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Re: not sure about my adviser

Thanks BitDude you are really making me feel better- NOT! So what is an "in-kind" transfer and why to Vanguard specifically? Thanks. An in-kind transfer is just moving all of your current holdings from say Schwab to a different brokerage. Why Vanguard is because most of this forum likes V...
by dbr
Thu Mar 05, 2015 9:03 am
 
Forum: Investing - Help with Personal Investments
Topic: not sure about my adviser
Replies: 42
Views: 2504

Re: Do you consider mortgage payments as savings?

It appears this is an emotional topic, presumably because a house payment is large for most people and there's a desire to put it in a special category of some sort. But in reality, your house is nothing more than a purchase. If you're interested in tallying up your net worth, then you should add y...
by dbr
Wed Mar 04, 2015 8:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Generating pre-retirement income from portfolio, and mor

If by several years you mean specifically $75K a year for three years, taking $215K out of $1,700K in cash would seem to be a non-issue. I am guessing that the annual need will be $75k for three years beginning in September 2015 (when the first child starts college), $125k in the 4th year (when bot...
by dbr
Tue Mar 03, 2015 4:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Generating pre-retirement income from portfolio, and more
Replies: 7
Views: 920

Re: VEU 3.52% vs. 5 year Treasury 1.58%

Back to the dividend -- one might get the impression that the dividends reduce risk and are almost bond like. This is not true -- they come from earnings like everything else about stocks, and the return of stocks with or without dividends fluctuates to about the same degree. So a comparison of div...
by dbr
Tue Mar 03, 2015 2:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: VEU 3.52% vs. 5 year Treasury 1.58%
Replies: 29
Views: 1745

Re: Generating pre-retirement income from portfolio, and mor

If by several years you mean specifically $75K a year for three years, taking $215K out of $1,700K in cash would seem to be a non-issue. If life insurance on the wife is the source of this much money, then that life insurance policy evidently did exactly what it was intended to do. Good planning for...
by dbr
Tue Mar 03, 2015 2:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Generating pre-retirement income from portfolio, and more
Replies: 7
Views: 920

Re: 66 year old needs assistance

I wonder if the posting by Anon1234 suggests a sticky on how to post advice as a follow on to the sticky on how to post a request for advice :happy
by dbr
Tue Mar 03, 2015 9:04 am
 
Forum: Investing - Help with Personal Investments
Topic: 66 year old needs assistance
Replies: 10
Views: 1434

Re: ...it is madness to risk losing what you need in pursuin

There actually is research on the subject. If one studies the effect of asset allocation on the risk of running out of money when withdrawing from a portfolio, then for modest withdrawal rates (say about 4%) there really has been over history a slight maximum at the values you quoted. That maximum ...
by dbr
Tue Mar 03, 2015 8:53 am
 
Forum: Investing - Theory, News & General
Topic: ...it is madness to risk losing what you need in pursuing wh
Replies: 43
Views: 3936

Re: Professional tax advice - when is it worth it?

The scenario is possible. Most likely the solution is to sell enough of the shares accumulated by the ISO exercise to pay any taxes due. An example where this is not possible and results in bankruptcy is the Enron case where people exercised options, kept the shares, and the share value plummeted be...
by dbr
Mon Mar 02, 2015 4:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Professional tax advice - when is it worth it?
Replies: 23
Views: 1562

Re: Portfolio advice for aging parent

Are there current sources of income enough to pay living expenses such as social security or pension? If so the asset allocation is primarily for heirs and though aggressive for an 80 y.o. may still make sense. The individual stocks have risks that most Bogleheads would not be willing to take. They...
by dbr
Mon Mar 02, 2015 2:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice for aging parent
Replies: 5
Views: 385

Re: WWWD (what would warren do)

He did not mention the S&P 500 in the video. He simply said to own a piece of America through a heavily diversified low cost index fund and advocated for a buy and hold approach through dollar cost averaging. Yes, it came up in the conversation about how he would recommend his wife invest and a...
by dbr
Mon Mar 02, 2015 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: WWWD (what would warren do)
Replies: 21
Views: 1584

Re: Dividends + LT/ST Capitol Gains for retiree (GES)

Why be happy paying taxes you don't need to pay when you could spend more and pay less.
by dbr
Mon Mar 02, 2015 2:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dividends + LT/ST Capitol Gains for retiree (GES)
Replies: 11
Views: 602

Re: WWWD (what would warren do)

Again it is a mystery whether this recommendation is intended to specifically suggest S&P 500 over TSM and if so what reason could exist for doing so. In previous threads no resolution was found and no one as asked WB and gotten an answer.
by dbr
Mon Mar 02, 2015 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: WWWD (what would warren do)
Replies: 21
Views: 1584

Re: Do you consider mortgage payments as savings?

