The Three-Fund Portfolio in Beancount: Simple FIRE Investing

General
1

If there’s one investment approach that dominates the FIRE community, it’s the three-fund portfolio: US stocks, international stocks, and bonds. Simple, diversified, low-cost.

Let me show you how I track mine in Beancount.

The Three-Fund Philosophy

The idea: instead of picking individual stocks or timing the market, own the entire market through low-cost index funds.

A typical allocation:

  • 60% US Total Stock Market (VTI, VTSAX, FSKAX)
  • 20% International Stocks (VXUS, VTIAX, FTIHX)
  • 20% US Bonds (BND, VBTLX, FXNAX)

Why this works:

  • Diversified across thousands of companies
  • Low expense ratios (0.03-0.05%)
  • Tax-efficient in taxable accounts
  • Requires minimal maintenance

My Beancount Setup

Here’s how I structure my investment accounts:

; Define the commodities
2020-01-01 commodity VTI
  name: "Vanguard Total Stock Market ETF"
  asset-class: "US Equity"
  
2020-01-01 commodity VXUS  
  name: "Vanguard Total International Stock ETF"
  asset-class: "International Equity"
  
2020-01-01 commodity BND
  name: "Vanguard Total Bond Market ETF"
  asset-class: "Fixed Income"

; Account structure
2020-01-01 open Assets:Investments:Brokerage:VTI
2020-01-01 open Assets:Investments:Brokerage:VXUS
2020-01-01 open Assets:Investments:Brokerage:BND
2020-01-01 open Assets:Investments:401k:VTI
2020-01-01 open Assets:Investments:401k:VXUS
2020-01-01 open Assets:Investments:IRA:BND

Tracking Allocation

The key query—am I at my target allocation?

SELECT 
  root(account, 3) as asset_class,
  sum(cost(position)) as cost_basis,
  sum(value(position)) as market_value
WHERE account ~ "Assets:Investments"
GROUP BY root(account, 3)

I also use commodity metadata to categorize:

SELECT 
  meta("asset-class") as class,
  sum(value(position)) as total
WHERE account ~ "Assets:Investments"
GROUP BY meta("asset-class")

My Current Allocation

Being transparent:

  • US Stocks: 62% (target: 60%)
  • International: 18% (target: 20%)
  • Bonds: 20% (target: 20%)

Slightly overweight US after 2025’s strong performance. I rebalance when any category drifts more than 5% from target.

Price Updates

For accurate market values, you need current prices. I use bean-price with Yahoo Finance:

bean-price --no-cache finances.beancount >> prices.beancount

My prices.beancount file looks like:

2026-02-12 price VTI 295.42 USD
2026-02-12 price VXUS 62.18 USD
2026-02-12 price BND 72.35 USD

Asset Location Strategy

Not all accounts are equal. I place assets strategically:

  • Taxable brokerage: Tax-efficient funds (VTI, VXUS) with low turnover
  • 401k: Anything (often international funds for foreign tax credit optimization)
  • IRA: Bonds and REITs (less tax-efficient)

This maximizes after-tax returns without changing my overall allocation.

Questions

  1. What’s your target allocation?
  2. How often do you rebalance?
  3. Any tips for automating price fetching in Beancount?
2

Love this breakdown! The three-fund portfolio is what finally got me to stop overthinking my investments.

For price automation, I run this cron job weekly:

# Every Sunday at 6pm
0 18 * * 0 cd ~/finances && bean-price main.beancount >> prices.beancount 2>&1

Works great for weekly rebalancing checks. If you need daily prices, just change the schedule.

One tip I learned the hard way: always review the prices before committing. Sometimes the API returns weird data (stock splits, data errors). I diff the new prices against last week’s before adding them to git:

tail -5 prices.beancount  # check what bean-price added
git diff prices.beancount # review changes

For asset location, I’ve taken a slightly different approach. Instead of separate accounts per fund, I use one account per brokerage but tag transactions:

2026-01-15 * "Buy VTI"
  Assets:Investments:Fidelity  10 VTI {295.00 USD}
    asset-class: "us-equity"
  Assets:Checking

Then I can query by account (for tax lots) or by tag (for allocation). Both approaches work—just personal preference.

My allocation: 70/15/15 (US/Intl/Bonds). More aggressive on US because I’m still 15+ years from retirement.

3

This is exactly what I needed! I’ve been paralyzed trying to pick individual stocks and this simplifies everything.

Quick clarifying question: how do you handle lots and cost basis in Beancount?

When I buy VTI multiple times at different prices, do I need to track each purchase separately? Like:

2026-01-01 * "Buy VTI"
  Assets:Investments:Brokerage  5 VTI {280.00 USD}
  Assets:Checking

2026-02-01 * "Buy VTI"  
  Assets:Investments:Brokerage  5 VTI {295.00 USD}
  Assets:Checking

And then when I sell, how do I specify which lot?

I’m coming from spreadsheets where I just tracked total cost and total shares. Beancount’s lot tracking is more precise but I want to make sure I’m doing it right from the start.

Also—is there a good guide for understanding the beancount cost basis syntax? The {...} stuff confuses me a bit.

4

@newbie_accountant Yes, you’ve got the buying part right! Each purchase creates a separate lot with its own cost basis.

For selling, you specify which lot using the cost in curly braces:

; Sell the shares bought at $280
2026-06-01 * "Sell VTI"
  Assets:Investments:Brokerage  -5 VTI {280.00 USD} @ 310.00 USD
  Assets:Checking  1550.00 USD
  Income:Investments:Gains  -50.00 USD

The {280.00 USD} says “sell the lot purchased at $280”. The @ 310.00 USD is the current sale price.

If you don’t care which lot, you can use FIFO (first in, first out):

; Sells oldest lot first
2026-06-01 * "Sell VTI"
  Assets:Investments:Brokerage  -5 VTI {} @ 310.00 USD
  ...

For tax loss harvesting, I specifically select lots that have losses:

; Find lots with unrealized losses
SELECT account, units(position), cost(position), value(position)
WHERE account ~ "Investments"
  AND cost(position) > value(position)

Then sell those specific lots at year-end to offset gains.

The Beancount documentation on inventory and cost basis is good: Beancount Language Syntax - Beancount Documentation

But honestly, the best way to learn is to enter a few transactions and run bean-check to see if they balance!