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Re: Should I use margin to buy a balanced fund?

I agree that this sounds like a free lunch, so there must be something obvious that I'm missing. If your plan is fool-proof, why isn't everyone doing it? It's very simple, risk-free, and you estimate it will boost your returns 50%. I'm guessing there is something you are missing. Here's what I sugg...
by HomerJ
Thu Jul 31, 2014 11:23 am
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 191
Views: 10190

Re: Principal Residence = Poor Investment?

Here's something I've never, ever understood: when someone says that renting is cheaper than buying, do they just ignore the whole down payment part of the equation? I can see maybe having your monthly mortgage payment be cheaper than monthly rent in some situations, if you're renting something rea...
by HomerJ
Wed Jul 30, 2014 4:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 70
Views: 4435

Re: Principal Residence = Poor Investment?

I was having a discussion with a friend the other day who is convinced that the home he lives in is a great investment. I was wondering if those with a bit more financial acumen could critique my analysis. Current market value = $600,000 PITI = $3,700/month Utilities = $330/month Landscaping/Mainte...
by HomerJ
Wed Jul 30, 2014 3:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 70
Views: 4435

Re: Which is King: Income Stream or $ Invested

Yes, but occasionally, you don't have renters. Occasionally, you have to put money INTO rental properties (like a new roof or a new heater). Sure, but try asking the folks in Detroit how their "guaranteed" pensions are going. *shrug* No income source is "safe" there are just dif...
by HomerJ
Wed Jul 30, 2014 1:40 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 51
Views: 4083

Re: Which is King: Income Stream or $ Invested

Income streams like SS or pensions or SPIAs are JUST income streams and ONLY income streams. That's the difference I think. Rental properties have excellent income streams and yet still have capital value. Yes, but occasionally, you don't have renters. Occasionally, you have to put money INTO renta...
by HomerJ
Wed Jul 30, 2014 1:31 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 51
Views: 4083

Re: Which is King: Income Stream or $ Invested

Why would it make a difference if I sold assets to buy an SPIA, for example, at age 85 for $100,000 and collected $11,240 per year, as opposed to maintaining my diversified portfolio and simply selling that much annually? Because your portfolio might run out... People call SS and SPIA's income stre...
by HomerJ
Wed Jul 30, 2014 1:10 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 51
Views: 4083

Re: Which is King: Income Stream or $ Invested

Why would it make a difference if I sold assets to buy an SPIA, for example, at age 85 for $100,000 and collected $11,240 per year, as opposed to maintaining my diversified portfolio and simply selling that much annually? Because your portfolio might run out... People call SS and SPIA's income stre...
by HomerJ
Wed Jul 30, 2014 12:22 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 51
Views: 4083

Re: Annuities and asset allocation

Why waste your money on an SPIA? Do the math and you’ll find that with an SPIA you’re just getting your own money back. The internal rates of return (not the payout rate) are pretty much 0% unless you live way past actuarial life expectancy. It's not about the return... It's like reverse life insur...
by HomerJ
Wed Jul 30, 2014 11:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Annuities and asset allocation
Replies: 32
Views: 1482

Re: Was ready to pull plug on Janus..until

I thought some of my Janus funds would have done better than VTI and some worse. Wasn't expctuing to see 7 out of 8 having done better, some much better. theplayer11... do you understand that you are comparing different things? This is very much like you coming on here and saying my Janus stock fun...
by HomerJ
Tue Jul 29, 2014 4:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 3859

Re: Which is King: Income Stream or $ Invested

Example: would you rather have $4 million invested or guaranteed (I.e. Pension, fixed annuity, etc) of $160,000/year? I'd rather have $2 million invested and a guaranteed $80,000/year income stream, really... But if I had to pick between your two choices, I'd pick the $4 million, since I'm very lik...
by HomerJ
Tue Jul 29, 2014 3:46 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 51
Views: 4083

Re: Grad school decision - Help requested

It seems as though a bit more information is necessary: - This is a Master's Program from Pacific Northwest College of Art. The program is entitled "Critical Theory and Creative Research." - I am only applying to the one school for the one program which is very specific. - It is a single-...
by HomerJ
Tue Jul 29, 2014 3:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Grad school decision - Help requested
Replies: 25
Views: 2232

Re: Please help me fight for index funds!

