Tax-Efficient Investment Placement Over Time

Since I don’t let myself actually fidget with my investments, I instead make a lot of spreadsheets about them. My latest spreadsheet shows how I would ideally split my investments across multiple accounts as my portfolio grows in size and my target asset allocation shifts. With this spreadsheet, by 2025, I hit a target of a 50/50 asset allocation split and decide to leave it there for a while. This is honestly the most mentally helpful spreadsheet I’ve made about allocating investments so far and I will try to do it justice.

Some assumptions in the making of this summary table:

1. 401(k) maximum stays at $17,500/year and Roth IRA maximum at $5,500/year.
2. My employer matching doesn’t increase. (Which it actually does with my salary.)
3. 5% returns on the overall portfolio, year-over-year.
4. I have access to the same funds as I do now in my 401(k) for the next 12 years.
5. My income 2015 and beyond is stable at around $160,000 gross and my expenses stay stable at ~$36-40k/year until the mortgage is paid off and then $24-28k/year after that.
6. I didn’t calculate any of the Series I Savings Bond interest.

Other notes about the table:

1. I’m maxing out my 401(k) and Roth IRA each year and either investing or paying down the mortgage with my surplus.
2. VEXMX (Vanguard Extended Market Index fund, investor shares) is kept in an 80/20 ratio with the S&P 500 index fund in my 401(k) until that becomes < $3,000 and not worthwhile.
3. The mortgage gets paid off in 2018, which is why the portfolio starts going up by a lot more in 2019.

Okay, so that table is pretty big. I took out the part below it where it shows that with a safe withdrawal rate (SWR) of 4% I should have enough in investments by 2021 (if I use retirement accounts) and assuming a SWR of 2%, I should be good around 2026.

I mostly made this spreadsheet because I was curious to see how my portfolio would change if it was larger. You can see that as my portfolio gets bigger, fund placement shifts a bit.

• Things start shifting a lot once the mortgage is paid off (~2018) since I’m then putting a disproportionate amount of money in taxable versus my 401(k) and Roth IRA:

1. The portion of my 401(k) in Total International gets smaller and smaller each year until 2019 when it’s gone entirely.
2. Starting in 2019, the S&P 500 index funds in my 401(k) get shifted towards the stable value fund and the extended market funds in my Roth IRA towards Total Stock Market (TSM).
3. I add shares of TSM in taxable in 2019.
4. By 2021, there’s no more need to have the extended market funds in my Roth IRA and by 2022, the S&P 500 index fund in my 401(k) is no more.
5. I start adding to Total Bond Market (TBM) in 2022.
6. By 2025, my 401(k) and Roth IRA (i.e. all of my tax-advantaged funds) are fully in fixed income. My taxable account now accounts for more than 50% of my investment portfolio, so it definitely needs some fixed income. I recognized that this would happen back in 2022 and started adding some more Series I Savings Bonds, but in 2025, I finally add a tax-exempt bond fund.

Tax-efficient fund placement doesn’t seem all that important with a $100,000 portfolio, let alone the $50,000 portfolio that I had last year, but with a $1 million portfolio, it sure seems a lot more important doesn’t it? My absolute favorite Bogleheads wiki is on this topic. I’ve also read a lot of the Ask a Boglehead posts on the forum to learn more about how people suggest structuring portfolios. I’ve definitely studied this like a crazy person in preparation for one day having a multi-hundred thousand dollar taxable investment portfolio. In my case, this isn’t that hard since my 401(k) has good funds for all cases, except that there is no Total Stock Market fund, “just” a S&P 500 index one.

I had a separate worksheet in my Excel spreadsheet for each year and I started fresh, placing funds in this order:

1. My employer match to the company stock
2. Series I Savings Bonds that already exist in taxable
3. As much of my remaining fixed income allocation to the stable value fund in my 401(k) as possible
4. As much of my remaining fixed income allocation to Total Bond Market in my Roth IRA as possible
5. If my tax-advantaged balances weren’t enough for all the fixed income necessary, added $10,000 in Series I Savings Bonds (possibly early for future-proofing)
6. Any other fixed income went to a tax-exempt bond fund in taxable.
7. As much of my international allocation in taxable as it allowed (in the first few years, my entire taxable balance; in later years, the entire international allocation)
8. Next, I added any of the remaining international allocation into my 401(k).
9. The remaining 401(k) funds went to the S&P 500 index fund. Call this amount X.
10. (X/0.8)-X is how much I put into the Extended Market index fund in my Roth IRA (minimum of $3,000).
11. The remaining Roth IRA funds went to Total Stock Market.
12. The remaining taxable funds went to Total Stock Market.

