Official Shiny Things thread Episode V, The Empire Strikes Back

BBCWatcher

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2. What happens to one's portfolio if they suddenly pass away? Must we set up a will to account for these shares? Shares cannot be in dual name right?
2. Your portfolio (if it's not a joint account) will form part of your estate and be distributed in accordance with your will
Even a joint account can be/often is part of an account holder's estate when any account holder dies. That's a common point of confusion, and it comes up frequently in this forum. A joint account only legally passes to the surviving account holder(s) if it's a "right of survivorship" joint account.(*) Otherwise, a joint account only makes access to (comingled) assets more convenient. It doesn't indicate anything in particular about asset ownership and disposition to survivors.

If the joint account holds U.S. estate taxable assets then the death of any joint account holder is a U.S. estate taxable event. Moreover, nearly always the whole joint account (100% of the fair market value of the whole account's U.S. estate taxable assets) forms the basis for the U.S. estate tax computation. For this reason you probably don't want a joint account when the account holds U.S. estate taxable assets. For example, a couple consisting of two non-U.S. persons could have one joint account with up to US$60,000 worth of U.S. estate taxable assets, and then the death of either account holder would result in zero U.S. estate tax owed (assuming that decedent did not hold any other U.S. estate taxable assets either jointly or individually). Anything above US$60,000 would be assessed estate tax. But if the couple has separate accounts then they can each hold up to US$60,000 of U.S. estate taxable assets (US$120,000 total) without their estates owing any U.S. estate tax.

If there's no valid will then the decedent's estate will be distributed according to applicable intestate laws. For assets in Singapore that's ordinarily the Intestate Succession Act, although if the decedent was Muslim then a different law applies.

(*) In the U.S. for example there's something called a "Payable On Death" ("POD") or "Transfer On Death" ("TOD") account. These POD/TOD accounts are not joint accounts, but when the account holder dies the account passes to the named beneficiary (or beneficiaries), outside of probate/will/intestate processes. Very similar to how CPF operates with named CPF nominees or how a life insurance policy operates with named beneficiaries. Most U.S. financial institutions offer POD/TOD accounts. As it happens, last year I inherited a portion of two U.S. POD accounts since I was one of the decedent's named POD beneficiaries. The decedent's will was not relevant to these particular assets. The financial institution just needed one official copy of the death certificate that covered all beneficiaries, my proof of ID, and that was that. Other countries often have similar choices available.

Also, in many countries (including the U.S.), residual pension-related assets — U.S. IRA and 401(k) accounts, for example — pass to the decedent's surviving legal spouse no matter what the decedent's will says. It's essentially a "mistress safeguard," that lawmakers didn't want a persuasive mistress (or consort) to help a boyfriend/girlfriend write his/her spouse out of his/her will and completely wreck that surviving spouse's financial situation. For any other arrangement the legal spouse must voluntarily agree, in writing, to surrender his/her legal right to pension-related assets. And that's exactly what happened last year, which is among the reasons I was so shocked and surprised. The decedent's surviving spouse voluntarily waived rights to the pension-related account, a precondition for attaching POD named beneficiaries to that account. The other account was not pension-related, but even so I was shocked there were any such POD accounts with my name on them. In case anyone is wondering, the surviving spouse simply decided there were/are more than enough other assets and felt strongly that these particular assets should pass to other loved ones, and without forewarning. So that's what they agreed to do. (Surprise!)
 

galkkl

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Hi everyone!

I started following Shiny Thing's 3 ETF portfolio (ES3, VRWA (VWRD), MBH (A35)) since 2016, but haven't been following the forums for some time now.

Can I ask if this is still valid? Any changes to the methodology etc? Tried to search posts but can't seem to find the correct info.

Many thanks in advance!
 

BBCWatcher

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I started following Shiny Thing's 3 ETF portfolio (ES3, VRWA (VWRD), MBH (A35)) since 2016, but haven't been following the forums for some time now.
Can I ask if this is still valid? Any changes to the methodology etc? Tried to search posts but can't seem to find the correct info.
Sure. VWRA, ES3, and MBH are all useful funds with low costs.
 

highsulphur

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Hi everyone!

I started following Shiny Thing's 3 ETF portfolio (ES3, VRWA (VWRD), MBH (A35)) since 2016, but haven't been following the forums for some time now.

Can I ask if this is still valid? Any changes to the methodology etc? Tried to search posts but can't seem to find the correct info.

Many thanks in advance!
Still my biggest components
 

Shiny Things

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I started following Shiny Thing's 3 ETF portfolio (ES3, VRWA (VWRD), MBH (A35)) since 2016, but haven't been following the forums for some time now.

Can I ask if this is still valid? Any changes to the methodology etc? Tried to search posts but can't seem to find the correct info.
Yep! Nothing's changed from what you have there; those are all great choices.
 

apriliasiao

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Does anyone manage to transfer USD from SCB to IBKR successfully before? How do you do it and what r the fees involve assuming a is a Priority/Private banking account? Been receiving dividend in USD so want to diversify it out somewhere else.
 

