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Re: Taxable Accounts - Am I thinking about this the right wa

Epsilon Delta wrote:The zero tax in retirement threads basically amount to "After decades of tax mismanagement, during which you paid more taxes than you needed to, you finally get to claw back part of the overpayment."


I agree 100%
by Wagnerjb
Wed Jul 23, 2014 12:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxable Accounts - Am I thinking about this the right way?
Replies: 22
Views: 1394

Re: Taxable Accounts - Am I thinking about this the right wa

I am not in the OP's situation (so I am not sure), but here is what I think is happening, and the $10k estimate may be valid after all: The $56k in interest income is essentially offset by the $52k in deductions and the personal exemptions. That leaves $134k in capital gains and (presumably qualifie...
by Wagnerjb
Wed Jul 23, 2014 12:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxable Accounts - Am I thinking about this the right way?
Replies: 22
Views: 1394

Re: Taxable Accounts - Am I thinking about this the right wa

Married filing jointly, $20,000 property tax paid and $32,000 given to charity. No other relevant deductions. Somebody in this situation (lots of after-tax equity investments and making sizable donations) should probably be donating highly appreciated securities instead of cash. In addition, this p...
by Wagnerjb
Wed Jul 23, 2014 9:09 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxable Accounts - Am I thinking about this the right way?
Replies: 22
Views: 1394

Re: Taxable Accounts - Am I thinking about this the right wa

DFAman, I am getting somewhat different numbers using Taxcaster. I inputted the following into the Taxcaster "other income" category: * Interest = $64,000 * Dividends = $96,000 * Gains / Losses (long term) = $50,000 (this corresponds to the $160,000 withdrawal making up the rest of your 4...
by Wagnerjb
Wed Jul 23, 2014 9:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxable Accounts - Am I thinking about this the right way?
Replies: 22
Views: 1394

Re: Vanguard not vigilant about taxes?

What if Medtronic was bought by a larger US company? Wouldn't the shareholders still have to pay capital gains tax on the acquisition price? Yes. So why doesn't the New York Times feel that mutual fund shareholders are "paying the price" when a domestic company acquired another one? I susp...
by Wagnerjb
Wed Jul 23, 2014 8:47 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard not vigilant about taxes?
Replies: 8
Views: 652

Re: Bloomberg rates Large Company 401k plans

I do think it would make sense to negotiate more salary in lieu of a better 401K if one had the leverage to get it. It would probably be the strongest signal to management that a bad plan is a cost to the business. Kalo You would probably say the same thing about a poor medical plan (subsidy too lo...
by Wagnerjb
Wed Jul 23, 2014 8:37 am
 
Forum: Personal Finance (Not Investing)
Topic: Bloomberg rates Large Company 401k plans
Replies: 9
Views: 1250

Re: If you are a winner before fees, why not lower the ER?

2. The winners (after fees) don't stay as winners consistently (no persistence). The problem is that the managers don't truly know if they have persistence or not. So....the manager beats the benchmark for a few years on a pre-expense basis. What to do? If you lower the fees, you lower your income....
by Wagnerjb
Tue Jul 22, 2014 11:55 am
 
Forum: Investing - Theory, News & General
Topic: If you consistently outperform (pre-fees), why not lower ER?
Replies: 35
Views: 1106

Re: Your allocation to Emerging Market small cap ETFs?

I used to own EWX but sold it in frustration due to the unacceptable tracking error. I now own DGS. Yes, I believe in the benefits of improved diversification through international Emerging Markets (and small and value). I understand the data show that these sectors provide better diversification th...
by Wagnerjb
Tue Jul 22, 2014 8:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Your allocation to Emerging Market small cap ETFs?
Replies: 11
Views: 976

Re: I'm a genius!

Will do good wrote:HomerJ- You are a genius.