I could have easily chosen to put Total International in my Roth IRA and more S&P 500 index fund in my 401(k), but this way will eventually eliminate the Extended Market index fund from my Roth IRA and make rebalancing even simpler. This exercise showed me that managing a multi-hundred thousand dollar portfolio isn’t that much more complicated than managing a $100,000 portfolio if you set things up nicely and it shouldn’t be that hard to keep up going forward.

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Updated Savings Plan

Sitting down and looking at my projected savings numbers for this year as I was doing my tax return last weekend, I started to realize a bit the enormity of how much I should be able to save this year. Assuming that I don’t get a raise, my RSUs vest at a medium stock price, and I don’t itemize my taxes, I should be able to increase my net worth by $100,000 this year. If you use the 52-week high stock price for my RSU vests and add in a 3% raise and itemizing, that’s looking at closer to $115,000. These numbers absolutely astound me considering that only three years ago, my *gross* income was less than what I am estimating to increase my net worth by this year and I bought a new car in cash that year, so my net worth didn’t go up by much despite my income (~$22,300). And a year before that? I was in college.

Some crazy part of me just wanted to throw every last cent at the mortgage. But then I started looking at the numbers. Here’s what my plan was to save this year:

• $17,500 Max out the Traditional 401(k)
• $2,000 Max out Health Savings Account for the plan year (rest of the $3,250 will go in next year, in 2014)
• ~$1,000 Roth IRA front door for 2012
• $5,400 Emergency fund aka cash savings
• $40,700 Five year mortgage pre-payment
• $6,000 Mortgage principal from regular payment
• $25,000 Extra savings (assuming no raise, RSUs vesting at a medium stock price and I take the standard deduction)

If I have $25,000 or so in extra savings room after accomplishing all of that, then maybe I should do the backdoor for the Roth IRA for 2012, since that’s giving up about ~$4,000 in tax-advantaged savings room, forever. I could end up working at a start-up with a bad retirement plan and wanting to roll over my old 401(k)s to a Vanguard Rollover IRA instead of into the new 401(k), so I might not have many years where I can do the backdoor Roth IRA contributions. That leaves me with $21,000 in extra savings. That’s still a lot of extra savings, so I started looking at my other options.

Buying Series I Savings Bonds from Treasury Direct is a bit of an appealing option when I see how much I’m paying in taxes now on the interest in my savings accounts and I could defer that interest until maturity (up to 30 years). The catch is that I don’t want to bunch up paying tax on their interest payments in a year with high income because then I could just be paying more in taxes than I would have to begin with. On the other hand, for now, they’re paying more in interest than my savings accounts are. I had been considering moving part of my emergency fund into CDs. One way to look at the i-bonds is that they’re a sort of 5 year CD with interest rates tied to inflation instead of stuck for 5 years.

I did a bunch of reading:

• Investing in I Bonds: An Intro to I Bonds for Young Investors
• September CPI up 0.6%: I Bonds Rate Announced
• The Finance Buff on I Bonds (link goes to his tag archive)
• Treasury Direct on I Savings Bonds (tons of good info on the official website!)

I’m also on the fence with my rewards checking account now that I have credit cards that have cashback/points. The rewards checking account was perfect back when it was paying me to do what I was already doing and even if I don’t make N debit card transactions per month, it’s not a bad checking account either since it has no fees. So my current plan is to buy $5,000 of i-bonds with the buffer I was keeping in my checking account, which doesn’t really affect the extra savings amount, come to think of it. I’m also going to give up on the rewards checking account starting in April – I’m already too far into it this month that I might as well keep going now. It’s going to be tight getting my N transactions in with my debit card by the end of the month, but I think I’ll make it by the end of the month. The cashback cards aren’t honestly that worthwhile either with how little I’m spending, but at least they’re rewarding me for what I would have been doing anyway.

These two changes have meant an adjustment in my asset allocations for the year. Very little, if any, of my 401(k) money will end up going to the Total International Stock Index fund. With the i-bond purchases, less of it needs to go to the stable value fund as well.