He is comparing a riskier PIMCO fund which uses futures and swaps to mimic the S&P 500, then invests the remaining cash in bonds, to Vanguard Total Stock Market Institutional (VITSX)? Nice apples and oranges comparison. And if you look back to the ten-year total return, VITSX (8.98%) beats PSPR...
by HomerJ
Tue Jul 29, 2014 3:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Please help me fight for index funds!
Replies: 37
Views: 2303

Re: Annuities and asset allocation

The amount of interest earned each year is dependent on which index you are using and, more importantly, the actual day you are issued the policy. A lot of annuities use annual point to point in their crediting strategy, so for example if you started on July 29th, you would write down the S&P50...
by HomerJ
Tue Jul 29, 2014 11:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Annuities and asset allocation
Replies: 32
Views: 1482

Re: Annuities and asset allocation

One reason you would buy an annuity now and defer the income is that with the newer annuities you get an increase in the income for each year that you defer, usually around 6-7%, which is guaranteed. You don't know if your equities or bonds will provide that return. Additionally, the deferred incom...
by HomerJ
Tue Jul 29, 2014 11:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Annuities and asset allocation
Replies: 32
Views: 1482

Re: Florida Retirement Communities advice/thoughts

galaxy wrote:wild life is great


Another reason I will probably not live in Florida is that I love lakes and boats, but I'm not a big fan of alligators :)
by HomerJ
Mon Jul 28, 2014 5:38 pm
 
Forum: Personal Consumer Issues
Topic: Florida Retirement Communities advice/thoughts
Replies: 24
Views: 2827

Re: Kitchen Remodel... Or Not?

You can't get woodwork or hardwood floors like the old days either. Someday look at a hundred year old oak floor and compare it to nowadays. Then take out your hankie and sniffle. Hankie is good to protect your airways from the lead paint and asbestos as well.... :) Edit: Ah, already mentioned righ...
by HomerJ
Mon Jul 28, 2014 3:47 pm
 
Forum: Personal Consumer Issues
Topic: Kitchen Remodel... Or Not?
Replies: 53
Views: 2814

Re: Florida Retirement Communities advice/thoughts

jimkinny wrote:Any thoughts on hurricanes.


I'd like to hear about this as well... The main reason I don't want to buy in Florida is the Hurricane risk... (also that whole "ocean levels may rise 10 feet and 70% of Florida is underwater" thing)
by HomerJ
Mon Jul 28, 2014 3:13 pm
 
Forum: Personal Consumer Issues
Topic: Florida Retirement Communities advice/thoughts
Replies: 24
Views: 2827

Re: Do Bogleheads Feel Wealthier?

I was pretty broke in my 20s (spent every cent I had, and didn't have many cents)... In my late 20s, I got married to a very smart very frugal woman, and my career finally started taking off.. We had plenty of income between the two of us, so I never felt broke, but I certainly didn't feel wealthy. ...
by HomerJ
Mon Jul 28, 2014 12:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do Bogleheads Feel Wealthier?
Replies: 57
Views: 4480

Re: Body by Science Workout

Which kind of post do I hate more??

I also gained about 5-6 pounds, which doesn't sound like much, but I don't have a tendency to gain weight so it was a big deal for me.


or

I have $15 million at age 40. Think I can retire?


Envy is not a pretty emotion :)
by HomerJ
Fri Jul 25, 2014 5:25 pm
 
Forum: Personal Consumer Issues
Topic: Body by Science Workout
Replies: 239
Views: 24814

Re: Rich Spouse, Poor Spouse [Tax filing apportionment]

TimeRunner wrote:
HomerJ wrote:
Alistair wrote:In all seriousness, start your own thread.


Why do you keep saying this? What does this mean?


