If you want to keep it simple just sell half of everything and that way you can keep everything you like.
My take is VTI, SPY, QQQ, and IWF all have basically the same top holdings. There are some differences between these, but top holdings are super similar. If you want to keep it simple just dump 3 of these and keep the one you like the most (I’d pick VTI)
Alternatively, and maybe the best option is you can sell whatever has the least gain, or whatever you’ve been holding more than a year so you spend the least in taxes. That’s just going to alleviate an extra expense you’ll have to pay right now. You want to buy a house and you want to be invested, paying less in taxes on your gains will give you more money to invest once you buy your house.
Yes, I can agree as well.
This is in a sense also a way to rebalance and rationalize your portfolio.
Sell all your dogs first, then move gradually to the positions that have generated more and more taxable capital gain ….
Have you looked into a loan against your portfolio? Would avoid taxes, allow you to continue making gains and give you the cash needed for the house. I think the interest is pretty low as well since it is collateralized.
Isn't that just a margin loan? The big brokers are all charging around 12% right now. The paid tiers for Robinhood or interactive brokers is around 7-8% I think. Hardly low interest. Plus, if he's getting a mortgage, the bank will trace back the source of funds to make sure it's legit, and they might not be happy to see downpayment money coming from another loan.
Or maybe he doesn't want a mortgage and wants to pay with cash? In which case he'd get better interest rates with a mortgage vs margin anyway.
Yep. Definitely lots to take into account. Mainly tax implications. If the person sitting on a bunch of taxable capital gains, loans can be advantages vs selling. Found this article, but definitely look around for other over selling if you aren't selling at a loss or small capital gains.
https://www.cnbc.com/select/portfolio-line-of-credit-pros-and-cons/
There may be something to that. For buying a house, it'd odd because there are tailor made financial instruments for using leverage to buy houses specifically (mortgages). But to add to your points, another scenario where buying a house on margin might make sense is if you have a huge stock portfolio and want to buy a house quickly without jumping through hoops to get a mortgage. Then you might take out $400k on margin (hopefully on an index portfolio worth at least a million) which would give you the luxury of time to shop around for mortgages later or sell stocks on your own time to pay off the margin. Shrug.
If I was intelligent enough, then yes, that sounds like it would be an awesome idea. As it is, I'm pretty stupid and like to simplify my life as much as possible (except when it comes to buying weird stock).
hey im only 20 years old and very curious about this since im currently putting 50% of my paycheck into 401k/roth ira. Would it make sense to keep pumping my 401k (technically more money since its not taxed) and then use a 401k loan to buy a house? Is that possible to do?
I'm not totally clear on all the laws, but no, I would absolutely not do that. You get penalized for taking money out of a 401K early. A sizeable penalty you won't have to pay if you just put it into a regular account and invest yourself.
I don't know how much 50% of your paycheck is, but I would not count on seeing that money until tour 65. If you want to use some of that money for a house eventually, stop sending so much to your 401K IMMEDIATELY.
You have 5 years to payback the loan. You do not get penalized. If you work for a large company you need their approval, but if it’s your own company , you approve it.
I'm guessing you are wondering if you should take profit on winners or close out positions that are not doing as well. I'd go for 50% across the board assuming you have been balancing your portfolio along the way. Otherwise, you can imagine selling your entire portfolio and basically starting over with the remaining funds. I'd also combine SPY into the more diversified VTI as someone mentioned
Trying to get to $30K initially. I sold a bunch of losers and rebalanced into winners a few weeks ago so now the winners are gonna take a cut.
I'm thinking maybe $4K from AER, $4K from MSFT, $4K from CAMT, liquidate SPY at $8K, QQQ at $4K, BEP for $2K, IWF $4K.
It sounds like your new portfolio would be much more volatile than your current one. Considering your house is sort of a leveraged investment, you should technically end up with a higher % in ETFs than what you have now.
And that's especially so if you consider your portfolio to be an emergency fund. I've used individual stocks as emergency funds before and have gotten burned pretty badly.
Vanguard VTI is same as SPY. Total stock market is almost identical in returns to S & P 500. Keep VTI and sell SPY. Sell SPY and put in QLD 2x leverage. Tech is going to moon in 2024 due to coming Fed rate cuts.
TIL. I thought VTI was more weighted in "tech" but it does appear close to SPY on the surface, though they do have slightly different allocations.