My target asset allocation at the end of 2013 will now be:

• 31% S&P 500 Index
• 6% Extended Market Index
• 37% International Stocks
• 26% Fixed Income (My age at the end of the year + the number of multiples of $100,000 I have in investments)

Based on this, let’s calculate my ideal portfolio at the end of 2013 and compare it to where my portfolio is now:

	Current	Ideal EOY	Difference
S&P 500	$25,700	$36,921	$11,221
Extended Market	$6,600	$7,146	$546
International Stocks	$31,800	$44,067	$12,267
Fixed Income	$19,500	$30,966	$11,466
total	$83,600	$119,100	$35,500

I’ve updated my 401(k) contribution allocation as follows:

• 74% Vanguard 500 Index fund
• 15% Vanguard Total International Stock Index Fund
• 11% Vanguard Retirement Savings Trust

Some more thoughts:

• I’ll hit the five year mortgage pre-payment amount by sometime in July.
• I’m going to wait until my last bonus of the year hits to make my non-deductible Traditional IRA contribution for 2013 and then I’ll convert the 2012 and 2013 amounts in one go. I’ve invested the 2012 amount in Vanguard Total International Stock Market Index Fund Investor Shares for now.
• I’m not sure whether I’ll buy my remaining $5,000 in I Bonds for the year out of my savings account (counting it as moving that money into a 5 year CD) or buy them out of cash flow.
• That still leaves another $20-35,000 in funds to save/invest.
• At that level of savings, there are so many good options to choose from. I’m hesitant to invest money that I could throw at the mortgage in a vehicle that is neither tax-advantaged nor guarantees the principal. So I’ll most likely throw the majority of that extra savings at the mortgage this year, even though another part of me doesn’t want to wait until the mortgage is fully paid off to invest in index funds outside of my retirement accounts. I estimate that if I only make extra principal payments on the mortgage through the end of this year, I will not see a cashflow impact when the mortgage rate resets in 2018 since it’s effectively a recast to a higher interest rate.
• One option I’m considering is to invest my Social Security tax break in the last half of the year (I’m estimating hitting the maximum income by July or August) and keep chugging along at the mortgage with the rest of my funds.
• I’ve also contemplated buying Series EE Bonds, but I’m hesitant about the 20 year wait to get the “good” interest gains from them. I’m only in my mid-twenties – I can’t see twenty years into the future!

Savings plans are always a work in progress and I’m sure this won’t be the last time that I fidget with mine this year!

Readers, how is your 2013 savings plan going so far? Have you made any adjustments?

2013 Investing Plan

1) Contributions

The first step to setting out my investing plan for the year is to calculate how much I plan to contribute to my investments, which requires choosing investment vehicles.

Investment Vehicles

1. I am going to max out my Traditional 401(k) since it saves me a good amount on income taxes. $17,500 in pre-tax income instead of post-tax saves $4,900 in the 28% federal income tax bracket, which is not a small amount.
2. Maxing out my 401(k) is more than enough to get the maximum match from my employer.
3. I could also contribute part of the IRA contribution limit ($5,000) to a Roth IRA for 2012. I won’t know for sure how much I will be able to contribute until I do a full run of my income taxes with all the tax forms.
4. I could also contribute the remainder of the 2012 IRA contribution limit to a non-deductible Traditional IRA and the full 2013 contribution limit ($5,500) to a non-deductible Traditional IRA.
5. I could buy up to $10,000 in i-bonds through Treasury Direct.
6. I could buy index funds in my regular, taxable investing account at Vanguard.

I’ve decided to go with #1, #2, and #3 for this year. Any remaining savings for the year will go towards the mortgage principal. I will re-evaluate this plan again for 2014.

Why do I not want to use the non-deductible Traditional IRA? Its gains are taxed as ordinary income rather than capital gains like they would be in a taxable account. It could make sense to defer taxes on fixed income investments, but for now, I have plenty of tax-advantaged room to cover than between my 401(k) and my Roth IRA and I could always buy i-bonds in taxable to gain some more fixed income room. Buying total stock index funds in taxable is pretty tax efficient, so I would rather do that over opening and maintaining a Traditional IRA with non-deductible contributions. It could make sense to use the non-deductible Traditional IRA if I was to convert its funds to my Roth IRA within a year or two. At some point, I could end up working somewhere with high fees in the 401(k) plan and wanting to roll over my current 401(k) to a Rollover IRA instead of into the new plan, which would leave me with both non-deductible and deductible Traditional IRA contributions. So for now, I’m going to keep things simple and not make non-deductible contributions. As above, I will re-evaluate this plan for 2014 and may retroactively make a non-deductible Traditional IRA contribution for the 2013 tax year.

