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Re: Please explain a 3% SWR to me

I agree. Blindly following a percentage based withdrawal is not recommended, but VPW is a much better starting point (or rule of thumb) than the typical SWR discussed every day on this forum. No withdrawal scheme can replace a life-time garanteed inflation-adjusted annuity like Social Security, but...
by 1210sda
Thu Apr 24, 2014 12:50 pm
 
Forum: Investing - Theory, News & General
Topic: Please explain a 3% SWR to me
Replies: 72
Views: 3216

Re: Some sense of having enough

I retired at the end of 2001 (12/31/2001) My very first year full year of retirement the sp500 was down over 22%. After that, from 2003 thru 2007, the mkt performed very nicely. 2007 started to slow down (5.5%) and then went to hell in a handbasket in 2008 (-37.00% ). From then until now, with the p...
by 1210sda
Wed Apr 23, 2014 3:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Some sense of having enough
Replies: 13
Views: 1719

Re: *poor* Bogleheads

So much depends on where you live.

$100,000 in Stamford, CT puts you in the 50% level

$100,000 in rural Mississippi puts you in the top 10%.

To be in the top 10% in Stamford requires close to $400,000.

1210 :happy
by 1210sda
Fri Apr 18, 2014 10:16 am
 
Forum: Forum Issues and Administration
Topic: *poor* Bogleheads
Replies: 78
Views: 5348

Re: The slackening...

There is a Chinese saying which goes something like: "Wealth doesn't get past 3 generations." Very interesting. I'm trying to decide what portion of our estate goes to our kids and what goes to charitable causes. Perhaps there is some way to motivate our children to become successful on t...
by 1210sda
Tue Apr 15, 2014 8:28 am
 
Forum: Personal Finance (Not Investing)
Topic: The slackening...
Replies: 61
Views: 6555

Re: The market portfolio vs. value tilts

That brings about another question I have been pondering. If the small and value premium is a risk story and you are trying to increase returns by taking on more risk, why not just increase your equity percentage in a market portfolio? If the market portfolio is the most efficient and the equity ri...
by 1210sda
Mon Apr 14, 2014 8:48 am
 
Forum: Investing - Theory, News & General
Topic: The market portfolio vs. value tilts
Replies: 66
Views: 3187

Re: The slackening...

There is a Chinese saying which goes something like: "Wealth doesn't get past 3 generations." Very interesting. I'm trying to decide what portion of our estate goes to our kids and what goes to charitable causes. Perhaps there is some way to motivate our children to become successful on t...
by 1210sda
Sun Apr 13, 2014 2:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: The slackening...
Replies: 61
Views: 6555

Re: Three-fund portfolio returns and variance drain

Thanks again, DBR. Maybe instead of "drain", it could be called "differential" or some such term. I think it's important to know the difference between the two calculations so that when it's misused by some (Ramsey, for example) we won't be as easily misled....at least that's my ...
by 1210sda
Sat Apr 05, 2014 1:34 pm
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

As an example, you buy shares in Joe's Donuts. Sales double and the stock price rises to reflect that. Day to day volatility, or "variance drain" has no bearing on this. It doesn't change the market value of the company. Let's say stock price goes from $100 to $200 to reflect the sales do...
by 1210sda
Sat Apr 05, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

Thank you, DBR. As Barry Barnitz showed in his blog post, the measure of Variance Drain is Arithmetic Return minus Compound Return (although I believe he had it reversed in the blog...Compound Return minus Arithmetic Return...:-) ). My question is, How is "sequence of return" quantified ? ...
by 1210sda
Fri Apr 04, 2014 10:51 am
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

While the term "Variance Drain" is new to me, the concept is not. There are many ways to look at risk, volatility being one of them. Some will say that volatility is not risk, but if it has a direct impact on my return, I consider it risk. If one has a 100% investment in an SP500 index fun...
by 1210sda
Fri Apr 04, 2014 10:12 am
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

Unfortunately, both returns are used by some investors. If investors are not aware of the difference between arithmetic and geometric, they can be using the wrong one and not know why their return projections are so generous (or the reverse). Even well known folks such as Dave Ramsey can mistakenly ...
by 1210sda
Thu Apr 03, 2014 2:19 pm
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

Note there was some discussion a while back about the question of whether the return plotted on the y-axis in most efficient frontier charts is the arithmetic average return for a year or the compound annualized average return and I think I read that it is the average return that is used and theref...
by 1210sda
Thu Apr 03, 2014 10:53 am
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

dbr wrote:try to optimize a portfolio by reducing risk at same return (arithmetic).


