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Re: A Low-Return Future? Are We Prepared?

By the way, that number assumes that returns are as good as they were in the past and that you don't live more than 30 years in retirement, both assumptions are looking less certain nowadays. Most of the time in the past, you could take 5% or 6% and do just fine... Going with 4% is already the cons...
by HomerJ
Tue Sep 02, 2014 9:12 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

Simplegift wrote:What long-term evidence is there (20-30 years out) that investment assets are fated for higher returns?


1 billion Chinese and Indians joining the middle-class, and buying Cokes, washing machines, and razor blades.
by HomerJ
Tue Sep 02, 2014 9:11 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: Will Bill Gross beat the Total Bond Market Index?

Thank you for all your responses. I suppose my problem is I view bonds as a terrible investment over the next 10 years. I hold them because I can't seem to find a better alternative to them. It makes sense to me that if interest rates are going to go up, an active manager like Gross will be able to...
by HomerJ
Tue Sep 02, 2014 6:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Will Bill Gross beat the Total Bond Market Index?
Replies: 24
Views: 1967

Re: Will Bill Gross beat the Total Bond Market Index?

Bill Gross is 70 years old and Forbes estimates his wealth at $2.4 billion. What odds are you giving that he'll still be managing the Pimco Bond Fund in 5 - 10 years? According to the CDC life table for U.S. white males, the probability of a 70 year old surviving 5 years is 87%, and, for 10 years, ...
by HomerJ
Tue Sep 02, 2014 6:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Will Bill Gross beat the Total Bond Market Index?
Replies: 24
Views: 1967

Re: Is a college degree really worth what it costs?

steadyeddy wrote:swimming lessons have terrible ROI, but you sign your kid up because...


So he won't drown? :)

(I agree with your point, but I couldn't resist)
by HomerJ
Tue Sep 02, 2014 5:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is a college degree really worth what it costs?
Replies: 33
Views: 1584

Re: Ghostbusters

30th anniversary, remastered in 4K. Just came back from it. We were a grand total of 4 people (!) in a gigantic XD theater. I was redeeming some Cinemark prepaid tickets bought at Costco. The XD is supposed to be extra charge for their premium XD with leather seats, but the clerk didn't know much e...
by HomerJ
Tue Sep 02, 2014 5:10 pm
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 66
Views: 2425

Re: Colleague being fleeced by insurance agent / Ponzi Schem

I wonder if it is a fair question to ask when interviewing a possible care provider: Where do you have your investments and what fees do you pay? If they do not have a satisfactory answer, then this probably speaks to their ability to do research and provide medical care, too. Really? My friend is ...
by HomerJ
Tue Sep 02, 2014 4:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Colleague being fleeced by insurance agent / Ponzi Scheme?
Replies: 14
Views: 1889

Re: Variable annuity 100k in fees help (UPDATE)

Trevor wrote:"Index funds are good but they will never give you 20% returns over the market that some active management can"


They'll also never give you returns under the market like MOST active management can.
by HomerJ
Tue Sep 02, 2014 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Variable annuity 100k in fees help (UPDATE)
Replies: 13
Views: 897

Re: Help out family without compromising my own retirement?

Someone pointed out that cultural values may be in play here, and that’s correct. In the culture where I come from, adult children are expected to take care of elderly parents as well as siblings in need to some extent. Also in my culture you never kick out your family even from your own place, so ...
by HomerJ
Tue Sep 02, 2014 3:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help out family without compromising my own retirement?
Replies: 66
Views: 4603

Re: John Hussman, smart guy, should you listen to his foreca

I wish it were like a broken clock because then I'd know just how close we were getting to the "right moment". Wouldn't that be nice :happy The problem with market forecasting is that you have to be right and right on time for it to be helpful. It's that second one that gets everyone. Exa...
by HomerJ
Tue Sep 02, 2014 2:38 pm
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 38
Views: 3865

Re: John Hussman, smart guy, should you listen to his foreca

Admittedly Hussman's funds have not done so well, stymied by the endless market-price goosing of central bank policy which his original models didn't contemplate. Heh, darn it, there's always something unexpected that messes up my models! How many times has that phrase been used over the last 100 y...
by HomerJ
Tue Sep 02, 2014 2:34 pm
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 38
Views: 3865

Re: A Low-Return Future? Are We Prepared?

freddie wrote:The point is a decade of low returns is no big deal. They have happened in the past and will happen in the future.


