How to Invest in a Taxable Account | Live Q&A

[@TeddyAlexanderv6]

Tax laws can be so complex, and it’s super helpful to break them down like this. Understanding how different policies can impact our finances is crucial for making informed decisions.

[@NikolasMartine01]

Making profitable investments during this time of political change can be risky without that insight. For me, working with an adviser is the best first step to navigate these complexities and make informed choices.

[@GraceOliviaf7y]

I think having an investment advisor is the way to go. I've been with one because I lack the expertise for the market. I made over $490K during the recent dip, highlighting that there's more to the market than we average folks know.

[@OscarBarnaby3k]

Hmmm this is quite interesting, Please can you leave the info of your investment advisor here? I’m in dire need for one.

[@GraceOliviaf7y]

Nicole Anastasia Plumlee can't divulge much. Most likely, the internet should have her basic info, you can research if you like.

[@OscarBarnaby3k]

I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.

[@iancho9587]

Aside from the interesting and for me very educational content, the thing I truly appreciate is not asking for thumbs, likes or subscribes... Thank you very much for the personal time donated to the masses.

[@scole4545]

This man is a God send. Thanks Rob I have learned so much from your Book and website as well as your many videos! I am 45 and started investing a couple of years back. Appreciate your guidance and your honest transparent advice.

[@danceoutnow]

Love your channel so much Rob. Just like the disclaimer I never use your videos to make financial decisions, but you've helped me a lot in the last year cut through the industry jargon and shown some of the questions to ask, which is infinitely more valuable. I treat my taxable account like a high savings accounts because my 401k and Roth are set to maximize returns. So I have 70% invested in Dividend stocks like KO and 30% invested in Vanguards tax protected Municipal bond fund. The goal is that even with dividends being taxed, it still has the ability to add shares over time (and I intend to hold KO forever), while the Municipal produces tax protected gains that are still better than the 1% savings accounts rates (though not by much at the moment). I hope to not have to touch it, but both of those stocks are also easy to sell with low share prices if I needed emergency cash as well.

[@kevinn6482]

Rob, I appreciate your videos and have learned so much from your content. Thank you!

[@kimappreciateslife]

This popped up tonight after your livestream. Watching this on Dec 5th 2022! Lol, things have really changed big time! 😂

[@laserdrip]

Great content. Thank you for sharing your wisdom.

[@garyb711]

Hey Rob! You stated that you goal is to be able to retire by withdrawing 3% or less each year. Did you reduce your income need by any social security you'll receive? If retiring early, how should someone approach deciding if a withdrawal rate greater than 4% is OK before social security kicks in? In my case, I think I'll be somewhere between 3.5% and 4% for about 7 years. If the market tanks, I could go over 4%. Once social security kicks in, I should be at 3% or less.

[@rob_berger]

My gut tells me you'll be fine. May gut is sometimes wrong. I'm not factoring in ss. I see that as a bonus. One tool you can use to model your situation is New Retirement.

[@alanzuckerman3972]

Rob, Vanguard shows the after tax returns for their funds. This might help in placing certain funds in taxable accounts. The Vanguard Balanced Fund out performed the Tax Managed Balanced Fund on an after tax basis over meaningful time periods.

[@ShaneVeltri]

Loved the stories!

[@ltmsimply]

ROB . LMAO!!!! You are getting funnier and funnier. “The day when you die to get the last shot of morfine“ hahaha

[@anepartners9603]

Thanks , great episodes. When selecting factors, is there any reason to diversify exposure on that factor with multiple vehicles instead of choosing just one . For example, if I wanted to allocate 15% in to Value . Can I allocate 5% SPYV, 5% to SCHV, and 5% VTV? What are your thoughts?. Thanks in advance.

[@Load2DeliverLLC]

Mr. Rob, thank you so much for your time and clarity in your videos. Also, are you going to continue to make videos after you RETIRE.

[@politicscommentator]

Hi Rob, thanks for bringing up a Q&A on investing with taxable account. Hopefully you will do another one. Just want a clarification, do you still think that index funds as mutual funds are still good investment option in taxable account?

[@hectorrubio1012]

Hi Rob, what is the best time to rebalance a portfolio in a taxable account, when the market is down or up. I'm pretty new to investing.

[@dandonofrio8701]

I’m curious of the same

[@rob_berger]

I think there are two reasonable approaches. One would be to rebalance once a year at the same time, regardless of whether the market is up or down. The other is to rebalance when your actual allocation has moved away from your planned allocation be a pre-defined amount. I've covered this in a video on Opportunistic Rebalancing.

[@hectorrubio1012]

@@rob_berger I appreciate it.

