Search found 344 matches

by LFKB
Wed Jun 24, 2015 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question Re: Backdoor Roth IRA Contributions
Replies: 7
Views: 916

Re: Tax Question Re: Backdoor Roth IRA Contributions

The IRS is very inconsistent in dealing with the need for amended returns. While it would be justified if they requested one in order to have a 1040 that reflected the 8606 you submitted, they may just see that you do not owe taxes and you may never hear from them. So while expecting that the IRS w...
by LFKB
Wed Jun 24, 2015 10:44 am
Forum: Personal Finance (Not Investing)
Topic: Tax Question Re: Backdoor Roth IRA Contributions
Replies: 7
Views: 916

Re: Tax Question Re: Backdoor Roth IRA Contributions

Since the 8606 forms are cumulative, if the return missing the 8606 was for 2012, you will need to amend the 2013 return if you did not pick up a prior basis amount on line 2 of the 2013 8606. Since 2012 did not include a distribution, only the non deductible contribution, you do not have to amend ...
by LFKB
Tue Jun 23, 2015 5:48 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question Re: Backdoor Roth IRA Contributions
Replies: 7
Views: 916

Re: Tax Question Re: Backdoor Roth IRA Contributions

You do not need a CPA for this. Check your tax returns. For 2012, your return should include Form 8606 showing a non deductible TIRA contribution on lines 1, 3 and 14. Your 2013 return should also include an 8606 showing your 2013 contribution on line 1, 5,000 on line 2 and 10,500 on line 3. Comple...
by LFKB
Tue Jun 23, 2015 11:46 am
Forum: Personal Finance (Not Investing)
Topic: Tax Question Re: Backdoor Roth IRA Contributions
Replies: 7
Views: 916

Tax Question Re: Backdoor Roth IRA Contributions

I contributed $10,500 to a Roth IRA via a Traditional to Roth backdoor conversion in 2013. I recently got a notice that I owe taxes on the $10,500 which should have been reported in taxable income. I made a contribution of $5,000 in January 2013 (my first IRA contribution) related to the 2012 tax ye...
by LFKB
Tue Apr 21, 2015 11:06 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

Re: What Guaranteed Return Would You Require to Move All Ass

Doesn't matter, wouldn't do it regardless of what was "guaranteed". If the number is too high then there isn't any way for whomever or whatever to really make good on the promise. There is no magic in this world. I can pretty much always invest better on my own bc of costs. If I am lookin...
by LFKB
Sun Apr 19, 2015 4:32 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

Re: What Guaranteed Return Would You Require to Move All Ass

So let's say hypothetically there is a fund with a 100% guarantee to return exactly X% every year for the next 25 years. If you are to buy this fund, you are required to liquidate your entire portfolio and move all your invested capital into the fund. What is the lowest X (annual return) that you w...
by LFKB
Sun Apr 19, 2015 4:27 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

Re: What Guaranteed Return Would You Require to Move All Ass

So let's say hypothetically there is a fund with a 100% guarantee to return exactly X% every year for the next 25 years. If you are to buy this fund, you are required to liquidate your entire portfolio and move all your invested capital into the fund. What is the lowest X (annual return) that you w...
by LFKB
Sun Apr 19, 2015 4:21 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

Re: What Guaranteed Return Would You Require to Move All Ass

I would not need any guarantee of return to move all assets from a company that charges 2% in fees to another company that charges 0.10% in fees. At bogleheads.org, we suggest this all the time. The fund you're describing sounds like a Madoff fund and I would not move any money into it no matter ho...
by LFKB
Sun Apr 19, 2015 4:17 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

Re: What Guaranteed Return Would You Require to Move All Ass

Also, there is a thing called an annuity that is essentially what I described so it's not "fantasy." I just phrased the question differently. Is an annuity a "fund"? That is the term you used in your question. I said specifically in my post that I intentionally used a different ...
by LFKB
Sun Apr 19, 2015 3:50 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

Re: What Guaranteed Return Would You Require to Move All Ass

So let's say hypothetically there is a fund with a 100% guarantee to return exactly X% every year for the next 25 years. If you are to buy this fund, you are required to liquidate your entire portfolio and move all your invested capital into the fund. What is the lowest X (annual return) that you w...
by LFKB
Sun Apr 19, 2015 3:39 pm
Forum: Investing - Theory, News & General
Topic: What Guaranteed Return Would You Require to Move All Assets
Replies: 54
Views: 3635