Why do I not want to buy i-bonds? I don’t have a need for that much fixed income room yet. My current fixed income allocation is ~1/4 of my investment portfolio. I like their tax-deferred nature, but the current composite rate is 1.76%, which is still less than my mortgage.

Why do I not want to add more funds to my taxable account? I would rather pay down the mortgage than invest in a non-tax-advantaged account this year. I will, of course, re-visit this decision again next year.

Monthly 401(k) Contributions

I have a simple little spreadsheet that takes the following formula to tell me how much to set my monthly contributions at:

• H3 = annual base pay (gross)
• J2 = Yearly max to the 401(k) – $17,000 for 2012
• I2 = ROUNDUP(J2/H3,2) = the % that I should contribute monthly from my paycheck to max out the 401(k) over the course of the year, e.g. if it is XX.3%, I will set it to XX+1%.

I updated my 401(k) contribution % back in December, so it is already set for the year!

Roth IRA Contribution

I set aside my estimated Roth IRA contribution with my January RSU vest. It is in a savings account and once I’m sure of the final amount, I will ACH it off to my Roth IRA at Vanguard. I will pull any extra funds necessary to max out my Roth IRA from my general savings account.

2) Asset Allocation

Now for the fun part: figuring out which index funds should get all of this money. To do that, I calculate what my portfolio will look like at the end of 2013 if the market makes no changes and what the “ideal” portfolio would be.

As of writing this post, my investments portfolio is worth ~$77,400. I estimate adding $20,700 to the portfolio this year, including my 401(k) contributions, my employer match, and my Roth IRA contribution, putting an estimated end of year balance at $98,100.

My target asset allocation at the end of 2013 will be:

• 31% S&P 500 Index
• 7% Extended Market Index
• 37% International Stocks
• 25% Fixed Income

Based on this, let’s calculate my ideal portfolio at the end of 2013 and compare it to where my portfolio is now:

	Current	Ideal EOY	Difference
S&P 500	$23,500	$30,411	$6,911
Extended Market	$3,500	$6,867	$3,367
International Stocks	$32,000	$36,297	$4,297
Fixed Income	$18,400	$24,525	$6,125
total	$77,400	$98,100	$20,700

I keep the Extended Market index fund in my Roth IRA. The amount that needs to go into it by the end of the year is more than my contribution amount. I also have Total International Stock Index fund in my Roth IRA, so I will re-balance by putting 100% of my Roth IRA contribution into the Extended Market Index fund and by exchanging the difference from the Total International Stock index fund into the Extended Market Index fund. That will even things out and then I won’t look at the Roth IRA again until January/February 2014.

The remaining amounts will go into my 401(k). I subtracted my employer match off of the targeted amount for the S&P 500 index fund since it goes into something I count as that for my asset allocation calculations and then came up with the following split for my 401(k) contributions:

• 27% Vanguard 500 Index fund
• 38% Vanguard Total International Stock Index Fund
• 35% Vanguard Retirement Savings Trust

Since this is all the contributions I plan on making for 2013, I should just be able to set and forget this for the rest of the year. I’ll check in on what things look like perhaps in early to mid July, but it looks like this year will be pretty simple for investment contributions!

Readers, have you set your 2013 investment plan? How does it look?

Investing, KISS: Roth 401(k)

For a few months last year while I was trying to figure some things out, I put my 401(k) contributions into the Roth instead of the Traditional. This is super annoying now because the funds that it has are in parallel with the Traditional 401(k), except that they’re tiny amounts, so it gets pennies (ish…) of stable value income each month and a few dollars of S&P 500 and Total International dividends every quarter. In essence: it’s just an annoying paper trail. So I’m going to simplify!

Since my stocks asset allocation is currently a bit overweighted to international vs. US, I’m going to exchange all of the money into the S&P500 index fund. With this move, plus all the stock dividends coming in next week (!), it looks like my entire 401(k) contribution for the next two months will be going to the stable value fund.

Scratch that, I’m going to do a double exchange instead (order of operations is important because of Vanguard’s exchange rules, so the exchanges to the stock index funds have to happen first and the exchange from the stock index fund last):

1. In Roth 401(k), 100% ($X) from stable value to S&P 500 index fund.
2. In Roth 401(k), 100% ($Y) from total international to S&P 500 index fund.
3. In Traditional 401(k), $X + $Y from S&P 500 index fund to stable value.

