A log of the investment returns and loan for my 25 Maverick

[dochawk]

While this has been hashed about in theoretical and generalized terms, I'm following through, and will post periodic updates.

I have created a separate Roth IRA account, and transferred funds to exactly cover the loan--to the penny, both are $42,646.00 at this moment.

There is a wrench in that I have about a $1,970 refund coming, that will probably go back to the lender. Part my deposit, part farm bureau, and part something else (maybe I double entered something, or adjusted for expecting the $300 increase on the advanced trailer from Job 2 [that they didn't ask for, anyway]). Anyway if it pays down the balance, I'll make adjustments to keep things apple to apple.

So today, March 22 2025, the balance is $42,646, and the interest rate is 4.79% for 72 months.

The initial allocation is:

Fund	Value	shares	price
VEUSX	$9,690.96​	113.106​
FEVFX	$11,377.09​	286.072​
VGENX	$10,428.07​	224.115​
FDGRX	$9,690.96​	264.131​
Cash	$1,000.89​	​
Total	$43,646​
Loan	$43,646​

The first two will be gradually converted to largely FWWFX and FDSVX, comparable Fidelity funds with significantly better 10 year performance. some will go to FDGRX (closed to new investors since 2006). The rest, as well as VGENXX, will go to as yet undetermined funds. (These are changes that were already underway in the account they came from).

(I'll note that this combination is not "balanced", and would be downright reckless for many, possibly most, people. This is definitely aggressive.)

My guess is that most likely, I'll have 40-45% left when I make the last payment in six years, but 50% is conceivable.

I did something similar with my covid EIDL, converting cash reserves into a segregated account to match the withdrawals from the EIDL. after almost a year and a half of payments, there's about 21% more in those funds than went in in the first place. That loan, however, has a 35 year amortization, though, and 3.75% interest. I segregated a Roth for it, too, in the same amount, and am now drawing down the taxable (the horror! ) account that used to be the EIDL offset. (seriously, folks, if you have the same things in your Roth and taxable, draw down the taxable!)

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[KEMeyer]

While this has been hashed about in theoretical and generalized terms, I'm following through, and will post periodic updates.

I have created a separate Roth IRA account, and transferred funds to exactly cover the loan--to the penny, both are $42,646.00 at this moment.

There is a wrench in that I have about a $1,970 refund coming, that will probably go back to the lender. Part my deposit, part farm bureau, and part something else (maybe I double entered something, or adjusted for expecting the $300 increase on the advanced trailer from Job 2 [that they didn't ask for, anyway]). Anyway if it pays down the balance, I'll make adjustments to keep things apple to apple.

So today, March 22 2025, the balance is $42,646, and the interest rate is 4.79% for 72 months.

The initial allocation is:

Fund	Value	shares	price
VEUSX	$9,690.96​	113.106​
FEVFX	$11,377.09​	286.072​
VGENX	$10,428.07​	224.115​
FDGRX	$9,690.96​	264.131​
Cash	$1,000.89​	​
Total	$43,646​
Loan	$43,646​

The first two will be gradually converted to largely FWWFX and FDSVX, comparable Fidelity funds with significantly better 10 year performance. some will go to FDGRX (closed to new investors since 2006). The rest, as well as VGENXX, will go to as yet undetermined funds. (These are changes that were already underway in the account they came from).

(I'll note that this combination is not "balanced", and would be downright reckless for many, possibly most, people. This is definitely aggressive.)

My guess is that most likely, I'll have 40-45% left when I make the last payment in six years, but 50% is conceivable.

I did something similar with my covid EIDL, converting cash reserves into a segregated account to match the withdrawals from the EIDL. after almost a year and a half of payments, there's about 21% more in those funds than went in in the first place. That loan, however, has a 35 year amortization, though, and 3.75% interest. I segregated a Roth for it, too, in the same amount, and am now drawing down the taxable (the horror! ) account that used to be the EIDL offset. (seriously, folks, if you have the same things in your Roth and taxable, draw down the taxable!)

You are a wise man and a good steward of your talents.

 

[Aguy]

Hmm I just put it in VFMXX. If it drops below my loan amount (3.9%) I'll move it to SCHD.

 

[gchu]

You will most likely be ahead - market averages about about double what your interest rate is...

I do feel the "interest" vs investment model changes in a taxable account or a tax deferred account (Non-Roth)

Great that you are sharing this with others that may not be as experienced as your are!

 

[REDRUM]

Why not income funds that pay more than 5%?

 

[gchu]

Why not income funds that pay more than 5%?

My guess is that the OP is interested in total return vs cash flow in the model.

I know there ARE exceptions, but most investments do not beat index funds over the long term without taking on higher risk

 

[Ryom]

seriously, folks, if you have the same things in your Roth and taxable, draw down the taxable!

Tax loss harvest in your taxable account to turn it into a mini-roth. If the market is down big for a day, sell off your 'total market index fund' and and immediately buy an 'S&P 500 fund', which have just about exactly the same returns but you can file a capital loss to offset future gains sales. You lose nothing, just make sure you aren't doing a wash sale.

Google 'Tax Loss Harvesting' for more thorough explanations and limitations.

 

[Cherokee]

Posted in the general Maverick thread, okay: ;’P

 

[dochawk]

I'm updating the starting positions.