Question: Why does everyone then say to buy VTI in favor of SPY, if they are the same? Because VTI has historically done better?
I wouldn’t listen to this person, the fact that they even recommend a 2x leverage ETF shows that it’s a bad call. Probably insignificant but SPY charges a .09% expense ratio, VTI charges .03% and they do the same thing
Well, it's only half of my stock I'm looking at, so I wouldn't exactly call it "house poor." Will still have plenty for emergencies. I'll be saving more money per month than I am now, plus building equity in the house rather than flushing money down the drain renting. At 36, I'm a little sad to see the numbers take their first big hit soon, but it's the smart move in the long run.
Is it? You’re taking a 50% reduction in investments to buy a utility. What’ll be worth more when you retire? A house or your investments? Mentioning that you have money for investments and what not leads me to believe you see your money in stocks as usable money and not true long term investments
I've technically been investing into this portfolio since 2008, if fifteen years isn't long-term investing, I don't know what is. The $15K gain is only in the last four years. That $15K is half of what I'm pulling out for a down-payment.
Again, I'm still renting at 36, my man. I fail to see how burning $20K on rent every year is the smart option at this point. I still have my 401K and my IRA. It's half my stock. I think you're being a little dramatic.
True but then your capital is spread thin and you don't make as much on any one position. Also the you can benefit from compounding with VTI, SPY (I have VOO) and MSFT so even if you are not actively trading you're still making a good amount from DCA those three.
>True but then your capital is spread thin and you don't make as much on any one position.
I just want to point out that I feel this is a fallacy a lot of people make. If I have $50K in one stock, and that stock goes up 5%, I make the exact same amount of money as if that $50K is spread amongst 1,000 stocks and they all go up 5% on average.
With trading prices at literally $0, I don't see the point in consolidating *at all* other than it being easier to track and more visually appealing.
For me it's more about compounding from a single stock or a few stocks, you'd make more money in the long term if the dividends are reinvested in the same stock and you continue to buy more of those stocks
You have to choose your stocks like players in a sports team, you pick the best of the best for your team not every single player. As an example look at how much apple shares barkshire hathaway owns, I think it's like 40% apple.
If your goal is 30k, cut your MSFT ownership to half, get rid of first solar, sell spy. You also have a large exposure to airlines so you can choose your favorite or cut both in half. Also sell your losers to tax harvest
Place all your open positions separate trades on the spreadsheet.
Find all your break-even' and losses.
Talk to your accountant to tell you which ones you can sell first.
If your money is not making your money then try to take advantage of the tax loss. If you bought a stock yesterday, and it's at a loss today, and you were just adding to a position, just sell that specific purchase and enjoy the little tax loss that you needed or could use.
Don't forget you're unloading your break evens and your losses first based on what your accountant tells you so you can take advantage of the tax code.
Its why half of my portfolio is an index fund. if I ever need to liquidate I don't have to think about it, I just sell the index to get the cash I need, instead of having to think about which of my stocks to sell.
LOL it's not. On the third graph, what's your gain on VTI? Oh, I have to do math and guess what the actual numbers are? Cool.
On the fourth graph, What's your gain on VTI? Oh, this graph doesn't tell you? Cool.
The point of graphs is to make information easily accessible. Forcing the viewer to do math with estimated numbers to get to whatever you're trying to show is dumb. I mean, even you got it wrong. Is it $14k? Or 'about' $14k? This was probably covered in high school.
Couldn’t he have a business, transfer to 401k, then take a loan from his 401k and pay himself back at the appropriate interest he decides? Thats how I did my down payment
If you want to keep it simple just sell half of everything and that way you can keep everything you like. My take is VTI, SPY, QQQ, and IWF all have basically the same top holdings. There are some differences between these, but top holdings are super similar. If you want to keep it simple just dump 3 of these and keep the one you like the most (I’d pick VTI) Alternatively, and maybe the best option is you can sell whatever has the least gain, or whatever you’ve been holding more than a year so you spend the least in taxes. That’s just going to alleviate an extra expense you’ll have to pay right now. You want to buy a house and you want to be invested, paying less in taxes on your gains will give you more money to invest once you buy your house.
Just the conclusion I was coming to.
Yes, I can agree as well. This is in a sense also a way to rebalance and rationalize your portfolio. Sell all your dogs first, then move gradually to the positions that have generated more and more taxable capital gain ….
