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Re: Do you consider mortgage payments as savings?

No. you can't spend your mortgage payments that you have made. Yes a portion of your payment goes to principal reduction but initially that is a very small portion of your mortgage payment. Do you offset these "savings" with home related taxes, insurance, maintenance? Why play games with r...
by Dandy
Sat Feb 28, 2015 7:37 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 78
Views: 3235

Re: Safe Withdrawal Rate as it relates to Size of Portfolio

Safe can be viewed in at least 2 ways. 1. is this withdrawal rate going to last my lifetime. e.g. At this rate assuming x growth in expenses and y growth in investments what is the percentage of times I will have enough money to fund my retirement for 30 years. 2. How much of the withdrawal amount d...
by Dandy
Sat Feb 28, 2015 7:26 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate as it relates to Size of Portfolio
Replies: 25
Views: 2484

Re: Not "Staying the Course"

Too many course corrections tend to devolve into a messy market timing situation. Some times to consider altering course a bit: 1. When markets, inflation and interest rates are at extremes could prompt those near or in retirement to rethink their allocations somewhat. 2. When you have more than eno...
by Dandy
Fri Feb 27, 2015 6:14 pm
 
Forum: Investing - Theory, News & General
Topic: Not "Staying the Course"
Replies: 35
Views: 3599

Re: Thoughts on Chase for everyday banking

I use BoA they bought out a smaller bank and have no fee checking and a HELOC currently at 2.74% - no problems. I had a Chase account (to get the $250? bonus) awhile ago and had no problems got extra bonus for opening credit cards and have been satisfied with their cash back feature/service. So whil...
by Dandy
Fri Feb 27, 2015 9:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Thoughts on Chase for everyday banking
Replies: 28
Views: 1877

Re: NYT: "As Hedge Fund Returns Falter,..."

As I understand it usually a 2% yearly fee, 20% of the profits (losses on you) and restrictions on redemptions. Spare me. When big, risky bets do well a compensation bonanza when they don't oh well 2% anyhow. A few good years and the fund manager has made enough for several lifetimes. A few bad year...
by Dandy
Fri Feb 27, 2015 9:05 am
 
Forum: Investing - Theory, News & General
Topic: NYT: "As Hedge Fund Returns Falter,..."
Replies: 21
Views: 1432

Re: Vanguard Strikes Back With Lower Target-Date Fees

Not sure what impact, if any, it will have on non institutional funds. But, clear and ongoing signal that while these type of allocation changes are not frequent they are not rare with Vanguard either. So, if you think you can buy a life Strategy or Target date fund and set it and forget it - you ma...
by Dandy
Thu Feb 26, 2015 8:42 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Strikes Back With Lower Target-Date Fees
Replies: 13
Views: 3412

Re: Immediate Pension Benefit Offering

I generally favor the annuity if age, health and longevity genes are good. Also, if the company seems healthy. People sometimes get dazzled by the size of the lump sum since it is often more money in one lump that they ever could get their hands on. I waited 8 years for one pension and 5 years for a...
by Dandy
Thu Feb 26, 2015 9:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Immediate Pension Benefit Offering
Replies: 8
Views: 1022

Re: Dollar Cost Averaging vrs lumpsum investment

In general it has been that lump sum works better most of the time. I haven't seen any studies that show what happens when equity markets are at or near record levels. Or for that matter when interest rates are at or near record lows. Or further still when both are in record territory. I would DCA 5...
by Dandy
Wed Feb 25, 2015 7:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Dollar Cost Averaging vrs lumpsum investment
Replies: 11
Views: 744

Re: Rebalancing vs. Timing the market

Don't worry about what it is called understand what the pros and cons are. I think when most people set up their allocation the feel they can handle a 10 to 20% drop but not the 40 to 50% drop over a number of years. If you are in the accumulation stage your retirement account has many years to reco...
by Dandy
Tue Feb 24, 2015 11:35 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing vs. Timing the market
Replies: 23
Views: 791

Re: Best Bond Diversifier

A lot depends on what your new target allocation will be. Say 90% equities? then consider intermediate or short term Treasury funds - When the stock market plunges Treasuries are a great place to be - usually. A more modest equity allocation Total bond fund might be a better all around choice. Some ...
by Dandy
Tue Feb 24, 2015 10:47 am
 
Forum: Investing - Help with Personal Investments
Topic: Best Bond Diversifier
Replies: 16
Views: 2850

Re: How much has Bogleheads contributed to your net worth?

