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Re: A Scenario and 3 questions

As dbr noted, the first, key question is the size of your expenses. Are you certain you have enough? From the way you have worded your question, I'm guessing the answer to that question is yes. I guess I never considered there would be an issue with a high 6 figure portfolio that has 10-12 years to...
by StarbuxInvestor
Sun Jul 27, 2014 2:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: A Scenario and 3 questions
Replies: 7
Views: 448

A Scenario and 3 questions

Here is the scenario. Individual is looking to retire in 1-3 years. Within 10-12 years of retirement they plan to start drawing SS and a pension both indexed to inflation which will cover expenses at their current level of spending. They currently have high 6 figures in their tax deferred accounts i...
by StarbuxInvestor
Sun Jul 27, 2014 11:18 am
 
Forum: Investing - Help with Personal Investments
Topic: A Scenario and 3 questions
Replies: 7
Views: 448

Re: Retiring soon setting aside 3 years living expenses

and of course, one should not be paying much in the way of taxes before retirement: http://www.bogleheads.org/forum/viewtopic.php?t=79510 Okay, but how do you comtribute $22,000 to a 401K while only making $22,000? It seems many employers have percentage limits plus you have to pay Medicare and FIC...
by StarbuxInvestor
Sat Jul 12, 2014 1:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Retiring soon setting aside 3 years living expenses

How woulld you do zero income years without cash reserves to utilize instead of being dependent on income? Waiting for a recovery from a market crash would seem to be what would endanger maximizing the early years of one's retirement. So apparently I am just not following the logic. I cannot imagin...
by StarbuxInvestor
Sat Jul 12, 2014 1:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Retiring soon setting aside 3 years living expenses

I wonder how much cash for retirees do those free Vanguard investment plans advocate? Here's a link to a study that cash reserves don't work: http://www.kitces.com/blog/Research-Reveals-Cash-Reserve-Strategies-Dont-Work...-Unless-Youre-A-Good-Market-Timer/ To me this is the flaw in the study. "...
by StarbuxInvestor
Sat Jul 12, 2014 11:56 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Retiring soon setting aside 3 years living expenses

Thanks for the information. Still not sure where the impression about being worried came from but no matter. My strategy has to do with building a platform for maximizing the experiences in my late 50s and 60s as well as creating and taking advantage of zero income years. I think the point is that ...
by StarbuxInvestor
Sat Jul 12, 2014 11:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Retiring soon setting aside 3 years living expenses

Generally speaking if 1) You have made a conservative estimate of the income you will need, including contingencies for a higher rate of spending or unexpected large expenditures, and 2) You have insured income streams for a significant fraction of your need, from Social Security, pensions, and ann...
by StarbuxInvestor
Sat Jul 12, 2014 10:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Retiring soon setting aside 3 years living expenses

I think as long as you use short-term bonds and include it in your fixed-income asset allocation and don't count it separately, then you are good to go. There are published studies that show that cash is a drag and doesn't save you. I don't think you even need those bonds to be short term, but if y...
by StarbuxInvestor
Sat Jul 12, 2014 10:30 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Retiring soon setting aside 3 years living expenses

I think as long as you use short-term bonds and include it in your fixed-income asset allocation and don't count it separately, then you are good to go. There are published studies that show that cash is a drag and doesn't save you. If you are on such dicey ground that you are worrying about where ...
by StarbuxInvestor
Sat Jul 12, 2014 9:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: 15 vs 30 yr fixed, or 5/1 ARM

I started with a 30 year but made the 15 year payment that way if I hit a rough spot I could fall back to the 30 year payment. A couple years in I refinanced to a 15 year but made 12 year payment. Now I just pay property tax. I think that's reasonable strategy. I did same exact set up - - started i...
by StarbuxInvestor
Sat Jul 12, 2014 9:37 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 yr fixed, or 5/1 ARM
Replies: 16
Views: 1440

Re: 15 vs 30 yr fixed, or 5/1 ARM

Why would you take the 30 year and pay a higher rate when you're going to make the payememt as if it's a 15 year? Same logic as an emergency fund. Why take lower returns. In some ways yuou could probably rationalize the ability to drop your payment by 1/3 is part of your emergency fund or at least ...
by StarbuxInvestor
Sat Jul 12, 2014 9:32 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 yr fixed, or 5/1 ARM
Replies: 16
Views: 1440