This is part of the efficient frontier, along with trying to increase return at the same risk.

1210
by 1210sda
Thu Apr 03, 2014 10:13 am
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Re: Three-fund portfolio returns and variance drain

The difference between the geometric mean (compound return) and the arithmetic Mean (average) is due to the standard deviation. If the standard deviation is zero, then the two means are equal. The larger the Standard deviation, the greater the difference in the two returns. Another way of measuring ...
by 1210sda
Thu Apr 03, 2014 8:31 am
 
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 39
Views: 2479

Which Muni Bond Fund in Taxable account ??

I'm using the Three Fund portfolio as my only investments. If I run out of room in my Tax advantaged account for my fixed income allocation (Total Bond Market Fund..VBTLX), what is/would be the appropriate tax exempt bond fund to use in my Taxable account ?? Is there such a thing as the Vanguard Tot...
by 1210sda
Wed Apr 02, 2014 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Which Muni Bond Fund in Taxable account ??
Replies: 14
Views: 1354

Re: Consequences of a failed HO insurance company...

Homeowners insurance carriers are heavily regulated in the US. There are some pretty aggressive capital controls in place to make sure that they have enough resources to adequately cover exposure. Most carriers will reinsure a portion of their own risk with others to more efficiently distribute the...
by 1210sda
Tue Apr 01, 2014 7:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Consequences of a failed HO insurance company...
Replies: 12
Views: 946

Re: Consequences of a failed HO insurance company...

I'm not sure of your question. If you know the company is in poor shape then why don't you switch now before you have a claim? I guess there are two parts to this. 1. How do you know when the company is in poor shape? How closely do you need to monitor their rating. Can a highly rated company still...
by 1210sda
Tue Apr 01, 2014 8:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Consequences of a failed HO insurance company...
Replies: 12
Views: 946

Consequences of a failed HO insurance company...

What happens if your HO insurance company goes bankrupt?

It seems if you don't have a claim pending, all that's required is switching to a new company.

Any experiences with this ??

1210
by 1210sda
Mon Mar 31, 2014 9:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Consequences of a failed HO insurance company...
Replies: 12
Views: 946

Re: How should I build a TIPS income ladder?

It depends on your timeframe. Each year for 5 years buy five year bonds and ten year bonds. It goes like this: 1. Goal to invest $100,000 in TIPS with $10,000 in TIPS maturing in each of 10 consecutive years beginning in 5 years. 2. Each year for the next 5 years, buy $10,000 of five year TIPS and ...
by 1210sda
Sun Mar 30, 2014 8:18 pm
 
Forum: Investing - Theory, News & General
Topic: How should I build a TIPS income ladder?
Replies: 30
Views: 3255

Re: Wade Pfau's TIPS ladder guide

Cruncher,

I downloaded your TIPS spreadsheet. Thanks so much.

BTW, :-) do you have a simpler version of this??

If not, I'll go ahead and struggle through it. Be ready for some PM's :-)

1210
by 1210sda
Sun Mar 30, 2014 11:19 am
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau's TIPS ladder guide
Replies: 7
Views: 2199

Re: William Bernstein-When you've won the game, why keep pla

DBR,

Wow, thanks for the detailed reply. I will need to re-read it a few times for it to sink in....Thanks again. 1210
by 1210sda
Fri Mar 28, 2014 2:24 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 25069

Re: William Bernstein-When you've won the game, why keep pla

because there is no re-balancing from the liability match to the risk side. the purpose of the liability match portfolio is just that -- to match your liabilities so you dont ever need to think about them. 1.Is the LMP supposed to match your liabilities with the income/dividends it spins off? Or do...
by 1210sda
Fri Mar 28, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 25069