What Guaranteed Return Would You Require to Move All Assets

So let's say hypothetically there is a fund with a 100% guarantee to return exactly X% every year for the next 25 years. If you are to buy this fund, you are required to liquidate your entire portfolio and move all your invested capital into the fund. What is the lowest X (annual return) that you wo...
by LFKB
Thu Apr 09, 2015 11:14 pm
Forum: Investing - Theory, News & General
Topic: The $1 Million Goal: Source of Motivation or Discouragement?
Replies: 172
Views: 17441

Re: The $1 Million Goal: Source of Motivation or Discouragem

It's a source of motivation for me. We hit $1.5M recently which was a milestone. I track our net worth and I find that every $100k is a baby milestone for me and every $500k feels like a big milestone.
by LFKB
Wed Apr 08, 2015 11:12 pm
Forum: Investing - Help with Personal Investments
Topic: Might Go $4,000 AAPL
Replies: 68
Views: 5976

Re: Might Go $4,000 AAPL

What do you know that the market doesn't already know? This really is the key question, and the answer is "nothing." Apple already has an inflated price to earnings ratio due to the speculation the opening poster has mentioned. This is already taken into account into the current price. Un...
by LFKB
Tue Apr 07, 2015 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Might Go $4,000 AAPL
Replies: 68
Views: 5976

Re: Might Go $4,000 AAPL

Apple is a wonderful company. AAPL is also a quite expensive stock. 15 years ago, Microsoft stocks (MSFT) looks like a sure winner. I checked on Morningstar and the annual result on the last 15 years for MSFT is -0.32% :( If you really want to speculate, find a company and sector that is currently ...
by LFKB
Tue Apr 07, 2015 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: Nailed it! $223,199/yr: magic# for making it in SF Bay Area
Replies: 117
Views: 12512

Re: Nailed it! $223,199/yr: magic# for making it in SF Bay A

$1.5 million house on $223k seems like quite the stretch. A 30 year at 4% would be ~$87k per year + ~$18k property taxes = $105k on housing alone (excluding insurance). Our joint income is around $800k and people on here tell me I shouldn't be spending $100k on housing! You left out property taxes, ...
by LFKB
Tue Apr 07, 2015 12:38 am
Forum: Investing - Theory, News & General
Topic: Mohamed El-Erian Has Most of His Money in Cash
Replies: 69
Views: 8318

Re: Mohamed El-Erian Has Most of His Money in Cash

My friend overheard him at a Range Rover dealership in Newport Beach. The employee asked him how much he made per month and his answer was "just put $2 million."
by LFKB
Mon Mar 30, 2015 6:24 pm
Forum: Investing - Help with Personal Investments
Topic: What makes my marginal tax rate behave like this?
Replies: 15
Views: 2008

Re: What makes my marginal tax rate behave like this?

I don't know the answer to your question, but at $830k of annual dividends you sound plenty rich to hire an accountant to explain it to you
by LFKB
Mon Mar 30, 2015 12:42 pm
Forum: Personal Finance (Not Investing)
Topic: Another can I afford this house thread
Replies: 11
Views: 1185

Re: Another can I afford this house thread

I guess it depends on how much your current spend is excluding your mortgage/rent and what your after tax income is per year. The way I look at it (we are considering purchasing a first home) is: After tax income Less: normal spend (not on housing) Less: housing cost with the new mortgage (including...
by LFKB
Sun Mar 29, 2015 11:10 pm
Forum: Investing - Theory, News & General
Topic: Best Way to Visualize Compounding
Replies: 40
Views: 3709

Re: Best Way to Visualize Compounding

The way I've heard it described visually is that it's like a snowball rolling down a hill that keeps building. As the snowball gets bigger it picks up more and more snow because the surface area increases. Something along those lines.
by LFKB
Sun Mar 29, 2015 11:40 am
Forum: Investing - Theory, News & General
Topic: How many of you invest in individual stocks?
Replies: 70
Views: 5654

Re: How many of you invest in individual stocks?

I own some Google and Apple stock but that's it. I believe those two companies will continue to be the dominant technologies of this generation and they seem to be making the right moved to keep from being passed up by others. We'll see. I own about $20k in each.
by LFKB
Thu Mar 26, 2015 3:45 pm
Forum: Personal Finance (Not Investing)
Topic: how much mortgage would you be comfortable with?
Replies: 43
Views: 4859

Re: how much mortgage would you be comfortable with?

