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Re: If your networth is over $3 million, how did you do it?

Hmm - I did not think a 100K pension would equate to a $3M nest egg. I am no expert, but I think it would require a lot less than 3M to purchase an SPIA that pays 100K per year? Using a 3.5% wihtdrawal rate $3MM gets you $105,000/yr. A $100K pension without COLA might cost about $1.7M. It varies wi...
by Rodc
Fri Jan 16, 2015 8:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 301
Views: 46108

Re: Is this an unreasonable quote for interior home painting

FWIW: decorative arts are very subjective, but I'd probably paint the trim white as well.
by Rodc
Thu Jan 15, 2015 7:09 pm
 
Forum: Personal Consumer Issues
Topic: Is this an unreasonable quote for interior home painting?
Replies: 55
Views: 4330

Re: Is this an unreasonable quote for interior home painting

Besides, unless your painter is either really really good, painting trim that's already fastened and not on the bench will never look as good as shop finished trim. I don't understand this. With trim painting, the thing that separates the pros from the hacks is usually the quality of the prep work....
by Rodc
Thu Jan 15, 2015 5:16 pm
 
Forum: Personal Consumer Issues
Topic: Is this an unreasonable quote for interior home painting?
Replies: 55
Views: 4330

Re: RA Expected Returns update yearend '14

I believe estimates on the linked tab are all in US$.


Yes, but in unhedged US$, so as we have seen over the last few years, currency valuations can play a very large role.

Unless I misunderstand what hedged and unhedged means.
by Rodc
Thu Jan 15, 2015 1:07 pm
 
Forum: Investing - Theory, News & General
Topic: RA Expected Returns update yearend '14
Replies: 10
Views: 1154

Re: How would you put a value on a pension?

Keep in mind that for some states, notably Texas, your teachers retirement reduces your Social Security payments. Many teachers do not notice this until they actually retire. Ralph True in our state, wife is a teacher. And moreover it means she does not get survivor benefits from my SS if I die. Fr...
by Rodc
Thu Jan 15, 2015 7:10 am
 
Forum: Personal Finance (Not Investing)
Topic: How would you put a value on a pension?
Replies: 11
Views: 1354

Re: RA Expected Returns update yearend '14

Russia 16.9% Three significant digits!! Impressive. Also note that appears to be in the local currency so US returns may be far different. Also note their estimate of the SD, and that might translate into a best case 10 year SD of the value divided by about 3, or about +/- 11% for Russia. But that ...
by Rodc
Thu Jan 15, 2015 6:53 am
 
Forum: Investing - Theory, News & General
Topic: RA Expected Returns update yearend '14
Replies: 10
Views: 1154

Re: Vanguard 500 vs TSM: Small Caps at Multi-Year Highs

With small cap stocks out-performing the market over the last couple of years and given the general idea of "reversion to the mean", would it be way out in left-field to put new money into the VG 500 Index (instead of VG Total Stock Mkt Index)? Some investment decisions don't matter. This...
by Rodc
Thu Jan 15, 2015 6:49 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard 500 vs TSM: Small Caps at Multi-Year Highs
Replies: 7
Views: 991

Re: How would you put a value on a pension?

Value of pension is dependent on several variables which may be unknown at time of offer: 1) annual wage/merit increases - contractual or ad-hoc. Typically, a worker employed under a contract would have a known wage scale with increases built into a schedule. This provides a level of reliability in...
by Rodc
Wed Jan 14, 2015 6:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: How would you put a value on a pension?
Replies: 11
Views: 1354

Re: Do REITs have higher expected return than the broad mark

Do you mean on a risk adjusted basis? Probably not if one measures risk properly (not at all easy to do). If so people who can handle the type and magnitude of the risk would tend to bid up the price until the extra risk-adjusted returns are gone. Might still be a good idea for those ok with the ris...
by Rodc
Wed Jan 14, 2015 11:28 am
 
Forum: Investing - Theory, News & General
Topic: Do REITs have higher expected return than the broad market?
Replies: 3
Views: 591

Re: Poll - How much is enough / what's your number?

