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Re: 15 year vs 30 year fixed

I would look to a lower 30 year. The lower required monthly payments gives you options e.g. pay down/off school loans, fund retirement, save for children's education, pay more than the minimum on the mortgage. You pay a bit more and likely for longer to have those options but I like having options.
by Dandy
Sun Apr 13, 2014 10:40 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 year vs 30 year fixed
Replies: 48
Views: 4609

Re: Was Wondering Why Windsor/Wellesley/Wellington?

Wellington and Wellesley are often given a "free" pass by many on this forum that usually pans active managed funds. Free pass may not do them justice since they do have very good track records and relatively low expenses/turnover. They do not fit the basic Boglehead model of low cost, bro...
by Dandy
Sun Apr 13, 2014 10:33 am
 
Forum: Investing - Theory, News & General
Topic: Was Wondering Why Windsor/Wellesley/Wellington?
Replies: 28
Views: 3271

Re: Question about Bonds

Actually, in your mid 30" you biggest mistake would probably be being too conservative. That being said I would agree that lower equity allocation might make sense. You have plenty of time to ride out the dip in an intermediate bond fund due to rising interest rates. If the goal is for your fix...
by Dandy
Sun Apr 13, 2014 10:17 am
 
Forum: Investing - Help with Personal Investments
Topic: Question about Bonds
Replies: 4
Views: 634

Re: Bond Portion of Retirement Account

I like you bond fund choices. I would also consider adding some CDs. Vanguard currently offers a 5yr at 1.95%, a 7yr at 2.7% and a 10yr at 3.35% (check to make sure). Their shorter term CDs are not competitive. Since brokerage CDs pay out their interest you can decide to have the CD interest investe...
by Dandy
Fri Apr 11, 2014 10:28 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond Portion of Retirement Account
Replies: 7
Views: 871

Re: Checking/Saving Account for Student

It will be interesting to see what changes, if any, Ally makes after their IPO and the US gov loosens up on some of it's restrictions. They were restricted on how much interest they could pay because banks that weren't bailed out were getting hurt when Ally paid leading rates. We will see what their...
by Dandy
Thu Apr 10, 2014 4:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Checking/Saving Account for Student
Replies: 13
Views: 733

Re: Help in Allocating Vanguard Funds

Can you give me examples of how to rebalance without incurring taxes by having both equities and fixed income in tax advantaged and taxable accounts? If you have to sell equities and buy fixed income or vice versa to rebalance there are no tax implications if you do it in your IRA. You can also adj...
by Dandy
Thu Apr 10, 2014 3:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help in Allocating Vanguard Funds
Replies: 11
Views: 846

Re: Help in Allocating Vanguard Funds

Dandy, Thank you for the kind reply. Do you recommend using the 3 fund portfolio in both the taxed account and the IRA's? The usual rule of thumb is all the fixed income in tax advantaged and most of the equities in taxable. High dividend equities (e.g. REITs) are better off in tax advantaged if yo...
by Dandy
Wed Apr 09, 2014 10:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help in Allocating Vanguard Funds
Replies: 11
Views: 846

Re: Checking/Saving Account for Student

Not familiar with all of Capital One account features. I would check into Ally Bank. Pays interest, free checks, all ATM fees reimbursed, 24/7 service if those features are better. Both my adult children use it and are happy.
by Dandy
Wed Apr 09, 2014 9:59 am
 
Forum: Personal Finance (Not Investing)
Topic: Checking/Saving Account for Student
Replies: 13
Views: 733

Re: This time it's different?

You are right to point out that retirees like me had some excellent tail winds during much of our accumulation phase. Of course we both face what looks like less favorable conditions currently. The focus on living below your means and saving is a good approach at any time but especially now. Histori...
by Dandy
Wed Apr 09, 2014 9:36 am
 
Forum: Investing - Theory, News & General
Topic: This time it's different?
Replies: 16
Views: 2379

Re: Help in Allocating Vanguard Funds

Welcome - I'm sure it will be difficult to go from so active to passive. I would suggest you do a limited number of funds so there won't be a temptation to play with them. The 3 fund portfolio is a good place to start: Total Stock Market, Total International Stock Market, and Total Bond Market. I wo...
by Dandy
Wed Apr 09, 2014 9:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Help in Allocating Vanguard Funds
Replies: 11
Views: 846

Re: How often do you rebalance to maintain your AA

First I keep an eye on the major equity vs fixed income allocation vs looking at every sub allocation during the year. If that varies by a few percent I will usually step in. The hot equity market in 2013 resulted in a few reductions to equities. I try to avoid large rebalancing moves. That said my ...
by Dandy
Wed Apr 09, 2014 8:51 am
 
Forum: Investing - Help with Personal Investments
Topic: How often do you rebalance to maintain your AA
Replies: 35
Views: 1589

Re: Do I take the separation package offer?