Wait I'm a genius too, I stayed the course :sharebeer


Wait....I rebalanced in March 2009. I guess that makes me a member of the Genius club too :D :D
by Wagnerjb
Tue Jul 22, 2014 8:33 am
 
Forum: Investing - Theory, News & General
Topic: I'm a genius!
Replies: 15
Views: 3975

Re: Minimizing Capital Gain Tax

Gift the appreciated shares to your daughter. When she is ready to attend college she can sell them (in tranches if necessary). She will use those funds to pay for college costs, and she will claim the American Opportunity Tax credit (confirm that this hasn't expired first). The AOT credit will offs...
by Wagnerjb
Thu Jul 17, 2014 1:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Minimizing Capital Gain Tax
Replies: 10
Views: 1137

Re: Pre tax vs. after tax retirement investing

I am in a similar situation in that I am in the highest tax bracket, and I have a choice of a Roth 401k or a regular 401k for my contributions (I am 25 years older than you). I am choosing the regular 401k plan and taking the tax deferral today. My concern is that future tax law changes may result i...
by Wagnerjb
Wed Jul 16, 2014 12:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Pre tax vs. after tax retirement investing
Replies: 15
Views: 1517

Re: Boglehead Rules Of Thumb To Investing?

I am just wondering what you personally would consider to be the overall Bugleweed rules of thumb to investing? I know this is a broad question since there are so many aspects to investing (age, income bracket, etc). But I’d like to narrow it down to the basics. Judging from all of the posts I’ve r...
by Wagnerjb
Fri Jul 11, 2014 8:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Boglehead Rules Of Thumb To Investing?
Replies: 23
Views: 3085

Re: A look at those hot high dividend yield funds,

You could buy a bunch of growth funds (see vanguard explorer) which pay tiny dividends (less than .1% last I looked) but the gain in taxes probably isn't worth the loss of diversification. How about buying growth funds in your taxable account and value funds in your tax-deferred accounts? You could...
by Wagnerjb
Thu Jul 10, 2014 2:05 pm
 
Forum: Investing - Theory, News & General
Topic: A look at those hot high dividend yield funds,
Replies: 9
Views: 2024

Re: Why do companies put up with high expense 401k choices?

Could it be that it costs money to administer a 401k plan? I suspect the reason for the high fee funds is that some companies don't want to absorb the cost of administering the 401k plan, and the financial institution offering the fund lineup says to management, "we will handle the cost of admi...
by Wagnerjb
Thu Jul 10, 2014 8:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Why do companies put up with high expense 401k choices?
Replies: 15
Views: 1477

Re: Oil Royalty LP

If LPs are such good deals, why haven't the big corporations previously bought the assets that the LPs are now marketing? Could it be that there is too much risk? Perhaps you are only seeing the current survivors? How long will the current leases continue to produce? What happens to your money when...
by Wagnerjb
Wed Jul 02, 2014 10:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Oil Royalty LP
Replies: 5
Views: 545

Re: Betterment launches tax loss harvesting

Wealthfront's tax loss harvesting service is interesting, because it replicates the S&P 500 using individual stocks (if you have over 500k worth of funds). It uses extended market ETF for stuff outside. That means you can constantly tax loss harvest. Betterment seems to use ETFs? That seems les...
by Wagnerjb
Sat Jun 28, 2014 1:46 pm
 
Forum: Investing - Theory, News & General
Topic: Betterment launches tax loss harvesting
Replies: 28
Views: 2808

Re: GABUX Big Yielder?

So how do you explain this to the average Joe? Who is starved for investments with yield and looks at the stable price of this fund and shrugs off the details of where the monthly income is coming from? Shouldn't the price be declining if they are returning principal of out about 10% each year?? Bu...
by Wagnerjb
Tue Jun 24, 2014 3:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: GABUX Big Yielder?
Replies: 5
Views: 292

Re: [Poll] How many brokerage firms do you use for investing

I use Vanguard for the bulk, but I also use Fidelity (although only for their low-cost passive funds). I do not intend to consolidate, as the purpose for two companies is to diversify my exposure to catastrophic systems issues (fraud, computer disaster, etc). When I retire and am taking withdrawals ...
by Wagnerjb
Mon Jun 23, 2014 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] How many brokerage firms do you use for investing?
Replies: 43
Views: 2018

Re: Betterment launches tax loss harvesting

TLHing to get the $3K/year income tax deduction has value to me. TLHing beyond that doesn't. The excess TLH balances just might come in handy. In my case, my wife inherited half of her childhood home. She and her sister let the tenant stay in the home for a few years, then sold at a very nice capit...
by Wagnerjb
Fri Jun 20, 2014 5:30 am
 
Forum: Investing - Theory, News & General
Topic: Betterment launches tax loss harvesting
Replies: 28
Views: 2808

Re: Commodity no longer a good diversifier?

