Financial Planning questions Flashcards
I need to borrow some money ($50k). What’s the best possible way?
Should I get extra insurance beyond what I am getting at McKinsey?
Should I pay down my debt or invest for potentially higher return?
Do I really need to invest in international equities (e.g., VXUS) when they’ve been performing so poorly in the last 5 years?
Yes, we believe there’s value of investing in foreign equities.
1) Nobody knows which region will outperform for the next 20-30 years.
2) We recommend highly diversified index funds. Foreign companies happen to locate in foreign countries but have global presence (not purely exposed to its country)
3) Valuation has been more attractive for international equities
I’ve heard “mega backdoor Roth”. Should I be doing that? Do you recommend it?
If my tax rate will be lower in retirement, do I really need to invest in Roth now?
My equity investment lost so much money this year. What do you generally recommend people to do now? Should I sell now?
My equity investment have lost a lot of money this year. I hear lots of news about recession coming. Do you think I should wait longer to invest in equities?
How much should I be saving for children’s education each year?
I’m turning 40 this year (have a wife and children) and probably don’t need to think about estate planning yet, right?
How much cash should I be holding?
I may not retire in the U.S. It’s 50/50. Does it make sense to build Roth balances?
Interest rates are so high these days. Is it ok to buy a house now? How should I think about the timing?
Why should an U.S. investor follow “market cap weighted” equity index?
1) Matching future liability with the USD based assets
2) US dividends are “qualified” that are taxed more favorably in taxable accounts
Do you offer retirement calculator? How should I think about taxes, sequencing, etc?
I have some Traditional IRA balances. Can I still do the backdoor Roth contribution?
Explain pro-rata rule in a simplistic way.
I am going through a separation with my spouse. What are some financial planning considerations that I should start thinking about?
QDRO
I recently got married. What are some financial planning considerations that I should start thinking about?
IRA contributions
Joint accounts
Beneficiary designation
We just had a baby. What are some financial planning considerations that I should start thinking about?
529
For your equity investing recommendation, should I implement all at once? or invest over time?
We recommend simply investing at once. That’s not necessarily because we think now is a good time to enter the market though. We think for long-term investors, investing now vs. over time doesn’t make material difference, so we recommend getting your cash invested as early as possible to avoid the behavioral biases.
How is investing in Vanguard Total Market Index Fund (VTI) different than investing in VOO, VIG, VUG, etc.? I thought my portfolio was diversified by having more funds?
Exposure is fairly close. VTI is very broad-based, holding ~4,000 company stocks in the U.S.
We are a big believer in simplicity too. It will be easier to manage a simple portfolio with your future cash flow.