It means that divorce, as a solution to the OP's question, is seriously off the table.


Ah, he wasn't quoting anyone so I wasn't sure what he was responding to.
by HomerJ
Fri Jul 25, 2014 5:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5400

Re: Treasury Direct--just blowing off steam

nisiprius wrote:sends you back a confirmation via regular non-secure smtp: mail, which includes the full message text with the sensitive information.


Yes, that is bad.
by HomerJ
Fri Jul 25, 2014 5:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Treasury Direct--just blowing off steam
Replies: 58
Views: 4104

Re: Treasury Direct--just blowing off steam

Never had any troubles with my treasury direct account. With the secret decoder card and without, it has always worked fine. I moved to a different state and had to change banks. So, I had to go through the medallion signature guarantee process. It was quick and painless. It also taught me that, ev...
by HomerJ
Fri Jul 25, 2014 5:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Treasury Direct--just blowing off steam
Replies: 58
Views: 4104

Re: Rich Spouse, Poor Spouse [Tax filing apportionment]

Alistair wrote:In all seriousness, start your own thread.


Why do you keep saying this? What does this mean?
by HomerJ
Fri Jul 25, 2014 5:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5400

Re: Personal win: I am now free of individual holdings!

Are the kids giving you the proceeds back? Not that I know of. They will both be in college next month. Must be nice. Can you adopt my kids? Or heck, adopt me... :) Your solution doesn't really address Rainier's problem livesoft... Rainer: "Hey I don't want to sell because I'd lose too much mo...
by HomerJ
Fri Jul 25, 2014 3:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Personal win: I am now free of individual holdings!
Replies: 18
Views: 1163

Re: Rich Spouse, Poor Spouse

Is this a question of Poor Spouse wanting to prove he/she is not trying to take advantage of Rich Spouse? If so, I understand that completely. My wife made twice as much as me when we got married, and I was very careful with money at first so she wouldn't think I married her for her money.... As the...
by HomerJ
Fri Jul 25, 2014 10:58 am
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5400

Re: Rich Spouse, Poor Spouse

Poor spouse should just claim 0 exemptions (so max tax for his/her income is taken out)... And Rich Spouse pays any money due at the end of the year.
by HomerJ
Thu Jul 24, 2014 5:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5400

Re: Here's another "where should I retire" thread

TomatoTomahto wrote:Lakefront home, probably one that prohibits jet skis and loud motor boats.


You'll get a lot more visits from the grandkids if you have a jetski... :)

Live in a cove off the main channel, and it won't be that noisy.
by HomerJ
Thu Jul 24, 2014 2:17 pm
 
Forum: Personal Consumer Issues
Topic: Here's another "where should I retire" thread
Replies: 104
Views: 6191

Re: Here's another "where should I retire" thread

@tibbitts, talk to livesoft; he wants me in 4 or 5 houses! I would not be surprised if we lived in one place and took extended vacations in various places with climates different from what we are getting sick of at home. The logistics of more than one house are not something I want to deal with; my...
by HomerJ
Thu Jul 24, 2014 2:16 pm
 
Forum: Personal Consumer Issues
Topic: Here's another "where should I retire" thread
Replies: 104
Views: 6191

Re: Dad had a whole life policy but it sounds like term life

36% / 14yrs = 2.6% gain per year Does this sound right? No. The entire concept of "return" is inapplicable when applied to death benefits (unless you are in the mafia). Think it through -- the best financial scenario would be to die immediately after paying your first premium. You'd have ...
by HomerJ
Thu Jul 24, 2014 11:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Dad had a whole life policy but it sounds like term life?!
Replies: 25
Views: 1669

Re: Family member as Financial Advisor

Yes, absolutely I would accept it. I'm a big boy. Of course, they can do math as well as anyone, so their decision would be a relatively short-lived one. My kids when they were younger would put their whole allowance into those arcade crane machines, but I never stopped them. They figured it out. B...
by HomerJ
Thu Jul 24, 2014 11:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Family member as Financial Advisor
Replies: 35
Views: 2998

Re: Family member as Financial Advisor

C'mon folks. Dad is a big boy and can deal with a child pulling their money out of his influence. I would treat it as part of launching my child and be proud that they made up their own mind. But then again, I want my kids to be completely independent of me. So, if your kid decided to go with a ful...
by HomerJ
Thu Jul 24, 2014 10:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Family member as Financial Advisor
Replies: 35
Views: 2998

Re: Can I retire early?