Thanks Andy. Looks like the cost-benefit doesn't really add up. Plus, we could have been 'too long' given our day jobs are energy related? :) Yes and Yes. I am already very long energy, with a job in energy, Restricted stock in energy and a house in Houston :D So, owning a commodity futures fund is...
by Wagnerjb
Thu Jun 19, 2014 1:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Commodity no longer a good diversifier?
Replies: 22
Views: 1848

Re: [Poll] Did you tax loss harvest in the past?

I have done it many many times over a long period. When I began investing in 1983 I bought a few individual stocks for my taxable account. One of the stocks (Huffy) declined and I sold it for a tax loss a year or two later. I have owned individual stocks my entire investing career. At first I only o...
by Wagnerjb
Thu Jun 19, 2014 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Did you tax loss harvest in the past?
Replies: 17
Views: 887

Re: Commodity no longer a good diversifier?

Actually when I think commodity exposure I'm thinking more on the crude oil side than gold. But as you pointed out, a true crude oil ETF might not exist. I am not aware of a pure crude oil ETF, one that owns the actual commodity. By the way, I work in the energy trading department for a major oil c...
by Wagnerjb
Thu Jun 19, 2014 8:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Commodity no longer a good diversifier?
Replies: 22
Views: 1848

Re: Insider Trading & Bogleheads

Okay, please clear something up for me. Perhaps it's me and my misunderstanding of the term "insider trading". In my mind there is a huge difference between "insider trading" and "trading on inside information". Insider trading : Top executives buying or selling large ...
by Wagnerjb
Wed Jun 18, 2014 10:43 am
 
Forum: Investing - Theory, News & General
Topic: Insider Trading & Bogleheads
Replies: 26
Views: 1746

Re: Insider Trading & Bogleheads

it seems to me to be too glib to assert that only active traders lose in such a situation. That it's zero sum and there is nothing to be extracted from naive index investors It is probably more accurate to state that "passive investors" are not hurt. Your example of front-running an index...
by Wagnerjb
Wed Jun 18, 2014 9:12 am
 
Forum: Investing - Theory, News & General
Topic: Insider Trading & Bogleheads
Replies: 26
Views: 1746

Re: Commodity no longer a good diversifier?

Even if your investment has a negative correlation to equities, it matters what the expected return of that investment is. For commodities, the expected return is very low (possibly even negative in real terms). Gold has exhibited this return characteristic, as it has similarly slight negative corre...
by Wagnerjb
Wed Jun 18, 2014 8:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Commodity no longer a good diversifier?
Replies: 22
Views: 1848

Re: Should international travel impact your investments?

Hello, I recently finished a trip to Europe, and visited 5 countries: France, England, Czech Republic, Ireland, and Netherlands. While I really enjoyed the overall trip, there were times where I said things to myself like "This is why some folks keep 100% of their investments in the US" o...
by Wagnerjb
Tue Jun 17, 2014 4:05 pm
 
Forum: Investing - Theory, News & General
Topic: Should international travel impact your investments?
Replies: 30
Views: 1854

Re: Insider Trading & Bogleheads

No. Insider trading moves stock prices up or down to reflect additional information possessed by insiders. In theory, this should increase the accuracy of pricing of individual equities. The same is true of high frequency traders. However, a boglehead investor who just buys equities or sells equiti...
by Wagnerjb
Tue Jun 17, 2014 2:17 pm
 
Forum: Investing - Theory, News & General
Topic: Insider Trading & Bogleheads
Replies: 26
Views: 1746

Re: What to pick: RSU or stock options?

If you feel comfortable managing your income taxes, I would choose the RSU's one year, then choose the stock options in the following year. With alternate year selection, you can maximize your tax management opportunities. Here is how: If you elect to receive RSU's every year, your income will be re...
by Wagnerjb
Tue Jun 17, 2014 9:20 am
 
Forum: Investing - Help with Personal Investments
Topic: What to pick: RSU or stock options?
Replies: 29
Views: 1645

Re: What to pick: RSU or stock options?