I found that I've been paying interest since February 28. [side note from hindsight: use pre-approval, don't apply for the actual loan when Ford claims to have shipped your vehicle. I ended up with about $130 in interest from loan approval to pickup.

I also put $40,000 in on the next market day, 3/3.

So instead of trying to match the amount to yesterday, I've simply gone to $42,646 into the account, and the payoff amount (it accrues $5.60/day in interest at this point).

I mulled a few possibilities about how to keep it apples and apples, or as close thereto as I could. I've ultimately decided to, instead of somehow matching yesterday's value in an incomprehensible manner. So I've put the $42,600 in, albeit early, and paid interest longer than I should have. The $40k was up a cumulative $116 on Thursday, but lost that and was down about another $65 on Friday (illustrating the futility of finding a coherent scheme. So I took $65 back out, giving me:

Fund	Value	shares	price
VEUSX	$9,690.96​	113.106
FEVFX	$11,377.09​	286.072
VGENX	$10,428.07​	224.115
FDGRX	$9,690.96​	264.131
Cash	$935.89​
Total	$42,581​
Loan	$42,786​

I also found that the FEVFX cannot be used in a recurring transaction, but must be sold to cash first. That also applies to a couple of the other Vanguard funds that I'm now holding at Fidelity.

 

[dochawk]

Tax loss harvest in your taxable account to turn it into a mini-roth.

That's really not worth the effort here. The funds in it will be liquidated by the end of the year, replacing Roth distributions. I also do Roth conversions in the amount of the standard deductions (but my non-Roth continue to grow faster than that!)

My guess is that the OP is interested in total return vs cash flow in the model.

Exactly

I know there ARE exceptions, but most investments do not beat index funds over the long term without taking on higher risk

Absolutely--but "without higher risk" is the key here. But this is part of extremely long term planning--I'm about halfway through a 75 year plan, and at this point am extending my horizon to consider how much my grandchildren inherit.

The longer the horizon, the more risk pays off on average, and the less likely the risk is to bite.

Eliminating the prospect of actually hitting $0 along the way makes a huge difference ce in the amount of risk you can take.

FDGRX has beat its benchmark, Russell 3000 Growth, by 2.75%/year for the last ten years annualized, at an annualized 18.97% to 16.22%, and FWNFX beat Russel 1000 Value by 2.86% (at 10.35% and 8.49%). The legendary Fidelity Magellan lags the S&P for that period by .03% [it's never been the same since losing Peter Lynch, one of about three people in history who consistently beat the market by significant amounts]

 

[dochawk]

A first, belated, update for the end of 25Q1:

As of close on March 31, 2025, the accounts balance was $41,926, while the outstanding balance was $42,824. So down by $898.

Now to throw a hitch into things, the dealer eventually sent the overpayment to nfcu, posted April 21, which applied it as the May, June, and partial July payments. Accordingly, I moved $1,475..74 out of the Roth for this loan.

(leading up to today, the investment side has dipped as low as $36,382 on April 8. As of yesterday's close, it had recovered to $40,002, compared to a payoff value of $40,841),

 

[dochawk]

As of Monday, May 12: back in black.

Account, $41,558; payoff, $40,895. One payment has been made.

​

 

[dochawk]

OK, first full quarter just completed, 2Q25.

The Roth holds $45,944, while the payoff is $41,152. So for the moment, up $4,792. [edited: incorrectly said $31,152).

I've finished converting the old vanguard funds for the moment, although I've held off on liquidating the energy fund. Current holdings:

Fund	Value	shares	price
FDGRX	$15,141	360.944	$41.95
FDSVX	$3,632.47	55.483	$65.47
FSELX	$8,912.44	252.12	$35.35
FWWFX	$8,527/32	231.532	$36.83
VGENX	$9,730.41	201.583	$48.27
Total	$45,944.24
Loan	$42,786

 

[dochawk]

it's between my quarterly reports, but I thought I'd post this just to make a point about volatility.

Last Friday the maverick account was up by $826 from the day before--more than the monthly payment!

That didn't stop it from being down $40 for the week!

It also leaves it with ten full payments more than the payoff of the loan, after already having made five payments.

 

[dochawk]

Ack, it ate what I wrote!

Trying again, for the end of 25Q2, I have the total as of close on 9/30/25, but I'm having to work backwards as I didn't save the specifics, and things aren't coming out right.

It is now set on autopay, withdrawing a fixed amount from each fund the day before the payment is made. The amounts are in proportion to the balances a couple of days b before I set them up. This will mean that funds that grow faster than the others will become proportionally larger, as I don't plan to rebalance.

I also seem to make $.30 in overnight interest for that one day!


At closing on 9/30, there was $49,009 on hand, with a payoff of $39,669.

So after it has made six payments for me, and after making six payments.and I have $6,363 more than I started with.

I have 9.3 payments above the starting value. Alternatively, it's generated enough income for 15.3 payments.

Or, I could pay it off today, and walk off with about $10k.

Frankly, I was expecting to do this well, but rather to cover half to most of the payments with growth.

It also helps that I started during a crash period, so significant parts of the gains are market recovery. (nonetheless, I'm up almost 17% in general since the start of the year, before the crash)

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