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Re: Not Interested in Ever Owning Real Estate

owning has worked very well for me. It helps a lot that I think of home maintenance as more a hobby that a chore (most of the time). I like mowing the yard, a nice little walk. House prices here have gone way up in the 20 years I have been here. But home ownership is not for everyone. It ties you do...
by Rodc
Tue Mar 03, 2015 8:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Not Interested in Ever Owning Real Estate
Replies: 14
Views: 1271

Re: Any ever do a small addition on their house?

I have done one large and one small. House was a small ranch, smaller than yours, 2 bedrooms. We removed the attic and put on a full second floor with 3 bedrooms and bathrooms, and moved around walls on the first floor to open it up to make a nice living room, kitchen, tv room and office. New master...
by Rodc
Tue Mar 03, 2015 7:56 pm
 
Forum: Personal Consumer Issues
Topic: Any ever do a small addition on their house?
Replies: 7
Views: 478

Re: Taylor Larimore Honored

Very cool.

You are living a life well lived.
by Rodc
Tue Mar 03, 2015 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: Taylor Larimore Honored
Replies: 52
Views: 3708

Re: Do you consider mortgage payments as savings?

EXTRA payments on the Mortgage (I agree with grabiner on this) Two twins buy identically priced houses. Twin A takes a 10 year mortgage and pays it off at the scheduled 10 year mark. Twin B takes a 30 year mortgage and pays it off early at the 10 years mark. Twin B is saved more because his payment...
by Rodc
Tue Mar 03, 2015 2:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

If you asked 100 homeowners outside of BH whether their mortgage payment is an expense, my guess is that most would say yes, including both principal and interest. You're right that most homeowners would say their entire mortgage payment is an expense. But popularity of an idea doesn't make it righ...
by Rodc
Mon Mar 02, 2015 8:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

This raises the corollary question of why hold bonds with an expected return of 2% while paying a mortgage with a guaranteed rate of 3.25% (by paying it down)? A good question. To answer one has to factor in things like liquidity, taxes, loss of tax advantaged space, and matching funding. Not all o...
by Rodc
Mon Mar 02, 2015 9:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

People that do not count the house will buy less house. Is that like setting your alarm clock off by 15 minutes to "trick" yourself into getting up on time vs just being accurate and getting up on time, because, well it is when you need to get up? Personally I have never been able to fool...
by Rodc
Sun Mar 01, 2015 9:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

I did propose a definition in an earlier post that I will re-state here. Put in words, I consider savings to be ... Right. You proposed. Did you get agreement from the group? My point is not that no one made a proposal. My point is that without agreement on a definition no meaningful progress will ...
by Rodc
Sun Mar 01, 2015 7:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

I think I've figured out what's going on here. People are assuming that their house is not an asset, and that their mortgage is not a liability. They're pretending they don't exist. But it's simply not factually accurate. If you have a $200,000 mortgage, you owe the bank $200,000. If you have a $25...
by Rodc
Sun Mar 01, 2015 7:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

I did propose a definition in an earlier post that I will re-state here. Put in words, I consider savings to be ... Right. You proposed. Did you get agreement from the group? My point is not that no one made a proposal. My point is that without agreement on a definition no meaningful progress will ...
by Rodc
Sun Mar 01, 2015 7:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

I think you all are not debating whether or not mortgage (principle) counts as savings. You are sort of dancing around the question of what the definition of "savings" should be. If you actually came up with a definition the answer to the question would be clear. Has anyone wanted to expl...
by Rodc
Sun Mar 01, 2015 5:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Do you consider mortgage payments as savings?