Re: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild

John, once again I thank you for all the help. You've nudged me into getting a little education on the project. BTW, you said "If you meet this requirement, they will pay 100% of any covered loss, partial or total, subject to whatever deductible there may be." Ok, but would a total loss al...
by 1210sda
Sat Mar 22, 2014 12:12 pm
 
Forum: Personal Consumer Issues
Topic: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild" ??
Replies: 8
Views: 595

Re: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild

Thanks again John. Didn't mean to be confusing. All have quoted on a replacement cost basis. The difference lies in the amount of coverage recommended. One said he used a computer program to determine the correct dwelling coverage(165%). The other two felt that using purchase price was the right amo...
by 1210sda
Fri Mar 21, 2014 7:56 pm
 
Forum: Personal Consumer Issues
Topic: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild" ??
Replies: 8
Views: 595

Re: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild

Thanks John, I'm glad you've had underwriting experience. What I'm trying to determine is "what is the appropriate amount of coverage that I need." 1. I've talked to two independent insurance agents and one in-house guy. The in-house guy quoted me on a "cost to re-build" that was...
by 1210sda
Fri Mar 21, 2014 3:45 pm
 
Forum: Personal Consumer Issues
Topic: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild" ??
Replies: 8
Views: 595

One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild" ??

I'm trying to get a competitive quote for a HO policy. One company used market value in determining the coverage and quote. The other wants to use Cost to Rebuild....which is about 1.85 times current value?? This is very confusing. Who is the good guy and who is the bad guy?? Is one company just try...
by 1210sda
Fri Mar 21, 2014 12:50 pm
 
Forum: Personal Consumer Issues
Topic: One Ins. Co uses "Mkt Value" other uses "Cost to Rebuild" ??
Replies: 8
Views: 595

Re: William Bernstein-When you've won the game, why keep pla

As Dr. Bernstein points out in his e-book "Ages of the Investor," investing a lump sum in stocks and other risky assets up front eliminates "sequence risk".. I believe this is true as long as there are no "withdrawals from or additions to" the portfolio. Once you start...
by 1210sda
Wed Mar 19, 2014 2:07 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 25069

Re: William Bernstein-When you've won the game, why keep pla

As Dr. Bernstein points out in his e-book "Ages of the Investor," investing a lump sum in stocks and other risky assets up front eliminates "sequence risk".. I believe this is true as long as there are no "withdrawals from or additions to" the portfolio. Once you start...
by 1210sda
Wed Mar 19, 2014 12:01 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 25069

Re: William Bernstein-When you've won the game, why keep pla

Very good thread. I have a target portfolio that provides for living needs beyond my (and DW's) mid 90's. My target portfolio also includes an amount for my heirs. My target portfolio has an AA of 60/40 and I am using 2% real return as my return. I too feel that I have won the game .... at this poin...
by 1210sda
Thu Mar 13, 2014 9:58 am
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 25069

Re: VOTE FOR JACK AT CNBC.COM

Just voted for St Jack.

Did I just miss it, or are there no academics in the group (Fama, French, Sharpe, Samuelson, etc.) Maybe academics are neither Leaders, Icons or Rebels...:-).

1210
by 1210sda
Tue Feb 25, 2014 1:01 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: VOTE FOR JACK [for 25 who changed business] AT CNBC.COM
Replies: 40
Views: 2049

Re: Explain "Wellness visit" versus "Annual physical"

My doctor wants my healthcare to be symptom oriented. That some tests do nothing more than needlessly alarm a patient. He doesn't believe in full body screenings and the like that are offered commercially by a traveling van. I guess that's OK. Otherwise, I would just have to change doctors. Not some...
by 1210sda
Tue Feb 25, 2014 11:56 am
 
Forum: Personal Consumer Issues
Topic: Explain "Wellness visit" versus "Annual physical"
Replies: 45
Views: 3654

Re: The Estate lawyer cost us big

I'm glad this post was made. It can be quite a lesson for those of us who may encounter this in the future.

