaranteed and bonds are losing for so long now, and likely to continue to lose if interest rates continue rising as it seems they will… Thanks! Scott PS: loved your comments on Fidelity…that actually helped me too!

    • jlcollinsnh says

      Hi Scott…

      Check out my conversation with Dave immediately above.

      Glad my comments on Fidelity were helpful. Given the questions their new funds raised elsewhere on the blog, I’m surprised not to have heard more in these comments. 😉

  20. Aaron says

    I’ve been super excited waiting for this post to come out. As always, you didn’t disappoint. Thanks for what you do. I bought your book and recommend it to anyone who will listen to me rant and rave about it.

  21. Dave says

    Great blog and book Jim!

    With just 1% in cash and being retired I forget if you believe in having buckets in retirement ? ie two years of expenses in cash etc


    • jlcollinsnh says

      Thanks Dave!

      Check out my conversation with Dave in Chi above.

      These days I am letting cash build.

      But back when we were drawing on the portfolio we just pulled what we needed from VTSAX.

      So, no buckets.

      • Dave says

        So no worries pulling down VTSAX in a down market?
        I guess: miss out on returns now (by having extra cash) or risk having to pull down VTSAX in a down market.


        • jlcollinsnh says


          That’s how the 4% withdrawal rate and the stock/bond allocations work together.

          The returns on the upside cover + those on the downside. Typically more than what you lose holding cash.

      • Sharon says

        I just don’t quite understand. If you have passive income, your letting your cash build and not drawing from VTSAX, then why still have bonds now? How do you decide when and why to add bonds?

        • jlcollinsnh says

          Take another look at this post.

          You’ll see I discuss my thinking on possibly going back to 100% stocks and why I haven’t.

          You’ll also find links to my post on asset allocation which goes into when and why to add bonds.

  22. Luis says

    Hi Jim,
    Thanks for sharing, once again, your experiences for the benefit of us who visit or are subscribers to your blog.

    As for Fidelity, I learned about their new funds from Rich on Money when he commented on them. Regardless, I’m still staying with Vanguard. However, I’m thinking of opening Fidelity accounts for the kiddos since there is no minimum compared to Vanguard’s $3k minimum. I think that a mutual fund account would be a great learning lesson in addition to start on their path to FI. Of course, once the account reaches $3k, then roll into Vanguard and they will learn about capital gains tax. Your thoughts are welcomed?

    Thanks again Jim.
    Semper FI,

    • jlcollinsnh says

      Hi Luis…

      Great to have you check in!

      I think your plan with Fidelity and the kids is great, and for the reasons you mention. Plus, at their income level they very likely won’t have to pay any capital gains tax when it moves.

      Go for it!

  23. Steve Fallert says

    Jim – 50,000+ copies sold of THE SIMPLE PATH TO WEALTH across all formats? Congratulations! I think my nameless S&S editor chose poorly. But that doesn’t seem to have held you back. I take credit for a few (probably 20+) of those sales.

    In personal news, I’m taking relatively early retirement (at 55) on Friday (9/28/18) and I give credit to your blog and book for helping me get to the point where I’m ready to pull the ripcord. As curious co-workers stop by to ask questions, I’m steering them towards you, Pete and the other FIRE apostles. Even with retirement staring me in the face, I’m still nearly 100% invested in stocks (with a cash reserve and some small amount of bond exposure in Vanguard Wellington and Lifestrategy Growth Funds) and I intend to roll my 401(k) over into VTSAX as well. I think I remember you writing that you were sometimes tempted to go the all-stock route. I’ll let you know how it plays out when the next (inevitable) correction rocks the markets. Cheers!

    • jlcollinsnh says

      Hi Steve…

      Great to see you checking in.

      I remember that “nameless S&S editor” looking things over and saying: “I don’t think there is a book here.” Since almost every successful author seems to have been told much the same by “experts” I consider it a badge of honor. 🙂

      Congrats on your pending retirement!

      For those curious co-workers, maybe you should hand them my book. Maybe even give a copy to the “nameless S&S editor”. You can tell him, “Here’s the book that wasn’t there.” 😉

  24. Kevin says

    Hi Jim –

    Love your blog. You rock!