I don't think it is a property of a transaction that it is or isn't savings. What has been saved is a result of tallying up the income and outgo for a period, or of looking at the change in total asset value due to certain classes of activities. Due to fungability of money no single transactions can...
by dbr
Mon Mar 02, 2015 2:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Recovering Your Investment after a Loss

A preliminary step that should always be assumed but may not be explicit is that diversifiable risk has been diversified away. In other words if someone takes on single stock risk, they are on their own.
by dbr
Mon Mar 02, 2015 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: Recovering Your Investment after a Loss
Replies: 12
Views: 1305

Re: ...it is madness to risk losing what you need in pursuin

There actually is research on the subject. If one studies the effect of asset allocation on the risk of running out of money when withdrawing from a portfolio, then for modest withdrawal rates (say about 4%) there really has been over history a slight maximum at the values you quoted. That maximum i...
by dbr
Mon Mar 02, 2015 9:13 am
 
Forum: Investing - Theory, News & General
Topic: ...it is madness to risk losing what you need in pursuing wh
Replies: 43
Views: 3936

Re: Help with municipal bonds

First of all muni bonds are a discussion vice-versa other bonds. Suggesting a change from bonds to more investment in stocks is a basic change in asset allocation and needs a step back to re-evaluate the whole plan, if that is the idea. Secondly muni's vice other bonds is a tax decision. The best ad...
by dbr
Mon Mar 02, 2015 9:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with municipal bonds
Replies: 4
Views: 461

Re: What can I expect in return?

As I understand it, real return (adjusted for inflation) is what's used by calculators like Firecalc and the Otar Retirement Calculator (ORC). This would work out to something about equal to the dividend yield on stocks and the bond yield. Figure 2-3% right now, max. This may seem conservative, but...
by dbr
Mon Mar 02, 2015 8:53 am
 
Forum: Investing - Help with Personal Investments
Topic: What can I expect in return?
Replies: 7
Views: 922

Re: Recovering Your Investment after a Loss

Hopefully the takeaway message is to diversify. The simple example of a 100% gain being required to recover from a 50% loss was one of the earliest light bulbs to go off over my head back in my days of not only being 100% in stocks, but not even holding the entire domestic market. I can't remember ...
by dbr
Mon Mar 02, 2015 8:41 am
 
Forum: Investing - Theory, News & General
Topic: Recovering Your Investment after a Loss
Replies: 12
Views: 1305

Re: Illiquid Assets

texasdiver wrote:Is there really a illiquidity premium?




If not, then what thread of benefit might have existed in the idea doesn't even exist.
by dbr
Sun Mar 01, 2015 9:12 pm
 
Forum: Investing - Theory, News & General
Topic: Illiquid Assets
Replies: 37
Views: 2681

Re: Do you consider mortgage payments as savings?

I think the issue about what is counted as an asset is arbitrary as long as all the accounting is self consistent. Naturally it is possible to create situations that seem distorted or that may not seem distorted from a different point of view.
by dbr
Sun Mar 01, 2015 8:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: where to put excess cash

any other thoughts on asset allocation issue? I set up my retirement accounts asset allocation and only counted all the retirement accounts in the asset allocation. Did not include things like: emergency funds, savings for a house, owned properties, cars, any other asset etc.. But should it? I didn...
by dbr
Sun Mar 01, 2015 7:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: where to put excess cash
Replies: 18
Views: 2912

Re: Do you consider mortgage payments as savings?

Yours one was of the posts that I had in mind. As Rodc points out there was not a deafening response acknowledging that your definition somehow offered helpful clarification. I think it does offer helpful clarification. One thing that would be included in your definition if the OP wants the scope t...
by dbr
Sun Mar 01, 2015 6:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: rebalancing & purchasing when fear is present

Well, there has a been a recent trend of stocks being up quite a bit compared to bonds, so to take some withdrawals I have liquidated stocks and not bonds to do it. I am not sure what fear is involved in that. I guess there is an underlying rationale there of not ending up invested too heavily in st...
by dbr
Sun Mar 01, 2015 6:10 pm
 
Forum: Investing - Theory, News & General
Topic: rebalancing & purchasing when fear is present
Replies: 8
Views: 431

Re: Do you consider mortgage payments as savings?

I did state earlier that cash flow is a very very very flawed way to measure saving of any kind. It can easily be manipulated by taking on more debt or reducing debt. Someone taking on loads and loads of debt could have very healthy cash flow and many people here, by their definition, would conside...
by dbr
Sun Mar 01, 2015 6:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Do you consider mortgage payments as savings?

