Rob I want to thank you. I just discovered you a few weeks ago. I pulled my money from my financial guy who gave me an over complicated portfolio. I’m going solo and slimming down to your simple 3 fund portfolio. I hope you keep doing what you’re doing-A mitzvah for your followers! I am beyond grateful. I have learned so much.
You have one of the very best finance and investing channels on RUclips and deserve way more subscribers. So sick of all the finance bros! You’re a breath of fresh air
I just posted up the last comment with asset allocation. Question...what do you think of bonds at this time? They seem worthless, especially with the threat of inflation now a days...thoughts?
@@acrobizer1238 3 Years later - things maybe a little better now, due to the recent reduction of the interest rate by a half %. If reductions continue, things should be better. But if the Fed is wrong and interest rates go back up, then bonds still make no sense - at least to me.
Excellent presentation. I am planning on retiring from Federal service in 2022, keeping 5 years of expenses in the TSP G Fund and rolling the rest into an IRA. You’ve given me much “food for thought”.
That is such a great plan. It's tough to set aside funds to earn peanuts when the market is roaring. I know you wrote this a year ago (before the market decline). One of THE biggest risks to a retiree's portfolio is a significant loss at the onset of retirement because the funds can't "grow" back if you have to spend them. If you carved out 5 years worth of expenses and put them in the G fund prior to retiring and prior to the worst start to a year for a 60/40 portfolio ever, you were able to mitigate one of the biggest retirement planning risks. Did you execute your strategy?
@@seetheforestthroughthetreesI apologize for not getting back sooner with an update. I retired May 31, 2022. I actually changed my original plan a bit. Since I have a pension that more than covers expenses, I don’t need to have 5 years in the G Fund. Actually, I’m more aggressive so I have 20% G and 80% in Schwab’s S&P index SWPPX. I don’t plan on making any withdrawals until I turn 62 (in 2 years) and that amount will be approximately 3.3% of my balance. So far so good. I’m up about 16% overall since retiring. Thanks.
Great video, about one year ago I moved my investments over to Vanguard. The Edward Jones advisor had me in 9 different funds averaging over a 1 percent expense ratio and all were front load fees. Now I am in 4 different funds and I am saving on fees and have the extra working for me not going to the advisor.
My EJ had me in 18 funds after some cognitive challenges following a stroke. When I got my senses back and realized how he took advantage, I transferred it all to Vanguard and doing a 2 fund portfolio. Watching to consider 3 funds.
True. If I had to choose just one fund to invest forever it would be Berkshire Hathaway. And to lose weight buy a commercial versaclimber. Done and done.
been using M1 for a couple months now and definitely enjoying it. There is a rebalance feature but one thing to keep in mind this will create a taxable event. If you just adjust the percentages you want in each ticker it will eventually balance itself as you invest money into it without creating a taxable event. Amazing feature!
Hi Rob, I’m coming to this video in the middle of the night as I watch over my newborn son. I’ve been thinking a lot about the future and seeing your deep dive and the thought process behind your choices is amazing. Thank you for taking the time to walk us through this and to provide the links as additional guidance. This is all amazing stuff! You’ve got a whole new subscriber!
I thoroughly enjoyed this video. I wish I had been taught this back when I started investing. Thank you for taking the time to explain this investing approach clearly. The tempo, tone and graphics of your delivery are perfect. There is no fluff or unnecessary information. You now have a new subscriber.
Very helpful for a single woman who is starting to invest in her children's future. I will recommend your channel to others. I love the page "portfolio visualizer".
Great video! I have a 3 fund portfolio with Schwab: SWPPX-S&P 500, SWMCX-US MID-CAPS and SWSSX- SMALL-CAPS. I just have it automated where monthly I contribute equal amount to each index.
I did some sensitivity testing using Portfolio Visualizer on the Bogle Three Fund portfolio. Turns out that while the Mid Cap Value Index has a lower return than Small Cap Value, it also has a substantially lower standard deviation. So instead of having 40/10 Total Market/Small Cap Value mix and going for 30/20 Total Market/Mid Cap Value mix you can have a higher CAGR and a lower standard deviation. In fact, it's the same StDev as only investing in the Total Market for US stocks with a better Best Year (not surprising) and a better Worst Year.
long term returns of VTI is same as VOO+VXF. Last year VXF did well and many will tend to use small caps. For simplicity VTI+VXUS+BND is just fine.. sometimes I feel VUG+VXUS+BND is fine
Can you do a video or offer advise to someone who has already retired but does not plan on making any withdrawls for another 10 to 15 years with no more money going in to the plan? Can you point me in the right direction? I just ran into your videos and really enjoy the information and presentation.