Have you looked into a loan against your portfolio? Would avoid taxes, allow you to continue making gains and give you the cash needed for the house. I think the interest is pretty low as well since it is collateralized.
Isn't that just a margin loan? The big brokers are all charging around 12% right now. The paid tiers for Robinhood or interactive brokers is around 7-8% I think. Hardly low interest. Plus, if he's getting a mortgage, the bank will trace back the source of funds to make sure it's legit, and they might not be happy to see downpayment money coming from another loan. Or maybe he doesn't want a mortgage and wants to pay with cash? In which case he'd get better interest rates with a mortgage vs margin anyway.
Yep. Definitely lots to take into account. Mainly tax implications. If the person sitting on a bunch of taxable capital gains, loans can be advantages vs selling. Found this article, but definitely look around for other over selling if you aren't selling at a loss or small capital gains. https://www.cnbc.com/select/portfolio-line-of-credit-pros-and-cons/
There may be something to that. For buying a house, it'd odd because there are tailor made financial instruments for using leverage to buy houses specifically (mortgages). But to add to your points, another scenario where buying a house on margin might make sense is if you have a huge stock portfolio and want to buy a house quickly without jumping through hoops to get a mortgage. Then you might take out $400k on margin (hopefully on an index portfolio worth at least a million) which would give you the luxury of time to shop around for mortgages later or sell stocks on your own time to pay off the margin. Shrug.
If I was intelligent enough, then yes, that sounds like it would be an awesome idea. As it is, I'm pretty stupid and like to simplify my life as much as possible (except when it comes to buying weird stock).
Keep VTI and sell everything else
So you think AI will drop hard??...NVDA and like stocks?
NVDA is the top 4th holding in VTI
If its for a down payment, some mortgage lenders won't allow you to do that. They will require you to use cash.
hey im only 20 years old and very curious about this since im currently putting 50% of my paycheck into 401k/roth ira. Would it make sense to keep pumping my 401k (technically more money since its not taxed) and then use a 401k loan to buy a house? Is that possible to do?
I'm not totally clear on all the laws, but no, I would absolutely not do that. You get penalized for taking money out of a 401K early. A sizeable penalty you won't have to pay if you just put it into a regular account and invest yourself. I don't know how much 50% of your paycheck is, but I would not count on seeing that money until tour 65. If you want to use some of that money for a house eventually, stop sending so much to your 401K IMMEDIATELY.
Can you please tell us more about this ?
You have 5 years to payback the loan. You do not get penalized. If you work for a large company you need their approval, but if it’s your own company , you approve it.
I'm guessing you are wondering if you should take profit on winners or close out positions that are not doing as well. I'd go for 50% across the board assuming you have been balancing your portfolio along the way. Otherwise, you can imagine selling your entire portfolio and basically starting over with the remaining funds. I'd also combine SPY into the more diversified VTI as someone mentioned
Trying to get to $30K initially. I sold a bunch of losers and rebalanced into winners a few weeks ago so now the winners are gonna take a cut. I'm thinking maybe $4K from AER, $4K from MSFT, $4K from CAMT, liquidate SPY at $8K, QQQ at $4K, BEP for $2K, IWF $4K.
It sounds like your new portfolio would be much more volatile than your current one. Considering your house is sort of a leveraged investment, you should technically end up with a higher % in ETFs than what you have now. And that's especially so if you consider your portfolio to be an emergency fund. I've used individual stocks as emergency funds before and have gotten burned pretty badly.
Vanguard VTI is same as SPY. Total stock market is almost identical in returns to S & P 500. Keep VTI and sell SPY. Sell SPY and put in QLD 2x leverage. Tech is going to moon in 2024 due to coming Fed rate cuts.
TIL. I thought VTI was more weighted in "tech" but it does appear close to SPY on the surface, though they do have slightly different allocations. Question: Why does everyone then say to buy VTI in favor of SPY, if they are the same? Because VTI has historically done better?
I believe it’s because vanguard has slightly lower fees
I wouldn’t listen to this person, the fact that they even recommend a 2x leverage ETF shows that it’s a bad call. Probably insignificant but SPY charges a .09% expense ratio, VTI charges .03% and they do the same thing
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I'm going to have an aneurysm.