I think you all are not debating whether or not mortgage (principle) counts as savings. You are sort of dancing around the question of what the definition of "savings" should be. If you actually came up with a definition the answer to the question would be clear. But it really does not mat...
by Rodc
Sun Mar 01, 2015 4:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 232
Views: 9702

Re: Debt Snowball with Variable Rates

I'd probably go after them in this order. I would re-evaluate if rates change. Who knows, we may be in a low interest environment for a long time. I would also limit discretionary spending until the debt was gone. $1.8k @ 5.5% ($50/month) $4.6k @ 4.6% ($25/month) $5.4k @ 2.88% ($63/month) Variable ...
by Rodc
Sun Mar 01, 2015 12:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Debt Snowball with Variable Rates
Replies: 6
Views: 621

Re: Do I have enough to retire at age 50?

How did you come up with that Net worth figure? Did you totally ignore the two pensions and SS? Including pensions and SS as part of networth is controversial and as far as I can tell a fairly new invention. Do it if you want, but it is not standard practice here or anywhere else. Of course you fac...
by Rodc
Sat Feb 28, 2015 7:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I have enough to retire at age 50?
Replies: 28
Views: 3823

Re: Subaru and Consumer Reports ratings

... Outback & Forester would be on my our short list to replace our Honda Odyssey. That being said, I am not convinced Subaru is any more reliable than other makes. One reason I chose my Cadillac CTS over a Subaru was because at the time the maintenance requirements for the turbo model were pre...
by Rodc
Fri Feb 27, 2015 9:40 pm
 
Forum: Personal Consumer Issues
Topic: Subaru and Consumer Reports ratings
Replies: 87
Views: 6640

Re: Do I have enough to retire at age 50?

I note that if you sell the house and invest $300K you might be able to generate that level of income with no work and perhaps less risk (4% withdrawal pretty much). The median household gets by on about $50K/year. You can certainly live on your wife's salary. May or may not be the lifestyle you are...
by Rodc
Fri Feb 27, 2015 3:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I have enough to retire at age 50?
Replies: 28
Views: 3823

Re: Approaching 50...What to expect?

Learn to adapt. It's a very underrated skill. As we get older we no longer have physical abilities and the memory we once had. Know your limitations and live within them. We know a couple about our age who decided to go ice skating a few weeks ago after not having done it for decades. The man fell ...
by Rodc
Fri Feb 27, 2015 2:51 pm
 
Forum: Personal Consumer Issues
Topic: Approaching 50...What to expect?
Replies: 108
Views: 9999

Re: Are remote starters bad for cars?

Any car this century ...(t)he maximum you should generally warm up your engine is as 'wander' said "when the temperature gauge starts to move". Such this century cars may exist, but my cars from this century do not have temperature gauges. :) They did mid-last century though. :) Some of u...
by Rodc
Fri Feb 27, 2015 1:50 pm
 
Forum: Personal Consumer Issues
Topic: Are remote starters bad for cars?
Replies: 41
Views: 2513

Re: Are remote starters bad for cars?

They are awesome inventions. Why should I spend 30 seconds in discomfort, when I can inefficiently burn fossil fuels that have been in the ground for millions of years? I wonder about that 30 seconds. None of the cars I've owned have warmed up the passenger cabin noticeably in 30 seconds of idle. W...
by Rodc
Fri Feb 27, 2015 12:48 pm
 
Forum: Personal Consumer Issues
Topic: Are remote starters bad for cars?
Replies: 41
Views: 2513

Re: Are remote starters bad for cars?

Any car this century ...(t)he maximum you should generally warm up your engine is as 'wander' said "when the temperature gauge starts to move".


Such this century cars may exist, but my cars from this century do not have temperature gauges. :)

They did mid-last century though. :)
by Rodc
Fri Feb 27, 2015 12:40 pm
 
Forum: Personal Consumer Issues
Topic: Are remote starters bad for cars?
Replies: 41
Views: 2513

Re: Are remote starters bad for cars?