Re: 15 vs 30 yr fixed, or 5/1 ARM

I started with a 30 year but made the 15 year payment that way if I hit a rough spot I could fall back to the 30 year payment. A couple years in I refinanced to a 15 year but made 12 year payment. Now I just pay property tax.
by StarbuxInvestor
Sat Jul 12, 2014 9:24 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 yr fixed, or 5/1 ARM
Replies: 16
Views: 1440

Re: Retiring soon setting aside 3 years living expenses

Look somewhere for a research paper on the duration of crashes, I read it a few years ago. Stock market crashes recover quicker than ones in RE. There is correlation but the trigger can be in one or the other. Of course, bonds crash in quick inflation. Three years is shorter than the usual recovery...
by StarbuxInvestor
Sat Jul 12, 2014 9:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: High end purses

I have offered my wife one whenever she wants. She says someday but right she is to rough on them traveling for work.
by StarbuxInvestor
Fri Jul 11, 2014 10:14 pm
 
Forum: Personal Consumer Issues
Topic: High end purses
Replies: 119
Views: 10949

Retiring soon setting aside 3 years living expenses

Barring unforseen circumstances it appears I will be retiring in 1 to 3 years. I am planning on moving 3 years of living expenses into shorter term investment (Money Markets, I Bonds, Short Term Bonds, etc.). So is this a good idea or is there some factor I need to consider in doing this that could ...
by StarbuxInvestor
Fri Jul 11, 2014 8:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5240

Re: Life, Love, Happiness, and Bogleheads

I have always lived below my means. Being a Boglehead only extends to index investing and tax planning for me. I am not a Social Boglehead.
by StarbuxInvestor
Fri Jul 11, 2014 7:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life, Love, Happiness, and Bogleheads
Replies: 11
Views: 1198

Re: Vacation Home Fractional Ownership

I have no experience with fractional ownership, but with the posts above, it sounds like a pain in the buttocks. Do you really want to have to go to the vacation house every year? What if you want to go to Utah or Idaho next winter? Or if it has to be this area, why not just rent a place, and let t...
by StarbuxInvestor
Fri Jul 11, 2014 4:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vacation Home Fractional Ownership
Replies: 15
Views: 1737

Re: Vacation Home Fractional Ownership

Are we talking about you putting together a fractional ownership deal or buying from one of the companies that sell fraction ownership and charge something equivalent to a condo fee?
by StarbuxInvestor
Fri Jul 11, 2014 3:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vacation Home Fractional Ownership
Replies: 15
Views: 1737

Re: Tiny House Movement

They lose me at composting toilet.
by StarbuxInvestor
Fri Jul 11, 2014 3:09 pm
 
Forum: Personal Consumer Issues
Topic: Tiny House Movement
Replies: 139
Views: 15712

Re: Finally an audience with my brother on Finances

jerome99 wrote:nope, he is an employee who receives a w-2.


And he already has his non-profit set-up and has consulted someone on the most tax efficient ways of making contributions to it?
by StarbuxInvestor
Thu Jul 10, 2014 3:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Finally an audience with my brother on Finances
Replies: 33
Views: 4085

Re: Finally an audience with my brother on Finances

No business is involved. He is a consultant with income between 480k and 600K each year. He is single. Expenses are low partially cause he has no mortage or any other payments or toys. His goals are to grow his net worth responsibly for the next 20 years and then move to Florida and join his non pr...
by StarbuxInvestor
Thu Jul 10, 2014 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Finally an audience with my brother on Finances
Replies: 33
Views: 4085

Re: Finally an audience with my brother on Finances

@Starbuxinvestor, can you give us a hint why a tax attorney would be helpful? I can see a corporate tax person helping out on the business side, but personal taxes are reasonably straightforward and uncomplicated. Maybe I am assuming there is a business involve and the tax attorney would be address...
by StarbuxInvestor
Thu Jul 10, 2014 12:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Finally an audience with my brother on Finances
Replies: 33
Views: 4085

Re: Finally an audience with my brother on Finances

I thought my initial post answered almost all, if not all the questions asked. He has no debt. The cash he has is an online savings and cash in a safety deposit box. All of this retirement and taxable investments will go into index funds and both him and I are capable in doing that change. He is in...
by StarbuxInvestor
Thu Jul 10, 2014 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Finally an audience with my brother on Finances
Replies: 33
Views: 4085

Re: Finally an audience with my brother on Finances

Personally I think your brother should be meeting with a tax attorney to discuss how to structure his finances at his level of income. He can afford it and he is getting advice without a disclaimer attached.
by StarbuxInvestor
Thu Jul 10, 2014 9:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Finally an audience with my brother on Finances
Replies: 33
Views: 4085

Re: The Millionaire Next Door: Are You One?