You are doing 50% US total stock and 30% Total world stock ratio. That is 62.5% US / 37.5% World. Vanguard has a Total World Stock Index (VT) That already essentially combines these two funds with a 60/40 split. So you could get to essentially the same place with only 2 funds, VT and BND.
This guy is correct imho. The lower the number of funds (or in my case investment trusts) the better, although i would have 4 as a minimum and 8 as a maximum. It is also a lot easier to get in when prices are low after corrections, crashes etc. Also, for this reason don't forget to hold some cash.
My 401 k is in an aggressive mixed which has large, mid, small caps with fixed rate and bond portfolio. It has gotten me about 12-14% returns. I just opened a deferred comp plan which I’ve allocated 90% into an index that mimics the s&p 500 and 10% in short term treasury bonds. I cant wait until next year to compare my deferred comp to my 401k. Good video btw mate
Hello, I’m interested in moving money from my tsp into a similar 3 fund portfolio with vanguard, I was just seeking some advice on whether or not this was a good idea?
Best video I’ve seen that breaks down the 3 fund/ETF portfolio. Just sent to our 3 kids - 1 in high school, 1 in college and 1 about to graduate college. Fingers crossed they follow the advise. We have Schwab and TSP accounts - wish they had a one button rebalance option as well. Great feature in M1 Finance. Thanks for the insightful videos
Hi Rob. What about investing in technology, say something like QQQ, instead of international stock VXUS. I realize there is a lot more volatility, but QQQ has performed well over time.
Rob: Before I ask my question, I want to say that I am a big fan. However, I do have a question about holding bonds in a portfolio. Bond coupons are at an all-time low. When bond coupons revert back to a normal level (like 5%) the value of the underlying bonds will suffer. With that as background, help me to understand how bonds (or a bond index fund) can help a portfolio.
I wish youtube existed with this advice when I was a kid in the 80s and my HR department told me I had a 401k! My father was a machinist and mother a nurse, they knew about savings bonds and cds ... investing in the stock market was something the rich people did and was completely foreign to me
Thanks for the clear explanation of everything Rob. Also, M1 Financial has some great features, but I’m looking to understand what an “account” actually means with this type of firm. If I setup a 3-fund portfolio in M1 Financial as you described, and I now own shares in each of those Vanguard funds, what role does M1 play in this (other than providing the platform and facilitating the transactions). What happens if M1 folds, but Vanguard is still healthy? What happens to my M1 account? What would the status be of my ownership of the Vanguard funds in this case? 20:41
Hi Rob - two years plus later do you still recommend the M1 Finance app? Really intrigued by it's flexibility. Would this be a good place to roll my entire Retirement Portfolio to?
You should do a book review of J.L. Collin's The Simple Path to Wealth. In it he distinguishes between investing when you are employed and when you no longer work. During the growth phase, he advocates putting everything in a stock index fund that tracks the S&P, which he points out has significant international exposure because so many of the S&P companies are international. During the preservation stage, he sees a place for bond to reduce volatility when regular contributions to one's retirement plans are no longer being made.
I read his book years ago. A review is a good idea. The problem with a 100% stock portfolio is that it can underperform say a 90/10 portfolio over a very long time period. That said, we are in unchartered waters with the current bond market.
I should add that I agree that the S&P 500 companies operate throughout the world. However, I see no reason to ignore 85% of the GDP in the world. Yes, the U.S. has been the dominant economy since WWII, but should we make a bet that it will continue in that role for the next 50 years?
@@rob_bergerregarding the last comment. Dont you think it’d be possible to adjust the portfolios based on how the world evolves and rip the benefits while they exist rather than limiting ourselves right off the bat? BTW this is a superbly clear video. Thank you
Great video. Thank you for taking the time to put this together. I've been torn on should I buy the top ten large cap stocks or go with an ETF. The diversification a ETF/Mutual can provide is unbeatable and in today's world cheep too.