Who told you to let the car warm up or idle for a few minutes? This is an old wives tale It was some old gray haired lady. I had a hard time figuring out if she was just somebody's old wife or really was a witch, and so she made me kind of nervous. I was only a teenager so I figured best to just go...
by Rodc
Fri Feb 27, 2015 11:39 am
 
Forum: Personal Consumer Issues
Topic: Are remote starters bad for cars?
Replies: 41
Views: 2513

Re: Illiquid Assets

returns can be increased by increasing risk. The is false on its face. It you could increase returns simply by increasing risk you would have decreased risk. 2+2= 5 if and only if 2+2=4 cannot be true because it is internally inconsistent. You can increase expected return by increasing risk, but si...
by Rodc
Fri Feb 27, 2015 8:10 am
 
Forum: Investing - Theory, News & General
Topic: Illiquid Assets
Replies: 37
Views: 2645

Re: Are remote starters bad for cars?

I would be worried about the effect on the engine by warming at idle in the winter. When the engine is cold, lubrication is at its worst, and you would be prolonging operation with poor lubrication. As I recall, auto owners manuals suggest immediately after starting to drive at moderate speeds to w...
by Rodc
Fri Feb 27, 2015 8:00 am
 
Forum: Personal Consumer Issues
Topic: Are remote starters bad for cars?
Replies: 41
Views: 2513

Re: Subaru and Consumer Reports ratings

I live in the North East with this year's near record snow. I have a 2009 Forester, base model. It gets a fair amount of abuse hauling stuff to the dump, hauling scouts and camping gear, hauling climbing gear winter and summer. It is great in the snow. No problems, just over 100,000 miles. It goes s...
by Rodc
Thu Feb 26, 2015 12:48 pm
 
Forum: Personal Consumer Issues
Topic: Subaru and Consumer Reports ratings
Replies: 87
Views: 6640

Re: 10 Interesting facts about the S&P500

So, when you download the Shiller data that lists price, dividend, and earnings for the S&P composite back to 1871, what exactly is it really showing? Sounds like a nice little Google project as to how that reconstruction was performed. I recall, hazily, that the Fama-French reconstruction of t...
by Rodc
Thu Feb 26, 2015 7:19 am
 
Forum: Investing - Theory, News & General
Topic: 10 Interesting facts about the S&P500
Replies: 28
Views: 3549

Re: 10 Interesting facts about the S&P500

Cap weighted indexes systematically overweight the most expensive stocks and underweight the cheapest. That's how they're designed. Some would say that's a fatal flaw. The problem with that logic is the following. Company A has sales of X and profits Y and 1000 shares that sell for $Z. Company B ha...
by Rodc
Wed Feb 25, 2015 6:42 pm
 
Forum: Investing - Theory, News & General
Topic: 10 Interesting facts about the S&P500
Replies: 28
Views: 3549

Re: 10 Interesting facts about the S&P500

Speaking of streaks and interesting patterns, since 1928 the S&P 500 has had more than 50 instances where it's advanced at least eight days in a row.


Pretty good for an index started in 1957...
by Rodc
Tue Feb 24, 2015 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: 10 Interesting facts about the S&P500
Replies: 28
Views: 3549

Re: Value investing doesn't even beat the S&P 500

The methodology cited in this article and the also mentioned Dalbar study is flawed and can overstate the performance gap between investor and index returns. As others mentioned, this has nothing to do with value as even straight index investors can seem to suffer the same fate. The Finance Buff do...
by Rodc
Tue Feb 24, 2015 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Value investing doesn't even beat the S&P 500
Replies: 45
Views: 4323

Re: How much did you have saved up for retirement at age 30?

Zero. I was still in grad school.

It was enough because I am nearing retirement and all is well.
by Rodc
Tue Feb 24, 2015 1:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: How much did you have saved up for retirement at age 30?
Replies: 172
Views: 12146

Re: Thoughts on replacing tires?