[@alrocky]

@@hectorrubio1012 If in taxable account do not auto-reinvest dividends / capital gains - use that money to rebalance.

[@paulacothren3591]

@@alrocky yes!

[@eusacadena2263]

Do u have or can u make video on rebalancing. In terms of interval to do it in various Accts ( hsa,401k, roth…) and talk about rollovers like employer hsa to broker hsa, what one time rollovers timing. Also hen choosing individual stock what bal sheet details is most important to review and what 5 u reviewed any why those. Thanks

[@jmalaverri1]

Hi Rob, thanks for this Q&A session. Do you own individual stocks in your taxable account? Do stocks like APPLE or Berkshire Hathaway (class B), for example, would be acceptable choices for a taxable account besides index funds?

[@taitruong968]

In my opinion they are high value stock, you probably won’t sell them. So ok for taxable account.

[@jmc8076]

Late reply but in case others w/similar question read this any security/fund can be held in any acct but tax efficiency is the issue. Ideally talk to a good CPA and fee only advisor (if US Rob has list on his website) at least once to review all your holdings in context with YOUR goals and situation. Best of luck.

[@jmc8076]

@@taitruong968 Depends on tax efficiency and tacking into account her situation. Both good CPA and fee only advisor at least once a year or at each major change in age or life situation would be ideal. Rob often suggests both. Obv based on budget.

[@shawnnahass6886]

Hello all remember with the tsp if u move the money before 59 1/2 from 401k to a IRA u will lose the advantage of not paying the early withdrawal penalty (10%) from age 55-59 1/2 which the 401k offers to your benefit that a IRA does not as long as u retire from your job at 55 where your current 401k is with.

[@danboruchowitz9803]

Hey Rob, enjoy your channel. Question - is M1 Finance a good option for a taxable brokerage account? I believe there is no tax loss harvesting available, but it does cater for tax efficiency. Perhaps you could expand on whether it's a good option seeing as though the pies and rebalancing elements are attractive. Thanks!

[@jimgrant1776]

How can I watch when the video is live? I would I know when it would occur?

[@greg5892]

Rob, do you know more these days about how NTSX works? It levers treasury futures for a 90/60 allocation of stocks to long term treasuries, effectively a 60/40 two-fund portfolio at 1.5x. The idea is to maximize the returns per unit risk and then dial up the risk to match a 100% equities portfolio. That increases returns over the 100% VOO portfolio except when treasuries and stocks are both dropping, which is true also of the 60/40 rather than being an effect of the leverage.

[@jasonhobbs2405]

I’m betting NTSX will beat VOO in Sharp ratio over the next 10, 20, and 30 years. It’s really a very well constructed and evidence based fund. Whether or not it beats in CAGR is a matter of where interest rates go.

[@barnhillcreations]

What is your take on the income factory strategy? Is it the same as its to complicated? Div

[@paulw3495]

If someone had an actively-managed Small Cap Growth fund in a taxable account, they might be subject to annual capital gains taxation. For example, JANVX, had about 12% of the portfolio value in capital gains for 2021. I understand this can be avoided by investing in a comparable index fund or ETF (VSGAX or VBX for example). My understanding was that Index funds are tax efficient because of low turnover. If VSGAX has a turnover rate of 24% (comparable to JANVX which has a 21% turnover rate), why has VSGAX produced no LTCGs over the past five years? Low turnover can’t be the only explanation as to why index funds are tax-efficient because VSGAX seems to have growth with a significant turnover rate but no capital gains. I appreciate the low-key informational focus of your channel.

[@pgbtomas]

Which do you prefer SPY oldest among index trackers, expense ratio 0.09%, average spread 0.00% , SFY same 500+ holdings, expense ratio 0.00%, average spread 0.09%, VTI has 4,000+ holdings, expense ratio 0.03%, average spread 0.01%, VT has 8,000+ holdings, expense ratio 0.08%, average spread 0.01% ? (to be applied in the 3 fund portfolio if given a choice to replace VOO). Hope you can read this question. Thank you

[@rob_berger]

They are all great funds. For me, I would use VTI for my U.S. Stock allocation. I like to control the U.S. vs. Int'l allocation, which VT wouldn't allow me to do.

[@pgbtomas]

​@@rob_berger thank you so much for answering.

[@thanhdang2546]

What is the issue with Vanguard Target funds. Why did they distribute large long term capital gain tax last year? Thanks.

[@BE2001]

Sorry if I missed this. Are there ETF conversions available at Vanguard for the target retirement accounts that don't trigger a taxable event?

[@rob_berger]

No. They don't have ETF target date funds.

[@KahangLChan]

Hi Rob. Please share your thoughts on owning bonds versus high dividend ETF's as an alternative. Thank you.