I was almost in the exact situation several years ago. I planned to retire at 62 and was offered a nice package at just past 60. The other key factor is I really didn't have a choice! But if I did I would have taken it. You are almost being paid until your target retirement age, but don't have to ac...
by Dandy
Tue Apr 08, 2014 10:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Do I take the separation package offer?
Replies: 49
Views: 4035

Re: Investment amount instead of allocation percentage

Not exactly. I do think people tend to look at risk in percentage terms rather than dollars. In the accumulation stage I had a certain dollar target for my stable value fund and put excess mostly into equities. In retirement I tend to have a base dollar amount "safe" and then put excess mo...
by Dandy
Tue Apr 08, 2014 10:24 am
 
Forum: Investing - Theory, News & General
Topic: Investment amount instead of allocation percentage
Replies: 21
Views: 1510

Re: Delaying Social Security - best long-term investment?

In this post I think the use of term best Investment is a bad way to look at when to take SS. It focuses on the breakeven point when taking SS at 62 vs 66 (or 70). Yes if you take it at 62 and die at 75 or 80 you probably will have done better dollar wise rather than delaying SS. Whether your surviv...
by Dandy
Mon Apr 07, 2014 11:44 am
 
Forum: Investing - Theory, News & General
Topic: Delaying Social Security - best long-term investment?
Replies: 78
Views: 3565

Re: Best option for high interest earning no fee checking?

I have a no interest no fee local checking account. I also have a savings account at Discover Bank (Ally, Barclays would be great also). Once set up it is easy to move money between Vanguard and either bank. Just a few clicks and a few days. You aren't going to get rich with the less than 1% interes...
by Dandy
Mon Apr 07, 2014 7:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Best option for high interest earning no fee checking?
Replies: 19
Views: 1585

Re: Why pay off your house?

I could earn 3.10% after tax if I invested the money in Long-Term Tax-Exempt, and that's good compensation for the slight credit risk. Bonds and bond funds have credit and interest rate risk. Agreed not necessarily lose your shirt risk. Paying off a mortgage has no risk. Why not take out more loan ...
by Dandy
Sun Apr 06, 2014 4:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379

Re: Why pay off your house?

Assuming you have decent liquidity and are on track for retirement savings having a mortgage rather than paying it off is not always logical. Sure you can invest the money and it may or may not grow. Paying off the mortgage is a sure thing. There are no safe "investments" that pay more tha...
by Dandy
Sun Apr 06, 2014 2:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379

Re: Financial question about a Doctor’s Visit

Doctors have many conflicts of interests from recommending certain medicines to ownership participation in testing labs, surgical centers, medical buildings etc. Two examples: 1. My eye doctor is an equity partner in an eye surgery center. It is very efficient, they have the process down to a scienc...
by Dandy
Sun Apr 06, 2014 11:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Financial question about a Doctor’s Visit
Replies: 77
Views: 3386

Re: Delaying Social Security - best long-term investment?

I don't focus on SS investment return or what age the payback would be the same by waiting until 70 vs taking the SS at 62. Many people don't have the luxury of waiting and some do. For those that do, if they are in good health, have good genes and can live comfortably without taking SS early I thin...
by Dandy
Sun Apr 06, 2014 10:42 am
 
Forum: Investing - Theory, News & General
Topic: Delaying Social Security - best long-term investment?
Replies: 78
Views: 3565

Re: Cold Feet Investing

I always try to remind people that there is no safe place to put your money. "Safe" places like bank accts or CDs usually don't keep up with inflation so you lose purchasing power, bonds have default risks and lose value when interest rates rise, stocks? that is where most people feel the ...
by Dandy
Sun Apr 06, 2014 9:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Cold Feet Investing
Replies: 9
Views: 1243

Re: Why pay off your house?

