Investing in a Three Fund Portfolio Across Numerous Accounts. Get the Spreadsheet! - Physician on FIRE (2024)

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For further reading on the three fund portfolio, check these out:

• He Has Read Over 250 Investing Books. He Recommends These Three Funds.
• From 28 Funds to 3: Simplifying to a Three Fund Portfolio
• A Vanguard Three Fund Portfolio Just Got Cheaper!
• Investing in a Three Fund Portfolio Across Numerous Accounts. Get the Spreadsheet!
• The Bogleheads Guide to the Three Fund Portfolio

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50 thoughts on “Investing in a Three Fund Portfolio Across Numerous Accounts. Get the Spreadsheet!”

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7. Hello there,

   I am so glad I found this website. And thanks for sharing all of this. What would be the ideal AA if I only have Roth IRA and Taxable account? I am really new to investing, doing my research first. I really like the simplicity that the three fund portfolio can offer. I am planing to open my Roth IRA and then my taxable brokerage account soon.

   Thanks

   Dora

   Reply

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11. Thanks for sharing these tips. Funds investment training classes are charging arm and leg, here you have provided lot of info.

    Reply

12. Thank you for this insightful post. Now I know how to better manage my portfolio and funds.

    Reply

14. Should you tax loss harvest to consolidate similar investments in your taxable account, such
    as SPY, VOO, VYM, VFIAX, SPHD? (Currently at a loss of ~$200-$2000 of each)
    When is the best time and how would you? Thanks!

    Reply

    • If you want to simplify things, when they’re down is a great time (March 23rd would have been the best time in recent history).

      I’ve written three posts on the topic that are pretty thorough:

      Top 5 Tax Loss Harvesting Tips
      Tax Loss Harvesting with Vanguard: A Step by Step Guide
      Tax Loss Harvesting with Fidelity: A Step by Step Guide

      These will answer your question and many others that might come up.

      Cheers!
      -PoF

      Reply

      • Thanks! Why is the bottom the best time?

        Reply

        • That’s when you’ll maximize your paper losses, giving you more future capital gains taxes eliminated and more potential deductions against ordinary income.

          Best,
          -PoF

15. If I needed to add rows to create more sections for my additional accounts such as HSA and 457 on top of 401 and taxable for both myself and my wife – how can I do so on the spreadsheet? And will that automatically continue the balance on the current/desired balance section and the graph?

    Reply

16. I’m struggling to find this spreadsheet in the download. Is it still available?

    Reply

    • Yes — the email you receive has a link to the direct download.

      Email me if you’re still having troubles.

      Best,
      -PoF

      Reply

17. I have a small gold allocation from years ago in our retirement account. Can you address that please. Easy to place in alternative category along with small reit allocation (waiting for it to sell/close out).

    Reply

18. 

19. Google Sheets seems to work good on the iPad.
    Thanks

    Reply

20. Anyway to download the spreadsheet and get it to work on an iPad? It comes up as a webpage. The bottom links are covered up by the donuts so I can’t read them on the iPad.
    Thanks.

    Reply

21. Just wanted to thank you for sharing the 3 fund portfolio spreadsheet! Really helpful to keep things simple.

    Reply

22. Excellent article. Can the spreadsheet be used or coverted to be used in MacBook?
    Thank you

    Reply

23. Thanks, POF for a very helpful article as usual and even better spreadsheet!

    Question about the advice to put Total International Stock Market Fund in a taxable account – I get that you benefit from the foreign tax credit, but you then have to pay taxes on ordinary dividends earned. If you put it in a tax-protected account, you don’t get the credit, but you don’t pay taxes on the dividends either. Do we know that one strategy is always better than another, or does it really depend year to year depending on the actual yields? Last year was my first year with a taxable account, so I haven’t had the benefit of experience.

    For what it’s worth, I have kept the majority of my international stock holdings in my 403(b) because it has a slightly lower expense ratio than what’s available in my taxable account (VTSNX vs VTIAX, both Vanguard funds); if it were the other way around, I’d put them in taxable. Curious how others have approached this?

    Reply

24. I have Google Sheets automatically calculate the value of each holding. I input shares and the last price updates using ‘=googlefinance(C4,”price”)’, where C4 is the ticker symbol (as on your spreadsheet). The product of those two cells is your value, though you gotta update shares if you’re reinvesting dividends, etc. It’s less updating than manually typing in values whenever you want a current snapshot.

    Anyway, I really like how you laid out your spreadsheet, thanks for sharing! It’s inspired me to pretty up my own 🙂

    Reply

25. Great post PoF Super informative. I checked out personal capital. I’ve had it for a while, but I use different aggregation software. It has a section on efficient frontier based allocation values which actually works very well. It also uses monte carlo to predict portfolio longevity as opposed to 4% x 25 which is excellent. With those kind of tools I might become a three fund fan!

