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Re: Help me save my parents from Merrill Lynch

When 401ks were first came about I and others warned that thieves and charlatans would try to con the ordinary folks that they needed high priced "expert" advice. I wrote memos about it to warn my colleagues that sharks smelled blood and wanted their share. Professor E, Therein is the rub...
by Professor Emeritus
Thu Jul 31, 2014 8:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me save my parents from Merrill Lynch
Replies: 54
Views: 5409

Re: Help me save my parents from Merrill Lynch

Professor E, It's important to separate an academic argument for low-cost index-investing (which I agree with) from the real lives of people who don't have the temperament or time to devote to reading the literature or managing their investments. I'll give you another family example: one of my sibl...
by Professor Emeritus
Thu Jul 31, 2014 5:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me save my parents from Merrill Lynch
Replies: 54
Views: 5409

Re: The Boglehead-prisoner’s dilemma.

Johm221122 wrote:I'm suprised this isn't locked :?:

John


It's a "locked box" problem so it started "locked"

Just restate it as

You want to invest 2 million dollars and absolutely agree there will be no transactions of any kind for 15 years. What would you invest in?
by Professor Emeritus
Thu Jul 31, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: The Boglehead-prisoner’s dilemma.
Replies: 26
Views: 2996

Re: Help me save my parents from Merrill Lynch

Yes it came at the price of 1-2% a year in expense ratios on the actively managed funds. . So if his rate of return was 5% per year (typical for low risk investments) you think it was a good deal to give 20-40% of that to the advisor? This is why most thoughtful academics say ordinary people of mod...
by Professor Emeritus
Thu Jul 31, 2014 5:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me save my parents from Merrill Lynch
Replies: 54
Views: 5409

Re: Principal Residence = Poor Investment?

I realize one can't generalize, but that still doesn't keep us from investing in stocks, since they still go up four years in five . (Seriously generalization). My main premise is that owning a house over the long term (more than three years, or whatever) is better than renting. Greg 3 years is a v...
by Professor Emeritus
Wed Jul 30, 2014 10:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 66
Views: 3770

Re: Principal Residence = Poor Investment?

When you are renting a home the investment-owner does not perform the maintenance, pay the taxes insurance etc. as charitable acts to your benefit. Those costs are part of the rent. Real estate has significant costs period and you can't escape them by renting or hold them up to "prove" th...
by Professor Emeritus
Wed Jul 30, 2014 6:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 66
Views: 3770

Re: Principal Residence = Poor Investment?

When you are renting a home the investment-owner does not perform the maintenance, pay the taxes insurance etc. as charitable acts to your benefit. Those costs are part of the rent. Real estate has significant costs period and you can't escape them by renting or hold them up to "prove" th...
by Professor Emeritus
Wed Jul 30, 2014 6:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 66
Views: 3770

Re: Principal Residence = Poor Investment?

rZ You have to live someplace. You can buy, or you can rent. When you rent, at the end, all you have are rent receipts. The rent receipts are worth nothing. When you buy, at the end you have a house. It is worth something. Over time, renting gets more expensive. Owning gets more expensive, but it d...
by Professor Emeritus
Wed Jul 30, 2014 2:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 66
Views: 3770

Re: How to keep family informed

jebmke wrote:
sscritic wrote:even the one I opened just before I had a heart attack and died slumped over my computer, still logged into my Vanguard account.

The Account Upgrade didn't work for you either?