Liquidity is important so I wouldn't leave myself short to pay off the mortgage. With a paid off house you have freed up years of extra monthly income to invest and protected yourself somewhat from losing your home in a bad economy/job loss. Having debt just to maintain a tax deduction for the inter...
by Dandy
Sun Apr 06, 2014 9:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8379

Re: Max out Roth or continue to build emergency funds?

Once a Roth opportunity passes you can't get it back. Since in an emergency you could use the funds in the Roth (as a last resort?) then I would fund the Roth.
by Dandy
Sun Apr 06, 2014 9:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Max out Roth or continue to build emergency funds?
Replies: 4
Views: 509

Re: Frugal Fatigue

You need to treat yourself to something nice once in awhile. It is all about balance. Have a nice dinner out on occasion, take the train when there is bad weather, etc. Sometimes the hardest thing for hard core frugal people is to loosen up a bit. It gets into your DNA and if you don't implement a b...
by Dandy
Sat Apr 05, 2014 10:00 am
 
Forum: Personal Consumer Issues
Topic: Frugal Fatigue
Replies: 96
Views: 9647

Re: passive versus active

The better return from passive investing comes from lower cost and avoiding bets that are not in line with the market allocation. Most bogleheads believe that low cost broadly diversified index funds will generally outperform the higher cost actively managed funds. You can twist yourself into a logi...
by Dandy
Fri Apr 04, 2014 6:33 pm
 
Forum: Investing - Theory, News & General
Topic: passive versus active
Replies: 25
Views: 1179

Re: John Bogle, Index Icon, Accused of Timing Market

People throw around the negative "market timer" too easily just like they do other labels. As noted a classic market timer thinks he knows more than the market and usually makes huge bets moving assets from one investment to another very frequently. I ran several mutual fund call centers t...
by Dandy
Fri Apr 04, 2014 9:57 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle, Index Icon, Accused of Timing Market
Replies: 44
Views: 4893

Re: Bogleheads/Paul Merriman

Total Stock and Total International Stock funds provide great diversification and low cost. Almost any equity fund you add will not make much difference and in fact will be making bets that one segment will do better than the other. e.g. add REITS and you end up with more REITS than the market becau...
by Dandy
Fri Apr 04, 2014 8:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Bogleheads/Paul Merriman
Replies: 33
Views: 3070

Re: Keeping track of expenses, early retirement?

I track monthly expenses in about 20 categories. each credit card is a category and all payments go through my checking account. other categories are for each type of insurance, ATM withdrawals, utilities, cable, lawn care, loan repayments etc. I keep it at a high level but look at each credit card ...
by Dandy
Wed Apr 02, 2014 10:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Keeping track of expenses, early retirement?
Replies: 32
Views: 3519

Re: Bogle: Tilt To Corporates For More Yield

If you are going to tilt toward corporates it is better to do it when the economy is in recovery (albeit slow) and to do it on the high rated bonds. Some of the intermediate CD rates look competitive and tend to offset the default risk of corporates. Why not a tilt to a little of both to supplement ...
by Dandy
Wed Apr 02, 2014 9:34 am
 
Forum: Investing - Theory, News & General
Topic: Bogle: Tilt To Corporates For More Yield
Replies: 60
Views: 5580

Re: PenFed rates

CDs are a commodity (almost) so don't get too fixated on Pen Federal. If you search you can find better rates rather than wait for Pen Fed to offer another teaser. Barclay's Bank was offering a 2+% 5yr CD recently. Vanguard offers some competitive brokerage CDs at the longer end which I have used in...
by Dandy
Wed Apr 02, 2014 9:14 am
 
Forum: Investing - Theory, News & General
Topic: PenFed rates
Replies: 3
Views: 732

Re: Time and benefits vs. money.