Whatever I have the day I decide I really don't want to work any more or my employer decides I need to go. At that point I will take what I have and make it work. If I am a little light I can work part time at some easy job (so one can argue if that is truly retirement or not). Every year the later ...
by Rodc
Mon Jan 12, 2015 6:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll - How much is enough / what's your number?
Replies: 79
Views: 7495

Re: Helping adult child understand investing

... But I certainly believe that a single person earning almost six figures has huge saving potential, and saving >$25k/yr should be extremely easy. (I'm making general comments, not about the OP's specific situation.) That is roughly a 40% savings rate of take home pay for a retirement account to ...
by Rodc
Mon Jan 12, 2015 1:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Helping adult child understand investing
Replies: 38
Views: 3330

Re: Helping adult child understand investing

I said per person . Compared to a single on a $90k/yr income, a family of 5 on a $45k/yr income has one tenth of that income per person. It was not me that used the words "real effort". But I certainly believe that a single person earning almost six figures has huge saving potential, and ...
by Rodc
Mon Jan 12, 2015 12:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Helping adult child understand investing
Replies: 38
Views: 3330

Re: WHY is retirement enjoyable / something to look forward

I met a great 84 year-old on my trip to Antartica, she was fantastic, everyone loved her. But I am a realist, and I have yet to meet a person who didn't slowdown by their 70s. That doesn't mean they aren't active or don't want to still do things but it isn't the same it once was. I think the saying...
by Rodc
Fri Jan 09, 2015 7:37 pm
 
Forum: Personal Consumer Issues
Topic: WHY is retirement enjoyable / something to look forward to?
Replies: 237
Views: 20036

Re: How do you calculate your savings rate?

I'd also suggest that having a clear understanding of my savings rate helps with estimating my retirement budget, as it happens that the 35% of my salary that is currently going into savings doesn't need to be budgeted in retirement. That is true. That is one place useful for relating to "on t...
by Rodc
Thu Jan 08, 2015 2:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: Refinance Mortgage only 6 months in??

Careful. This is less of an issue 6 months in, but by extending to a new 30 years you have to remember to account for the total cost due to the extra 6 months if payment. That is the total cost is either 30*12*new monthly payment vs 30*11.5*old monthly payment. Even if the new payment is lower there...
by Rodc
Thu Jan 08, 2015 2:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Refinance Mortgage only 6 months in??
Replies: 8
Views: 1195

Re: Gaming PC for son, buy or build?

HI All - I wanted to give an update, that my son ended up building his own Gaming PC, and it works awesome. He learned a lot along the way, and I am very proud of him. Personally, I would have been afraid to do this, so I really got behind his effort. The tips and advice from everyone helped a lot....
by Rodc
Thu Jan 08, 2015 12:56 pm
 
Forum: Personal Consumer Issues
Topic: Gaming PC for son, buy or build?
Replies: 63
Views: 5011

Re: Why do you look at past performance of stocks/funds?

I look at past performance in determining fund selection. I think most people do even though they won't admit it. If you had 2 choices of airlines and one had a bad record of safety vs one with a great record of safety which would you choose? I agree it offers no guarantee but it helps you make an ...
by Rodc
Tue Jan 06, 2015 6:37 pm
 
Forum: Investing - Theory, News & General
Topic: Why do you look at past performance of stocks/funds?
Replies: 28
Views: 2379

Re: How do you calculate your savings rate?

In calculating our personal savings rate I do not include our 401k company match, or additional home equity resulting from mortgage payments. For the denominator I only include our salary income, not dividends, interest, cap gains. I agree with this. This is what enables you to do an apples-to-appl...
by Rodc
Tue Jan 06, 2015 6:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: How do you calculate your savings rate?

Perhaps we have different interpretations of "high level of likelihood". Or perhaps different situations. My wife and I have decent, but not extremely high, pensions coming which grow every year we work. One backed by a very large university endowment. Those coupled with SS and a paid off...
by Rodc
Tue Jan 06, 2015 7:15 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: How do you calculate your savings rate?

If secure pension streams and Social Security will cover your anticipated needs, then savings and investments are obviously not very important. The issues then are the accuracy of your projections for your future needs and whether the pensions will adjust for inflation. richard, This is assuming a ...
by Rodc
Tue Jan 06, 2015 7:05 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: Why do you look at past performance of stocks/funds?