I just found your channel and want to thank you for a really good video. I have watched many videos that talk about finance and give no real info just jibber jabber. Anyway I just want to say thank you!
I just found this video and found it very helpful. I was wondering, since it was made over a year ago and we are now entering a recession, if you would still recommend the same mix of funds. Thanks!!
Just found your channel yesterday, your videos are so helpful to a newer investor in 50’s. Would love some more videos on getting started late to investing:) Thank you!
You should have millions of subscribers. Clear, intelligent, transparent and refreshing! Much appreciated.
Why does this guy seem so honest and trustworthy? Nice presentations.
Rob I want to thank you. I just discovered you a few weeks ago. I pulled my money from my financial guy who gave me an over complicated portfolio. I’m going solo and slimming down to your simple 3 fund portfolio. I hope you keep doing what you’re doing-A mitzvah for your followers! I am beyond grateful. I have learned so much.
You have one of the very best finance and investing channels on RUclips and deserve way more subscribers. So sick of all the finance bros! You’re a breath of fresh air
Thanks for such simplicity. Where were you when I was 50 years old. It’s time to educate my children.. Thanks again
This was one of the best financial videos I've ever watched. Thank you so much.
Learned more from this video then thousands of dollars I have spent on different types of investing education.
I’m 53 with this breakdown...
50%. S&P 500 passive index
30% Small Cap passive index
20% Int passive Index
YTD: 16%
I just posted up the last comment with asset allocation. Question...what do you think of bonds at this time? They seem worthless, especially with the threat of inflation now a days...thoughts?
@@acrobizer1238 3 Years later - things maybe a little better now, due to the recent reduction of the interest rate by a half %. If reductions continue, things should be better. But if the Fed is wrong and interest rates go back up, then bonds still make no sense - at least to me.
Hello sir, do you have a video for people close to retirement. A portpolio for income stream in retirement ?
Rob, your videos are both, timeless and priceless: please keep them coming!
Fantastic context Bob…. Presented in an exceedingly kind and forgiving way. Thank you.
Excellent presentation. I am planning on retiring from Federal service in 2022, keeping 5 years of expenses in the TSP G Fund and rolling the rest into an IRA. You’ve given me much “food for thought”.
That is such a great plan. It's tough to set aside funds to earn peanuts when the market is roaring. I know you wrote this a year ago (before the market decline). One of THE biggest risks to a retiree's portfolio is a significant loss at the onset of retirement because the funds can't "grow" back if you have to spend them. If you carved out 5 years worth of expenses and put them in the G fund prior to retiring and prior to the worst start to a year for a 60/40 portfolio ever, you were able to mitigate one of the biggest retirement planning risks. Did you execute your strategy?
@@seetheforestthroughthetreesI apologize for not getting back sooner with an update. I retired May 31, 2022. I actually changed my original plan a bit. Since I have a pension that more than covers expenses, I don’t need to have 5 years in the G Fund. Actually, I’m more aggressive so I have 20% G and 80% in Schwab’s S&P index SWPPX. I don’t plan on making any withdrawals until I turn 62 (in 2 years) and that amount will be approximately 3.3% of my balance. So far so good. I’m up about 16% overall since retiring. Thanks.
So similar to what Fed workers have for their TSPs and it WORKS.
Great video, about one year ago I moved my investments over to Vanguard. The Edward Jones advisor had me in 9 different funds averaging over a 1 percent expense ratio and all were front load fees. Now I am in 4 different funds and I am saving on fees and have the extra working for me not going to the advisor.
How’s it going with vanguard? Thinking of switching myself!
@@Noah4evaa So far I am happy with them. When I retired I am going to stay with Vanguard.
Well done! Low expense index funds are the way to go. No need to pay more than 0.06% annual expense on any fund.
My EJ had me in 18 funds after some cognitive challenges following a stroke. When I got my senses back and realized how he took advantage, I transferred it all to Vanguard and doing a 2 fund portfolio. Watching to consider 3 funds.
@perfectlymprfct Glad you escaped from the pond scum.