You cannot trade employee stock options NQSO on the open market, so the volatility is irrelevant. If the exercise price is above the current fair market value of the stock, then the NQSO is worthless, regardless of volatility. I'm not an expert on NQSO's but in general early exercise is suboptimal ...
by Wagnerjb
Tue Jun 17, 2014 9:10 am
 
Forum: Investing - Help with Personal Investments
Topic: What to pick: RSU or stock options?
Replies: 29
Views: 1645

Re: Daily Tax-Loss Harvesting with Wealthfront

Tax-Loss Harvesting is a transfer of a tax-free loan from government to individual. It's not free money as taxes are eventually due (unless you're talking about things like step basis). So while there are real benefits, they're not always that substantial, and spending a lot of time and money on th...
by Wagnerjb
Mon Jun 16, 2014 4:52 pm
 
Forum: Investing - Theory, News & General
Topic: Daily Tax-Loss Harvesting with Wealthfront
Replies: 8
Views: 907

Re: How can this be legal (employers over-riding employee 40

The article says very clearly - multiple times - that the employee can opt out of the changes. Go find somebody else to sue.....
by Wagnerjb
Sat Jun 14, 2014 11:23 am
 
Forum: Personal Finance (Not Investing)
Topic: How can this be legal (employers over-riding employee 401k)
Replies: 23
Views: 1751

Re: Is the first million really the hardest?

If you were reasonably young in the 1980's, you rode a huge wave. Let's say you were 35 years old and had accumulated $1 million already (this is just hypothetical). At age 35, your AA might have called for 75-80% equities. In the 1980's I believe there were three consecutive years with equity retur...
by Wagnerjb
Thu Jun 12, 2014 3:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is the first million really the hardest?
Replies: 64
Views: 7754

Re: Exercise stock options to max retirement accounts?

I would not want to give up too much intrinsic value (time value) to accomplish this. If you have some options that are within a few years of expiring, go for it. Otherwise, more information is needed. For example, I don't think I would sell 10 year options after 4 years unless they are way up abov...
by Wagnerjb
Tue Jun 10, 2014 4:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Exercise stock options to max retirement accounts?
Replies: 6
Views: 284

Re: Another Reason to Index

afan wrote:I was hoping someone would explain how he missed the stepped up basis opportunity. Did this mean that a diversified fund would not have had a big distribution and he would have gotten the stepped up basis at death?


Maybe you could IM Livesoft and see if he would explain his comments.
by Wagnerjb
Fri Jun 06, 2014 4:52 pm
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2595

Re: "Bracket Management" chart - thoughts?

The 15 suggestions seem to be focused 100% on lowering current taxes, but little regard for other consequences. Why would one want to invest in high-cost or undiversified investments just to achieve a lower current tax burden? Why would you only tax loss harvest in high-income years? Why would you o...
by Wagnerjb
Fri Jun 06, 2014 9:13 am
 
Forum: Investing - Theory, News & General
Topic: "Bracket Management" chart - thoughts?
Replies: 1
Views: 387

Re: Another Reason to Index

Maybe in theory. But in reality, most Boglesaurs didn't have 500 stocks in their portfolios. And many sold the losers to reap the tax loss. So they often ended up with large concentrations of a few highly appreciated stocks. Subject to the risk of one crashing or the risk of one getting bought out....
by Wagnerjb
Fri Jun 06, 2014 8:58 am
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2595

Re: Another Reason to Index

Maybe. Maybe not. An actively managed portfolio will not necessarily beat an index either before or after taxes and expenses. I think we are talking about different strategies. I don't think the OP indicated that we are talking about active management, but if so then I agree with you that an index ...
by Wagnerjb
Thu Jun 05, 2014 5:40 pm
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2595

Re: Another Reason to Index

First of all, most of the index funds that we Bogleheads own will have many many stocks. So any buy out will result in smaller cap gains than the average "Boglesaurus" (a prehistoric Boglehead, investing in a handful of blue chip companies) with a larger portion in any one stock. I believ...
by Wagnerjb
Wed Jun 04, 2014 5:28 pm
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2595

Re: Another Reason to Index

Note that Vanguard 500 and Total Stock Index funds haven't paid a cap gains distribution since 1999 and 2000, respectively. Yes, and they accomplish this "no distribution" track record by taking tax losses inside the mutual fund as they become available. (You don't get to use these tax lo...
by Wagnerjb
Wed Jun 04, 2014 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2595

Re: Another Reason to Index

What about the times when he doesn't own the takeover stock, but the index does? Doesn't he have a better tax outcome than index investor in that case? Having a very low basis is a sign that the stock did very well, which can never be a problem. In that case a tax savvy investor would use the highly...
by Wagnerjb
Wed Jun 04, 2014 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2595

Re: "Brokers, Liquid Alts and the Fund That Never Goes Up"