These three charts show very similar past performance of the Vanguard Market Neutral Fund (VMNFX), the Vanguard Limited Term Tax Exempt Bond Fund (VMLTX), and the stock of Telekom Austria AG (ADR) over the time period shown. Let's agree that they don't tell us which of them will be the best investm...
by Rodc
Tue Jan 06, 2015 6:58 am
 
Forum: Investing - Theory, News & General
Topic: Why do you look at past performance of stocks/funds?
Replies: 28
Views: 2379

Re: Can you make money betting on random coin flips?

Sometimes I don't know exactly why I am wrong, but even though I'm reasonably smart, if I am losing an argument 30 to 1, against other smart people, and I have zero people on my side, I start to think maybe I'm missing something. Just saying... The math has been beaten to death, and is correct, so ...
by Rodc
Mon Jan 05, 2015 8:36 pm
 
Forum: Investing - Theory, News & General
Topic: Can you make money betting on random coin flips?
Replies: 295
Views: 16520

Re: Can you make money betting on random coin flips?

Sometimes I don't know exactly why I am wrong, but even though I'm reasonably smart, if I am losing an argument 30 to 1, against other smart people, and I have zero people on my side, I start to think maybe I'm missing something. Just saying... The math has been beaten to death, and is correct, so I...
by Rodc
Mon Jan 05, 2015 8:12 pm
 
Forum: Investing - Theory, News & General
Topic: Can you make money betting on random coin flips?
Replies: 295
Views: 16520

Re: Are markets becoming inefficient?

Probably not. For one thing day traders don't control a large percentage of the market cap. Frankly they trade far less than the robo traders, both in speed and volume. It may not have been clear in my original question, and you may not have a different answer, but I was talking about all individua...
by Rodc
Mon Jan 05, 2015 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: Are markets becoming inefficient?
Replies: 15
Views: 1802

Re: WHY is retirement enjoyable / something to look forward

You seem to define "getting very far" as being somehow related to money. Only because of your complaining about your low pay. You brought up money, not I. Terrible, low-paying jobs. But I did manage to work my way up to $16/hour with no benefits, after starting at $9.50/hour right out of ...
by Rodc
Mon Jan 05, 2015 4:51 pm
 
Forum: Personal Consumer Issues
Topic: WHY is retirement enjoyable / something to look forward to?
Replies: 237
Views: 20036

Re: How do you calculate your savings rate?

I don't. Seems like two different calculations. Including it in the denominator gets you towards a calculations of Saved/Save-able. Excluding it gets you towards a calculation of Savings/Income. If it is money your employer handed you it is income, seems to me. If someone gets "paid" by y...
by Rodc
Mon Jan 05, 2015 12:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: Are markets becoming inefficient?

Probably not. For one thing day traders don't control a large percentage of the market cap. Frankly they trade far less than the robo traders, both in speed and volume.
by Rodc
Mon Jan 05, 2015 12:32 pm
 
Forum: Investing - Theory, News & General
Topic: Are markets becoming inefficient?
Replies: 15
Views: 1802

Re: WHY is retirement enjoyable / something to look forward

So young, huh? I wish. I'm in my 30s. So yes, so young. Only the young would think 30s is not young. I'd rather have the freedom now. So I only work jobs that I can do while still leaving the office by 3:30 or so. A 9-5 job kills every week day and then I have to do my errands (laundry, shopping, e...
by Rodc
Mon Jan 05, 2015 12:26 pm
 
Forum: Personal Consumer Issues
Topic: WHY is retirement enjoyable / something to look forward to?
Replies: 237
Views: 20036

Re: Why do you look at past performance of stocks/funds?

Someone, might have even been you, showed that under ideal conditions, the 95% confidence interval for the long range return of stocks is 3-11% real. That range is large enough not to be entirely useless, but close for determining a required savings rate. That was me and thank you for bringing it u...
by Rodc
Mon Jan 05, 2015 10:55 am
 
Forum: Investing - Theory, News & General
Topic: Why do you look at past performance of stocks/funds?
Replies: 28
Views: 2379

Re: How do you calculate your savings rate?