Aggressive saving and living below our means was key to get a nice size nest egg by my late 40's then it was Bogle and especially Wm Bernstein's 4 Pillars of Investing that got me to be investing like a Boglehead. That came at a time of peak earnings so it really made a difference. So, lots of thing...
by Dandy
Mon Feb 23, 2015 2:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: How much has Bogleheads contributed to your net worth?
Replies: 58
Views: 4092

Re: Yes, another Pension / Lump Sum dilemma !

If you take the IRA option you will be forced to take increasingly large RMDs that you probably won't need. Use a RMD calculator to see if this is an issue. I also like the predictable steady stream of income. No worries about managing that extra investment, taking RMDs etc. Taking RMD's needn't be...
by Dandy
Mon Feb 23, 2015 11:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Yes, another Pension / Lump Sum dilemma !
Replies: 15
Views: 1259

Re: Yes, another Pension / Lump Sum dilemma !

The good news is that you are in great shape so either decision won't be a big deal. I guess I lean toward taking the pension. If you take the IRA option you will be forced to take increasingly large RMDs that you probably won't need. Use a RMD calculator to see if this is an issue. I also like the ...
by Dandy
Mon Feb 23, 2015 7:48 am
 
Forum: Investing - Help with Personal Investments
Topic: Yes, another Pension / Lump Sum dilemma !
Replies: 15
Views: 1259

Re: Expense Ratio Regarding my Vanguard Prime Money Market F

Mutual fund money markets used to pay much higher than most bank savings or bank money market deposit accounts. That is currently not the case. New rules for mutual fund money markets require shorter average maturity and much higher restrictions on the quality of the investments they make. This was ...
by Dandy
Sun Feb 22, 2015 6:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Expense Ratio Regarding my Vanguard Prime Money Market Fund
Replies: 12
Views: 1110

Re: AA: Keep constant regardless of state of market?

Your 90% equity allocation might be the real market timing decision. I feel 90% is too high for almost anyone so I would advocate a less aggressive allocation no matter what the state of the market. A lot depends on age and where you stand vs retirement. If you are early in the accumulation stage yo...
by Dandy
Sun Feb 22, 2015 6:27 am
 
Forum: Investing - Help with Personal Investments
Topic: AA: Keep constant regardless of state of market?
Replies: 10
Views: 927

Re: [What to do at] Market Top

Pretty much standing pat. Not happy that equities are at or near highs and fixed income yields are at or near lows. I diversified my fixed income a year or two ago - adding some shorter duration, some additional corporate exposure and some CDs.
by Dandy
Sat Feb 21, 2015 6:50 pm
 
Forum: Investing - Theory, News & General
Topic: [What to do at] Market Top
Replies: 57
Views: 4921

Re: Why don't I see more people arguing for a world portfoli

In addition to being in the US and paying for everything is US dollars I have some doubt about how well regulations, accounting practices, etc are implemented in other countries. Also, I must admit a lot of home town bias. We supposedly have a lot of regulation and control and still have frauds, sha...
by Dandy
Sat Feb 21, 2015 6:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why don't I see more people arguing for a world portfolio?
Replies: 41
Views: 2817

Re: Risk of Rebalancing

Your equity stake should be exactly what you can afford to lose, and somewhat less than that if you want to add the risk of rebalancing. I agree. the point for retirees to keep in mind that they usually don't have the earning power they had in the accumulation stage or the match to their 401k. So, ...
by Dandy
Sat Feb 21, 2015 8:27 am
 
Forum: Investing - Theory, News & General
Topic: Risk of Rebalancing
Replies: 63
Views: 3701

Re: Risk of Rebalancing

In or near retirement maybe a slightly different approach to rebalancing should be considered . Assume you are in the drawdown phase and have zero earning capacity. When the equity market plunges should you fully rebalance out of safer fixed income into equities and also drawdown from those same fi...
by Dandy
Fri Feb 20, 2015 11:18 am
 
Forum: Investing - Theory, News & General
Topic: Risk of Rebalancing
Replies: 63
Views: 3701

Re: Risk of Rebalancing

The professor doesn't mention the risk of not rebalancing. There is risk of a better outcome anytime you make or decide not to make a move. So, if a 60/40 portfolio goes to 80/20 because you don't rebalance - there is no increased risk? Sure, if I fully rebalance I "risk" the gain of it go...
by Dandy
Fri Feb 20, 2015 9:27 am
 
Forum: Investing - Theory, News & General
Topic: Risk of Rebalancing
Replies: 63
Views: 3701

Re: Will LS Fund Take Big Hit if Interst Rate Rise

So the "generous bull market" caused your returns to be almost seven times smaller Unless you are 100% stocks your portfolio benefits from having a "bull" market in fixed income -- even if it is a lot smaller. The point is that most investors in the past few decades had both seg...
by Dandy
Thu Feb 19, 2015 3:12 pm
 
Forum: Investing - Theory, News & General
Topic: Will LS Fund Take Big Hit if Interst Rate Rise
Replies: 13
Views: 1064

Re: How best to use gifted 25k. . .