These are tough hours and add a relatively long commute. Depending on the nature of the job and how much you enjoy it that can be hard to keep up as you age. If you have a family you are often too tired to enjoy them much. If you enjoy your current job you may not enjoy the different environment at ...
by Dandy
Mon Mar 31, 2014 3:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Time and benefits vs. money.
Replies: 21
Views: 1554

Re: Individual Stocks vs Vanguard ETF's/Mutual Funds

However, for some reason I like the thought of buying monthly increments of individual stock such as JNJ, PG, KMB, etc while utilizing a DRIP. "For some reason" is not a good reason. Individual stocks, even those considered blue chips, have much more risk than a diversified, low cost equi...
by Dandy
Sun Mar 30, 2014 9:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Individual Stocks vs Vanguard ETF's/Mutual Funds
Replies: 29
Views: 2868

Re: Cash in Roth

If you keep any equities in your IRA or Roth I would advise keeping all or most of them in the Roth. While in the accumulation phase you are focused on growth but in your retirement you want to have the growth be more in your Roth than IRA since it will tend to reduce your RMD. Even with a nice IRA ...
by Dandy
Sat Mar 29, 2014 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Cash in Roth
Replies: 12
Views: 1569

Re: The Boglehead Car -- What is It?

I think the Boglehead philosophy is mostly about investing and saving enough mostly by living below your means. If you do that it doesn't matter so much what you spend your money on. The purpose of accumulating money, deferring gratification and living somewhat below your means is that you will have...
by Dandy
Sat Mar 29, 2014 1:01 pm
 
Forum: Personal Consumer Issues
Topic: The Boglehead Car -- What is It?
Replies: 150
Views: 10463

Re: Anyone ever send their car via autotrain?

Did it twice a long time ago. As I recall it took a long time to load up the cars on the train. Once on the train it was nice to relax and not drive. The kids seem to enjoy it a bit since they weren't cooped up the car. Forget about sleeping - it is better to assume your are not going to sleep - the...
by Dandy
Sat Mar 29, 2014 10:41 am
 
Forum: Personal Consumer Issues
Topic: Anyone ever send their car via autotrain?
Replies: 4
Views: 514

Re: The Boglehead Car -- What is It?

I'm not much of a car person. Was very (too) frugal in the past e.g. drove a 1972 Pinto for 10 years!! I didn't put enough emphasis on quality or resale value. When I had children my focus also became safety. As a retiree in pretty good financial shape I added some emphasis on comfort. I recently tr...
by Dandy
Sat Mar 29, 2014 10:32 am
 
Forum: Personal Consumer Issues
Topic: The Boglehead Car -- What is It?
Replies: 150
Views: 10463

Re: Should you discuss your wages with your peers?

As an employee I never discussed my salary or bonus with other people except my wife. No peers, no co workers, no friends, no relatives - nobody. I never saw it having positive results. Never wanted other people's envy or pity. I never wanted to know what anyone else made. Not my business. To me it ...
by Dandy
Sat Mar 29, 2014 9:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Should you discuss your wages with your peers?
Replies: 82
Views: 6551

Re: Saving a % of income vs saving a $ amount?

Maxing out in dollars is a good thing. As your income rises you probably want to focus more on what percent you are saving. Your pre retirement standard of living kind of sets the bar as to what you might need in retirement. So, when you are making $100,000 a year you wouldn't want to just fund your...
by Dandy
Thu Mar 27, 2014 7:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Saving a % of income vs saving a $ amount?
Replies: 23
Views: 3017

Re: Worried about the market

It is natural to worry - it is your hard earned money. The market seems high we worry about it going low, the market goes low we worry about it going lower, the market stagnates and we think maybe CDs are better. Over the long run a balanced approach like Life Strategy fund should do fine. If you fi...
by Dandy
Thu Mar 27, 2014 7:48 am
 
Forum: Investing - Help with Personal Investments
Topic: Worried about the market
Replies: 24
Views: 2295

Re: We Don't want to die with Money

Consider looking into a joint annuity somewhere down the road for a large chunk of your nest egg. Income will last as long as the last survivor and will generate decent payouts given mortality credits. No fancy annuities just an immediate fixed annuity or deferred fixed annuity. Assuming interest ra...
by Dandy
Wed Mar 26, 2014 4:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: We Don't want to die with Money
Replies: 45
Views: 3742

Re: New money and Investment Policy Statement

You seem to have gotten yourself in a very complex portfolio. You are fortunate that it seems to be substantial and allocation is close to your target. Relax - you seem to be doing fine and this lump sum is only a small % of your portfolio. I would not increase the complexity of your allocation - so...
by Dandy
Wed Mar 26, 2014 4:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: New money and Investment Policy Statement
Replies: 10
Views: 786

Re: Statement of the Retirement Funding Problem

Retirement funding is a major problem because the ability to earn income usually drops to near zero and the funding may have to last 30+ years and may have to fund two people for much or all of that time. So you work and save for 30 or 40 years and expect your savings to help support you for almost ...
by Dandy
Wed Mar 26, 2014 7:58 am
 
Forum: Investing - Theory, News & General
Topic: Statement of the Retirement Funding Problem
Replies: 89
Views: 5641

Re: Hypothetically living off investment dividends?