Perhaps we have different interpretations of "high level of likelihood". Or perhaps different situations. My wife and I have decent, but not extremely high, pensions coming which grow every year we work. One backed by a very large university endowment. Those coupled with SS and a paid off...
by Rodc
Mon Jan 05, 2015 9:53 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: How do you calculate your savings rate?

I don't. I ask: am I saving enough to meet my goals with some high level of likelihood. Why would I care what the percentage is? Absent fairly reliable information on future spending and returns, how does one determine one's goals and whether one is meeting them with a sufficient level of likelihoo...
by Rodc
Mon Jan 05, 2015 8:21 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: How do you calculate your savings rate?

5) So, in order to save $$K of money, I need to transfer certain percentage of my gross income to Vanguard in addition to my 401K, Roth IRA, and HSA contributions. I am similar. I want to transfer $X to my 401K and the way it is set up I cannot specify $X. I have to specify Y%. So I do. I do not ne...
by Rodc
Mon Jan 05, 2015 7:45 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: Do you rebalance each time you fund your account?

my 401k contributions are automatic and fixed. New contributions there are split 80% S&P/15% bonds/5% TIPS, and they do not change. That's a good point. Automatic contributions must be fixed I can change my automatic contributions with a few mouse clicks as I suspect just about anyone can. Not ...
by Rodc
Mon Jan 05, 2015 7:35 am
 
Forum: Investing - Theory, News & General
Topic: Do you rebalance each time you fund your account?
Replies: 25
Views: 1739

Re: Rick Ferri looking to internationalize his portfolio

I remember a post about a Dr. Bernstein article about future expected returns of different asset classes and Dr. Bernstein suggested that foreign equities would have higher future expected returns than US equities. For the most part, as I recall, people just oohed and aahed over Dr. Bernstein's bri...
by Rodc
Mon Jan 05, 2015 7:15 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 226
Views: 25367

Re: Do you rebalance each time you fund your account?

I invest with each paycheck. I do not adjust every month, but as things drift out of whack I will change where the new money goes. Might happen a few times a year or so. Depends on how crazy the markets are. If thing really go nuts and new money is not enough I will buy and sell to rebalance.
by Rodc
Sun Jan 04, 2015 7:26 pm
 
Forum: Investing - Theory, News & General
Topic: Do you rebalance each time you fund your account?
Replies: 25
Views: 1739

Re: Rick Ferri looking to internationalize his portfolio

No one can invest in the real "total market". True, but then you can't demonstrate that with the S&P 500 which is a non-TSM fund by committee. The issue would be are the various TSM funds close enough to total market? That is if they differ from a true TSM fund at the 1% level, should...
by Rodc
Sun Jan 04, 2015 4:20 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 226
Views: 25367

Re: Ben Stein's new book: How to Ruin Your Financial Life

IMHO Ben has not proven to be a wise or frankly very decent person, and there are many good books so personally I will spend my money elsewhere even if he has somehow managed to write something worthwhile.
by Rodc
Sun Jan 04, 2015 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: Ben Stein's new book: How to Ruin Your Financial Life
Replies: 18
Views: 4468

Re: How do you calculate your savings rate?

I don't.

I ask: am I saving enough to meet my goals with some high level of likelihood. Why would I care what the percentage is?
by Rodc
Sun Jan 04, 2015 4:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 44
Views: 3956

Re: Rick Ferri looking to internationalize his portfolio

^^^ Very well said.

Thank you.
by Rodc
Sun Jan 04, 2015 12:44 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 226
Views: 25367

Re: Ben Stein's new book: How to Ruin Your Financial Life

He agrees with Buffett that most investors would be better off just to put their equity money into an S&P500 Index fund and leave it alone. Then he spends the rest of the book explaining the ways in which most of us just don't take that advice. Could that be true of wise Bogleheads? Can you spe...
by Rodc
Sun Jan 04, 2015 12:36 pm
 
Forum: Investing - Theory, News & General
Topic: Ben Stein's new book: How to Ruin Your Financial Life
Replies: 18
Views: 4468

Re: Rick Ferri looking to internationalize his portfolio

Changing from 70/30 US/Int to 60/40 (note Rick did not give a number) is not likely to make enough difference to effect your retirement lifestyle (or anything else). And the bigger the move the more pain if you are wrong either in fact or in timing. Market weighting is currently about 50/50 (VG Tot...
by Rodc
Sun Jan 04, 2015 9:08 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 226
Views: 25367

Re: Why not put 2x amt. of emergency funds in the market?