    I am posting a link to an illuminating initial analysis of VTI (ETF equivalent of VTSAX) vs. Fidelity’s FZROX and other low cost funds. The significantly greater tax burden that will likely be associated with FZROX will wipe out (and then some) the expense ratio advantage of FZROX over VTI, thus making VTI the lower-cost choice.

    Disclosure: I do not know the author of the article I linked to, but he seems like he knows what he’s talking about.

  25. Simon says

    I am in the UK and wondered if you can recommend a Vanguard fund for UK investors. Should it be all UK stocks or Internstional?

  26. Debbie says

    Not only do I have the Kindle version of your book but also have the Audible version. A great book only made even better by hearing it in your voice. Made me feel better that my thoughts are very similar to yours on Fidelity’s zero expense funds.

  27. Phillip Vaughan says

    My wife tells me I am the dumbest smart person she knows, so it makes a little sense that I can’t wrap my head around what I think is a simple concept. Can you explain the mechanics of how your investments grow and compound? When you purchase so many shares of VTSAX, do you wait until the end of the year, sell the share to realize the profit, then turn around and buy more shares with the original principal and the new profit? When most people purchase stocks, they normally sit on it for the long term and gain appreciation from the price per share going up, but to me, that doesn’t seem to be a compounding effect.
    I would love to understand if you can set me straight!

    • jlcollinsnh says

      Taking your questions in order:

      1. When the companies you own grow and prosper they become more valuable. That value is reflected in higher prices to own shares of them. For some companies, dividends are also paid.

      2. No.

      3. “sit on it for the long term and gain appreciation from the price per share going up” This is exactly how compounding works.

  28. planedoc says

    Jim, hello from the fire (as opposed to the FIRE) world. As always, enjoy your posts. (happy to have purchased audible, as well as written) copies of your book. I’ve read a bunch of other finance books, and yours distills it better than any other single tome.

    (Yep, have left a 5-star on Amazon too).

    You do a great service.

  29. Ronnie says

    Loved your book, and love your blog. Wanted to get your insight on a topic. I’m 56. No debt. Been maxing our 401-k for past 10+ years. Blessed to have a pension through my employer (who I’ve been with for 32 years). Can begin drawing anytime I choose to retire for my lifetime (and at my death, 75% for my spouse). In looking at my post-retirement asset allocation, would you consider the pension to be a “fixed income” investment, and subsequently, should I push my stock holdings up vs. if I did not have the defined benefit plan? I’ve always considered I’d be 40/40/20 stocks/bonds/cash. But I might be better served at 50/30/20. How would you view the defined benefit? THANKS

    • jlcollinsnh says

      Yes, that is exactly how I would think of it.

      To put numbers on it, let’s look at an example.

      Suppose your pension pays you $2000 a month, $24,000 per year.

      VBLTX (bonds) yields ~3%. So it would take $800,000 in VBTLX to throw off $24,000 per year.

      75% of $24,000 is $18,000. It would take $600,000 in VBTLX to throw off $18,000 per year.

      Depending on your life expectancy vs. your wife’s, I’d weight the pension between those two.

      For this exercise, let’s say $700,000.

      Let’s say you have 2.1 million in VTSAX. Combined, you have the equivalent ratio of 75/25 stocks vs. bonds/cash/pensions. If the allocation you wanted was 50/50, you would take $700,000 from your VTSAX and buy VBTLX: 1.4 million VTSAX + 700k VBTLX + 700k pension.

      You can also think of Social Security in this fashion.

  30. Dave A says

    You’ve simplified my investing strategy in 1 week! And given me a whole lot of headache!

    I stumbled upon your podcast interviews when I took a week off to help with family commitments while visiting Sacramento, CA.

    I’m a senior IT professional in the Bay Area with $1M in 401k, $200k in Vanguard brokerage account, real estate worth $2M.
    With my job and rental income, I earn about $500k/year (and pay a ton of taxes which no one wants to deal with).

