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bolido_sentimental  1yr ago (text post)   3350 thread views

Small-Scale Question Sunday for December 25, 2022

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https://www.bogleheads.org/wiki/Three-fund_portfolio

I'm planning to start one of these next year but have run into confusing information regarding how to handle taxes (on a taxable brokerage account, not an IRA).

Is it better for the completely lazy investor (me) to put the money into ETFs vs the index funds like VTSAX? I want to minimize any time spent dealing with paperwork or tax bullshit and it seems like index funds aren't as "set and forget" as I thought in that sense.

I'm not sure. I use index funds and there isn't anything I consider paperwork or tax bullshit. Vanguard sends me a simple form at tax time that gets added to my tax return and that's it.

ETFs are (slightly) more tax efficient than mutual funds and also more liquid; they also usually have lower fees. Most things generating a return in taxable accounts will trigger taxable events, but ETFs are about as simple as it gets: they'll issue dividends, but so do mutual funds. For VTI, most are qualified and they're small (~1.5%) anyway.

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