Bogleheads.org

Banks can borrow at a lower rate from other banks (fed funds market) than from the Fed (discount window). Fed funds rate is not the borrowing rate from the Fed. It's the lending rates between banks.

It seems like there are two calculations to be made. The first is: Am I in a financially stable enough place that the worst case scenario will not bring me financial ruin. This is what 325e and Skinut's comments seem to go. If and only if the answer to that is yes, then one can address your concern...

can you provide the source that says junk (= speculative grade) bonds have the same risk and returns as 25% in small value and 75% in regular bonds?

I'm trying to convince others to use Vanguard Group. Here is the list of reasons that I can think of. Please add, if I missed any. 1. Vanguard mutual funds are low cost. 2. No transaction fees if buying Vanguard funds or ETFs. 3. Automatic dollar cost investing with mutual funds. 4. Owned by investo...

41 yrs old, 56% of gross.

My definition of saving rate = 1 - (consumption + expense) / gross.

I was talkin with friends about bonds last night and was hoping someone here may be able to clear things up for me. I was told that the bond gets issues from Company XYZ at 7% (as an example), and those bonds are purchased by a company/group who then turns around and sells those Company XYZ bonds t...

Fed: 8.9%
State: 0%
SS/Med: 4.4%

acegolfer So are you planning to do any analysis based on the responses? In scanning the responses I was unable to gain any insight into what such a ratio might mean; too many other variables and a host of unknowns. I agree. To be able to do any analysis, I will need more personal information such ...

There are many threads discussing whether to pay off mortgage or not. Okay, originally I had an example in my previous comment: If someone had $100k cash and decided to buy a $100k house with a $80k loan, equity = $20k, net worth = $100k, ratio = 20%. But then if one pays off that loan immediately,...

I'm somewhat confused with what this is trying to get at or learn. Is this looking at diversification of one's net worth, so one doesn't put too much of one's net worth into a single asset/home equity? Right on. There are many threads discussing whether to pay off mortgage or not. Most of the advic...

I'll go first.

1. 44%

2. no

1. What percentage of your net worth is in home equity (=home market value - mortgage balance)?

2. Did you payoff your mortgage?

3. If you answered yes to Q2, what was the home equity / net worth right after you paid off the mortgage?

I have been using the $30 tmo plan since I got nexus 4.

There are many guides at xda where you can make unlimited calls using data.

Using OP numbers, if you sell the house in 1 year, then making extra $10k payment is equivalent to investing in a 4% (before tax) 1-yr CD. If you are willing to invest in 4% 1-yr CD, then making extra payment is the right thing to do. As others pointed out, duration of a bond is not what you think. ...

Here's how you should look at prepayment.

You said you have 5 years left in your 4.375% mortgage. Making extra payment is equivalent to investing in a 5yr 4.375% CD. If you are not itemizing deduction, then it's like investing a nontaxable 4.375% CD.

I'll probably give a different perspective from others. I was in a similar situation as OP about 10 years ago. We had no kids then, now we have 2. We bought a luxury SUV (about $45k+), which was my wife's dream car, with a 5-yr loan. Do I regret it? Yes. But not because we couldn't afford it. We pai...

I am going to give you advice. You will probably ignore it. You are early on in the process with this seller. He/she is putting an obstacle up that you do not want there. You do not know what more they will request/cajole/torment you with. Just walk now. Good bye. Let them get a buyer who wants $50...

Have you checked out Ally Bank (ally.com)? I have been with them for several years and I have been overall very pleased with them. Their customer service is top notch - there is someone available 24/7. Plus there are no fees, no minimum balances, etc. Plus, on their CD's there are very low penaltie...

Given the results so far, more than half BHs don't have any debt. How do you conclude this from the poll results? Agree with Green. It should have said more than half of poll responders don't have any debt. We have no idea how that projects to BH's as a whole. Too be pedantic: more than half of the...

So here are the groups corresponding to the poll: 2. [bank + investment accts > debt] Those who like to invest on margin, but don't call it that Absolutely. This category includes those who could pay off a mortgage but don't and the equivalent, those who could have paid cash for a house but didn't....

Given the results so far, more than half BHs don't have any debt. How do you conclude this from the poll results? So here are the groups corresponding to the poll: 1. No debt, or so little they can't be bothered to pay it off 2. Those who like to invest on margin, but don't call it that 3. Those wh...

I would recommend that the mods on this forum review the poll questions before they are posted on this forum... If the questions don't make any sense, perhaps don't allow those polls??? If it doesn't make sense to you, then don't participate. Simple. I wanted to know what percentage of BHs have eno...

Fallible wrote:

ResNullius wrote:Confusing poll. We have zero debt.

Also confused; also zero debt.

What's confusing?

If you have 0 debt, then your bank account (assuming positive) is bigger than your debt. I bet most ppl who answered #1 have 0 debt like yourself.

slick_dealer_05 wrote:Wow...quite amazed at how many folks have a large holdings in their bank accounts.
I keep my bank acct and line 8a on 1040 as low as possible.

Ppl who answered #1 probably carries 0 debt rather than large bank accounts.

1. Please do not include non-financial assets such as house/cars.
2. I am assuming most ppl define investment and retirement accounts more or less the same. If not, please define them.
3. Debt only includes interest bearing loans such as mortgage/car loans/credit cards.

It depends on how one defines portfolio.