To the other posters, I would argue that the mortgage to gross income multiple should be higher for high earning families. Don't forget, we have a very "progressive" income tax system in this country. At higher incomes, using gross income is probably not always the best idea.... I mention...
by LFKB
Thu Mar 26, 2015 10:38 am
Forum: Personal Finance (Not Investing)
Topic: how much mortgage would you be comfortable with?
Replies: 43
Views: 4859

Re: how much mortgage would you be comfortable with?

To the other posters, I would argue that the mortgage to gross income multiple should be higher for high earning families. The family making $1M a year is 10x higher in terms of income relative to the family making $100k a year, but may spend only 3x on normal monthly non housing expenses, so there...
by LFKB
Thu Mar 26, 2015 12:35 am
Forum: Personal Finance (Not Investing)
Topic: how much mortgage would you be comfortable with?
Replies: 43
Views: 4859

Re: how much mortgage would you be comfortable with?

Jeff D, A comment from thewhitecoatinvestor.com site comes to mind... "Debt never sleeps...". With one more year of focused effort, you could kill the loan debt and increase your down payment while renting. You avoid paying interest twice basically on studen loan debt and mortgage debt an...
by LFKB
Wed Mar 25, 2015 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: how much mortgage would you be comfortable with?
Replies: 43
Views: 4859

Re: how much mortgage would you be comfortable with?

OP, how much is your after tax income and how much do you spend on everything else other than housing inp a year? The key is to know your after tax income, how much you spend on everything else, and then with whatever is left come up with an allocation for X% to mortgage payments and Y% to savings. ...
by LFKB
Thu Mar 12, 2015 10:59 pm
Forum: Personal Finance (Not Investing)
Topic: Help Explain Turbo Tax Calculation of "Federal Taxes You Ow"
Replies: 2
Views: 406

Re: Help Explain Turbo Tax Calculation of "Federal Taxes You

I was able to figure it out. The table and calculators I was using do not factor in AMT, which bridged the difference.
by LFKB
Thu Mar 12, 2015 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: Help Explain Turbo Tax Calculation of "Federal Taxes You Ow"
Replies: 2
Views: 406

Help Explain Turbo Tax Calculation of "Federal Taxes You Ow"

Turbo Tax says the "Federal Taxes I Owe" are $91,892. My federal taxes withheld according to Turbo Tax are $83,852 (which includes $82,414 federal taxes withheld from my W-2 and $1,438 Additional Medicare Tax from my W-2). So according to Turbo Tax I owe $8,040 in federal taxes. Turbo Tax ...
by LFKB
Sun Mar 08, 2015 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Re: Help Me Calculate My Monthly Housing Cost

You should use something like TurboTax to actually calculate the tax impact. Because of AMT and various phaseouts it's not necessarily as straightforward as you present. Ok thanks. I will look into that. My general understanding of the tax deductiblity of interest (limited to $1.1M principal value)...
by LFKB
Sun Mar 08, 2015 4:37 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Re: Help Me Calculate My Monthly Housing Cost

NotWhoYouThink wrote:One reason to model this in tax software is that these deductions may push you into AMT, or maybe you are already there. In which case there will be no federal tax savings on the property tax. Lots of moving parts here.


Which tax software do you recommend?
by LFKB
Sun Mar 08, 2015 4:37 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Re: Help Me Calculate My Monthly Housing Cost

You should use something like TurboTax to actually calculate the tax impact. Because of AMT and various phaseouts it's not necessarily as straightforward as you present. Ok thanks. I will look into that. My general understanding of the tax deductiblity of interest (limited to $1.1M principal value)...
by LFKB
Sun Mar 08, 2015 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Re: Help Me Calculate My Monthly Housing Cost

You didn't state the term of the mortgage. Here's an online Interest-only mortgage calculator . A 30 year mortgage, 7 year interest only, $ 2M amount, 2.5% results in (view report): 84 monthly payments of $4,166.67 ($50k/ year) 276 monthly payments of $9,535.61 Total payments: $2,981,829.65 Total i...
by LFKB
Sun Mar 08, 2015 3:52 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Re: Help Me Calculate My Monthly Housing Cost