In 2008-9 I was a bit of a deer in headlights. I did not sell, but also did not have the glee of those buying on discount. Perhaps 60/40 will smooth things out a bit. I'll ponder it. Certainly 50/50 by ten years into early retirement, if not sooner, makes sense. You've won the game... I would start...
by HomerJ
Mon Jul 21, 2014 12:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Can I retire early?
Replies: 28
Views: 3921

Re: Helping My Grandmother

She should buy a SPIA (Single Premium Immediate Annuity) with the $30k... At her age it will pay her around $180 a month or a 7% return... until the day she dies. Note that the money is GONE. She pays a single premium ($30k), and the insurance company pays her $180 a month until she dies. If she die...
by HomerJ
Sun Jul 20, 2014 11:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Helping My Grandmother
Replies: 54
Views: 3186

Re: Should I use margin to buy a balanced fund?

Homework question #3: Have you read this thread yet... http://www.bogleheads.org/forum/viewtopic.php?t=5934 I have not read it, but I definitely will. Thanks! If it's too boring for you, skip forward to page 10 or so (look for Sept 2008-Nov 2008 posting dates), and watch poor MarketTimer go $200k i...
by HomerJ
Thu Jul 17, 2014 4:47 pm
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 191
Views: 10190

I'm a genius!

Was searching through some old posts for something else, and found this little nugget posted by myself... In March 2009... Man, I'm smart... or maybe just lucky :) Those who invested in 1999 (10 years ago) who currently have absolutely nothing show for their investments... will STILL likely end up i...
by HomerJ
Thu Jul 17, 2014 2:02 pm
 
Forum: Investing - Theory, News & General
Topic: I'm a genius!
Replies: 19
Views: 5160

Re: Should I use margin to buy a balanced fund?

It's not every day that you run into an Amazon review from a nobel prize winner. Here's Robert Shiller's Amazon review of the Ayres and Nalebuff book. I have been getting flak for endorsing the Ayres and Nalebuff book (see above on Amazon.com), just as the authors are for writing it. People are thi...
by HomerJ
Thu Jul 17, 2014 11:35 am
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 191
Views: 10190

Re: Should I use margin to buy a balanced fund?

Homework question: Which balanced funds dropped less than 37% in the past 80 years? Have any dropped by 58%? Wellington is easy to check. The others would need to be approximated by their indexes. Homework question #1: What happens if the fund you pick DOES drop more than 37%? Is the extra potentia...
by HomerJ
Thu Jul 17, 2014 11:32 am
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 191
Views: 10190

Re: New vehicle...GMC Acadia, Chevy Traverse, or Buick Encla

For heaven's sake, the towing capacity wouldn't even be needed at this time, rather for the future. Why do you need towing capacity in the future? How often will you need to tow and go off-road? Maybe you need two cars... One for daily driving, and one for occasional hauling (this one could be an o...
by HomerJ
Mon Jul 14, 2014 3:54 pm
 
Forum: Personal Consumer Issues
Topic: New vehicle...GMC Acadia, Chevy Traverse, or Buick Enclave?
Replies: 64
Views: 5369

Re: In a crash, will you re-balance to maintain your target

For those who answered they will re-balance to the target gradually over time such as with new contributions, I have another q. Why gradually? If ratio deviates enough, shouldn't you re-balance immediately? Is it because of tax reasons? Or market correction? Or not committed to your target? What is...
by HomerJ
Mon Jul 14, 2014 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4170

Re: [Poll] Are you more risk averse than average?