Widows 8
by Professor Emeritus
Wed Jul 30, 2014 5:21 am
 
Forum: Personal Finance (Not Investing)
Topic: How to keep family informed
Replies: 34
Views: 2133

Re: Advice on getting a power adapter

6VDC and 1 AMP is a very common power output. The trickier part is getting the connector right. Radio Shack sells the power adapter with interchangeable connectors; if you take the device in, they can match it up for you. This has worked for me in the past when I needed to replace a power supply an...
by Professor Emeritus
Wed Jul 30, 2014 5:19 am
 
Forum: Personal Consumer Issues
Topic: Advice on getting a power adapter
Replies: 13
Views: 659

Re: Where to keep "emergency fund" and how much to keep in b

I use Vanguard intermediate muni fund. You can write checks if needed. I keep more than a few thousand there though. I keep about 10 k in Fido cash account. Excess cash goes to Vanguard. While I am a Vanguard flagship customer , I never write "checks" on a vanguard account. I transfer the...
by Professor Emeritus
Wed Jul 30, 2014 5:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Where to keep "emergency fund" and how much to keep in bank?
Replies: 19
Views: 2673

Re: Principal Residence = Poor Investment?

rZ You have to live someplace. You can buy, or you can rent. When you rent, at the end, all you have are rent receipts. The rent receipts are worth nothing. When you buy, at the end you have a house. It is worth something. Over time, renting gets more expensive. Owning gets more expensive, but it d...
by Professor Emeritus
Wed Jul 30, 2014 4:58 am
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 66
Views: 3770

Re: Advice on getting a power adaptor

I know that V=IR. I also know that I have a home blood pressure monitor (Omron HEM780). It came with an adapter but that has ran away and hid. It does work with 4 AA batteries but they run out quickly. I looked at the specs for the adapter from the manual: Input: AC 100 - 240 Volts (I assume this j...
by Professor Emeritus
Tue Jul 29, 2014 10:38 pm
 
Forum: Personal Consumer Issues
Topic: Advice on getting a power adapter
Replies: 13
Views: 659

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

I get you have to compare apples to apples, but I'm trying to justify the move to Vanguard total stock market index when the funds I'm currently in have outperformed over an 8 year period. I chose 8 because that's where my records started. You stated "still liking janus" when you only sho...
by Professor Emeritus
Tue Jul 29, 2014 4:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 3823

Re: How to handle a company that won't honor a warranty?

Objectively, Since you didn't provide warranty wording, I'll make the following assumptions, until you provide further detail: - the warranty says defects are covered for 5 years - normal wear & tear isn't covered So, a part stops working after 4 years ... on what basis did you determine that i...
by Professor Emeritus
Tue Jul 29, 2014 3:17 pm
 
Forum: Personal Consumer Issues
Topic: How to handle a company that won't honor a warranty?
Replies: 23
Views: 1410

Re: How to handle a company that won't honor a warranty?

I taught this area for many years. start with http://www.business.ftc.gov/documents/b ... aw#stating

No defects do not have to show up right away.
the legal term is a "latent defect"
Exclusions have to be clearly stated etc.
by Professor Emeritus
Tue Jul 29, 2014 2:51 pm
 
Forum: Personal Consumer Issues
Topic: How to handle a company that won't honor a warranty?
Replies: 23
Views: 1410

Re: CSRS and SS, check my logic

heerekj1 wrote:I get 50%.


if it is CSRS you should get 55%
by Professor Emeritus
Tue Jul 29, 2014 1:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: CSRS and SS, check my logic
Replies: 24
Views: 1310

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

Ok..found this site, thought I should make things easier and invest in index founds at Vanguard. Saw how most funds don't even beat the index. To be honest, I never compared Janus' performance with anything else. I was ready to move my wife and my SEPs and Roths when I decided to look closely at th...
by Professor Emeritus
Tue Jul 29, 2014 1:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 3823

Re: state pension

Many school teachers are not in SS. They get pensions from "uncovered" work. They need to consider WEP and GPO. Many state workers are in SS. They don't get pensions from "uncovered" work. They don't need to worry about WEP and GPO. There is a difference between being out and be...
by Professor Emeritus
Mon Jul 28, 2014 4:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2616

Re: state pension

The windfall elimination provision might ding your social security. It's based on idea that collecting both social security and another government pension is some kind of double dipping. IRS probably still has a publication listing contact people for your state regarding Federal, State, and Local G...
by Professor Emeritus
Mon Jul 28, 2014 4:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2616