You should use something like TurboTax to actually calculate the tax impact. Because of AMT and various phaseouts it's not necessarily as straightforward as you present. Ok thanks. I will look into that. My general understanding of the tax deductiblity of interest (limited to $1.1M principal value)...
by LFKB
Sun Mar 08, 2015 3:43 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Re: Help Me Calculate My Monthly Housing Cost

Why are you looking at an Interest-Only Mortgage loan? It's a lower interest rate than a fixed and still gives the flexibility to pay down principal at anytime if we choose. At 1.95% tax effected cost of debt I don't necessarily see the need to pay down principal though, I would rather have the mon...
by LFKB
Sun Mar 08, 2015 3:30 pm
Forum: Personal Finance (Not Investing)
Topic: Help Me Calculate My Monthly Housing Cost
Replies: 14
Views: 757

Help Me Calculate My Monthly Housing Cost

We are in the market for a first home. I want to make sure I am calculating the monthly cost correctly and thinking through everything. For hypothetical purposes let's say the house is $2.75M, the mortgage is $2 million and assume a 40% tax rate. 7 year interest only loan at 2.5%: $50k per year. Cal...
by LFKB
Thu Feb 19, 2015 11:04 pm
Forum: Investing - Help with Personal Investments
Topic: Is there a site that shows past/present market cap data?
Replies: 15
Views: 482

Re: Is there a site that shows past/present market cap data?

I don't know what the 4 to 1 rule is either. I think maybe he means that TSM is about 80% large cap and 20% mid and small cap? I think the actual percentage is 70% large, 20% mid and 10% small but it all depends on what parameters you set for small, Mid and large.
by LFKB
Thu Feb 19, 2015 10:16 pm
Forum: Investing - Theory, News & General
Topic: The 8x retirement savings rule
Replies: 83
Views: 8759

Re: The 8x retirement savings rule

So if I make $1 million per year but spend $20k per year I need $8 million to retire? This is why the rule of thumb around here is based on spend in retirement, not income pre retirement.
by LFKB
Tue Dec 09, 2014 2:46 am
Forum: Investing - Theory, News & General
Topic: Update: 6 years into Buffett's Bet With Hedge Funds
Replies: 24
Views: 3043

Re: Update: 6 years into Buffett's Bet With Hedge Funds

Not all hedge funds and private equity are bad. They are certainly more risky and less diversified, but I invested in a PE fund which is marked at 3.5x the original investment amount after just one year.
by LFKB
Mon Dec 08, 2014 8:01 pm
Forum: Investing - Help with Personal Investments
Topic: High(ish) earner; spending too much?
Replies: 71
Views: 9639

Re: High(ish) earner; spending too much?

Sounds reasonable enough to me. I make about the same amount as you and my fiance makes a bit less than I do so combined we make quite a bit more. We are 28 and spend a decent amount (about $100k per year before rent). We probably travel 15-18 times per year with one week to week and a half trip and...
by LFKB
Mon Dec 08, 2014 1:59 am
Forum: Investing - Help with Personal Investments
Topic: Start saving for House downpayment using Wellesley?
Replies: 35
Views: 3638

Re: Start saving for House downpayment using Wellesley?

Seems reasonable to me as long as you are okay with the tax inefficiency aspect of Wellseley. It's highly unlike that you get a 20% drop as others have said; that would equate to about a 60% drop in the equity portion assuming the bonds hold up.
by LFKB
Wed Dec 03, 2014 12:56 am
Forum: Personal Finance (Not Investing)
Topic: Do we have too much house?
Replies: 45
Views: 4745

Re: Do we have too much house?

I will never understand the posters that say "if you are asking then you probably know." Clearly the OP is asking because he/she doesn't know and wants feedback from more knowledgable posters. Agree that the math is fuzzy. Impossible to answer the question without clarifying what the true ...
by LFKB
Tue Dec 02, 2014 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: Share your networth progression
Replies: 226
Views: 49171

Re: Share your networth progression

/.[/quote] Your working career was under 6 years? How old are you? Is your wife still working? Seems like a very small amount to retire off of if you're young.[/quote] I worked 5 years and retired at 34 (spent a long time in school). My spending, including childcare, comes to $20-25K/year, with a pa...
by LFKB
Tue Dec 02, 2014 9:56 pm
Forum: Personal Finance (Not Investing)
Topic: Share your networth progression
Replies: 226
Views: 49171

Re: Share your networth progression

My progression: 1/1/09: -$210K (started working this year) 1/1/10: -$120K 1/1/11: -$35K 1/1/12: $150K 1/1/13: $300K 1/1/14: $510K 8/1/14: $690K (retired) I averaged income a bit over $200K/year and had substantial investment/trading gains to help. If you include my wife's assets, we are over $1mn. ...
by LFKB
Sun Nov 23, 2014 4:25 pm
Forum: Personal Consumer Issues
Topic: 23 year old... Can I afford a Rolex?
Replies: 167
Views: 18578

Re: 23 year old... Can I afford a Rolex?