That will keep things exactly in line (almost) AND reduce the paper trail on the Roth account!

With that little bit of rearranging and the stock dividends this month, I should put 93% of my December 401(k) contribution into the S&P 500 index fund and 7% into the stable value fund. Ignoring that rearranging and just looking at the expected stock dividends, it looks like I should do 50/50 into the S&P 500 index fund and the stable value fund. That’s way off from what I set it at a few months ago (72/28), so I’m going to update it. I’ll probably wait until January I will do the Roth “fixing”, so I think I’ll just update my contribution allocation to 50/50 to be safe and re-visit my contribution allocation for January.

I’ve also already updated my 401(k) contribution % for 2013 to contribute $17,500 [1] since less than that from my December paycheck is going to max it out anyways. I’m pretty excited for the extra $500/year, even though it is a bit under $500/year less that I can use to pay down the mortgage! Readers, have you updated your 401(k) contribution % for 2013?

[1] http://www.irs.gov/uac/2013-Pension-Plan-Limitations

Re-balancing with new funds, October edition

I’m trying to get into the habit of adjusting where my 401(k) money goes each month since my 401(k) company allows me to do this easily online. My options are:

1. Vanguard Retirement Savings Trust (stable value)
2. Vanguard 500 Index Fund Investor Shares
3. Vanguard Total International Stock Index Fund Investor Shares

My employer match goes into something that I just count in my allocation to US Stocks.

My first priority is the ratio between fixed income investments and stocks, with the ratio between US and international stocks being second.

So far this year:

• In July, since I had made such a huge addition to stocks by buying the Total International Admiral shares fund in my taxable account, I ended up putting 100% of my 401(k) contribution to the stable value fund. This put the split at 24%/31.5%/44.5% (Stable value/US Stocks/International stocks).
• In August, there was a bit of a stock market gain, so I ended up putting 49% of my 401(k) contribution to the stable value fund and the rest to the S&P 500 fund. The split was now 24%/32.2%/43.8%, so a slight improvement over last month.
• In September, I saw a lot of stock dividends post to my investment accounts, which threw off the distribution a bit. I re-did the calculation and determined that I should put 47% of my 401(k) contribution to the stable value fund and the rest to the S&P 500 fund, so I just left the contribution split from August since it was so close. The split was now 24%/32.7%/43.3%.
• In October, my stocks went down a bit. I re-did the calculation again and it suggested I put only 28% of my 401(k) contribution into the stable value fund this month and the remaining 72% into the S&P 500 fund. I updated it this time around since that was quite a difference from August’s calculation. The split was now 24.3%/33.2%/42.5% (it looks like I updated my spreadsheet since I updated my 401(k) contribution allocation with Vanguard…), so we’re definitely trending towards the target of 24%/38%/38%.

I understand that this isn’t an exact science, but I generally try to do the calculation in the last few days of the month so that it’s as close to my contribution posting as possible.

You might also wonder why I’m adjusting with new money each month instead of flat out exchanging some shares of Total International for S&P 500 in my 401(k) since it’s so far off target. Well, my investment policy statement says to only re-balance with new money, ever. I implemented that policy so that I wouldn’t be tempted to try new strategies or different things by rearranging my money into different funds and it’s working quite well so far. Other than moving my employer match funds into the S&P 500 index fund, I haven’t exchanged any funds since December of 2011 and I think it’s much better this way. I need to protect myself from my fidgeting mind!

Asset Allocation: Re-balancing with new funds

Re-balancing is a confusing concept that I’m still becoming accustomed to. The idea of re-balancing one’s entire portfolio at some set time period seems too complicated to me when I’m adding more money each month to my portfolio and then, with bonuses, sometimes adding to it at random times as well.

So I’m trying to re-balance with the new funds I add each month. To do this, I do some math in my spreadsheet and then go into my 401(k) website and update the %s for the new money. I did this last month and again this month and so far, I feel better about this way of doing it.

For example, last month, since I had made such a huge addition to stocks by buying the total international Admiral shares fund in my taxable account, I ended up putting 100% of my 401(k) contribution to the stable value fund.

My first priority is the ratio between fixed income investments and stocks, with the ratio between US and international stocks being second.

