Hi all
I would like to create an Excel file to solve this problem but I really suck at it and have no idea how to...
Any kindred spirits out there to help me with that? Any help would really be highly appreciated!
For information, I tried with ChatGPT but it is not helpful. It generates every time different answers so it is not reliable at all.
I am really not sure about the tax calculations for Scenario 1.
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Starting capital: $100k
Annual growth rate of stocks: 10%
Annual growth rate of bonds: 4%
Bank annual fees: 0.20%
Tax on realized capital gains: 34%
Tax on unrealized capital gains: 0%
Asset allocation:
Scenario 1:
Stocks ETF: 80% / Annual fees: 0.14%
Bonds ETF: 20% / Annual fees: 0.10%
In this scenario, since stocks perform better than bonds, I will need once a year to sell stocks to buy bonds in order to rebalance the portfolio to the original allocation (80% stocks and 20% bonds). Each rebalancing will trigger taxes on the portion of stocks sold based on their average cost (not FIFO).
Scenario 2:
All-in-one ETF (80/20 - auto-rebalancing): 0.25%
No need to rebalance annually so no taxes triggered.
Question:
At the end of the 25th year, I sell all my positions. What would the final capital be, net of taxes, in both of these scenarios?
Here is my try: Calculation.xlsx
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