For $5,000 you could buy 500 malaria nets and save about two lives . Sounds like a lot more fun to me than having a watch that's nice to look at! :beer How many malaria nets have you bought? Peter Singer has recently convinced me that most of the money I've been sending towards retirement savings s...
by LFKB
Sun Nov 23, 2014 10:45 am
Forum: Personal Consumer Issues
Topic: 23 year old... Can I afford a Rolex?
Replies: 167
Views: 18578

Re: 23 year old... Can I afford a Rolex?

backpacker wrote:For $5,000 you could buy 500 malaria nets and save about two lives. Sounds like a lot more fun to me than having a watch that's nice to look at! :beer


How many malaria nets have you bought?
by LFKB
Sun Nov 23, 2014 10:40 am
Forum: Personal Consumer Issues
Topic: 23 year old... Can I afford a Rolex?
Replies: 167
Views: 18578

Re: 23 year old... Can I afford a Rolex?

I think some of the "well if invested it would be $120k in 45 years. Are you willing to pay $120k for a watch?" posts are a bit over the top. It's good to know the lost opportunity cost for perspective but if you multiple everything by a future value of 25x you would never buy anything. Is...
by LFKB
Wed Nov 05, 2014 12:33 am
Forum: Investing - Theory, News & General
Topic: 27 yr old reaches $1m net worth [Update: With lies.]
Replies: 56
Views: 13606

Re: 27 yr old reaches $1m net worth

Good for him. He seems like a very good Investor that timed things well. I (we) actually achieved the same goal at 27 but without any real estate through duel income, saving a majority of our earnings and investing. We also each had the benefit of having the vast majority of our college educations p...
by LFKB
Tue Oct 14, 2014 6:58 pm
Forum: Investing - Theory, News & General
Topic: Why does the stock market beat inflation?
Replies: 62
Views: 3516

Re: Why does the stock market beat inflation?

I still am having trouble getting my brain around why stocks increase on the average a massive 8%/year if inflation only increases 2-3%/year on average. It seems like a fairly simple concept and one that a few posters (myself included) have answered more than adequately in this thread. What is it t...
by LFKB
Tue Oct 14, 2014 2:35 pm
Forum: Investing - Theory, News & General
Topic: Why does the stock market beat inflation?
Replies: 62
Views: 3516

Re: Why does the stock market beat inflation?

Assuming a constant P/E or other valuation metric, stocks would theoretically match inflation if companies only increased their earnings due to inflation. Earnings increase due to technological innovation, operational efficiency, population growth, inflation, synergies and so on, all of which allow ...
by LFKB
Tue Oct 14, 2014 12:24 am
Forum: Personal Finance (Not Investing)
Topic: Fidelity AMEX: Close Saphire and SPG
Replies: 14
Views: 2654

Re: Fidelity AMEX: Close Saphire and SPG

If you use sapphire on travel and restaurants you get double points which are worth about 2 cents each for Southwest flights, so equivalent to 4% yield. The SPG card gets you 1 points per dollar but they're valued at about 2.5 to 3 cents for Starwood hotels. Your call if you value the cash back vs t...
by LFKB
Wed Sep 24, 2014 12:06 pm
Forum: Personal Finance (Not Investing)
Topic: What Is the Best Way to Shop Mortgage Rates
Replies: 7
Views: 902

What Is the Best Way to Shop Mortgage Rates

I have been working with a lender who has been very helpful and referred by some friends but I want to confirm the rate is the lowest I can possibly get. What is the best way to check? I am looking at a 7/1 interest only jumbo so most of the rate comparison sites are not helpful. Should I just cold ...
by LFKB
Thu Sep 18, 2014 9:43 pm
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 35
Views: 5089

Re: Alibaba is NOT coming to an index near you

So it will not be in any Vanguard indexes correct?

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