I sincerely hope that Bru will keep us posted on the eventual outcome.

1210
by 1210sda
Mon Feb 24, 2014 4:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 8898

Re: When to drop auto collision insurance?

This is an excellent post. It's a reminder to take action, if needed. Similar to other BH's, I looked up the used car value on both Edmunds and Kelly Blue Book. There is a fairly big gap between the two. One was 16,000 and the other was 12,000, so I averaged out to $14,000. (eight year old car with ...
by 1210sda
Wed Feb 19, 2014 12:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: When to drop auto collision insurance?
Replies: 21
Views: 2030

Re: '60/40' Portfolio Down But Not Out

I really like 60/40 ever since I read Peter Bernstein's The 60/40 Solution mentioned by Mr. Ludwig. We're currently at 73/27 and we're increasing bonds by 1 percentage point per year, but when we get to 60/40, we might stay there a while…maybe even forever. Pingo........thanks so much for the link ...
by 1210sda
Tue Feb 11, 2014 10:49 pm
 
Forum: Investing - Theory, News & General
Topic: '60/40' Portfolio Down But Not Out
Replies: 16
Views: 3805

Re: Wow! Jim Cramer hates passive index investing

Has anyone seen, or know where to find, an audited record of the performance of Cramer's recommendations ? Hopefully over the "long term", but anything will do.

1210
by 1210sda
Tue Feb 11, 2014 9:43 pm
 
Forum: Investing - Theory, News & General
Topic: Wow! Jim Cramer hates passive index investing
Replies: 52
Views: 5630

Re: What to do when a parent's money runs out?

What a sobering topic.

Having a parent in great need is a situation that could happen to anyone of us.

If you are old enough to have escaped it, be thankful.

1210
by 1210sda
Tue Feb 11, 2014 11:31 am
 
Forum: Personal Finance (Not Investing)
Topic: What to do when a parent's money runs out?
Replies: 135
Views: 15228

Re: Reporter looking for retiree withdrawing prior to RMD

Prior to my RMD period, I would use TurboTax in mid December to estimate how far below the top of the 15% tax bracket (MFJ) I was. I then made a Roth conversion for this amount before the end of the year. This way, I was still able to take advantage of the 0% tax on capital gains and qualified divid...
by 1210sda
Wed Feb 05, 2014 5:51 pm
 
Forum: Investing - Theory, News & General
Topic: Reporter looking for retiree withdrawing prior to RMD
Replies: 16
Views: 1420

Re: AARP Membership?

Wow !

I dropped AARP many years ago (after being a member for many years as well) due to their marketing tactics and political views. I thought my opinion of them was in the minority.

Reading the comments on this post is quite satisfying. I am not alone.

1210
by 1210sda
Sun Feb 02, 2014 5:56 pm
 
Forum: Personal Consumer Issues
Topic: AARP Membership?
Replies: 33
Views: 1579

Re: My annualized returns are better than yours. Why?

Mr Critical wrote:When I talked to my advisor about my distaste for expense ratios, and how appealing low cost index funds look...he said "you can do that if you're ok with average returns."
[/quote]

Shooting "Par" at Augusta National is OK if you want an average round :D

1210
by 1210sda
Tue Jan 28, 2014 11:46 am
 
Forum: Investing - Help with Personal Investments
Topic: My annualized returns are WORSE than yours. Why?
Replies: 87
Views: 6358

Re: Pros and Cons: Mortgage Broker vs Bank

Dulocracy,
If I had met you at a bar, I would ask you....How can you identify (in advance) if you are getting a good mortgage broker?? 1210
by 1210sda
Fri Jan 24, 2014 1:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pros and Cons: Mortgage Broker vs Bank
Replies: 16
Views: 1368

Re: TAYLOR'S UPCOMING 90th BIRTHDAY

90, eh?

How does it feel to be able to tell Jack Bogle......Hello young man......