Excellent advice. Investing to me is like losing weight both are simple but not easy. Your temperament is the most important part.
True. If I had to choose just one fund to invest forever it would be Berkshire Hathaway. And to lose weight buy a commercial versaclimber. Done and done.
You're like the wise uncle I never had, Rob! Appreciate the education ✌️
been using M1 for a couple months now and definitely enjoying it. There is a rebalance feature but one thing to keep in mind this will create a taxable event. If you just adjust the percentages you want in each ticker it will eventually balance itself as you invest money into it without creating a taxable event. Amazing feature!
You can create a roth ira or a traditional ira with M1 Finance. So that the taxable events won't happen when you re-balance.
You are experiencing tax events because you are in a Brokerage account and not in a Tax Deferred account - like an IRA or 401(k).
@@Tbay007 What if their Roth IRA is already maxed out so this is a secondary brokerage account?
Hi Rob,
I’m coming to this video in the middle of the night as I watch over my newborn son. I’ve been thinking a lot about the future and seeing your deep dive and the thought process behind your choices is amazing.
Thank you for taking the time to walk us through this and to provide the links as additional guidance. This is all amazing stuff!
You’ve got a whole new subscriber!
I thoroughly enjoyed this video. I wish I had been taught this back when I started investing. Thank you for taking the time to explain this investing approach clearly. The tempo, tone and graphics of your delivery are perfect. There is no fluff or unnecessary information. You now have a new subscriber.
Very helpful for a single woman who is starting to invest in her children's future. I will recommend your channel to others. I love the page "portfolio visualizer".
My ROTH IRA Is actually a 3 fund portfolio! FXAIX 50% FTIHX 25% and FREL 25%
How is the portfolio doing? I was considering these funds. Would you consider fzrox over fxaix
Great video!
I have a 3 fund portfolio with Schwab: SWPPX-S&P 500, SWMCX-US MID-CAPS and SWSSX- SMALL-CAPS.
I just have it automated where monthly I contribute equal amount to each index.
VOO performs slightly better than SWPPX
I did some sensitivity testing using Portfolio Visualizer on the Bogle Three Fund portfolio. Turns out that while the Mid Cap Value Index has a lower return than Small Cap Value, it also has a substantially lower standard deviation. So instead of having 40/10 Total Market/Small Cap Value mix and going for 30/20 Total Market/Mid Cap Value mix you can have a higher CAGR and a lower standard deviation. In fact, it's the same StDev as only investing in the Total Market for US stocks with a better Best Year (not surprising) and a better Worst Year.
Rather than look at CAGR and STDev over a long period, use the tab on Portfolio Visualizer to compare rolling three and five year numbers.
What does CAGR mean? And what is meant by a sensitivity test? Thank you much. I'm learning and found your post very interesting.
@@finesgomez4154 CAGR - Compound Annual Growth Rate. Sensitivity testing is making small changes and observing the result.
Thank you for that..wish someone had explained this to me 20 years ago. ❤
I subscribed to the 'video'!
And I watched the entire thing!
I can’t believe I just now found your channel on RUclips. Thank you for sharing your great knowledge. Subscribed.
Explained clearly and accurately. Was having some confusion around bonds until watching this. Thank you!
I was very sceptical as I saw the title of the video but it made me curious and at the end it was a video worth watching.
Fantastic exactly what I was looking for. Thanks Rob
You just validated my Monte Carlo analysis I’ve been doing and got my best performance with the Buffet strategy.
I've been emulating this with VOO VXF VXUS and BND. Added the VXF to get some mid-small cap exposure. Happy with is so far.
long term returns of VTI is same as VOO+VXF.
Last year VXF did well and many will tend to use small caps.
For simplicity VTI+VXUS+BND is just fine.. sometimes I feel VUG+VXUS+BND is fine
@@JoeC5050 I wasn’t very clear. I use VXF to overweight mid/small cap (compared to VTI
This is the best content you have created.
Oh yeah👍.. watched your VTI vs VOO vid. Made my choice. Bought a couple books.. Like to learn about M1 finance.
Love M1 Finance.. it’s just so easy to use
Thank you! This was the most informative video I have found. Subbed
Do sensible; just love that you share your wealth of knowledge and information! 😊
Lol, love the "it's not broken. Let's get back to the portfolio." Thank you for the information.