Exactly. Didn't we just have a "lost decade"? Yet, somehow we're all immensely richer just a couple years after that.
by HomerJ
Tue Sep 02, 2014 1:33 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: Why invest in bonds?

Using Morningstar... 100% VTSAX (Vanguard Total Stock Market Index) starting with $10,000 ten years ago... fell to $6,958 in March 2009, but has grown to $23,677 today. (9% annualized growth) $10,000 dropping to $6958 doesn't seem too bad in abstract, but when it's $1 million and it grew to $1.53 mi...
by HomerJ
Tue Sep 02, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 5673

Re: Why invest in bonds?

Many people here seem to think that crashes are completely random and unpredictable, so it makes sense to hold a fixed [age-dependent] portion of your portfolio in bonds. If it is indeed true that crashes are completely random and unpredictable then this strategy makes sense. But if crashes are eve...
by HomerJ
Tue Sep 02, 2014 9:15 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 5673

Re: Why invest in bonds?

It would be helpful if responders to these threads would include their years to/in retirement, perhaps add as part of their signature. :happy Retired 2011, age 69 Current Asset allocation: 55% stocks/45% Bonds, cash I am concerned stock allocation is too high, fixed income returns are too low. Not ...
by HomerJ
Tue Sep 02, 2014 9:11 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 5673

Re: How to become a millionaire retiree -- then and now

Yep. I million isn't worth what it used to be. If you're using the 4% rule, that's a lousy $40K/year income. Still, that would be about 80% of the average man's salary in 2013. So if you're the average man, saving $1M would be about right. Actually, with your SS income added in your standard of liv...
by HomerJ
Mon Sep 01, 2014 10:04 pm
 
Forum: Investing - Theory, News & General
Topic: How to become a millionaire retiree -- then and now
Replies: 62
Views: 7347

Re: How to become a millionaire retiree -- then and now

Fresh out of college engineers in 1978 - 1979 made about $30,000 a year with ChemE even higher. Nope. Nope. Nope. Not even close. $30,000 in 1978 is the equivalent of $110,000 today. Fresh out of college engineers are not making $110,000 today and they weren't making the equivalent in 1978. That $3...
by HomerJ
Mon Sep 01, 2014 2:04 am
 
Forum: Investing - Theory, News & General
Topic: How to become a millionaire retiree -- then and now
Replies: 62
Views: 7347

Re: Why invest in bonds?

There was nothing "out there" about anything I said. The OP's point, which I am writing to support, is essentially Daniel Kahneman's point about people consistently and erroneously overweighting their fear of loss over their fear of foregoing a gain. Nobel Prize stuff. Why is erroneous to...
by HomerJ
Mon Sep 01, 2014 1:05 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 5673

Re: Why invest in bonds?

jebmke wrote:I'm not willing to assume that there will be no crash in the next 5 years or that stocks will return 15% going forward.


LOL, me neither...

I assume there will be a 50% crash tomorrow, and possibly a 90% crash, and structure my Asset Allocation around that.
by HomerJ
Mon Sep 01, 2014 12:52 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 5673

Re: Move for nicer home in better school district?

I think moving to a more expensive house for a good public school instead of paying for private school is a no-brainer...

(1) You get to live in a nicer house
(2) You get most of the money back when you sell the house

Money spent on private school is just gone.
by HomerJ
Sun Aug 31, 2014 11:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Move for nicer home in better school district?
Replies: 14
Views: 989

Re: A Low-Return Future? Are We Prepared?

If a KNOWN 5% failure rate is conservative for you then great, you're done. You make good points, and I'll stop our discussion with this last word (feel free to respond one more time, if you want the "last word") :) That 5% "failure" means I take 3 vacations a year instead of 4....
by HomerJ
Fri Aug 29, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

Going with 4% is already the conservative number... Yes, it's fairly conservative with only a 5% failure rate. If that's within your risk tolerance then go with it. Ugh... (1) You might not even live the full 30 years. (2) You can adjust your spending downward if needed... Going from 3 vacations a ...
by HomerJ
Fri Aug 29, 2014 11:53 am
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

Wow is right. I just read that table for the first time. If returns are this low going forward, I would think real estate would be a more attractive investment option. This is sort of depressing. (1) No one can predict anything. (2) Even if they're right, the FOLLOWING ten years will probably give ...
by HomerJ
Fri Aug 29, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