Best Wishes
1210
by 1210sda
Wed Jan 22, 2014 6:41 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Taylor's 90th Birthday
Replies: 272
Views: 12684

Re: Pros and Cons: Mortgage Broker vs Bank

I am a banker who originates mortgages so I have a lot of experience with this. Using a mortgage broker is almost always more expensive than going directly to a bank or credit union for financing. This is because you pay a fee to the broker for his or her services, plus you pay the usual fees with ...
by 1210sda
Wed Jan 22, 2014 4:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pros and Cons: Mortgage Broker vs Bank
Replies: 16
Views: 1368

Pros and Cons: Mortgage Broker vs Bank

Re: 30 year fixed mortgage for a first time home purchase. I have the general perception that getting a mortgage loan from a broker can be less expensive than using a bank. Is this correct? If so, are there any negatives that I should be concerned with ? I'm sure your collective experiences will pr...
by 1210sda
Tue Jan 21, 2014 7:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pros and Cons: Mortgage Broker vs Bank
Replies: 16
Views: 1368

Re: What's your one big takeaway from the Crash of 2008?

What a very interesting thread to read five years later. Thanks for starting it Gekko. (you too 500kaiser for reviving it) Thinking back, I learned that my IPS was appropriate for me. While the drop in my equities made me uncomfortable, I did not consider selling. That my cash reserve allowed me to ...
by 1210sda
Tue Jan 21, 2014 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: What's your one big takeaway from the Crash of 2008?
Replies: 300
Views: 42795

Re: Has the bond market already crashed?

My Total Bond Mkt fund (VBTLX) with dividends re invested was down 2.15%. I don't consider that a crash. Maybe 2014 will produce a crash. 1210
by 1210sda
Mon Jan 20, 2014 1:25 pm
 
Forum: Investing - Theory, News & General
Topic: Has the bond market already crashed?
Replies: 23
Views: 2347

Re: "Passive Investing: The Evidence"

Very nice.

If it could be edited from 53 minutes to say 15 or 20 minutes, it would be something new investors, particularly young investors, would benefit from.

The scenes from London streets were quite nice....brought back memories of visits there.

1210
by 1210sda
Sun Jan 19, 2014 10:26 am
 
Forum: Investing - Theory, News & General
Topic: "Passive Investing: The Evidence"
Replies: 19
Views: 3008

Re: "The dangers of long-term care insurance"

"At the upper end, if non-home assets are above about $700,000, a couple can self-fund most nursing home stays without depleting assets. It is those whose wealth ranges from about $150,000 to $700,000 who have the greatest need for conventional long-term care insurance." " A good trad...
by 1210sda
Fri Jan 17, 2014 1:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: "The dangers of long-term care insurance"
Replies: 106
Views: 7569

Re: 3 fund portfolio vs. slice and dice

I'm laughing that folks believe that slice-and-dice is complex and takes lots of time, perhaps spreadsheets and maybe even running regressions. And the dozen of funds? That is so advisor-motivated and from the 1980's. Modern slice-and-dice seems to be a 5-fund portfolio. Consult the TrevH thread(s)...
by 1210sda
Thu Jan 16, 2014 11:06 am
 
Forum: Investing - Theory, News & General
Topic: 3 fund portfolio vs. slice and dice
Replies: 39
Views: 2648

Re: Reached first savings milestone: 1x salary

...by all savings benchmark charts, I should have 1x my current salary in savings by 30-35... Do you have a link to these charts? Here are some I've bookmarked. I know the Morningstar and Fidelity ones have been posted here, because that's how I found them. I'm sure most Bogleheads are ahead of the...
by 1210sda
Wed Jan 15, 2014 4:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reached first savings milestone: 1x salary
Replies: 29
Views: 2955

Re: The Anti-Target Date Retirement Strategy

Pfau and Kitces' approach sounds counter-intuitive at first blush. However, I intend to keep an open mind on this. Pfau and Kitces are highly respected and highly regarded. Perhaps this was the same luke-warm reaction to Harry Markowitz and Bengen's work in the early years. There are so many possibl...
by 1210sda
Wed Jan 15, 2014 9:48 am
 
Forum: Investing - Help with Personal Investments
Topic: The Anti-Target Date Retirement Strategy
Replies: 48
Views: 3670
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