Here’s how I do the math:

1. I retrieve the $ value of each fund in each account and put it into my spreadsheet.
2. I then pretend as if I’ve already added the money, by adding the employer match $ amount to that fund and my contribution to one of the funds randomly. I usually start by guessing the one that is going to be undervalued (fund G for guess).
3. The spreadsheet tells me the current value in each category (Fixed Income, Stocks: US, Stocks: International), the current % for each, the target % for each, and the target $ amount for each, as well as how much the current $ value is off from the target $ value.
4. I add exactly the $ amount that the fixed income category is off by to the stable value fund and then give the rest of my contribution to the S&P 500 index fund since that is the next category (US stocks) that is off.

So now my asset allocation is reset to 24% fixed income / 76% stocks. The US/international stock balance is still off-kilter somewhat, but I’m okay with that and accept that it will slowly grow back to 50/50.

Taxable Investing

Tax-deferred investing is awesome for getting used to the crazy world of investing. I don’t know about you, but I didn’t learn much of anything about investing from my parents, in high school, or in college. I developed some pretty good savings habits and frugal ideas, but not about what vehicles to put that money I saved in.

My first retirement accounts (that I opened while in college) are in 5-year certificates that, when they mature, will roll into more 5-year certificates. I include those in my cash asset allocation and just leave them be.

I started putting money into my employer’s 401(k) pretty soon after I started working full-time a few years ago. I started maxing it out in 2011, which was a great decision. It is now valued at over $30,000 and is a good chunk of my investment portfolio!

1. I have had some interesting adventures with investing in my first few years post-college:

2. I invested my 401(k) in NINE different funds.

3. I opened my Roth IRA with $5,000. I had no idea that you could contribute any less! I thought it had to be $5,000 exactly.

4. I eventually learned the difference between index funds and actively managed funds and why I should stick with index funds.

5. I experimented with ETFs and decided to stick with index funds.

6. I started to learn about asset allocation. I eventually learned that it isn’t really an exact science and it’s really hard to gauge my interest/acceptance of risk without experiencing a significant downturn.

Starting out investing in tax-deferred accounts has been a really great blessing. I have a pretty reasonable sum of money in my 401(k) and Roth IRA at this point. I was able to make strange decisions, mistakes, and good decisions without any tax consequences whatsoever.

One of the “problems” with having reasonable sums of money is figuring out exactly what to do with it. Where to put it. Whether to keep it or to give it away. Having this problem when you’re young and haven’t really had any education in these matters is worse. I’m starting to figure out that for a lot of these decisions, there is no one “right” decision, but many “good” ones and I just have to pick one.

Since I sold off some stock and ETF shares in the fall to improve my down payment, I’ve replaced the dollar amount that I “borrowed” from myself, but I haven’t invested it in anything. I’ve just left it all in a money market fund in my taxable account at Vanguard. With the raise last month, I’m now putting some money in there monthly in addition to with my quarterly RSU vests. But I’m still waiting. I’ve decided that after the July RSU vest, I will finally invest the money into stocks and re-balance my Roth IRA and 401(k) accordingly. At that point, I will have over $10,000 sitting in my taxable account, waiting. Hopefully, at that point I will be a bit more confident in my decision.

My taxable account will not be an insignificant portion of my overall investment portfolio. I estimate that it will be valued around $13,000 by the end of 2012 and that I will add another $10,000 – $15,000 to it in 2013, almost as much as I will put into my 401(k) that year. I’m trying to tread cautiously in trying to decide what to do with this money.

I’ve decided that a cash/bonds allocation of only 13% is more risk than I am comfortable with. My portfolio is currently sitting at about 28-29% cash, so I’m going to instead up the target cash/bonds allocation to 24%. I still want to split international/US stocks 50/50.

This is what my ideal portfolio would look like with the forecasted overall amount at the end of 2012:

Taxable

• 17% Vanguard Total Stock Market Index Fund (Admiral Shares!)

Roth IRA

• 13% Vanguard Total Stock Market Index Fund (Investor Shares)

Other

• 11% 5-year certificates

401(k)

• 13% Vanguard Retirement Savings Trust
• 38% Vanguard Total International Stock Market Index Fund
•  8% Vanguard 500 Index Fund

(Percentages are of the overall portfolio, not within each individual account.)

Readers, how did you get your feet wet with investing? Did you start in tax-deferred accounts or taxable accounts? What was the silliest investing move you made when you first started out investing?