Great video for beginners
Can you do a video or offer advise to someone who has already retired but does not plan on making any withdrawls for another 10 to 15 years with no more money going in to the plan? Can you point me in the right direction? I just ran into your videos and really enjoy the information and presentation.
GOOD JOB INFO. WELL DONE. THANK YOU SO MUCH MR BOB
Such an excellent video. Great simple presentation. Thank you Rob!
Your videos are all straightforward and to the point. Will recommend your channel to my daughter who is just started her career.
THANK YOU SIR 😊
I'm more of a four stock guy. I revile fees. 4 and done. DCA monthly regardless of price. AAPL, MO, TSLA and UNH. I don't trade. I buy for life.
You are doing 50% US total stock and 30% Total world stock ratio. That is 62.5% US / 37.5% World. Vanguard has a Total World Stock Index (VT) That already essentially combines these two funds with a 60/40 split. So you could get to essentially the same place with only 2 funds, VT and BND.
Hes talking about what a traditional 3 fund portfolio would be.
Good info on 3 - 6 fund portfolios. I was reluctant to enter my SSN to create an M1 account just so I could access your portfolio samples.
This was so helpful. Thank you.
Thanks Rob.... 5-Fund portfolio for the taxable, 6-Fund portfolio for the Roths.
Great info!!!
Rob - awesome lesson!!
Another excellent voice of common sense reason.
Excellent video, Rob! You are THE BEST!
What a fantastic video thank you.
Thank you for the research you do for these super in depth videos. I'm new to the channel and I've been enjoying learning from you. Thank you.
This video was incredibly helpful. Thank you.
I like your approach. Straight forward & sinple.
This an incredible finance video. Thank you very much.
Great work on all your videos. Would love to get your take on looking at rolling returns to compare portfolios in a future video
Great video Rob. Very informative as are all of your videos. I wish I had seen this years earlier.
How would you edge the market? Would you buy gold? What are best non correlating investments to stocks?
This guy is correct imho. The lower the number of funds (or in my case investment trusts) the better, although i would have 4 as a minimum and 8 as a maximum. It is also a lot easier to get in when prices are low after corrections, crashes etc. Also, for this reason don't forget to hold some cash.
My 401 k is in an aggressive mixed which has large, mid, small caps with fixed rate and bond portfolio. It has gotten me about 12-14% returns. I just opened a deferred comp plan which I’ve allocated 90% into an index that mimics the s&p 500 and 10% in short term treasury bonds. I cant wait until next year to compare my deferred comp to my 401k. Good video btw mate
I like this topic and that's what i was looking for. thanks Rob!
Excellent video Rob!
Superbly done! Thank you!
just found your this video. I am thankful to you for the clarity and information shared.
Hello, I’m interested in moving money from my tsp into a similar 3 fund portfolio with vanguard, I was just seeking some advice on whether or not this was a good idea?
Can you recommend a good short-term bond fund?
Best video I’ve seen that breaks down the 3 fund/ETF portfolio. Just sent to our 3 kids - 1 in high school, 1 in college and 1 about to graduate college. Fingers crossed they follow the advise. We have Schwab and TSP accounts - wish they had a one button rebalance option as well. Great feature in M1 Finance. Thanks for the insightful videos
I have TSP, love M1 been using it for over 2 years and open an account for all my 5 kids, hopefully the follow too.
They’re all in Crypto 😂 (hopefully not)!
Very informative video Rob. Great job! Thanks for sharing…Ed
Thanks for the info Rob.
Thank you for sharing!!
I really liked the info on reits in tax savings account. I’m learning so much on RUclips, thanks for what you do.
You are wonderful, thank you very much. So glad I found you!
Great show Rob! Thank you very much for sharing your knowledge.
VTI has you covered. No need for international. Bonds are going to be making very little as interest rates rise.
🙈🙈🙈
Excellent video. Thank a lot of value from this video
Rob, what is the perfect cap weighting in a portfolio?
Great advice. I'm hammering this type of advice into my kids in their early 20s.
Hi Rob. What about investing in technology, say something like QQQ, instead of international stock VXUS. I realize there is a lot more volatility, but QQQ has performed well over time.