    Your blogs and podcast interviews have done the following:
    – Removed the clutter from all my investment accounts (retirement and otherwise)
    – Provided clarity of thought on my investment strategy
    – Provided clarity of thought in life priorities (time vs family vs friends vs hobbies vs work)
    – Stress less about losing my job (since I think I can manage comfortably)
    – Rebalancing my portfolio after so many years
    – And the head-ache part: Starting Q1’19, I need to focus on scheduling to start off-loading my real estate holdings to be more mobile, travel the world, stress less about investments, stress less about rental maintenance and repairs, be more liquid, etc, etc.

    To summarize: Thank you!!
    P.S. – When are where is the next Chatauqua in 2019?


    • jlcollinsnh says

      In fairness, Dave…

      …you created your own headache. I just pointed it out. 🙂

      Tentatively, for 2019 we are planning two Chautauquas in the UK in the spring and two in Portugal in the fall. Specific dates are yet to be finalized.

  31. Luke says

    Hey Jim, Why not keep your cash in Ally instead of VMMXX? Currently, they are paying out 1.85%. I have my short-term savings there. Transferring from Ally to my bank takes about 2 business days so I can have the cash on hand pretty quick as needed.

    • jlcollinsnh says

      No particular reason.

      VMMXX pays ~2%, so they are just about the same. Not a big enough difference for me to worry about.

      Ally is fine.

  32. Passivecanadianincome says

    hey Jim

    First time here, found out about you from the choosefi podcast.

    Man, that is a simple portfolio. So much easier than my list of individual stocks. =)

    Congrats on the success of your book, I got to check it out sometime.

    Look forward to reading more from your blog.

    keep it up

  33. Kevin says

    Great article as usual. While Lysh and I may not be on the same playing field as an Oprah….we love spreading the message and book in our little corner of the world. Lysh has a box full of your books in the closet that she hands out as graduation presents. We recently gave it as a gift…and I could see the look on his face. It almost read “Oh great…other folks gave me money and you gave me homework”. You can lead a horse to Jim Collins, but you can’t make him think. I wish I had had this knowledge when I was a younger man. Looking forward to hearing about Chautauqua 2019.

  34. Andy says

    Awesome post. Thanks for sharing your portfolio.

    Lately, with the strong emergence of the FIRE movement, do you think there is a strong correlation between the FIRE movement and one of the greatest bull markets? A decade long bull market, the explosion and simplification of blogging, and the passage of the ACA in the US all came together to form the prefect storm?

    What happens to this movement if there is a prolonged retraction of the current bull market?

    • jlcollinsnh says

      Thanks Andy!

      The FIRE movement is still very small in the overall scheme of things and I don’t see it being much of a factor in this bull market.

      That said, I do expect that the ranks of the FIRE movement will drop come the next bear market. Too many have come into the fold with great enthusiasm and no experience with a bear.

      It is one thing to read about them and very much another to stay the course while enduring the reality of one.

  35. Freedom says

    Dear Jim

    I know you don’t like “timing the market” but don’t you think that right now (due to the already announced increasing interest rate in 2019 and maybe 2020) also for someone with a job (I.e. in Wealth Accumulation Stage) it would be better to invest the saving also in some bond index fund (e.g 10%) instead of 100% stocks ?


  36. TokyoJimbo says

    Hey Jim,

    I’ve only just started reading your blogs about week ago. I hopped around a lot and hit much of the early Stock Series. They have been so informative and so helpful! I’ve also been reading ERE and read the differences in opinion you both have and it is actually even more helpful to see the two of you give your reasoning to support your ideas.

    Currently, I am really thinking hard on what to do. I keep seeing so much about this bull market we are in and how the bear is coming soon. Actually, statistically it should be here extremely soon: https://www.reddit.com/r/wallstreetbets/comments/9tb3k1/reposting_bullbear_markets_since_the_original/

    In light of all this, I am about to bombard you with questions and I hope you have a chance to answer when you are back from Chautauqua!