I may have missed it. Is there a post that defines savings and some set of posts where folks agreed to that definition? (note it would be best of the OP provides the definition and asks folks to use that for the purposes of the thread. Many will wander off to other definitions because few can hold ...
by dbr
Sun Mar 01, 2015 5:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Do you consider mortgage payments as savings?

Has anyone wanted to explicitly discard the definition that savings is the difference between income and outgo in any particular period of time? Is it that there has been some implicit discarding of this definition, perhaps by altering what is defined as income and what is defined as outgo? Does an...
by dbr
Sun Mar 01, 2015 5:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

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 dbr
Sun Mar 01, 2015 5:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Dividends and Market Slides

I don't have a problem debating possible subtle differences in risk and return, especially at the extreme downside of the returns distribution, in a sub-selection of the total stock market based on dividend paying. I have a big problem if lying behind that is an investor who is misunderstanding the ...
by dbr
Sun Mar 01, 2015 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 55
Views: 3184

Re: Illiquid Assets

The problem for a young investor is the good illiquid investments end up being undiversified because they're too large a fraction of their portfolio. Like raw land in a good location. Or a field of timber. So if you want exposure in small diversified chunks1 yiu have to rely on intermediaries. The ...
by dbr
Sun Mar 01, 2015 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: Illiquid Assets
Replies: 37
Views: 2681

Re: Costs of loyalty to employer

You can most likely maximize compensation by moving around. You can also learn some positive and some negative lessons about what companies are worth sticking with and what companies are not. Those lessons will come too late to be of use. I would say that the biggest factors in this equation are int...
by dbr
Sun Mar 01, 2015 3:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Costs of loyalty to employer
Replies: 14
Views: 1639

Re: Help for a relative

If you follow a rough estimate that one can affort to take about 4% of a portfolio annually in withdrawal and recognize that somewhere around 2%-3% has already been siphoned off by the expenses of holding those funds (the ER plus trading costs in the funds plus other costs at ML) then you could incr...
by dbr
Sun Mar 01, 2015 3:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help for a relative
Replies: 4
Views: 473

Re: Tips on answering the question - What Should I Do?

I am a great believer in getting an overview of the life income situation using one of the retirement planners like FireCalc, Otar's Retirement Optimizer, the Fidelity Planner, etc. It is the best way to combine planned income streams, investment situation, hoped for income in retirement, and evalua...
by dbr
Sun Mar 01, 2015 2:55 pm
 
Forum: Investing - Theory, News & General
Topic: Tips on answering the question - What Should I Do?
Replies: 153
Views: 180676

Re: Investing 1 Mill for 75 year old parent

I agree with two points. One is that more than 1/3 of needed income should be annuitized, possibly spaced out, and the other is that for investments the target retirement income fund is a pretty good concept for investing. A target withdrawal of 4.5% for 15 years is not crazy, but it would be better...
by dbr
Sun Mar 01, 2015 2:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing 1 Mill for 75 year old parent
Replies: 18
Views: 1666

Re: Do you consider mortgage payments as savings?

stan1 wrote:
dbr wrote:What causes this ongoing confusion about what it means to save?


Because saving 30% or 50% is obviously better than saving 20%, especially if you want to tell your spouse/friends about it or gloat on the internet. :moneybag


Maybe that is exactly it.
by dbr
Sun Mar 01, 2015 1:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Fund for 50+ years???

Holding something 50 year is a big stretch. I would opt for balanced fund. Vg doesn't seem to mess with that fund as it does with Target Date and Life Strategy Funds - so maybe what you are buying at low cost will stay the same. No international, no TIPS etc so if that is needed/wanted you need to ...
by dbr
Sun Mar 01, 2015 1:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fund for 50+ years???
Replies: 6
Views: 515

Re: Do you consider mortgage payments as savings?

It's not saving. It's paying for something you already bought. Correct. If I get a big inheritance, for instance, and buy a house for cash, would THAT count as "savings"? No it would not, and neither does paying down a loan or debt for any reason... But getting the big inheritance and kee...
by dbr
Sun Mar 01, 2015 1:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Do you consider mortgage payments as savings?

As a previous poster pointed out, moving money from one asset, cash in the bank for example, to another, reduction of loan liability for example, is not saving. If the question is whether or not it is saving to make use one's new paycheck to make a payment against mortgage principal versus not makin...
by dbr
Sun Mar 01, 2015 1:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 306
Views: 12164

Re: Fund for 50+ years???

There is no "best" fund for such a general purpose. There are lots of investment choices that would be very suitable, possibly including those you list and others besides. I think it is better to lay out one's entire investment portfolio and solve the investment selection problem last rath...
by dbr
Sun Mar 01, 2015 12:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fund for 50+ years???
Replies: 6
Views: 515

Re: Risk--Again. The common stepping stone

The benchmark study would be this one: http://en.wikipedia.org/wiki/Trinity_study but the research has continued over the years. You could Google for Wade Pfau and Michael Kitces for recent work. This is a source of frequent and lengthy discussions on this forum. Milevsky is another academic who has...
by dbr
Sun Mar 01, 2015 11:12 am
 
Forum: Investing - Theory, News & General
Topic: Risk--Again. The common stepping stone
Replies: 57
Views: 3257

Re: Help me calculate changing asset percentages.