RuiQi_91

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Hello, this is probably a silly question, but it’s best that we continue DCA-ing into VWRA and the STI ETF even during this period when the markets are down (and may worsen due to the trade wars) since we are in it for the long haul, right?
 

highsulphur

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Hello, this is probably a silly question, but it’s best that we continue DCA-ing into VWRA and the STI ETF even during this period when the markets are down (and may worsen due to the trade wars) since we are in it for the long haul, right?
short answer is yes

long answer is also yes
 

BBCWatcher

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Hello, this is probably a silly question, but it’s best that we continue DCA-ing into VWRA and the STI ETF even during this period when the markets are down (and may worsen due to the trade wars) since we are in it for the long haul, right?
short answer is yes
long answer is also yes
Exactly. What's wrong with lower prices when you're a buyer?

Although (to underscore the short-term aspects) it's not that much lower! VWRA, for example, is trading right around the middle of its 52 week price range on an intra-day basis. VWRA had a lower price all the way back in ancient history: January, 2025. Also keep in mind it's an accumulating fund, and all comparisons should be dividend inclusive. Of course you're reinvesting dividends if you don't have an accumulating fund, right?
 

Nick67

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Hi all,

Recently I was offered an investment policy. The broad details are as follows:

1) Up till 100 years old
2) Capital is guaranteed upon death (i.e. Your beneficiary will receive your full capital invested)
3) Dividends target ~7% annually
4) Worst quarter in historical performance so far is ~7%
5) For the first 3 years, the fund gives a bonus of 5% on top of the dividend yield.
6) Minimum placement is for 7 years, withdrawing before that will have severe penalties.
7) First 7 years there is a 3% fees annually, 8th year onwards it's 0% fees.
8) 8th year onwards, you can withdraw your principal anytime with no fees.
9) dividends can be reinvested with a one-time fee of 3%

This seems like a decent investment policy. Assuming consistent 7% dividends, first 7 years I would nett 4% yield. 8th year onwards I should be getting 7% annual returns, up until I'm 100 years old.

I keep thinking there must be a catch somewhere that I missed. Could anyone savvy with these type of investment share some advice? How does a policy like this compare with the usual VWRA investments? For comparisons, I have been DCA-ing monthly into VWRA for 2 years, so far the growth is about 10% overall. In this scenario, wouldn't the 7% return annually be better?
 

Shiny Things

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Hi all,

Recently I was offered an investment policy. The broad details are as follows:

1) Up till 100 years old
2) Capital is guaranteed upon death (i.e. Your beneficiary will receive your full capital invested)
3) Dividends target ~7% annually
4) Worst quarter in historical performance so far is ~7%
5) For the first 3 years, the fund gives a bonus of 5% on top of the dividend yield.
6) Minimum placement is for 7 years, withdrawing before that will have severe penalties.
7) First 7 years there is a 3% fees annually, 8th year onwards it's 0% fees.
8) 8th year onwards, you can withdraw your principal anytime with no fees.
9) dividends can be reinvested with a one-time fee of 3%

I keep thinking there must be a catch somewhere that I missed.
Yeah, there's a few things here that are over-promising ("dividends target 7% annually"), or possibly misleading ("worst quarter so far is 7%", "bonus of 5% on top of div yield"), or just straight-up bad (the reinvestment fees, the surrender fees). It's very very confusing, and deliberately so!

In practice, there's a bunch of ways this could go wrong:
1) The most likely one is that you'll have to withdraw the money early. Up to 75% of life insurance policies get surrendered early, and that's what the insurers are banking on—that's how they make a lot of their money.
2) "Dividends target 7% annually" is skating very close to the line of "they're going to get in trouble for saying that". They're not promising it'll pay 7% - they're not promising it'll pay anything - but they're hoping you'll think it's a promise. In practice, if interest rates drop, they'll have to cut the dividend eventually.
3) That reinvestment fee on dividends is a disgrace. Your broker wouldn't charge you 3% to reinvest your dividends. And that by itself effectively cuts the "dividend target" from 7% to 4%.

Could anyone savvy with these type of investment share some advice? How does a policy like this compare with the usual VWRA investments?
Comparing insurance policies to stock investments (like VWRA) isn't the right comparison, because stocks benefit from capital growth as well as dividends. (For example, VWRA has doubled in five years, measuring from the March '20 lows—this insurance policy would take fifteen years to double your money, if my math is right.)

A better comparison for a whole-life insurance policy is that it's like investing in a bond unit trust, but paying a ton of extra fees for it and agreeing to lock your money up for seven years. There's no good reason to lock your money up like that.
 

ChinoGirl

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Hello! I realized that I have not updated the allocation for my stocks and bonds since I started (a bit late) my ETF portfolio a few years ago.

Current Portfolio (at age 40):
  • 60% IWDA/VWRA (switched to this from IWDA)
  • 10% ES3
  • 30% MBH
Updating to the Age 44 Portfolio by Adjusting Proportionally:
  • 60% IWDA/VWRA → New amount: 57%
  • 10% ES3 → New amount: 9%
  • Bonds (MBH) → New amount: 34%
Questions:
  1. Is this the correct way to adjust the proportions?
  2. Are the updated proportions for IWDA/VWRA and ES3 suitable?