Re: Where to place 2nd tier emergency fund

FWIW we have always kept what you call the "second tier" money in Wellesley. It includes any money we might need while deferring SS, any money beyond a years living expenses. (We have DB pensions) and catastrophe money related to health care. In taxable or tax deferred if I can be so bold...
by Professor Emeritus
Mon Jul 28, 2014 2:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where to place 2nd tier emergency fund
Replies: 16
Views: 1504

Re: Where to place 2nd tier emergency fund

FWIW we have always kept what you call the "second tier" money in Wellesley. It includes any money we might need while deferring SS, any money beyond a years living expenses. (We have DB pensions) and catastrophe money related to health care.
by Professor Emeritus
Mon Jul 28, 2014 1:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where to place 2nd tier emergency fund
Replies: 16
Views: 1504

Re: state pension

If you take the 60K and invest it for 27 years with a 6% return, you'll end up with approximately 300K. (of course, you'd likely want to shift to less risk/less return as your retirement date draws closer) Is that better or worse than the pension payment options you will have? How stable is the pen...
by Professor Emeritus
Mon Jul 28, 2014 11:27 am
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2616

Re: Help me save my parents from Merrill Lynch

Given that they have TIAA-CREF they must have been K-12 teachers or college faculty or staff. Why don't you feel as though they can make their own decisions? Many academics are very proud of their complete lack of financial savvy. They are not "proud" of it, but when you spend your life a...
by Professor Emeritus
Mon Jul 28, 2014 11:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me save my parents from Merrill Lynch
Replies: 54
Views: 5409

Re: state pension

If you take the 60K and invest it for 27 years with a 6% return, you'll end up with approximately 300K. (of course, you'd likely want to shift to less risk/less return as your retirement date draws closer) Is that better or worse than the pension payment options you will have? How stable is the pen...
by Professor Emeritus
Mon Jul 28, 2014 10:31 am
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2616

Re: state pension

If you take the 60K and invest it for 27 years with a 6% return, you'll end up with approximately 300K. (of course, you'd likely want to shift to less risk/less return as your retirement date draws closer) Is that better or worse than the pension payment options you will have? How stable is the pen...
by Professor Emeritus
Mon Jul 28, 2014 9:15 am
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2616

Re: state pension

Hello, I am 35 years old. For the past 14 years I worked for a state university and I was enrolled in state pension (not a 403b). Six months ago I left my job for a position at a private university. My current balance in the pension fund is close to $60,000. As far as I understand I have two option...
by Professor Emeritus
Mon Jul 28, 2014 9:14 am
 
Forum: Investing - Help with Personal Investments
Topic: state pension
Replies: 43
Views: 2616

Re: POLL: My home is worth less/more in 2014 than in 2007?

My FIL died in Dec 2006. Estate tax FMV valued the house at 800k. Step MIL died this past December so we are selling the house. As is where is it is worth less than 700K. If all maintenance had been promptly done, (it wasn't ) value would be 725K. So about a 10% decline House is just outside the Bel...
by Professor Emeritus
Mon Jul 28, 2014 9:04 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: My home is worth less/more in 2014 than in 2007?
Replies: 82
Views: 4054

Re: Vanguard sued for charging too little

No way the guy will win. I have to figure that between teh various federal attorneys, a whole bunch of them own Vanugard funds. And if the guy wins? So Vanguard will first discontinue it's charitable giving, raise it's expense ratio as needed and distribute less in dividends. So I guess the guy Van...
by Professor Emeritus
Sun Jul 27, 2014 10:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard sued for charging too little
Replies: 114
Views: 11506

Re: Vanguard sued for charging too little

JamesSFO wrote:
Professor Emeritus wrote:According to the complaint
...


Maybe I missed it but can someone post a link to the complaint itself?