I am pretty sure I will never really fit into the MND mold and I am alright with that.
by StarbuxInvestor
Wed Jul 09, 2014 4:24 pm
 
Forum: Personal Consumer Issues
Topic: The Millionaire Next Door: Are You One?
Replies: 187
Views: 22352

Re: Disclosing Financial Position

She is your partner or she isn't. You trust her or you don't. Would you marry a sprendthrift? You need to have frank conversations about money, investments and your beliefs on how they should be handled later you can talk specifics. I would think it would be very difficult to be in a marriage where ...
by StarbuxInvestor
Wed Jul 09, 2014 4:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Disclosing Financial Position
Replies: 13
Views: 1169

Re: Toys for a Lazy Cat

I wonder if this varies by vet; mine said that wet food is worse, and has higher calories and is bad for the teeth. He asked that we go on a full dry food diet, but my cat loves it too much. We ended up cutting his wet food intake by half going from the 5.5 oz cans to the 2.75 oz ones. Find a new v...
by StarbuxInvestor
Wed Jul 09, 2014 10:14 am
 
Forum: Personal Consumer Issues
Topic: Toys for a Lazy Cat
Replies: 46
Views: 2893

Re: The Millionaire Next Door: Are You One?

I can't remember--does the book talk about geography at all in its demographics? I suspect that I'm one of several MND in my neighborhood, and I wonder if they're likelier in some places than others. We're in a fairly low COL area a ways from any big conurbation and it's a state university town, so...
by StarbuxInvestor
Wed Jul 09, 2014 10:13 am
 
Forum: Personal Consumer Issues
Topic: The Millionaire Next Door: Are You One?
Replies: 187
Views: 22352

Re: Valuing a personal residence for net worth purposes

I do a very rough calculation which comes out surprisingly close to livesoft's 10% deduction. I figure realtor fees will be 5%, transfer tax about 1.5% and then I throw in an amount for estimated repairs/sprucing up. I get within a a tiny fraction of the 10% figure, so I think I will go with that f...
by StarbuxInvestor
Tue Jul 08, 2014 9:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Toys for a Lazy Cat

Changing him from dry to wet food could help. Dry foods have way too many carbohydrates for cats.
by StarbuxInvestor
Mon Jul 07, 2014 6:47 pm
 
Forum: Personal Consumer Issues
Topic: Toys for a Lazy Cat
Replies: 46
Views: 2893

Re: When you retire you plan to?

pennstater2005 wrote:Stay in my current home and become a snowbird.


Will you rent or buy when you are down south?
by StarbuxInvestor
Mon Jul 07, 2014 9:43 am
 
Forum: Personal Finance (Not Investing)
Topic: When you retire you plan to?
Replies: 44
Views: 3362

When you retire you plan to?

What are your plans for your current house when you retire? Select all that apply.
by StarbuxInvestor
Mon Jul 07, 2014 9:35 am
 
Forum: Personal Finance (Not Investing)
Topic: When you retire you plan to?
Replies: 44
Views: 3362

Re: Valuing a personal residence for net worth purposes

So after spinning through the emergency fund the plan is to keep reducing exposure to FI while increasing the exposure to equities in your AA. Fair enough. You postulated a 30% decline in stocks so I would NOT be increasing my exposure to equities but rather rebalancing (remember that when you set ...
by StarbuxInvestor
Sun Jul 06, 2014 4:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

Market crashes, which would you rather do once you tap out your ermengency fund exercise a HELOC at 3% or sell stocks that are off 30+%? False dilemma unless your entire investments are in stocks so a typically invested person here will have a good percentage in fixed income to sell or exchange in ...
by StarbuxInvestor
Sun Jul 06, 2014 3:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

I have no interest in net worth calculations so for you it's important to first figure out the meaning and use of this number you are trying to calculate to guide you to the proper way to evaluate it. Net Worth for me is one of my critical measures. Personally, I track it monthly. To each his own, ...
by StarbuxInvestor
Sat Jul 05, 2014 8:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

Home paid off, but don't count it at all. As far as net worth goes I'm adding that up now for the purpose of posting my portfolio for advice, but otherwise I have no interest in counting and recounting net worth. I don't get why some are so fixated on that. They want to move to CA when they retire....
by StarbuxInvestor
Sat Jul 05, 2014 2:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