I mean, think about this. Typical retirement is probably 20 years. Yes, we prepare for 30. We hypothesize that we'll possibly live 40. But we probably won't. We'll probably keel over at 80 or 85 like most people. This. The problem with the kind of pessimism exhibited on threads like this one is it ...
by HomerJ
Fri Aug 29, 2014 11:21 am
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

I blogged about this a year and a half ago. Then I enjoyed my 2013 returns of 19.7% and my YTD returns of 7.17%. Maybe those guys are right and just early. Maybe it's cool to be a pessimist. I don't know. Yeah I almost feel bad for Pfau... The guy has been predicting low returns since 2011 and in t...
by HomerJ
Fri Aug 29, 2014 11:18 am
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

By the way, that number assumes that returns are as good as they were in the past and that you don't live more than 30 years in retirement, both assumptions are looking less certain nowadays. Most of the time in the past, you could take 5% or 6% and do just fine... Going with 4% is already the cons...
by HomerJ
Fri Aug 29, 2014 11:15 am
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: A Low-Return Future? Are We Prepared?

Before you say 0.26% is irrelevant realize that this represents a 6.5% loss in spending power. 5% chance of a 6.5% loss in spending power is irrelevant to me... Plus, one can always get a SPIA (which will pay FAR more than 4%) if you see half-way through your 30-year retirement that you're not doin...
by HomerJ
Fri Aug 29, 2014 11:06 am
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 179
Views: 10592

Re: My husband's " WILL", $ left for me to live on....

I also like the idea of writing your OWN will, and show him how he's going to get $25k of your $600k, while the rest goes to some dog shelter.

Just kidding! But I sure like that idea... :)
by HomerJ
Fri Aug 29, 2014 2:04 am
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

I'd like to reverse some of my replies.... I think (and he thinks) that: $300k inheritance $100k CD $500k Social Security is plenty... You'll get $2000 a month from SS... You'll have to sell your house and downsize to a smaller $200k house... That will leave you with $700,000... 4% withdrawal from $...
by HomerJ
Fri Aug 29, 2014 2:02 am
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: When, if ever, should an annuity be used in retirement p

What are your thoughts on using a variable annuity as a long-term tax deferred investment with minimum fees? It's just not a good investment... There are plenty of tax-efficient choices in a taxable account... Just put the money in Total Stock Market Index Fund, which is very tax-efficient, and whe...
by HomerJ
Thu Aug 28, 2014 11:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2320

Re: When, if ever, should an annuity be used in retirement p

I often hear an annuity recommended for someone who can't manage their money. Even if they spend everything they have this month, they will have income next month. I actually see this as a positive for ME as well... Not because I can't manage my money now... but maybe I won't be able to manage my m...
by HomerJ
Thu Aug 28, 2014 11:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2320

Re: When, if ever, should an annuity be used in retirement p

I think a SPIA can be a integral part of a retirement plan... It's basically a way to generate a pension for yourself... It's a way to ensure that you don't run out of money... It's a GREAT Plan B, since it pays so well when you're older... You retire at 65 pulling 4%... bad times ensue, and 15 year...
by HomerJ
Thu Aug 28, 2014 6:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2320

Re: When, if ever, should an annuity be used in retirement p

We have GWLI Variable that has two accounts. The Income account from which the income be taken (5% of the Income Value when you pull the trigger, for life. You do not need to annuitize.) The 2nd account is the Actual account which is variable. The Income account is guaranteed to grow by 5% compound...
by HomerJ
Thu Aug 28, 2014 5:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2320

Re: My husband's " WILL", $ left for me to live on....

He owes around $600.000-$700.000. He did mention that if he died this year and economy is bad , if his children get greedy and sell off everything to get cash real fast, it can get down to around 4 million.(his estimate) So, he is hoping to live long and also hoping his childrens are smart enough t...
by HomerJ
Thu Aug 28, 2014 5:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

His property income is around $6000-7000 but few of the rentals still have mortgage , so I think cash flow after the mortgage payment might be only around $3000 plus minus and it does take quite bit of money to maintain these rental buildings so, I do not think total $3000 is used as a part of livi...
by HomerJ
Thu Aug 28, 2014 4:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

Prenup and child support both refer to divorce... I'm sorry but you're wrong. Prenups can involve almost anything relating to the marriage including rights to the respective estates of the couple. Gill Okay, I'm wrong... I still think context of the posters above us is that she could divorce him an...
by HomerJ
Thu Aug 28, 2014 4:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

Gill wrote:
ddunca1944 wrote:Even if you did sign a prenup, that doesn't apply to child support.