    I’ve spent a lot of time optimizing my portfolio with professional software and I put my optimized numbers into PC, and my graph matches their prediction almost perfectly. Wow! You can use PC therefore to create an allocated portfolio that has the highest yield at the lowest risk for a give set of assets. NO GUESSING I recommend!

    Probably won’t get a copy of your spreadsheet since I’m not a signer upper but it looks very complete! Bravo

    Reply

26. Thanks PoF! Just what the doctor ordered!

    Reply

27. PoF —

    I’ve been bingeing on your blog – which is way out of my norm.

    Why is this?

    It’s because I hear you asking (or even pleading) for someone to “stop you” from making a terrible mistake.

    You’ve got all this fantastic education. You are good at what you do. And you are very well paid for it. You are so young.

    Yet, you can’t stand it!

    This is where I got hooked.

    What is the “it” that you can’t stand?

    For you, I think it boils down to a bunch of bureaucrats sitting in an ivory tower somewhere treating you like a marionette.

    You have serious passion in your retelling of the recent example of having to take a ridiculous test.

    Believe me, doctor, I get it!

    We share the same gene. The one that just can’t stand having someone tell us what to do.

    So as your armchair psychologist, here’s my unsolicited advice.

    First, keep the blog going – eh hem, this is more for my benefit than yours.

    Second, acknowledge that the reason you keep talking about “$10,000,000” in all sorts of different ways, is because that’s what you actually “want” to accumulate.

    Can you live on less? Absolutely! But wouldn’t it just be awesome…?

    Its within your power to achieve, so can you really stop short?

    Your history of going all the way to becoming an anesthesiologist, instead of stopping short along the way, suggests it will be difficult for you to stop short in the money category as well. (This is where the psychologist in me joins the conversation).

    So sorry to act as that little devil on one shoulder egging you on, but at the most primordial level – you know you want the full-meal-deal.

    So keep talking about it, dreaming about, rationalizing to others about your bullet-proof logic.

    But as an echo deep inside your cranium, my vote is that you fly the ivory tower-types your longest digit in some other way!

    Reply

28. I’ve simplified our investments over the years, but it is still a big mess.
    I have the bond funds in our 401k/traditional IRA so at least that’s set.
    Our taxable account has dividend stocks.
    The US and International funds are spread across 401ks, Roth, and traditional IRA. It’s not as bad as the cables behind my TV, but pretty close…

    Reply

29. Just wanted to know if this is the smart thing to do ? Or should i add another fund to my roth for greater return in that tax advantaged space. Maybe a large or small blend US fund or just another TSM fund.

    Reply

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    • look at IWY if you want to add some more return. It will pay you an extra 1.25% at slightly less risk than VTI. It’s cost is .2 instead of .04 but that gets diluted in the overall portfolio mix.

      Reply

      • Thanks for sharing the spreadsheet. It’s what I have been looking out for!

        Reply

30. Excellent post and thanks for the practical spreadsheet. I’m currently using Personal Capital but I will be able to be more detailed with your spreadsheet.

    I’ve been using the Three Fund Portfolio for several years now but I still struggle with the asset location mentally. My current portfolio is heavily weighted towards taxable which means that at an 80/20 ratio my tax deferred accounts are almost entirely made up of bonds. This means that, historically speaking, my tax deferred accounts are less volatile than my taxable, but growing at a slower rate. I’ve been struggling with this concept and have asked opinions from others and gotten varied responses. If you would be willing to weigh in it would be much appreciated. FYI, I am about 2 years away from ER with other sources of income available for a while separate from my portfolio, hence the heavily weighted stock allocation.

    Reply

    • I would like to see a response to this too. Doesn’t filling a 401k with slow-growing bonds limit the benefit of tax-deferred growth? Our tax-deferred space is quite limited, so wouldn’t it be beneficial to use that space for what we expect to grow most?

      Reply

      • Ya’ll read this link.

        Reply

        • Thanks. That helped.

31. The three fund portfolio, for me, is ideal. I like simplicity! Thanks for getting into the weeds on the particulars.

    Reply

32. Thanks POF! I am also a big fan of making spreadsheets and that is a beauty! Gee, that felt kind of like publicly admitting to playing Dungeons and Dragons on a Friday night, but oh well 😉

    Reply

33. Thank you for the spreadsheet! I have been a 3 fund investor for several years and am relieved with the complexity gone from my portfolio. I do have one mixed fund in my IRA, and see that you have addressed the balanced funds as well.

    Reply

    • Yes, I wanted to make the spreadsheet versatile enough to accommodate any stock or mutual fund, so the option is there. You just have to look up the percentages of the different classes and enter them.

      Cheers!
      -PoF

      Reply

34. I rebalance with new money. That said, my spreadsheet has the ability to tell me how to distribute the new contributions based on the desired AA. Good work, but it lack that feature!

    Reply

    • I do the same, Michael.

      At the bottom of this spreadsheet, the difference between your desired allocation and current allocation is listed by both percentage and absolute dollars. So you would put the new money towards whichever class is most underweight to balance things out.