    Okay, here we go:
    I have a nice chunk of change (roughly 100k) I’ve saved up to start investing with and I know you always say that you don’t really try to time the market and just get in, however, I’m wondering if in this case my better option is to implement Dollar Cost Averaging over the next year.

    I am 34, married with 1 kid, and I live in Japan. I do not have a 401k or IRA of any kind yet. My job does not provide one either, so I only have the mandatory Japanese pension plan and I’ve already added the max to that. I know you don’t know much about Japan, but that’s not what I’m here to talk about.

    We pull in about 50k a year and we can save about 20k a year currently – we are working hard to increase that to at least 30k.

    My wife is a huge proponent of saving for retirement, but that’s the extent of it, she is deathly afraid of even mild investments and wants to keep all our money in our bank account, which only yields .03%

    I really need some advise on how to move forward.
    I’ve convinced her to let me use 50% of our saved money to start investing as I see fit. That means I’ve got 50k to start with and 50% of whatever we can save each year to add to those investments, which is currently only 10k per year.

    With all that in mind, is it better for me to go 100% into VTSAX since I’ll really need to be building the wealth? I feel as though I should go 100% since I’m only using half of our saved money anyway, so the money in the bank is our cushion.
    Should I open and hold my VTSAX in a Traditional IRA or split it between Roth and Traditional or some other split of deductible/non-deductible?
    Are Index Funds really going to continue to grow in this world the way they have been?
    Is the market about to go Bear and Dollar Cost Averaging is the way to go with my 50k spread out over a year?
    Or with these record highs, should I wait to invest till after the market crashes pretty heavily to maximize my gains?

    And finally, if I have my returns from VTSAX go right back to purchase more stock, is that still considered ‘income’ that needs to be reported? I’m really unclear about this in general. It also makes a difference because if it is considered income, I’ll have to report it here in Japan and it could change my tax bracket. And just some final info, I am a US citizen and file form “2555” and form “1116” since I pay my taxes in Japan.

    Thank you so very much for your blog, it has changed my life in just this past week! I’d never learned any of this before, I’d heard terms, but never understood anything, and now I’m feeling versed enough to at least discuss ideas!! I’ve already started making life changes to, and thinking in terms of how our monthly $50 meals out are actually 38k if invested for 25 years instead, etc. I’ve also started talking to all my friends and family who are interested and starting to pick their brains about their portfolios if they have them and telling them to start thinking about it if they don’t.

    Looking forward to hearing you thoughts.
    Warm regards,

      • TokyoJimbo says

        Thanks Jim,

        I’ll make sure to complete the Stock Series and all the links within each.

        Hopefully I won’t still have similar questions after that!


      • TokyoJimbo says

        Hey Jim,

        Thanks again for responding!

        I had read through much of your content, as well as many others, and also through the first case study, which lead me to DCA* initially. I had also read part XVIII about investing in a Bull Market.

        I had not read part XXXII you linked, nor part XXVII about why you don’t like DCA, which was linked within XXXII.

        You are very right, in answered my questions, in context, almost exactly as if you’d been answering me here.

        You are right 100%, I am totally scared. Scared about everything in general as it is so new to me. And the way I phrased my questions was poor.

        I will read more and study more and research more and then work on some mental experiments with myself to see if I feel I am ready to start or not, thank you for the confidence building.

        I guess what I was really trying to get at is, how realistic is it for the market to rise indefinitely?
        In 2013 you wrote that 60 years before, in 1953, the DOW was trading at 250 and in 2013 was trading at 15,424. Do you really expect to see the DOW trading at close to a million per share in another 60 years if growth since the 1930’s persists?
        Even over 100,000 seems unlikely doesn’t it? At that point nobody even has a chance to buy-in unless they are already wealthy right? Or am I way off on that?

        Or are there procedures already in place that limit this growth before it gets out of realistic proportions? And if so, then does that mean indefinite growth is not a reality looking 30, 50, 70 years in the future?

        I really appreciate your input and thank you again for taking time out of your day to reply!


        *Just as an aside, it might be a good idea to addendum your first case study with a link to your explanation and thoughts on DCA, as I’d have already read it for sure if it were!

