Grady and I have been working on the second edition of the Plan Your Money Path book, as so much has happened since I first published it over a year ago! We've been culling lots of notes, mostly from all we learned in our many client plans developed, updated, and reviewed in that time. Also, from discussions here on the various topics.
The ask is for any of you that made liner notes as you read it and have suggestions for things to add, update, or make clearer this is your chance! For those we take up, we'll add you in the acknowledgements. We'd like to put it out early in the year, hopefully to coincide with PRC2026 to ensure we have the updates factored in.
Thanks! Bill and Grady
I have the first edition and found it very helpful. There are a lot of places one can make a mistake and the book points out many of these.
I think the Mode 2 description under asset allocation and location, page 70 in my book, might benefit from more discussion. Here's the section:
"If you choose Mode 2, the tool will do a bunch of fancy, complex work to move money around (virtually, you should follow suit with the actual recommended transfers) to achieve your desired overall asset allocation. Neither Pralana, nor any other consumer grade planning tool can handle the taxes on this moving around (in the taxable brokerage). Dick and Jane are using mode 1."
If I understand this correctly, the rebalancing in the taxable account done by Mode 2 doesn't result in taxable events. Assuming this is correct, I have 2 comments below that you might consider addressing.
1) If I'm trying to maintain an overall asset allocation, Mode 2 makes a lot of sense to me, especially for Roth conversions. The tax issue is a key insight, although the significance probably depends on the specific case. Is there any way to use Mode 2 and somehow manually approximate the taxes? For example, it might be possible to do an initial run and then approximate the taxes due to rebalancing and add them to a second run.
2) In Mode 1, if I try to maintain an overall asset allocation, I might use the different period entries to try and achieve this. I wonder if changing these entries doesn't have the same issue, where rebalancing in the taxable account doesn't generate a taxable event.
@zuiker01gmail-com Thanks for the input. For sure that mode 2 section needs to be much clearer. We gathered some comments from the various discussions here and how we've been covering it with clients, as well as Mr. Eaton's examples in the manual.
If I understand this correctly, the rebalancing in the taxable account done by Mode 2 doesn't result in taxable events.
This is no longer the case (see 8/27/25 release notes) - rebalancing the taxable account can now generate taxable capital gains.
If I understand this correctly, the rebalancing in the taxable account done by Mode 2 doesn't result in taxable events.
This is no longer the case (see 8/27/25 release notes) - rebalancing the taxable account can now generate taxable capital gains.
Excellent! I missed that. Thanks for pointing it out.