      Do you have a more elegant way of calculating new contributions?

      Cheers!
      -PoF

      Reply

      • Always appreciate all your work and pre-made spreadsheets, PoF. I’ve learned an insane amount from you. Thank you!

        I tweaked your “Portfolio Tracker” spreadsheet to include an exact calculation for new contributions to rebalance the portfolio to the desired asset allocation. This can easily be adapted to the “Three Fund Tracker” spreadsheet as well.

        All I did was copy your box with desired/current/discrepancy percents and balances and pasted it below that box with a new line above to write in the amount of a new contribution. Then I just adjusted your “Current Percent” and “Desired Balance” cell calculations in the new box I copied/pasted, to add this contribution cell to those calculations. Done. Now that new box will show your percent and balance discrepancies based on your new total (original balance + new contribution), and will tell you exactly how much to contribute to each asset class in order to rebalance the portfolio.

        Reply

    • I’d also love to see how you do this calculation inside the spreadsheet. Adding new money adds to the new total, making it a tricky topic. The best I’ve been able to come up with is using this link.

      Reply

      • That sheet is good but you should be able to do it inside a spread sheet using the ratio of ending NW to beginning NW.

        Old NW =1,000,000
        600k stocks
        400k bonds

        Let’s say stocks go up 20k and you add 10k in new dough

        nw new= 1,030,000

        ratio = 1,030,000/1,000,000 = 1.03

        new stocks/bonds allocations =
        600k x 1.03 = 618k
        400k x 1.03 = 412k

        ratio 60/40 total 1,030,000

        If the stocks went up 20k you would sell 2K of stocks and add that to your 10k new money and put it in bonds.

        The reason this is important is risk management. By performing the above you are automatically forced to sell stock when it’s expensive and put it into bonds when they are cheap. When the market crashes you are automatically forced to sell bonds and put that money into stocks when they are cheap. New money is just proportioned according to your asset allocation. This way you are always optimally growing your dough by controlling your risk. If you have dutifully tax loss harvested you can do this maneuver for free in a post tax account.

        It becomes a bit more difficult if you have bonds in pretax but you can do it by proxy, owning stocks in post tax and both stocks and bonds in pretax. Market goes up sell 2k post tax add it to10k new money, put 12 k into pretax portioned appropriately. Market goes down sell bonds in pretax and buy some stocks in pretax therefore buying cheap shares. Tax loss harvest in the post tax acct.

        Reply

        • Thanks Gasem – that works. I actually arrived at the same numbers you did, but I used a different formula. I did, however, figure out what I was doing wrong to think it was too complex for the spreadsheet: I was testing my formula incorrectly. Whoops! Thanks for the confirmation that the method above will work.

35. Love the spreadsheet. I have a similar version and have one recommendation. I would add a column after “value” to discount the pre-tax retirement accounts (401K’s, traditional IRAs), etc. as there will likely be a tax impact before realizing the full value on these accounts. Depending on RMD’s / conversion ladders, etc., you’re likely going to be paying some amount of tax on these accounts. I’ve haircut my pre-tax buckets by 15% and my asset allocation is based off this discounted value.

    I also had to weigh the tax/fee impact on keeping bonds in the 401K vs. brokerage account. While the 401K bond fund had higher expense ratios, it still made sense from a tax perspective to hold the bonds in the 401K. Probably worth a quick calculation in a situation where you have limited bond fund options with high expense ratios in your pre-tax accounts.

    Reply

    • Good thought, Jason.

      WCI has talked about how keeping an asset like a bond fund in a tax-deferred account is essentially giving yourself a slightly riskier overall asset allocation.

      The sheet is as complex as I want it to be, but it might be a good exercise for the user to consider the future tax implications of the money in various account types. It’s tough because capital gains can range from 0% to over 30%. Tax-deferred money could be taken mostly in the 12% bracket or entirely in the 37% bracket. And that’s assuming the tax code doesn’t change between now and when you access the money!

      Cheers!
      -PoF

      Reply

      • This is the article I have been waiting for the past couple of years! And the spreadsheet is a big bonus. Thanks so much. Perhaps this is a silly question, but how is keeping a bond-fund in a tax-deferred account a riskier asset allocation?

        Reply

        • Here you go.

36. After I sell an older Janus fund I have I will have my portfolio close to this simple. Been delaying the sale to spread out cap gains taxes, I sold another old fund last year. I do, however, have a lifecycle fund in my TSP. Since that changes it’s assets routinely (but predictably), it does make it a bit harder to track things.

    Reply

37. I love keeping it simple. I am going to download this sheet and keep it for when I start a taxable account (when all my student loans are gone). I love a good spreadsheet!

    Appreciate you spelling out the tax implications for the different accounts. I think you’ve said it before that this is one of the reasons some carry Berkshire stock in their taxable account (since it doesn’t spit off dividends).

    Thanks for putting the work into the spreadsheet.

    Reply