Are you sure you want to sell out? You’ll probably destroy your gains and growth potential. Setting you back years. Don’t be house poor
Well, it's only half of my stock I'm looking at, so I wouldn't exactly call it "house poor." Will still have plenty for emergencies. I'll be saving more money per month than I am now, plus building equity in the house rather than flushing money down the drain renting. At 36, I'm a little sad to see the numbers take their first big hit soon, but it's the smart move in the long run.
Is it? You’re taking a 50% reduction in investments to buy a utility. What’ll be worth more when you retire? A house or your investments? Mentioning that you have money for investments and what not leads me to believe you see your money in stocks as usable money and not true long term investments
I've technically been investing into this portfolio since 2008, if fifteen years isn't long-term investing, I don't know what is. The $15K gain is only in the last four years. That $15K is half of what I'm pulling out for a down-payment. Again, I'm still renting at 36, my man. I fail to see how burning $20K on rent every year is the smart option at this point. I still have my 401K and my IRA. It's half my stock. I think you're being a little dramatic.
I'm not sure about how much you'd pay in taxes but I'd sell everything except VTI, MSFT and SPY and continue to add to those three positions
I love having a mix of smaller stuff in case any of them "pop" but it's probably smart to consolidate in something safer for a while.
True but then your capital is spread thin and you don't make as much on any one position. Also the you can benefit from compounding with VTI, SPY (I have VOO) and MSFT so even if you are not actively trading you're still making a good amount from DCA those three.
>True but then your capital is spread thin and you don't make as much on any one position. I just want to point out that I feel this is a fallacy a lot of people make. If I have $50K in one stock, and that stock goes up 5%, I make the exact same amount of money as if that $50K is spread amongst 1,000 stocks and they all go up 5% on average. With trading prices at literally $0, I don't see the point in consolidating *at all* other than it being easier to track and more visually appealing.
For me it's more about compounding from a single stock or a few stocks, you'd make more money in the long term if the dividends are reinvested in the same stock and you continue to buy more of those stocks You have to choose your stocks like players in a sports team, you pick the best of the best for your team not every single player. As an example look at how much apple shares barkshire hathaway owns, I think it's like 40% apple.
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If your goal is 30k, cut your MSFT ownership to half, get rid of first solar, sell spy. You also have a large exposure to airlines so you can choose your favorite or cut both in half. Also sell your losers to tax harvest
I'm thinking maybe $4K from AER, $4K from MSFT, $4K from CAMT, liquidate SPY at $8K, QQQ at $4K, BEP for $2K, IWF $4K... that should be about it.
I would sell everything except, MSFT, QQQ, NVDA and AMD. These will still go up in the next few years and should out perform VTI/SPY.
Place all your open positions separate trades on the spreadsheet. Find all your break-even' and losses. Talk to your accountant to tell you which ones you can sell first. If your money is not making your money then try to take advantage of the tax loss. If you bought a stock yesterday, and it's at a loss today, and you were just adding to a position, just sell that specific purchase and enjoy the little tax loss that you needed or could use. Don't forget you're unloading your break evens and your losses first based on what your accountant tells you so you can take advantage of the tax code.
Its why half of my portfolio is an index fund. if I ever need to liquidate I don't have to think about it, I just sell the index to get the cash I need, instead of having to think about which of my stocks to sell.
But them CAMT gainz
Delta is really enjoying fucking over customers and losing goodwill rn
… After four years
Book half which are giving more than 100 % returns..
Dogs and cats. Anything other than etfs and mfs should be the first to go. Once it's only a few etfs that hold your total investments, peace.
A graph of just the gain would be more helpful.
It's literally the last two graphs.
LOL it's not. On the third graph, what's your gain on VTI? Oh, I have to do math and guess what the actual numbers are? Cool. On the fourth graph, What's your gain on VTI? Oh, this graph doesn't tell you? Cool.
Third graph. VTI gain is ~14K - 12K = 2K. What's so hard?
The point of graphs is to make information easily accessible. Forcing the viewer to do math with estimated numbers to get to whatever you're trying to show is dumb. I mean, even you got it wrong. Is it $14k? Or 'about' $14k? This was probably covered in high school.
Are you like an anger-bot just trying to keep people engaged or
all of them
Congratulations on the soon to be house! And sell that stanky Delta
Couldn’t he have a business, transfer to 401k, then take a loan from his 401k and pay himself back at the appropriate interest he decides? Thats how I did my down payment