Rob, this is so good! You've earned a new subscriber in myself. Thank you for putting it where us goats can get it!
Rob: Before I ask my question, I want to say that I am a big fan. However, I do have a question about holding bonds in a portfolio. Bond coupons are at an all-time low. When bond coupons revert back to a normal level (like 5%) the value of the underlying bonds will suffer. With that as background, help me to understand how bonds (or a bond index fund) can help a portfolio.
Sounds to me like you already know the answer, you’re just looking for reassurance?
I'm hoping Rob will respond to this question--it's my question, too.
@@Bokescreek It's my question also.
At the moment, Bonds are just VERY slightly better than putting your money beneath the matress.
still no answer ((
@rob berger please be so kind to say a word )
Great video - keep it simple! Many thanks.
That was awesome 👏 thanks so much
Fantastic content! Exactly what I was looking for. You should have millions of views by now. Anyways Thank you!
If I have a shorter time horizon of ten years, is the 3-fund approach appropriate?
To me yes
I wish youtube existed with this advice when I was a kid in the 80s and my HR department told me I had a 401k! My father was a machinist and mother a nurse, they knew about savings bonds and cds ... investing in the stock market was something the rich people did and was completely foreign to me
Thank you so much for this tutorial !!!
Thanks for the clear explanation of everything Rob. Also, M1 Financial has some great features, but I’m looking to understand what an “account” actually means with this type of firm. If I setup a 3-fund portfolio in M1 Financial as you described, and I now own shares in each of those Vanguard funds, what role does M1 play in this (other than providing the platform and facilitating the transactions). What happens if M1 folds, but Vanguard is still healthy? What happens to my M1 account? What would the status be of my ownership of the Vanguard funds in this case? 20:41
Where is the link to the article you referenced around the 19:00 mark. I would like to read it.
Visit his website for Feb 26 2021 article entitled How to Build Three Fund Portfolio
@@alrocky Thank you!
Hi Rob - two years plus later do you still recommend the M1 Finance app? Really intrigued by it's flexibility. Would this be a good place to roll my entire Retirement Portfolio to?
Following
Can you talk to how target date funds might compare to a six fund or three fun in an IRA
great content. Subscribed!
You should do a book review of J.L. Collin's The Simple Path to Wealth. In it he distinguishes between investing when you are employed and when you no longer work. During the growth phase, he advocates putting everything in a stock index fund that tracks the S&P, which he points out has significant international exposure because so many of the S&P companies are international. During the preservation stage, he sees a place for bond to reduce volatility when regular contributions to one's retirement plans are no longer being made.
I read his book years ago. A review is a good idea. The problem with a 100% stock portfolio is that it can underperform say a 90/10 portfolio over a very long time period. That said, we are in unchartered waters with the current bond market.
I should add that I agree that the S&P 500 companies operate throughout the world. However, I see no reason to ignore 85% of the GDP in the world. Yes, the U.S. has been the dominant economy since WWII, but should we make a bet that it will continue in that role for the next 50 years?
@@rob_bergerregarding the last comment. Dont you think it’d be possible to adjust the portfolios based on how the world evolves and rip the benefits while they exist rather than limiting ourselves right off the bat?
BTW this is a superbly clear video. Thank you
Great video. Thank you for taking the time to put this together. I've been torn on should I buy the top ten large cap stocks or go with an ETF. The diversification a ETF/Mutual can provide is unbeatable and in today's world cheep too.
Thanks for that!
Do you have any video talking about ETF x Index Fund... Or something like VTI vs VTSAX?
Thank you so much for this video!!
I just found your channel and want to thank you for a really good video. I have watched many videos that talk about finance and give no real info just jibber jabber. Anyway I just want to say thank you!
Glad it was helpful!
I just found this video and found it very helpful. I was wondering, since it was made over a year ago and we are now entering a recession, if you would still recommend the same mix of funds. Thanks!!
Love your content. Just wanted to give you a subscription.
Just found your channel yesterday, your videos are so helpful to a newer investor in 50’s. Would love some more videos on getting started late to investing:) Thank you!
I am in my 50s and a new-ish investor as well. Do you have any other good references to pass on to me? Thank you!