At one time when dividends and interest were high you might have gone through most of retirement living off them. It would be nice if that were to happen. I wouldn't depend on it. I wouldn't retire very early banking on living off dividends. Some market hits, some inflation bouts, some health issues...
by Dandy
Wed Mar 26, 2014 7:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Hypothetically living off investment dividends?
Replies: 34
Views: 3008

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

The risk in a portfolio is always in dollars. Sometimes we feel a conservative allocation percentage to equities is low risk. As the portfolio grows during the accumulation phase the risk increases even though the equity allocation percentage does not. So the idea to decrease equity allocation as on...
by Dandy
Tue Mar 25, 2014 8:54 am
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24354

Re: Really confused by Bernstein

I believe that Bill is saying you have won the game (barely). If you have 20 years of funding for your retirement needs you can't afford to take much risk. 20 x $50k = $1M. It is hard to find safe returns of 2 to 3%. Major risks are inflation and living beyond your means. Thus TIPS and annuities are...
by Dandy
Mon Mar 24, 2014 6:17 pm
 
Forum: Investing - Theory, News & General
Topic: Really confused by Bernstein
Replies: 168
Views: 12635

Re: Faulty Logic [Asset Allocation nearing Retirement]

Just enough now assuming no change in current portfolio balance - I assume. There are lots of opinions on this. Usually, decades of retirement ahead that need to be funded. If you have just enough now each year assuming conservative growth and inflation after withdrawals to live on -- you will still...
by Dandy
Sun Mar 23, 2014 4:44 pm
 
Forum: Investing - Theory, News & General
Topic: Faulty Logic [Asset Allocation nearing Retirement]
Replies: 24
Views: 1843

Re: Help me settle a debate -- Risk in Retirement

There really is no wrong answer. You can afford to take as much risks as you feel comfortable with. 100% equities? Buffet has billions and his directive for his wife's allocation upon his death is 90% S&P and 10 short term treasuries. Depending on the age of your children you could invest accord...
by Dandy
Sat Mar 22, 2014 9:32 am
 
Forum: Investing - Theory, News & General
Topic: Help me settle a debate -- Risk in Retirement
Replies: 61
Views: 4206

Re: Aargh, investing!!

Keep enough money in savings to be an emergency fund and cushion then put 1/2 the money at risk and 1/2 in savings. Trust me the markets always look somewhat scary. When they are down they seem like they will go down more, when they start up and have a bad day - here we go again, when they are up a ...
by Dandy
Sat Mar 22, 2014 9:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Aargh, investing!!
Replies: 79
Views: 6093

Re: Variable Annuities with GLWB

The term buckets is scary since it is often used in a scam like manner. It is useful to think of money in separate categories to understand and remember its purpose as opposed to just an allocation. I don't like any annuities except those with no bells and whistles. People hate to part with large lu...
by Dandy
Sat Mar 22, 2014 8:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Variable Annuities with GLWB
Replies: 13
Views: 893

Re: The Intelligent Investor

My idea is to make relatively modest adjustments based on market being at historical highs not moving an allocation from 70% equities to 50% equities. I'm talking about maybe a 5% move at best or deciding to only lump sum 50% instead of 100%. Making wide swings for me is too much of a bet on the odd...
by Dandy
Fri Mar 21, 2014 9:36 am
 
Forum: Investing - Theory, News & General
Topic: The Intelligent Investor
Replies: 27
Views: 3290

Re: Target date retirement funds

I'm leaning toward using Life Strategy funds vs Target date funds for when I want to simplify my retirement investments, especially for my spouse. Looking at " Put 30% in Retirement Income and 70% in Life Strategy moderate (whatever get the overall equity allocation at my target) and take the R...
by Dandy
Thu Mar 20, 2014 5:37 pm
 
Forum: Investing - Theory, News & General
Topic: Target date retirement funds
Replies: 20
Views: 2160
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