Apparently I suck at math. Can anyone show me how calculate the correct amount or percentage of asset class when adjusting asset allocation? For instance, assume my current allocation is 30% Total Stock Market and 70% Total Bond Market. If I want to add 10% Total International Stock Fund to my 30% ...
by dbr
Sun Mar 01, 2015 10:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me calculate changing asset percentages.
Replies: 6
Views: 277

Re: Recovering Your Investment after a Loss

There is a calculator in the New York Times "Your Money" section that allows you to calculate how long it takes to recover where you were after a portfolio loss. You enter in what you had, where you are after the loss, any estimated on-going contributions, an expected return rate, and an ...
by dbr
Sun Mar 01, 2015 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Recovering Your Investment after a Loss
Replies: 12
Views: 1305

Re: Help me calculate changing asset percentages.

You haven't define what you mean by "add." If you mean you want to increase your stock allocation by 3% with the addition to be in international stocks, then you sell 3% of total assets in bonds and buy those stocks, ending up with a 33/67 allocation. If you mean you want to sell some bond...
by dbr
Sun Mar 01, 2015 10:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me calculate changing asset percentages.
Replies: 6
Views: 277

Re: Inheritance to be held in expensive trust for ~10 years

We are the grantors of an irrevocable trust, making annual gifts to the trust. Each year the trust files a Form 1041 return based upon its net income from investments. In our case the trust pays no tax. It issues a K-1 form to us, as grantors, that we include in our personal Form 1040 tax filing, p...
by dbr
Sun Mar 01, 2015 10:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance to be held in expensive trust for ~10 years
Replies: 55
Views: 6419

Re: Risk--Again. The common stepping stone

It appears that the essence of this discussion is the event: "running out of money" (or the event: available funds being less than XXX dollars). This "event" (e.g. dying, cancer diagnosis, some other adverse event), can be modeled (i.e. proportional hazards regression), given va...
by dbr
Sun Mar 01, 2015 10:21 am
 
Forum: Investing - Theory, News & General
Topic: Risk--Again. The common stepping stone
Replies: 57
Views: 3257

Re: Retirement planning - Too soon for TIPS?

The one caveat about I bonds is that interest payment will stop and tax come due after thirty years. This may not be a big deal but for some investors could be awkward if the timing falls in years of highest earnings before retirement. I bond tax can be paid as you go, but one of the appeals of I bo...
by dbr
Sun Mar 01, 2015 10:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement planning - Too soon for TIPS?
Replies: 25
Views: 2257

Re: slice and dice question (fixed income)

I was recommended these by a financial adviser. Are these more/less risky than just investing the money in BND? Yes, they are risky. High yield corporate bond, for example, is risky enough that a lot of people here would classify that as effectively half stocks and half bonds. Emerging market forei...
by dbr
Sun Mar 01, 2015 10:10 am
 
Forum: Investing - Help with Personal Investments
Topic: slice and dice question (fixed income)
Replies: 10
Views: 671

Re: Inheritance to be held in expensive trust for ~10 years

The trust tax return is Form 1041 and Instructions. Aside from articles, as offered in the reply above, the tax rate schedule is part of the instructions for 1041 Schedule G, which is found on Page 30 of the instructions. As with any other part of the Tax Code there is nothing on this form that is s...
by dbr
Sat Feb 28, 2015 4:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance to be held in expensive trust for ~10 years
Replies: 55
Views: 6419

Re: PIN + Signature card in Europe

I traveled a lot across all continents and never had a problem using ATM cards. There were only a few places where I used cash anyway. In a few places it sometimes pays to have a wad of USD -- sometimes the unofficial exchange rates are quite good. I was in Buenos Aires the week after they unpegged...
by dbr
Sat Feb 28, 2015 2:13 pm
 
Forum: Personal Consumer Issues
Topic: PIN + Signature card in Europe
Replies: 16
Views: 604

Re: PIN + Signature card in Europe

That usually means finding an attended gas station. At least in Italy I've found that many stations take cash vending-machine style. But yes, attended is better. That's exactly what was happening. Cash was working in the machines and the credit cards were turned off. We had been in Switzerland and ...
by dbr
Sat Feb 28, 2015 2:12 pm
 
Forum: Personal Consumer Issues
Topic: PIN + Signature card in Europe
Replies: 16
Views: 604
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