This is probably a triumph on the Efficient Markets over humans, even some very smart ones. This note below is a pretty profound one, and demonstrates that the author understands either Market Efficiency or the impact of costs...or both. What actually did happen was this: Andy Lo, maybe one of the s...
by Wagnerjb
Mon Jun 02, 2014 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: "Brokers, Liquid Alts and the Fund That Never Goes Up"
Replies: 7
Views: 728

Re: Appreciated Securities...Concentrated Positions Question

Donating them to charity either directly or through a DAF is the best option if you normally give to charity. I agree. First of all, the stocks are only 7.5% of your portfolio so you don't have a severe concentration issue that calls for urgent or expensive actions. But I would feather these stocks...
by Wagnerjb
Wed May 28, 2014 6:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Appreciated Securities...Concentrated Positions Questions
Replies: 7
Views: 429

Re: A Simple Demonstration of Market Inefficiency

... Markets are not efficient. I know I'm shunned ... I think you'd find yourself in very respectable company: I have never accepted the EMH and don’t today. http://johncbogle.com/wordpress/category/op-eds/ From the John Bogle Op-Ed: The "pragmatic school" of indexing, on the other hand, ...
by Wagnerjb
Mon May 19, 2014 6:05 pm
 
Forum: Investing - Theory, News & General
Topic: A Simple Demonstration of Market Inefficiency
Replies: 18
Views: 2378

Re: stable value stable?

there has been a lot of discussion on the dangers of owning bond funds. what about stable value funds? there must be scenarios in which these vehicles lose (such as everybody cashing out at once for some black swan reason). At my company, there is a clause to suspend redemptions in an extreme circu...
by Wagnerjb
Sun May 18, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: stable value stable?
Replies: 6
Views: 715

Re: A Simple Demonstration of Market Inefficiency

Now that we've dispensed with the efficient market hypothesis, we can get on to bigger and better things. :beer We already knew that markets weren't perfectly efficient. They are just efficient enough so that an investor cannot make predictable and consistent profits from exploiting the "ineff...
by Wagnerjb
Fri May 16, 2014 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: A Simple Demonstration of Market Inefficiency
Replies: 18
Views: 2378

Re: Deferred compensation plan--fixed income vs. equity AA?

I also have a similar plan at work, and I agree that it has equity-like risk at the extreme. However, my company allows a choice of Vanguard mutual funds so I invest in equities in this plan. My concern is that an individual invests in fixed income in the DC plan, and a deep recession hits. Their eq...
by Wagnerjb
Fri May 16, 2014 9:28 am
 
Forum: Investing - Theory, News & General
Topic: Deferred compensation plan--fixed income vs. equity AA?
Replies: 7
Views: 240

Re: Where does Vanguard stand on exorbitant CEO pay?

I am a lot more outraged when somebody like Mike Tyson gets paid $20 million for one fight. Or a bunch of 25-year old athletes get paid $20 million when they are cheating on steriods. You have an opinion on executive pay and I have one too. I don't want Vanguard to vote all of their shares according...
by Wagnerjb
Thu May 15, 2014 3:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where does Vanguard stand on exorbitant CEO pay?
Replies: 14
Views: 1381

Re: 10% penalty on 529 plan really a penalty?

What is AOT credit? It is the American Opportunity Tax credit, for college tuition and fees paid. In my case, my daughter can claim the AOT credit since I don't claim her as a dependent on my tax return (I get no tax benefit listing her as a dependent, due to my income). Most of the time, a college...
by Wagnerjb
Tue May 13, 2014 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: 10% penalty on 529 plan really a penalty?
Replies: 30
Views: 2086

Re: 10% penalty on 529 plan really a penalty?

Since the penalty is only on the gain, the trick is to have no gains and thus no penalty. That's what worked for me. :) Also the idea of "fully funding" leaves money on the table if one can capture education credits which can sometimes be an instant 25% gain for some folks. Thus, I advoca...
by Wagnerjb
Tue May 13, 2014 1:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: 10% penalty on 529 plan really a penalty?
Replies: 30
Views: 2086

Re: How Much Uninsured Motor Vehicle Insurance?

Keep in mind that your health insurance will not cover your for non-medical losses such as pain and suffering as well as lost wages. furthermore, if your state does not offer no-fault (Oklahoma does not offer it), you can't go to that coverage to recover any of those non-medical losses (No-fault wo...
by Wagnerjb
Mon May 12, 2014 7:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: How Much Uninsured Motor Vehicle Insurance?
Replies: 55
Views: 2617
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