If it confines to financial assets, then real estate should be excluded.

If you define it in the broadest sense, then real estate and even human capital should be included.

That is very different. I am referring to the outcome. It's kind of like asking people whether they are happy they bet on the Giants to win the Super Bowl after the game has been played. The past decade has not exactly been the most investor friendly environment (i.e. the Patriots) as compared to t...

swaption wrote:I have read some, but not all the posts here, so not sure if this has been pointed out. I hope all realize there is significant statistical bias at work here.

It was mentioned in the first post.

I found a guy who regretted paying off early from another website. I was once a Dave Ramsey groupie. But no longer. You see, living just outside Detroit in Eastpointe, I was caught in the middle of the housing bust with a $130k house now worth about $40k, which was a price not seen since the 1960s. ...

Finished paying off mortgage this year, age 48. Here is one negative I have found, although I am not sure it is a "regret," in fact I consider it a "relative" negative. I no longer have the desire to work harder, extra hours, and keep trying to make more money and increase my in...

This is an unscientific poll. Just curious on how bogleheaders think how risk averse they are. The 5 choices below represent 5 quintiles (20 percentile groups).

ann and Victoria,

Thanks for your posts. But I'm the OP and this is not another discussion on whether or not to pay off mortgage early. There are plenty of those already.

I was looking for 1st hand experience from those who paid off.

Interesting.

I was hoping someone would say they regret paying off early because they should have invested in apple stock or gold.

If you have paid off mortgage early, have you ever regretted your decision and why? From another thread, it seems ppl are mostly happy with their decision to pay off the loan. Let's hear your experience, if you have paid off. This is NOT another thread on whether to pay off mortgage or not. If you w...

1. You have calculated after tax-deduction interest rate on the loans. But your nominal 6% return on the investment is before tax. Apples to oranges. 2. It seems that you are not going to make any extra principal payment on either 30-yr and 15-yr. If you are making extra payment, then there's a flaw...

Title: How NOT to open a new Ally Bank account

You are saying: don't credit freeze and open a bank account at ally.

Come on, man!

Also, I meant to ask if anybody knows if a transfer from my Ally online savings would count as a "direct deposit." It used to be. But last time when I spoke with my bank (forgot which one), they no longer count it as direct deposit. I didn't believe them but didn't want to take any chance...

If you earn say $100K (a round number, not a statement about what someone ought to be making), and you expected your investments to return more than that (tax nuances aside) and you assume a total return of 6%, then you need assets of about $1.7M. These numbers can be adjusted to suit. Was there an...

Will wait till the dust settles and see what kind of fees I have and try to get Ally to help. Kind of mad at myself, but their process is a little confusing. NateW: Have you tried to get Ally to reimburse you? You said that Ally process is confusing. I had CDs with other banks, but I didn't find Al...

I use a combination of BofA + Ally.

I make deposits at BofA branches, which are everywhere in S. Florida. Other than deposits, I use Ally exclusively. Love the ATM fee reimbursements.

EO 11110 wrote:does the lexus require premium gas? a lot of the step-up japanese vehicles do. thus, off of my list -

My wife is driving 2004 RX-330. Every Lexus person told us to put 93. We started putting 87 a year ago and have noticed 0 difference.

I think applying it "to your next month's payment" would accomplish the same thing as putting it against principal... but again, you don't want it to wind up in your escrow account so specify principal. rg I'm afraid that you are wrong. Paying next month (principal+interest) payment has d...

Ask the lender. As previous poster said, normally, the excess payment applies to principal. But make sure your bank does it.

In my case, I use automatic payment where I can specify the additional principal payment amount.

I would not borrow to invest in stocks, but I sure would borrow against my home to invest in CDs, I-bonds, Treasuries, and other bonds. Would you believe I made about $6,000 profit in the last 3 years by borrowing from my credit card and investing in bonds? If I see money lying on the ground in fro...

I am still baffled that the majority of arguments on these threads are for "piece of mind". Do most of the people here have insignificant property taxes? My property tax (in DC suburb) is growing up every year and will bypass mortgage payment in 5 years at this rate. Utility bills seem to...

We are all gamblers but one party (who is paying off) is using currently available information to make a bet: current CD rate < mortgage rate. On the other hand, you are are also making a bet on future rates. So your position is a bit more risky. (I'm not saying paying off right now is riskless. It...

I don't understand why anybody would be in a hurry to pay back a (tax-deductible) loan at such a historically low cost of capital.[...] If a bank offered you a home loan at 3% would you pay that off as fast as you could? And even if you would pay off a loan at 3% based on circumstances today, how c...

New member, first post, but a Boglehead investor for many years. Every situation is different, but as a free-lance musician, my income fluctuates more than most. My wife and I paid off our first house after 7 years and paid cash for our 2nd house. Some friends would ask about us losing the mortgage...

The rate difference between 30, 15, and 10 is really minuscule now. According to bankrate.com (5/25/2010), the 30-yr FRM rate is 4.87% and 15-yr is 4.20%. The spread is 67 basis points. I say the difference is considerably large now. For a $200k loan, the annual interest payment difference is $1340...

When I saw the title, I assumed $10k was the closing cost to refinance and was interested to see the responses. Since your $10k is not a closing cost, this is an easy call. Refinance. You are not dumping $10k. It's just a transfer. If you consider $10k as spending (which is incorrect but some do), y...