I created this poll because there's a thread asking about 100% stock. Most replies were against it. Curious whether BH think they are more risk averse than average. FYI, I'm not implying average investors invest 100% stocks. I'm very conservative with my investments... 50/50 right now stocks/bonds ...
by HomerJ
Mon Jul 14, 2014 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Are you more risk averse than average?
Replies: 36
Views: 2648

Re: Unique situation

Currently making about 60-80k/month give or take, but that can change at ANY moment. How much could you LOSE a month? What part of your portfolio is your gambling stake? Is that separate from the million in Schwab? How much do you have set aside? How long could you withstand a losing streak? Does t...
by HomerJ
Mon Jul 14, 2014 1:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Unique situation
Replies: 17
Views: 2750

Re: In a crash, will you re-balance to maintain your target

If you have $600K in stocks and $400K in Treasury bonds, you at least have the comfort that you will have $400K even if stocks go to zero. If the stock market goes to zero then the nation as a whole is bankrupt and there's a good chance those Treasuries won't be worth much either. Okay not zero, bu...
by HomerJ
Mon Jul 14, 2014 1:15 pm
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4170

Re: In a crash, will you re-balance to maintain your target

The better question than "will" you rebalance in a crash is, "Did" you rebalance in the last crash? Actually, here's a list of possible spin off poll questions that have crossed my mind after reading Bogleheads this week: - If you are 100% invested in stocks, in what year did yo...
by HomerJ
Mon Jul 14, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4170

Re: Will you change your AA based on market performance?

ralph124cf wrote:in 2008-2009, when some of the individual stocks that I own dropped 80%-90%. They have done very well since.


That is a dangerous game... The market as a whole is 99.99% likely to come back.... Individual stocks... not nearly as good odds.
by HomerJ
Mon Jul 14, 2014 10:25 am
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4170

Re: In a crash, will you re-balance to maintain your target

Suppose you are a 80/20 investor and there's no personal change (same age, same job, etc.) If the stock suddenly drops by 25% so your new portfolio weights are 75% (= 0.75*0.80/(0.75*80%+0.20)) and 25%. Will you re-balance back to 80/20? You can also rebalance by changing all your new money to 100%...
by HomerJ
Mon Jul 14, 2014 10:22 am
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4170

Re: Family member as Financial Advisor

Yeah, it will be awkward, but it will never be easier than now. I would just say that upon reflection, you decided you don't want to mix business with family. And I don't think I would try to talk about costs/ERs/fees as a justification. "Dad, we just don't want to mix business with family. It...
by HomerJ
Fri Jul 11, 2014 3:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Family member as Financial Advisor
Replies: 35
Views: 2998

Re: Engineer career change

Heh.

Image
by HomerJ
Fri Jul 11, 2014 11:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Engineer career change
Replies: 55
Views: 5529

Re: The Millionaire Next Door: Are You One?

The best way to get a million bucks is to have a high paying job and save 15%. It is a lot easier than having a job that pays half as much and needing to save 30%. Not if the guy with the high-paying job is paying 5x as much for housing... The lower-paid guy may indeed have more disposable income t...
by HomerJ
Fri Jul 11, 2014 10:23 am
 
Forum: Personal Consumer Issues
Topic: The Millionaire Next Door: Are You One?
Replies: 187
Views: 22456

Re: Finally an audience with my brother on Finances

He asked my opinion based on my and other's experience on this forum. Responding with a "go do your own research" doesn't reflect well on the community in my opinon. Give him some books to read... The Four Pillars of Investing is an excellent one. He needs to understand for himself (not b...
by HomerJ
Thu Jul 10, 2014 11:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Finally an audience with my brother on Finances
Replies: 33
Views: 4093

Re: Disclosing Financial Position

Are you asking if you should keep it a secret forever? Or until AFTER you're married? Or until AFTER you're engaged? Or until AFTER you're serious (dating only each other, the "L" word has been spoken, and "boyfriend/girlfriend" is used during introductions) My opinion: I wouldn'...
by HomerJ
Wed Jul 09, 2014 4:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Disclosing Financial Position
Replies: 13
Views: 1172
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