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This is the twenty-second day in our 31-Day Money Challenge. Over 31 days we’ll publish 31 podcasts, each designed to help you move closer to financial freedom. Yesterday we discussed the importance of keeping mutual fund fees as low as possible. In today’s podcast, I share my own asset allocation plan and the investments I’ve selected to implement that plan.

Sponsors: The 31-Day Money Podcast is sponsored by Betterment and Personal Capital. Betterment and Personal Capital are two tools I use to make investing easier, less expensive, and more effective.

Topics Covered

Here’s my asset allocation, which I discuss in depth in today’s podcast:

Stocks: 80%

U.S. Equites: 40%
Foreign Equities: 25%
REITs: 10%
Commodities: 5%

Bonds: 20%

U.S. Total Bond Market: 10%
Tax-Exempt Muni Fund: 10%

Resources

Day 23: Interview with Brandon Turner on investing in real estate

Article comments

6 comments
Kenneth says:

Rob, you sound like you have a very complicated, but well diversified, portfolio. Maybe you have fun doing this – no reason to change.

I’ve got all my Non 401k money at Betterment, one of your 31 day challenge sponsors. Why? I just have to set one number, which I’ve dialed in at 75% stocks and 25% bonds. They take care of the rest, including automatic rebalancing and reinvesting. Here’s what they invest in, very similar to your portfolio. Why make it hard? My time is better used for playing golf, playing with the grandkids, housework and travel.

Betterment

Stock ETFs
VTI US Total Stock Market
IVE US Large Cap Value
IWS US Mid Cap Value
IWN US Small Cap Value
VEA Developed Markets
VWO Emerging Markets

Bond ETFs
SHV Short Term Treasuries
VTIP Inflation Protected Bonds
AGG US High Quality Bonds
LQD US Corporate Bonds
BNDX International Bonds
VWOB Emerging Markets Bonds

This would be way too complicated for me to figure out the ratios and keep them current. Betterment does that automatically for me, for 15 basis points. Also, in 2 years, I’ll be going into withdrawal phase. I plan to take 4%/12 each month, or 0.3333% monthly. Betterment will take out of my funds in proportion to rebalance them. What could be easier?

Rob Berger says:

Kenneth, thanks for sharing your strategy. That is one of the big benefits of Betterment. Very, very easy to use and maintain.

Karla Henrichon says:

I just wanted to ask your opinion. I see that you seem to like Betterment as do I. I started a rainy fund with them as you had mention in some past blogs. Now I am getting emails regarding rolling over my IRA due to the fact that their fees are less than probably mine (fidelity), honestly I have no idea what my fees are, however with a company like Fidelity I am assuming quite high. I am not rich by any means so every little bit counts for me and my family. I was wondering what are your suggestions regarding possibly doing something like this? My only concern is that Fidelity has been around for awhile, while Betterment is fairly new, even though I am very happy with my rainy fund. Just looking for advise.

Md. Taslimuzzaman Fakir says:

Hi Rob. I’m at Day 22 in your 31 day money challenge podcast. Thank you, thank you, thank you! I’ve been looking for a comprehensive guide from all respect please help me.

Taslimuzzaman

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Nathan says:

Rob, Your blog and your style of writing and communicating the way you do are excellent. I do not feel intimidated when I read your newsletters. I especially appreciate today’s discussion about your investment portfolio. I’m 58 years old and I finally accepted in myself that I don’t have the training or the sense to manage a portfolio on my own. I read all kinds of news letters and pay for one from the Motley Fool about individual stocks. The information is so interesting, but I find myself not being able to follow-through. Big fear of individual stocks and the risks associated with individual stock investing.
My account is at Vanguard and I even has trouble pulling the trigger to buy and sell or rebalance. Have you seen a marked difference between what a managed account at Betterment might provide and your own portfolio? By the way, I have read much about value-oriented ETFs from Paul Merriman’s blogs. I benefit from being a subscriber to your blog. Thank you for all you do. I just need to decide to act and move my retirement fund to Betterment or find the courage and gumption to build a portfolio of ETFs that follow your model for example. Thanks again.