To me, the point of an EF is easy access and stability of capital. I don't even chase online savings rates. I use a B&M regional bank where I can walk in and get cash any day but Sunday, or instantly transfer to checking at the same bank online. I lose $20-40 of interest per year before taxes a...
by Rodc
Sun Jan 04, 2015 9:06 am
 
Forum: Investing - Theory, News & General
Topic: Why not put 2x amt. of emergency funds in the market?
Replies: 19
Views: 2186

Re: Why do you look at past performance of stocks/funds?

Useful for getting a rough idea of what to expect. For example just on theory one should expect that over the long haul stocks should beat bonds most of the time and both should beat inflation. But good to have some idea of by how much, what might long haul mean, how often, etc. No guarantees that t...
by Rodc
Sun Jan 04, 2015 9:01 am
 
Forum: Investing - Theory, News & General
Topic: Why do you look at past performance of stocks/funds?
Replies: 28
Views: 2379

Re: Car Recommendations for about 25k

If you have a 15 year old civic, a new civic will feel like a nice step up. This is one advantage of buying cars infrequently; even a base model feels like a step up. I have a base model 2009 Forrester. My wife just bought a 2015 base model Forrester. It is noticeably, if modestly nicer. But compare...
by Rodc
Sat Jan 03, 2015 9:15 pm
 
Forum: Personal Consumer Issues
Topic: Car Recommendations for about 25k
Replies: 36
Views: 5256

Re: Poll: How long have you been with your current AA?

in the winter of 08-09, is was a on Bogleheads that I learned that TIPS were temporarily a screaming buy relative to nominal bonds. My one and only market timing move. Agree with your thought about convergence of honest change in circumstance and market timing. If the market goes from PE10 of 8 to ...
by Rodc
Sat Jan 03, 2015 7:51 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: How long have you been with your current AA?
Replies: 44
Views: 2471

Re: Why not put 2x amt. of emergency funds in the market?

A dedicated emergency fund is only needed when your assets are modest. Once you have substantial assets you can skip if you want. Then again if you have substantial assets having what is by then a small or modest amount in a cash allocation hardly matters. If you want 60/40 say, just lump the cash i...
by Rodc
Sat Jan 03, 2015 7:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why not put 2x amt. of emergency funds in the market?
Replies: 19
Views: 2186

Re: Trying to understand AA divisions

I find it hard to understand, however, how some of the small allocations I see recommended could have much of an impact on either return or risk. You are correct. Historically, the exact split between international and US has made very very little difference over the long haul, as well. Given inter...
by Rodc
Sat Jan 03, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Trying to understand AA divisions
Replies: 29
Views: 1663

Re: Question About SS Statement Figures

The AnyPia program hasn't been updated for my version of the Apple OS, so I can't use that at this time. Rodc, I've started to work up my own spreadsheet, which is why I raised these questions. I'm now in my 33rd year of work, so I'm most interested in how I can goose the benefit over the next few ...
by Rodc
Sat Jan 03, 2015 4:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question About SS Statement Figures
Replies: 5
Views: 1003

Re: Rick Ferri looking to internationalize his portfolio

I'm not big on following experts making predictions (if we get a sovereign default foreign stocks will crash and be a bargain and I'll make a bundle on the rebound) because too often they are wrong either in fact or wrong on the timing (even if they always have a nice sounding story). That said it i...
by Rodc
Sat Jan 03, 2015 4:08 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 226
Views: 25367

Re: Poll: How long have you been with your current AA?

Based on the feedback above: 2 years. I do a re-eval every January to see if any changes are warranted (better funds come available in my 401K primarily). A major job change could trigger a change in risk tolerance for example. But also over time getting ever closer to retirement might trigger a des...
by Rodc
Sat Jan 03, 2015 3:54 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: How long have you been with your current AA?
Replies: 44
Views: 2471
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