Thanks for helping to address my queries!
 

highsulphur

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Hello! I realized that I have not updated the allocation for my stocks and bonds since I started (a bit late) my ETF portfolio a few years ago.

Current Portfolio (at age 40):
  • 60% IWDA/VWRA (switched to this from IWDA)
  • 10% ES3
  • 30% MBH
Updating to the Age 44 Portfolio by Adjusting Proportionally:
  • 60% IWDA/VWRA → New amount: 57%
  • 10% ES3 → New amount: 9%
  • Bonds (MBH) → New amount: 34%
Questions:
  1. Is this the correct way to adjust the proportions?
  2. Are the updated proportions for IWDA/VWRA and ES3 suitable?

Thanks for helping to address my queries!
To be honest, depending on the quantum, the original ratio looks OK even after 4 years
 

BBCWatcher

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To be honest, depending on the quantum, the original ratio looks OK even after 4 years
For what it's worth here's the approach Vanguard takes in their "target date" mutual funds:
  • "Young" phase [25 years or more to the target date (age 65 typically)]: 90% stocks, 10% bonds
  • "Transition" phase (from 25 years to the target date, to the target date): shift from 90-10 to 50-50. That's a 1.6 percentage point per year shift.
  • "Early Retirement" phase (from the target date to 7 years after the target date): shift from 50-50 to 35-65. That's about 2.14 percentage points per year. The 65% "bonds" portion includes a bit of cash.
  • "Late Retirement" phase (thereafter): hold steady at 35-65.
At age 44, assuming a target date of age 65, Vanguard would be at 83.6-16.4 stocks-bonds. I'm eyeballing the above percentages from their chart, so the percentages are approximate.
 

kickass22

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For what it's worth here's the approach Vanguard takes in their "target date" mutual funds:
  • "Young" phase [25 years or more to the target date (age 65 typically)]: 90% stocks, 10% bonds
  • "Transition" phase (from 25 years to the target date, to the target date): shift from 90-10 to 50-50. That's a 1.6 percentage point per year shift.
  • "Early Retirement" phase (from the target date to 7 years after the target date): shift from 50-50 to 35-65. That's about 2.14 percentage points per year. The 65% "bonds" portion includes a bit of cash.
  • "Late Retirement" phase (thereafter): hold steady at 35-65.
At age 44, assuming a target date of age 65, Vanguard would be at 83.6-16.4 stocks-bonds. I'm eyeballing the above percentages from their chart, so the percentages are approximate.
This is the "Traditional method" and a method when you have not understood what asset allocation is and not sure why 60? why 40? . While you keep it at that, the best advice is to go learn more about asset allocation for your needs. Based on your circumstance, what assets should be in your portfolio and why? .

Some books you can read :
The Simple Path to Wealth" by JL Collins
"The Bogleheads’ Guide to Retirement Planning
"The Little Book of Common Sense Investing" by John C. Bogle
 

highsulphur

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For what it's worth here's the approach Vanguard takes in their "target date" mutual funds:
  • "Young" phase [25 years or more to the target date (age 65 typically)]: 90% stocks, 10% bonds
  • "Transition" phase (from 25 years to the target date, to the target date): shift from 90-10 to 50-50. That's a 1.6 percentage point per year shift.
  • "Early Retirement" phase (from the target date to 7 years after the target date): shift from 50-50 to 35-65. That's about 2.14 percentage points per year. The 65% "bonds" portion includes a bit of cash.
  • "Late Retirement" phase (thereafter): hold steady at 35-65.
At age 44, assuming a target date of age 65, Vanguard would be at 83.6-16.4 stocks-bonds. I'm eyeballing the above percentages from their chart, so the percentages are approximate.
i suppose for non US residents, global equities ETFs will replace both US equities and international equities?
 

Shiny Things

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Hello! I realized that I have not updated the allocation for my stocks and bonds since I started (a bit late) my ETF portfolio a few years ago.
[...]Questions:
  1. Is this the correct way to adjust the proportions?
  2. Are the updated proportions for IWDA/VWRA and ES3 suitable?
Yep and yep. Easy, right?
 

cassowary18

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Haven't been back in this forum for a while. Good to see that this thread is still alive and kicking.

@Shiny Things what's your hot take on the global economic mess going on right now? I think we haven't seen the bottom yet. Going to be rough on the markets, but I'm prepared for a recession with extra buffer of emergency savings in case I lose my job (which I can deploy into the markets if it all works out)
 

revhappy

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Haven't been back in this forum for a while. Good to see that this thread is still alive and kicking.

@Shiny Things what's your hot take on the global economic mess going on right now? I think we haven't seen the bottom yet. Going to be rough on the markets, but I'm prepared for a recession with extra buffer of emergency savings in case I lose my job (which I can deploy into the markets if it all works out)
Nice to see you back. I remember back in 2017 interacting with you here. How naive I was to worry about the markets then, if I had just stuck to my plan my networth would have been 50% higher. But no regrets, atleast I didn't screw up totally.
 
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