A decedent has no obligation of child support. He can disinherit the child completely.
Gill


Prenup and child support both refer to divorce...
by HomerJ
Thu Aug 28, 2014 4:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

since he is cash poor (everything tied to his property) Does he own $7 million worth of rental property, but still owes $6.3 million on them? In that case, he's really only worth $700k, and you should be happy with the $300k you're getting. Or does he own $30 million worth of rental property, but s...
by HomerJ
Thu Aug 28, 2014 4:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

What will be your annual estimated expenses? I really don't know... But He said I should be able to live since myself and child will be right at the porverty line around $30,000 a year . He said we can receive many government assistance that way. Poverty level for a family of 2 is about half that a...
by HomerJ
Thu Aug 28, 2014 3:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

He talks about government assistance for you and your child that you had together ... with his 7 M$ net worth ? +1 on marital counseling / frank discussion. Better than that - divorce attorney! After the courts are done with him, especially with minor in picture.......... I am not thinking about di...
by HomerJ
Thu Aug 28, 2014 3:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

It's possible that his net worth is not what you think it is. Maybe he mortgaged the rentals and speculated it away, or fell for a scam. If he really is worth 7m, see an attorney. Yeah, if they are living a $60k lifestyle, either he doesn't really have $7 million in rental properties, or he's hidin...
by HomerJ
Thu Aug 28, 2014 3:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

Divorce is not an option for me because beside this money matter, everything is just fine. But he is always has been very cautious with his money. As few people mentioned here, another option for me to go back to work and save. But there is a "but"....If I go back to work, he will expect ...
by HomerJ
Thu Aug 28, 2014 3:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

Ineedadvice50 wrote:Mine(house and $100000) is created by me before the marriage also.


I especially like how he moved into your house (that you paid for), but his money is only his.
by HomerJ
Thu Aug 28, 2014 3:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: My husband's " WILL", $ left for me to live on....

What will be your annual estimated expenses? I really don't know... But He said I should be able to live since myself and child will be right at the porverty line around $30,000 a year . He said we can receive many government assistance that way. Oh boy... time for you to go back to work. And did y...
by HomerJ
Thu Aug 28, 2014 3:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 17011

Re: Mortgages and financial freedom

Where I live, on Long Island, property taxes and insurance is more than 50% of my total mortgage payment. So paying off my mortgage principal would still leave me with around $2000 month payment for taxes and insurance. Ouch... Here in Kansas City, I went from paying $3000 a month for everything, t...
by HomerJ
Thu Aug 28, 2014 2:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6697

Re: Mortgages and financial freedom

You haven't really made your situation better on a rational basis by paying off the mortgage even in the case of unemployment. Since unemployment is more likely to happen AT THE SAME TIME that your investments are going down the toilet, I would say, yes, the situation is better if things go bad (no...
by HomerJ
Thu Aug 28, 2014 11:06 am
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6697

Re: Mortgages and financial freedom

I probably fall into that situational bucket where much of this was about behavioral feelings about money than raw numbers, but it sure feels good that if I were to lose my job now I wouldn't be eating into my savings to cover the mortgage. It also feels really nice to be taking my old mortgage pay...
by HomerJ
Thu Aug 28, 2014 10:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6697

Re: Mortgages and financial freedom

Where I live, on Long Island, property taxes and insurance is more than 50% of my total mortgage payment. So paying off my mortgage principal would still leave me with around $2000 month payment for taxes and insurance. Ouch... Here in Kansas City, I went from paying $3000 a month for everything, t...
by HomerJ
Thu Aug 28, 2014 10:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6697

Re: Hit a financial milestone at an age milestone

These threads always generate a predominance of congratulatory responses and a few skeptics. It just goes to show you that it's not how much you make, it's how much you spend: if you make $200k per year and spend $75k you'll simply be much further ahead than if you make $200k and spend $125k. Congr...
by HomerJ
Thu Aug 28, 2014 1:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Hit a financial milestone at an age milestone
Replies: 50
Views: 4912

Re: Mortgages and financial freedom

SkierMom wrote:Regardless, I would still owe property taxes and special assessments and a HOA fee every totaling about $550/month. You are still paying a monthly bill for housing every month.


I bet there's a lot of people who would love to live in your big house for only $550/month. :)
by HomerJ
Wed Aug 27, 2014 4:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6697
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