My apologies I thought I had

http://taxprof.typepad.com/files/vanguard-complaint.pdf
by Professor Emeritus
Sun Jul 27, 2014 8:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard sued for charging too little
Replies: 114
Views: 11506

Re: Vanguard sued for charging too little

I'm not sure what "surplus funds" means. I'm an accountant by trade so maybe I'm thinking with the wrong hat on. I think of surplus funds as a positive cash balance, which is unrelated to taxation. Taxes are based on profits. Some firms are very profitable but have no cash to speak of. Ot...
by Professor Emeritus
Sun Jul 27, 2014 7:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard sued for charging too little
Replies: 114
Views: 11506

Re: Saving for Adoption

I wish everyone the best, and there are several wonderful adopted children in our extended family. But just this once I wish the decision on adoption were made with the best interests of the child at heart, rather than treated as a consumer purchase.
by Professor Emeritus
Sun Jul 27, 2014 1:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Saving for Adoption
Replies: 14
Views: 1263

Re: Help me save my parents from Merrill Lynch

Feel free to quote me. I am an attorney, and at one time a full Professor in Consumer Economics. IMHO no ordinary person wants or needs or benefits fr0m an account at Merrill Lynch. Their fees are huge and they have NOTHING special to offer. Fidelity , Schwab and Vanguard have different services and...
by Professor Emeritus
Sun Jul 27, 2014 11:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me save my parents from Merrill Lynch
Replies: 54
Views: 5409

Re: Stop Extra Payment Toward Mortgage?

LeeMKE wrote: You have already figured out that you are adding equity faster than any investment you have.


He is paying off a debt. His ROI is simply the interest avoided. "Adding equity" is a meaningless real estate term. You have an asset and you owe a debt.

nothing more or less.
by Professor Emeritus
Sun Jul 27, 2014 11:36 am
 
Forum: Personal Finance (Not Investing)
Topic: Stop Extra Payment Toward Mortgage?
Replies: 31
Views: 1988

Re: Old people and financial advisors - a family tale

Lot's of people get ripped off in this industry, so these stories are unfortunate. But, if folks don't want to educate themselves about the industry and either 1) DIY or 2) FInd a good fee only advisor then that's their fault. I see you agree with Calvera: If God didn't want them sheared, he would ...
by Professor Emeritus
Sun Jul 27, 2014 6:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 75
Views: 5508

Re: Possibility of getting sued - what steps to take

reducing the uncertainty in such cases is one of the reasons you buy liability insurance. There is absolutely NO way to tell from your post if there is any kind of case, but I carry a large personal liability policy so that I don't have to worry about it
by Professor Emeritus
Sat Jul 26, 2014 10:39 pm
 
Forum: Personal Consumer Issues
Topic: Possibility of getting sued - what steps to take
Replies: 25
Views: 3609

Re: Vanguard sued for charging too little

The key is not the charging too little , it is the use of non arms length transactions to accumulate of a 1.5 billion dollar fund on which no taxes have been paid. As an analogy Think of a for profit entity that controls a non profit and uses the non profit to accumulate untaxed revenues that are th...
by Professor Emeritus
Sat Jul 26, 2014 10:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard sued for charging too little
Replies: 114
Views: 11506

Re: Old people and financial advisors - a family tale

the motto of the financial adviser is from the magnificent 7



Calvera: If God didn't want them sheared, he would not have made them sheep.
by Professor Emeritus
Sat Jul 26, 2014 3:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 75
Views: 5508

Re: A question on long term care insurance

Are you a Genworth customer? If so, do you feel that they paid you adequately? I am an agent that represents Genworth. I believe the question deals with actually getting paid for claims i.e. the consumer experience. FWIW I am a Genworh customer for term life insurance and annuities and have never h...
by Professor Emeritus
Sat Jul 26, 2014 1:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: A question on long term care insurance
Replies: 18
Views: 938

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

You get what you pay for. Clearly the higher income spouse was an "undesirable" marriage partner or they would have netted a higher income spouse. That is what trophy spouses are all about. :oops: My wife had more assets but I had more income. I am still trying to figure out who was the t...
by Professor Emeritus
Fri Jul 25, 2014 11:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5222