In my experience, snow tires are a necessity on a rear wheel drive car. For front wheel drive, the all season tires do just fine. Of course, snow tires would be better on a front wheel drive car, but you would need them on all for wheels, and it is not really necessary. My front wheel drive cars ha...
by Rodc
Tue Feb 24, 2015 12:58 pm
 
Forum: Personal Consumer Issues
Topic: Thoughts on replacing tires?
Replies: 60
Views: 3433

Re: ? present value of soc sec and pension

Go to an insurance site. Find an insurance product that is close to each option. Get a quote. with a COLA on first $18,000 of up to 3% based on 50% of the CPI Are you in MA? I'm curious why you asked this, Rodc. Are MA residents in some sort of unique situation? MA state pensions behave this way (o...
by Rodc
Tue Feb 24, 2015 11:25 am
 
Forum: Investing - Theory, News & General
Topic: ? present value of soc sec and pension
Replies: 37
Views: 2855

Re: ? present value of soc sec and pension

Ignoring these "annuities" runs the risk of making allocation decisions too conservative, and the loss of possible accumulations becomes a real risk to longevity and lifestyle. And I do plan to hold about 8% of my equities portfolio in cash-like assets. No one is suggesting you ignore the...
by Rodc
Sun Feb 22, 2015 7:43 pm
 
Forum: Investing - Theory, News & General
Topic: ? present value of soc sec and pension
Replies: 37
Views: 2855

Re: ? present value of soc sec and pension

Ignoring these "annuities" runs the risk of making allocation decisions too conservative, and the loss of possible accumulations becomes a real risk to longevity and lifestyle. And I do plan to hold about 8% of my equities portfolio in cash-like assets. No one is suggesting you ignore the...
by Rodc
Sun Feb 22, 2015 7:23 pm
 
Forum: Investing - Theory, News & General
Topic: ? present value of soc sec and pension
Replies: 37
Views: 2855

Re: To Fence ... Or Not?

Glad to hear it worked out well.
by Rodc
Sun Feb 22, 2015 7:16 pm
 
Forum: Personal Consumer Issues
Topic: To Fence ... Or Not?
Replies: 93
Views: 8165

Re: Contradictory use of the term "Market Portfolio"

The historical data seems to indicate that these have not been the same fund, that value and small would be over-weighted in the latter.


I tried to address that in the three steps in a post above. Seems there are a few reasons why this might be so.
by Rodc
Sun Feb 22, 2015 3:17 pm
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: Contradictory use of the term "Market Portfolio"

RIght, and apologies for expanding my post... In casual use we recognize the existence of separate "markets." In technical use, what do financial economists say? For example, is "the market" equivalent to "all securities?" I think context matters, as it often does. We ...
by Rodc
Sun Feb 22, 2015 3:13 pm
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: When 60/40 just isn't appropriate

Rick Ferri wrote:By a perception of greater loss during a bear market for a retiree, I meant there is a perception that a market downturn is worse than if the same person was working and adding money to their account.

Rick Ferri


Right, I agree. Just commenting on the fact I think that is true, but even worse.
by Rodc
Sun Feb 22, 2015 12:10 pm
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13091

Re: Contradictory use of the term "Market Portfolio"

the fact that the cap weighted and tangency portfolios have in fact had different weights for small and value if you just take the measurable returns, variances and covariances at face value . Think that gets to a few things. 1) standard deviation is not really a complete measure of "risk"...
by Rodc
Sun Feb 22, 2015 12:08 pm
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: Contradictory use of the term "Market Portfolio"

A random question. Really just a question, don't look for a "point" here. In your personal opinion, are assets that are not "on the market" part of "the market portfolio?" There must be something in the back of someone's mind when they construct (and when Vanguard inde...
by Rodc
Sun Feb 22, 2015 10:38 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: Contradictory use of the term "Market Portfolio"

In the ordinary casual uses of the word, we assume that "the" stock market is a separate "market" from "the" bond market. On the other hand, we assume that the NYSE and the NASDAQ (and the is-it-nineteen others) are all part of "the" stock market. It must hav...
by Rodc
Sun Feb 22, 2015 10:32 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: Contradictory use of the term "Market Portfolio"