While Roth IRAs are usually thought of having tax free withdrawals there are certain situations where a fee or penalty on withdrawals might apply. Check out the rules before you invest. Roths weren't created to be short term savings or short term emergency funds even though in many cases they can be.
by Dandy
Thu Feb 19, 2015 10:30 am
 
Forum: Personal Finance (Not Investing)
Topic: How best to use gifted 25k. . .
Replies: 25
Views: 1852

Re: How best to use gifted 25k. . .

I would do something fun with some of the money e.g. a weekend away? The rest I'd keep rather liquid. Your emergency fund is a bit low and children can be much more expensive than you think (and very worth it). Car seats, diapers, day care let me count the ways. having some extra cash around will re...
by Dandy
Thu Feb 19, 2015 8:46 am
 
Forum: Personal Finance (Not Investing)
Topic: How best to use gifted 25k. . .
Replies: 25
Views: 1852

Re: Will LS Fund Take Big Hit if Interst Rate Rise

A lot depends on your term and temperament. I assume you are investing for the long term. If so, rising interest rates will cause some drop in your fund's fixed income allocation. But, as has been point out the fund's bond portion will eventually right itself as old bonds reach maturity and new, hig...
by Dandy
Thu Feb 19, 2015 8:32 am
 
Forum: Investing - Theory, News & General
Topic: Will LS Fund Take Big Hit if Interst Rate Rise
Replies: 13
Views: 1064

Re: Cap Gains & Divs killed me this year

We all love the gains but wince at the taxes. When the market corrects we will be moaning about the lack of capital gains - there is no happy place :D I'm retired and have my taxable divs and cap gains sent to MMkt. I also have withholding on them so there are no surprises at tax time. This approach...
by Dandy
Thu Feb 19, 2015 8:11 am
 
Forum: Investing - Theory, News & General
Topic: Cap Gains & Divs killed me this year
Replies: 61
Views: 5881

Re: Investing for Retirement

I'm not a fan of very high equity allocations for those new to investing. I like the idea of having some Roth and some not Roth. Beware of having a lot of company stock. If it is in a 401k make sure you can exchange from company stock to other 401k investments. If the company stock is outside of the...
by Dandy
Thu Feb 19, 2015 7:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Investing for Retirement
Replies: 5
Views: 629

Re: Should I switch to the 3 fund portfolio?

Those are the fund names at Vanguard - they have a series of these funds with different allocations. Which is the right one for you depends on your need and ability to take risk. Without knowing your financial position etc. it is not for us to say what is the correct allocation for you without more ...
by Dandy
Wed Feb 18, 2015 10:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I switch to the 3 fund portfolio?
Replies: 23
Views: 3074

Re: Should I switch to the 3 fund portfolio?

The 3 fund portfolio is fairly simple and fairly well diversified. It is not set it and forget it. You should consider some rebalancing to control/maintain your risk. Balanced funds, especially Life Strategy and Target Date funds are almost set it and forget it and very simple. The concerns would be...
by Dandy
Wed Feb 18, 2015 11:31 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I switch to the 3 fund portfolio?
Replies: 23
Views: 3074

Re: Looking For Fixed Income Advice -CDs Are Maturing

It sounds as if you don't really need this money - at least for a long while. If the CDs are in your retirement account you just want to make sure the RMDs (when required) won't cause you to have to early redeem a CD. Any move to a bond fund has some risk due to the potential rising interest rates. ...
by Dandy
Wed Feb 18, 2015 11:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Looking For Fixed Income Advice -CDs Are Maturing
Replies: 2
Views: 291

Re: Gifts to children

Interesting. My parents really couldn't help much. I paid for most of college and most of grad school was paid by my employer (does that still exist?). My in-laws gave us some money for a down payment which I paid back within 5 years over their objections. But the helped out in other ways e.g. home ...
by Dandy
Mon Feb 16, 2015 11:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Gifts to children
Replies: 30
Views: 2251

Re: Expecting a big inheritance - Should it change my life?