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

[method using marginal increase in tax] Easy but clearly unfair to the lower income spouse . But the lower income spouse is living a lifestyle 10 times what would be affordable on one low income. The lower income spouse struck it rich! That should come at a price. So what is unfair to whom? You get...
by Professor Emeritus
Fri Jul 25, 2014 10:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5222

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

Do full tax return w/ both incomes. $A tax. Delete income for spouse 1: $B tax Add back income for spouse 1, delete income for spouse 2: $C tax Say this produces the following example numbers: * both = $100K * spouse 1 = $15K * spouse 2 = $95K Probably the easiest calculation would then be: * spous...
by Professor Emeritus
Fri Jul 25, 2014 2:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5222

Re: 500K Sitting in a Bank Account

Handled exactly this problem with a series of laddered CDs
by Professor Emeritus
Thu Jul 24, 2014 1:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: 500K Sitting in a Bank Account
Replies: 17
Views: 1587

Re: Rich Spouse, Poor Spouse

DW has always had separate assets. We both had earned income. We filed jointly and she paid the full marginal excess tax due to her asset based income.
by Professor Emeritus
Thu Jul 24, 2014 1:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5222

Re: Vanguard Account Owners - has this happened to you?

sscritic wrote:The only strange things that have happened to me were the result of pilot error. The controls were just too complicated for this old brain.


Actually "over complicated" controls are design error, not user error. Its a big area in medical negligence/malpractice on computerized equipment
by Professor Emeritus
Thu Jul 24, 2014 1:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Account Owners - has this happened to you?
Replies: 17
Views: 2636

Re: Anyone attend Worcester Polytechnic Institute

I agree, but how do you know which questions to ask if you've never done the job? . Ah, this is the $64,000,000 question . How do you develop qualified experts who are actually self critical of their own field? I've tackled this problem in Engineering design, Medical systems and higher education it...
by Professor Emeritus
Thu Jul 24, 2014 12:30 pm
 
Forum: Personal Consumer Issues
Topic: Anyone attend Worcester Polytechnic Institute
Replies: 45
Views: 2431

Re: Gold, Silver, Copper

"However USD can also be greatly reduced in value by government policies or truly overwhelming external events over which one has even less control than how they secure their gold (including making themselves the armed guards who can't be bribed). And the common hand wave of 'you'd have bigger...
by Professor Emeritus
Wed Jul 23, 2014 1:22 pm
 
Forum: Investing - Theory, News & General
Topic: Gold, Silver, Copper
Replies: 87
Views: 5011

Re: Gold, Silver, Copper

"However USD can also be greatly reduced in value by government policies or truly overwhelming external events over which one has even less control than how they secure their gold (including making themselves the armed guards who can't be bribed). And the common hand wave of 'you'd have bigger ...
by Professor Emeritus
Wed Jul 23, 2014 1:15 pm
 
Forum: Investing - Theory, News & General
Topic: Gold, Silver, Copper
Replies: 87
Views: 5011

Re: Gold, Silver, Copper

I am normally a big sceptic on gold BUT recent actions by the US to freeze bank accounts (eg connected to Iran) have meant more countries are using gold as a means of settlement (you can't freeze gold). That means there is a demand shift in favour of gold. I just don't know how big this could get, ...
by Professor Emeritus
Wed Jul 23, 2014 12:48 pm
 
Forum: Investing - Theory, News & General
Topic: Gold, Silver, Copper
Replies: 87
Views: 5011

Re: Gold, Silver, Copper

Renewable energy means big demands for grid infrastructure. Wind farms and solar farms tend to be in remote areas and they have to be hooked up to the grid, a major constraint. In the UK you add offshore wind. The future of power transmission is in long distance and international High Voltage DC li...
by Professor Emeritus
Wed Jul 23, 2014 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: Gold, Silver, Copper
Replies: 87
Views: 5011
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