But an index fund is not holding "the market portfolio." It tries to hold a miniaturized replica of the market portfolio. No index fund exists that tries to be the total market portfolio. There are funds that try (and do a fine job) of holding miniature replicas of slices of the market po...
by Rodc
Sun Feb 22, 2015 10:22 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: Contradictory use of the term "Market Portfolio"

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCkQFjAA&url=https%3A%2F%2Fwww.chicagofed.org%2F~%2Fmedia%2Fpublications%2Feconomic-perspectives%2F1999%2Fep3q99-4-pdf.pdf&ei=5vLpVJuEEYOkgwT-jYTwBw&usg=AFQjCNE2-50NJ3k_TLVX0JQeG8mlid3t0w&sig...
by Rodc
Sun Feb 22, 2015 10:19 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: Contradictory use of the term "Market Portfolio"

But an index fund is not holding "the market portfolio." It tries to hold a miniaturized replica of the market portfolio. No index fund exists that tries to be the total market portfolio. There are funds that try (and do a fine job) of holding miniature replicas of slices of the market po...
by Rodc
Sun Feb 22, 2015 10:14 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: ? present value of soc sec and pension

Go to an insurance site. Find an insurance product that is close to each option. Get a quote. with a COLA on first $18,000 of up to 3% based on 50% of the CPI Are you in MA? I'm curious why you asked this, Rodc. Are MA residents in some sort of unique situation? MA state pensions behave this way (o...
by Rodc
Sun Feb 22, 2015 9:58 am
 
Forum: Investing - Theory, News & General
Topic: ? present value of soc sec and pension
Replies: 37
Views: 2855

Re: Contradictory use of the term "Market Portfolio"

In MPT the market portfolio is the cap weighted portfolio of all risky assets and it is assumed* that the tangency portfolio is the MP. Are you meaning to say that MPT assumes that, or do you mean that the internet assumes that? I don't see where MPT assumes that the tangency portfolio is the cap w...
by Rodc
Sun Feb 22, 2015 9:55 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: John Bogle on International Investing

Steve Dunn's remarks about international vs. domestic investments (and slice & dice) are interesting in regards to this discussion, originally found at: http://socialize.morningstar.com/NewSocialize/forums/t/162377.aspx ORDER OF IMPORTANCE IN MANAGING ONE'S FINANCIAL AFFAIRS: As a rather sluggi...
by Rodc
Sun Feb 22, 2015 9:50 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Contradictory use of the term "Market Portfolio"

I think the primary difference is different than you suggest. In MPT the market portfolio is the cap weighted portfolio of all risky assets and it is assumed* that the tangency portfolio is the MP. That is everything not the riskless asset. So it includes bonds to start, but also real estate. Then t...
by Rodc
Sun Feb 22, 2015 9:01 am
 
Forum: Investing - Theory, News & General
Topic: Contradictory use of the term "Market Portfolio"
Replies: 22
Views: 758

Re: When 60/40 just isn't appropriate

I suggest there is a greater perception of loss to a retiree who is withdrawing money. It is not just "perception of loss". If you sell shares they are gone, they do not recover. The loss is locked in and real. Agree there is also a perception issue s not all shares are sold. Just comment...
by Rodc
Sun Feb 22, 2015 7:40 am
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13091

Re: When 60/40 just isn't appropriate

History shows that over 30-40 years, stocks are almost certainly going to be the best investment. Why would I intentionally deviate from that advice when I am in retirement? If you are going to hold for 30 years and not sell that is one thing. If you are simply living off dividends that is one thin...
by Rodc
Sat Feb 21, 2015 8:57 pm
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13091

Re: Prom budget for teenage girl?

This is 2015. Do kids really still watch TV?


Yes.

On their phone or tablet.
by Rodc
Sat Feb 21, 2015 8:40 pm
 
Forum: Personal Consumer Issues
Topic: Prom budget for teenage girl?
Replies: 82
Views: 4647
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