Maybe a little. My friend's father lived to 99 and another's grandma lived to 106. How long has Fidel and the Queen of England been around. You all should probably see an elder and/or estate attorney. I don't like to count my chickens before they hatch - though it is temping. One key is to make sure...
by Dandy
Mon Feb 16, 2015 2:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Expecting a big inheritance - Should it change my life?
Replies: 124
Views: 7889

Re: Gifts to children

with the realization that the parental income stream ends at graduation . Nice goal. But be prepared. We were fortunate to have both daughters graduate college with no debt for them or us. With my older daughter and her husband both working having a modest house and two children they barely make en...
by Dandy
Mon Feb 16, 2015 1:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Gifts to children
Replies: 30
Views: 2251

Re: Gifts to children

I help our daughter with her Roth contribution each year and now added some grad school help. I'm thinking of using my HELOC at 2.74% tax deductible rather than have her take a loan or use a credit card, even short term, to pay the grad school. I don't know I'd do it for 50k. I would rather have him...
by Dandy
Mon Feb 16, 2015 12:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Gifts to children
Replies: 30
Views: 2251

Re: Improving the Lifestrategy Funds

Substitute a short term bond fund and/or TIPS fund for the international bond fund -and then leave it alone
by Dandy
Mon Feb 16, 2015 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Improving the Lifestrategy Funds
Replies: 29
Views: 2521

Re: 5-year CD ladder versus One 5-year CD

What do you plan to do with the money and when? If you want to have an ongoing ladder of CDs and keep that going for years - then you have to start sometime. Either buy a 5 year now and put the rest in a "high" yield savings and then buy another 5 yr each year until the ladder is complete....
by Dandy
Mon Feb 16, 2015 12:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: 5-year CD ladder versus One 5-year CD
Replies: 9
Views: 1001

Re: I'm not a bad Boglehead [buying Powerball ticket]

Not me - I'm not much of a gambler. I always get a kick out of those who are motivated to buy when the jackpot goes from $20 million to $400,000 million. Like $20,000 wouldn't change your life enough? Have fun - it is nice to have a dream. Get ready for lots of joy and stress if you win.
by Dandy
Sun Feb 15, 2015 11:15 am
 
Forum: Personal Consumer Issues
Topic: I'm not a bad Boglehead [buying Powerball ticket]
Replies: 101
Views: 6143

Re: Unusual CD ladder

Not a bad idea for some of your fixed income allocation. Often CD ladders are yearly rather than quarterly. But, it is better to have smaller value CDs in case you need to redeem money early. So rather than 1 CD for say $40k for one year's rung of the ladder he could buy a 10k one year CD each quart...
by Dandy
Sun Feb 15, 2015 11:01 am
 
Forum: Investing - Theory, News & General
Topic: Unusual CD ladder
Replies: 3
Views: 840

Re: 5.6% stable value fund - what allocation?

I'm retired and it has been a long time since I had the pleasure and opportunity to put money into a Stable Value Fund. I hope this is what you are talking about. Still, the old warning: if it seems to be too good to be true ..." I'd be very careful to understand the terms and conditions of thi...
by Dandy
Sun Feb 15, 2015 10:48 am
 
Forum: Investing - Theory, News & General
Topic: 5.6% stable value fund - what allocation?
Replies: 29
Views: 2525

Re: Pension Withdrawal Options

Don't be dazzled by a lump sum. A lot depends on your retirement assets, you wife's financial position if you die early, your ages etc. In general it makes sense to take the pension option vs the lump sum if your health and longevity genes are good. Also, if the company is in decent shape. I used th...
by Dandy
Sun Feb 15, 2015 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Pension Withdrawal Options
Replies: 10
Views: 904

Re: IRA withdrawal stage

I'm 3 years away from taking RMDs and haven't worked out how to do it. It has dawned on me that my fixed income heavy IRA RMDs will eventually increase my overall equity allocation. Rebalancing in equity heavy taxable will result in lots of tax exposure. Also the RMD amount grows larger so that the ...
by Dandy
Sun Feb 15, 2015 10:26 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA withdrawal stage
Replies: 3
Views: 298

Re: Projecting “Increasing Withdrawal Rates” and not SWR

I don't think you can have a confident plan for retirement withdrawals that will be real for much more than a few years. It is great to plan and to get a good sense of likely outcomes for asset growth, withdrawals, inflation etc. Based on that information you can set an initial withdrawal amount. Ev...
by Dandy
Sat Feb 14, 2015 10:22 am
 
Forum: Investing - Theory, News & General
Topic: Projecting “Increasing Withdrawal Rates” and not SWR
Replies: 35
Views: 2534

Re: Shouldn't bond fund holders celebrate if rates go up?