[@last9up]

This comment is two years old and I'm sure you gave gotten an answer but there might be someone else who sees this. From what I have seen, they are not equivalents. Bonds are meant to be used to as a hedge in case of a downturn. High yield dividend ETFs are for extra income. Yes, high yield ETFs usually do better in a downturn BUT they still go down. Sometimes just as much as growth ETFs. Also, there are times when the companies stop paying dividends, see Intel in 2024. If you want to use them then go ahead, but remember with higher reward there is always higher risk. This isn't financial advice. I'm a software engineer who learned that long term investingis key 😄

[@jdmulloy]

My one problem with ETFRC is that it only works with ETFs, not regular mutual funds. I wish I could also compare overlap between mutual funds, or an ETF and a mutual fund.

[@AlexYurchak]

Question regarding HSA. Would your approach change if the HSA doesn't allow you to submit old receipts?

[@captainnitrousx1331]

Rob your the best and I have learned a lot about investing but I do have one question! Rob is there maybe a chance someone added something more than just coffee in that cup for tonight's show?

[@richardhead2318]

What are your thoughts on the golden butterfly portfolio? Seems like it might be wise to substitute a muni bond etf (e.g.,MUB) for treasury ETFs in taxable accounts.

[@chrisvild1263]

What about BRK ? Does that have zero income ?

[@joannfahey8423]

I like your regular videos. These live streams are way too long. It seems to encourage rambling.

[@Steven-se5jd]

Would you be able to share your insight on bank wealth management/private banking vs index/robo-advisor?? I’ve been learning a lot from you and also do a lot of reading myself. But I am still relatively new to investing.

[@Asstronauts93]

I want my money before 59 1/2. Simple as. Taxable is right for me

[@urbanart7325]

I I do appreciate your KISS principle

[@Micahpickles]

I have good insurance through my employer. Can I still open a HSA?

[@70qq]

Thanks

[@diggin420]

TSP is easily managed online, but they restrict withdrawal and force difficult actions for retirement age. Always better to move to a public broker.

[@VietnamSteve]

So happy I’m in an alternate geography. Retirement accounts can take $107k per annum so no need to use taxable accounts until you’re contributing $107k annually to the retirement account. And then you can bring forward three years of contributions. Struggling to hit the retirement account limits.

[@dkc9875]

wow! where do you live? I have to accept money back if i contribute more than the 20K or so in my 401 k

[@rosemarybrandl7895]

I have notice that for the most part, Vanguard does not have capital gains on their 500 Index and Total stock market funds. However, Fidelity does. Why this this?

[@nbatra]

Would you convert VTSAX to VTI or VITSX to save on expenses.

[@alrocky]

0.04% ER VTSAX Vanguard Total US Stock Market Admiral Shares 0.03% ER VTI Vanguard Total US Stock Market ETF 0.03% ER VITSX Vanguard Total US Stock Market Institutional Shares $5 Million Initial Purchase The 0.01% ER is negligible so performance virtually indistinguishable. There are more important considerations that affect your portfolio. At Morningstar > Performance > Returns > 15 years returns

[@johnhull9317]

Do you own any value stocks in your taxable account?

[@rob_berger]

Yes. My bank stocks are value stocks.

[@victorcardenas4]

Love your videos, sir. Hopefully Vanguard don’t send you a “cease and desist” letter.

[@voncilledemesa2075]

I’ve had a few people say not to hold Bonds in my taxable account just in a tax deferred account. Your thoughts???

[@rob_berger]

Generally I agree.

[@123jochi]

Another 2 hours of no chess puzzles. At least you mentioned the word chess this time.

[@tobyt1975]

When’s the next QA?

[@rob_berger]

Thursday at 11 am ET.

[@tobyt1975]

Thanks!

[@lw9936]

@Rob Berger, Can we buy I bond from Retirement accounts or Roth IRA account? thanks

[@stewdogg42]

LOL @ Emerging Markets

[@ShOwStOpp3rr]

VOO SCHD and chill...thats how i sleep at night

[@Danfrd]

I'm a new investor looking at these as well... do you chill with these in a taxable account?

[@Travlinmo]

You definitely should visit Singapore. Wonderful people and country. Strict laws but you appear to not be a 20 year knucklehead.

[@higiniomorales459]

........ Coke is better than Pepsi.

[@wbcoll01]

Pepsi for sure.

[@chrisoneillstitt]

Fsa- the more the better,dental work could go into the thousands alone.

[@bpodesta1]

I do like your videos, but the lip smacking is driving me crazy, Rob. 😂

[@victorm.perezmora2624]

Coke!

[@Valencia-27]

👍