  37. Nitro says

    To jlcollinsnh or other savvy investors,

    I’m new to the game of managing my own retirement accounts, but would like to convert a 401(k) into a Vanguard IRA. Could someone please explain the advantages of investing in a Total Stock Market Index Fund versus a Total Stock Market Exchange Traded Fund? Jlcollinsnh states his preference for VTSAX, but why not VTI? From Vanguard’s website, I can’t really see a difference in holdings or performance. I read the basic differences from Vanguards website (lower cost of entry, real time pricing, etc.) but is there more to consider?

    Same question goes for a Total Bond Market Index Fund (VBTLX) versus some ETF equivalent.

    Thanks a bunch! I’m learning lots so fast!

  38. NWA-non says

    Vanguard just announced yesterday that they are lowering the minimum investment for Admiral shares on 38 index fund, VTSAX being one of them. Now you only need $3k for initial investment, from the earlier $10k!

    Everyone should rejoice.

    I just wanted to leave a comment here knowing that thousands read the comments on your blog and even if this benefits 1 single person, I’ve done a good deed for the day.

  39. WTF says

    Funny thing about your book… I believe I’ve bought six copies of it so far. Unfortunately, I can never keep one around the house since I end up giving a copy away to anyone brave enough to ask me about personal finance and investments. Everyone I’ve shared it with (who’s serious enough to read it) has benefitted as greatly from its wisdom as I have. In my opinion, “The Simple Path” deserves to be a perennial bestseller. Thank you for taking the time to publish it.

    • jlcollinsnh says

      And thank you for passing it on!

      If you haven’t already left a 5-star review for it on Amazon, your comment here would be a great one.

      Just sayin’ 🙂

  40. Hope says

    I read you book and love it! What do you think in general of the new zero fee fidelity index funds in comparison/as an alternative to vanguard which still has a fee (albeit a low one)? And a friend said they prefer ETFs (stock market index) to index funds since you have the flexibility to sell actively throughout the day versus end of day price if there were some major disaster. Is there an ETF index that is the same as the vanguard total stock index you recommend?

  41. Eric says

    What is your take on the much publicized idea that Index investing is hurting the market? The idea being that passive investing doesn’t try to evaluate specific companies and buy the “best” ones, but rather passive investing buys them all good or bad, and doesn’t try to allocate money to the “best” ones.

  42. Mike says

    JL or anyone else who knows the answer,

    Hope you are well. I haven’t seen the answer to this on any other post (forgive me if I missed it) so I want to confirm here. When using various retirement calculators, I usually use around 6% rate of return since that is what VTSAX has earned since inception and I plan on having almost 100% VTSAX until retirement. I noticed on another post you mentioned the 1.8% dividend that we receive from holding VTSAX. Does this mean I should really be using about 7.8% (minus the taxes paid on dividends of course) for my retirement calculator exercises? Does this work similarly for bonds as well? Obviously this would make a huge difference in calculating how much my nest egg could be worth in 20/30 years etc. so clarification would be great.


  43. Tony says


    I just wanted to commend you on remaining patient with commenters asking questions when the answer is already in the post or can be easily found in the stock series. You are doing yeoman’s work for us all and I am very appreciative of it.

  44. Debra A Dunn says


    Loved your book and plan to buy it for my soon to graduated daughter and future son in law as their careers take off!

    I wish I had found out about you when we started investing as I see I could have saved even more! We are retiring next year October of 2020 we plan to take a lump sum of my husband’s pension (Ford Motor Company 38 years). Can I put it all into VTSAX and get a monthly payment (if needed)? Confused as to where to put our money put I know I need to get out from our financial adviser sooner than later!

    Thanks for any help!

  45. GD Pierce says

    Jim, thank you for all the fantastic information you share on this blog. I moved a couple of IRAs to Vanguard last year and am happy I did! I am currently researching high-yield online savings accounts to move my emergency fund ($50K) from my local credit union low interest account. The high yield rates range from 2.1% to 2.5% APY. Of course, there’s a lot of fine print to decipher to make an informed decision. Do you have a recommendation for a totally liquid account?