I do get the short-term taking a hit part, as it relates to price/NAV, but isn't it a mathematical fact that if held to average duration, you should at least break even on any bond fund?

I didn't write this - it was a quote from another poster that I highlighted in blue.
by Dandy
Fri Feb 13, 2015 4:43 pm
 
Forum: Investing - Theory, News & General
Topic: Shouldn't bond fund holders celebrate if rates go up?
Replies: 55
Views: 4979

Re: What is the BH consensus on international bonds?

I'm not a fan but don't claim to have special insight. I'm put off by VG including them in their Life Strategy and Target Date funds. I have about a 60% allocation to fixed income and the larger that allocation is the more International bonds those funds hold. I also don't like VG messing with/"...
by Dandy
Fri Feb 13, 2015 4:20 pm
 
Forum: Investing - Theory, News & General
Topic: What is the BH consensus on international bonds?
Replies: 47
Views: 3026

Re: Shouldn't bond fund holders celebrate if rates go up?

I do get the short-term taking a hit part, as it relates to price/NAV, but isn't it a mathematical fact that if held to average duration, you should at least break even on any bond fund? The recovery about the timeframe of your bond duration is what is said. I assume it is pretty well founded. Don'...
by Dandy
Fri Feb 13, 2015 4:08 pm
 
Forum: Investing - Theory, News & General
Topic: Shouldn't bond fund holders celebrate if rates go up?
Replies: 55
Views: 4979

Re: Shouldn't bond fund holders celebrate if rates go up?

It will be hard to cheer when you watch your "safe" fixed income take a hit (probably the stock market as well)-- but having these rates hikes hanging over our heads is a pain. Bring it on -- I'm tired of waiting. Low interest rates create asset bubbles and unforeseen problems.
by Dandy
Fri Feb 13, 2015 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Shouldn't bond fund holders celebrate if rates go up?
Replies: 55
Views: 4979

Re: Tolerance for "rebalancing risk" in retirement

I retired in 2008 so in a sense I've been there. I was 60 and could collect a moderate pension but my nest egg was taking a severe hit even though I entered the downturn with about 55% in equities. In the accumulation stage it was relatively easy to change future contributions, company match and eve...
by Dandy
Fri Feb 13, 2015 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: Tolerance for "rebalancing risk" in retirement
Replies: 29
Views: 1572

Re: Vanguard target date asset allocation

No. Since equities outperform fixed income over time you can justify a very high allocation to them if you want. So, on paper far dated Target Date funds having very high equity allocations makes some sense. However, that doesn't account for an investor's risk tolerance or experience. Oh, that's rig...
by Dandy
Fri Feb 13, 2015 8:44 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard target date asset allocation
Replies: 23
Views: 2678

Re: How to make this fair: gifting to kids with different me

Interesting discussion. for me equal doesn't always mean fair and money doesn't ever equal love. As parents I feel our obligation is to try to help each child reach their potential - some need more help than others. This help comes in many forms, time, advice, money, company, etc. At lot depends on ...
by Dandy
Fri Feb 13, 2015 7:34 am
 
Forum: Personal Finance (Not Investing)
Topic: How to make this fair: gifting to kids with different means
Replies: 108
Views: 8886

Re: How much is a safe car worth?

all these things are not safety features. They are crutches for irresponsible and distracted drivers. You don't need a car that's going to brake automatically if you're paying attention Did you ever think they might prevent these crazy distracted drivers from hitting you? Also some of the safety fe...
by Dandy
Thu Feb 12, 2015 11:28 am
 
Forum: Personal Consumer Issues
Topic: How much is a safe car worth?
Replies: 170
Views: 8997

Re: How much is a safe car worth?

Interesting discussion. In general, I see people who overestimate their driving skill and underestimate the benefit of newer safety equipment and design. Agreed the cost/benefit of driving a safer car is not very precise. You can surely overpay for safety features that might not be proven to be all ...
by Dandy
Thu Feb 12, 2015 10:23 am
 
Forum: Personal Consumer Issues
Topic: How much is a safe car worth?
Replies: 170
Views: 8997
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