True, but the basic point is that a realitor either chose or was convinced to start there. And looking at the price per sq. ft. it isn't much different than new construction in the area, so I am guessing they will get closer to asking than to the zEstimate. Realtors don't determine the selling pric...
by StarbuxInvestor
Sat Jul 05, 2014 2:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

Home paid off, but don't count it at all. As far as net worth goes I'm adding that up now for the purpose of posting my portfolio for advice, but otherwise I have no interest in counting and recounting net worth. I don't get why some are so fixated on that. Market crashes, which would you rather do...
by StarbuxInvestor
Sat Jul 05, 2014 1:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

Unless you are planning to sell in the near future why does it make much difference? Or at least why do you want to be precise? If desired, I guess I would get some comparable sales in the neighborhood and perhaps apply a small negative factor. Couldn't you say something similar about the value of ...
by StarbuxInvestor
Sat Jul 05, 2014 1:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

Assuming you have no outstanding mortgage on the home, for net worth calculation I would use a realistic value of what it would sell for if you sold it today. That is to say the realistic selling value that would be assigned by you and your realtor. Of course if you have a mortgage balance that wou...
by StarbuxInvestor
Sat Jul 05, 2014 1:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

I have no interest in net worth calculations so for you it's important to first figure out the meaning and use of this number you are trying to calculate to guide you to the proper way to evaluate it. Net Worth for me is one of my critical measures. Personally, I track it monthly. The value of any ...
by StarbuxInvestor
Sat Jul 05, 2014 1:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: SIPC protection of the equity in financial accounts

What is SIPC? The Securities Investor Protection Corporation (SIPC) is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt or assets are missing due to fraud. The SIPC will cover up to $500,000 in securities, including a $250,000 limit fo...
by StarbuxInvestor
Sat Jul 05, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: SIPC protection of the equity in financial accounts
Replies: 19
Views: 1206

Re: Tiny House Movement

I love the idea of tiny homes for a parent who may need to move closer to adult children. Or, a place for a college kid to live while going to school that can be turned into a guest house, or a private studio office. These types of homes can be placed in back yard. Everyone has their own space but ...
by StarbuxInvestor
Sat Jul 05, 2014 12:32 pm
 
Forum: Personal Consumer Issues
Topic: Tiny House Movement
Replies: 139
Views: 15712

Re: The Millionaire Next Door: Are You One?

So is the goal to have significantly more money than your neighbors while spending significantly less money than your neighbors? While I can see how it is a good thing, it is sort of a twisted form of keeping up with the Jones.
by StarbuxInvestor
Sat Jul 05, 2014 12:19 pm
 
Forum: Personal Consumer Issues
Topic: The Millionaire Next Door: Are You One?
Replies: 187
Views: 22352

Re: Want international exposure? You already have it.

My understanding is you buy international indexes for currency reasons not for international divesification and exposure. That's certainly not the reason I buy them :). It doesn't have to be but it is definitely what I have understood as the Boglehead orthodoxy. Ferri: 3-Fund Portfolio the Simplest...
by StarbuxInvestor
Sat Jul 05, 2014 12:14 pm
 
Forum: Investing - Theory, News & General
Topic: Want international exposure? You already have it.
Replies: 65
Views: 6332

Re: Valuing a personal residence for net worth purposes

I have no interest in net worth calculations so for you it's important to first figure out the meaning and use of this number you are trying to calculate to guide you to the proper way to evaluate it. Net Worth for me is one of my critical measures. Personally, I track it monthly. The value of any ...
by StarbuxInvestor
Sat Jul 05, 2014 12:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

Assuming you have no outstanding mortgage on the home, for net worth calculation I would use a realistic value of what it would sell for if you sold it today. That is to say the realistic selling value that would be assigned by you and your realtor. Of course if you have a mortgage balance that wou...
by StarbuxInvestor
Sat Jul 05, 2014 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Re: Valuing a personal residence for net worth purposes

chaz wrote:Just your equity.


So how does or doesn't appreciation play into that. Appreciation would be part of equity so what tool do you use to find a reasonable valuation of your home?
by StarbuxInvestor
Sat Jul 05, 2014 11:37 am
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823

Valuing a personal residence for net worth purposes

For net worth purposes I value our home at the purchase price. From everything I know it has most definitely appreciated but I don't want to count on that because there are lots of costs associated with selling a house. How do other people valuae their home for net worth purposes?
by StarbuxInvestor
Sat Jul 05, 2014 11:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Valuing a personal residence for net worth purposes
Replies: 73
Views: 3823
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