  46. Sarah says

    New to the FI world but I’m finding the information you provide here really useful. Any advice on the best vanguard investments for a UK resident? Struggling to make a like for like comparison of the index funds available in the US and those in the UK.


  47. Tara says

    Dear Jim, thank you for your blog, I am learning a lot from you even though I live in Australia.

    What I would like to ask is, if you think that the asset allocation that gives the best long term return is make up of nearly 100% VTSAX with just enough cash to last 3 years (in case of market downturn), then why do you allocate as much as 25% to VBTLX?

    In the event that you no longer get an income outside of your portfolio, can you then live on the 2% dividend from your 100% VTSAX portfolio, and if not, then and only then start diversifying a small percentage out of VTSAX into VBTLX enough to fund your living expenses?

    You have written that VBTLX allows you to hedge against deflation, but just like you could ride out the rough years with VTSAX, could you not do the same with VBTLX?

    Thank you for reading, and I wish your blog and book every success, Jim.

  48. Taylor says

    Hey Jim!

    For starters your blog is awesome and I’ve learned so so much! I have a question about the difference between putting your cash in VMMXX and a high-yield savings account through an online bank like Ally or Citibank. Citibank currently offers an APY of 2.05%, Ally currently offers 1.81% and then with VMMXX it looks like the current compound yield is 1.82%. I know all three can fluctuate a bit depending on the market’s behavior. I currently have my cash in an Ally savings account and I’m wondering what is the best long term solution? Should I move the funds to Citibank or VMMXX? Or are the differences so minimal that it won’t make much of a difference?

    Again, thanks for creating such a useful and straight forward blog about investing, it truly is one of the most helpful resources I’ve come across. Thanks!

  49. Gabe says

    Hi Jim

    What’s the best way to calculate how much to allocate to my brokerage account with Vanguard? I currently have it set at 100% VTSAX.
    To begin I invested roughly 50% of my savings, which prior to reading your book and several others, sat in an on-line checking account with only 0.5% interest. My company has a 401k as well as a Keogh plan for retirement (I begin contributions in another 3 months).
    I’m paying off loans aggressively over the next 5 years (refinanced with an excellent low rate), which required keeping the other 50% of my savings stationary in their checking account for the duration of the loan repayment.
    So I guess what I’m wondering is, how much should I putting into the Vanguard each month considering I already have 2 tax-advantage retirement accounts to work with.

  50. Anthony Cavanagh says

    Hi Jim,

    Greetings from England, I hope all is well with you, family, and friends. I have been thoroughly enjoying The Stock Series, insightful common sense that cuts though the noise, the nonsense, and is often humorous, what’s not to like! I thank you deeply and sincerely for the enlightenment.

    For a variety of reasons I find myself with around £700K to invest, (not least because of my financially modest and careful parents, to say I owe them a debt of gratitude doesn’t even begin to cover the life they have given me, I was adopted, may God rest their souls).

    I very much want to invest as you illustrated in ‘What We Own and Why’, (the UK Vanguard available equivalent), simple common sense. However I was wondering if, with my age being 54, and this lump sum, you would do anything differently with regards to the percentages, or anything else at all?

    I ask as I am now aware that it is ‘time in the market’ and unsure if the 10 – 15 years I (think) have, is long enough to weather the ups and downs, and with my hopes and goals taken in to consideration. Whilst I want to leave a financial legacy for my daughter, (a good kid, at college, studies hard, plays hard), and I want to put something back in to society, (I’m thinking on that – I was a care home kid so have been winning ever since I was adopted), I want to enjoy the money in a way I wish my parents had whilst they were still alive, (regardless of how it has benefitted me). Hey, who knows, maybe I will feel like that as I get a little older too. But at this time…

    I feel I am at the wealth building and wealth preservation stage, I would like to have money to b able to travel and generally be out in the world while my body will allow me to do that with comfort and confidence.

    Thank you again for your time, and the wisdom and common sense you have shared, you cannot begin to imagine how much I appreciate it.

    With warmest regards,


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