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Re: Evaluating Vanguard CFP Recommendations

tibbitts wrote:
It's always been my feeling that VG can't win here.


Right. People should not be going to investment companies for financial advice.
by dbr
Wed Jul 23, 2014 9:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Evaluating Vanguard CFP Recommendations
Replies: 22
Views: 1468

Re: Defining what an expense ratio means for individuals

Thank you for your reply. Sounds like your first sentence is in agreement with dbr. It still sounds a bit complicated. Do companies like Vanguard make it clear how much money you actually paid in fees in a year through the ER? It sounds like in my simplified example, the person could have paid a wi...
by dbr
Wed Jul 23, 2014 9:06 am
 
Forum: Investing - Theory, News & General
Topic: Defining what an expense ratio means for individuals
Replies: 10
Views: 562

Re: Evaluating Vanguard CFP Recommendations

We see Vanguard recommendations from time to time. But this one makes me wonder if we've ever seen one solely for a taxable account. It is not tax-efficient and certainly not what would be recommended here. That does not mean it is a bad suggestion, but it makes me wonder if Vanguard pays attention...
by dbr
Tue Jul 22, 2014 9:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Evaluating Vanguard CFP Recommendations
Replies: 22
Views: 1468

Re: Defining what an expense ratio means for individuals

The value of your investment is the number of shares you have in the fund multiplied by the net asset value (NAV) of a share. The NAV is computed daily by adding up the value of all the holdings of investments and cash of the fund divided by how many shares are outstanding. The company will sell hol...
by dbr
Tue Jul 22, 2014 9:39 pm
 
Forum: Investing - Theory, News & General
Topic: Defining what an expense ratio means for individuals
Replies: 10
Views: 562

Re: Can it be wrong to be too risk averse?

A real issue here would be how to live with the idea that from time to time the total value of assets may actually go down, otherwise known as the dreaded "loss of principal." There has to be a step at which one understands how financial affairs work that takes a person past this difficult...
by dbr
Tue Jul 22, 2014 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2131

Re: Buying in ok neighborhood vs good neighborhood

What does it mean to be "x blocks away from the 'crime part of town'"? Doesn't sound like either one is a good choice.
by dbr
Tue Jul 22, 2014 11:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Buying in ok neighborhood vs good neighborhood
Replies: 27
Views: 1542

Re: Can it be wrong to be too risk averse?

It is possible to be to averse to the risk of stock fluctuations and not sufficiently averse to the specter of ending up with too little savings for retirement. That could be viewed as not having sufficient risk aversion. But some people are in a position to save enough without taking risk in the s...
by dbr
Tue Jul 22, 2014 10:43 am
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2131

Re: Need financial advice

He can just give the money back. The thing to understand about the annual limit is that this is a point where a gift tax return needs to be filed but for most people that will not require paying any tax because there is a huge lifetime exclusion. Also the obligation is only on the giver and not on t...
by dbr
Tue Jul 22, 2014 8:39 am
 
Forum: Personal Finance (Not Investing)
Topic: Need financial advice
Replies: 1
Views: 356

Re: Can it be wrong to be too risk averse?

You can ask him how he knows he will have enough income when he retires.
by dbr
Mon Jul 21, 2014 11:29 pm
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2131

Re: What is reasonable for 403b fees?

I would say 0.5% is reasonable. That's total ER inclusive of everything: Fund ER + 12b-1 + account maintenance fees + etc. I would say that a retirement savings plan that loses more than 0.5% all in is unreasonable. The only truly reasonable fee is 0.00%. Between the two is a question if understand...
by dbr
Mon Jul 21, 2014 4:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: What is reasonable for 403b fees?
Replies: 21
Views: 1073

Re: Stable Value Fund vs Total Bond Market

I prefer total bond market but see a diversification benefit to having some % in a stable value fund at this time. I understand that it is riskier from a credit standpoint than the total bond fund because it is mostly invested in corporate bonds with longer durations that the total bond market fund...
by dbr
Mon Jul 21, 2014 2:06 pm
 
Forum: Investing - Theory, News & General
Topic: Stable Value Fund vs Total Bond Market
Replies: 27
Views: 2063

Re: Helping my sister consolidate to Vanguard after 30 yrs

Hi, I'm helping my sister with her finances. She was approached by a financial advisor who wants to charge her 1.5% to manage her finances. I think he is well meaning and trustworthy, but I have told her that a simple portfolio composed of index funds will likely do just as well without the fee. I'...
by dbr
Mon Jul 21, 2014 12:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Helping my sister consolidate to Vanguard after 30 yrs
Replies: 6
Views: 824

Re: Which kind of bike for recent retiree?

At the same time, I've ridden with hundreds of middle-aged bikers, mostly retired, who spend a ton of money on gear and saddles and pedals and shoes and expensive bikes, because it's their hobby and they enjoy spending money on stuff and showing off all the stuff they buy and going on tours and cha...
by dbr
Mon Jul 21, 2014 10:36 am
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2498

Re: Stable Value Fund vs Total Bond Market

The stable value fund in my 401(k) has 4x the expense ratio of the total bond fund, and information on it is more opaque. The first of those is generally not relevant as one should evaluate the return which is usually net of expenses and fees. While that is true, I still choke on the idea of financ...
by dbr
Mon Jul 21, 2014 9:58 am
 
Forum: Investing - Theory, News & General
Topic: Stable Value Fund vs Total Bond Market
Replies: 27
Views: 2063

Re: Stable Value Fund vs Total Bond Market

I would not be comfortable with a single dedicated SV fund in a 401K holding over 20% of my assets due to idiosyncratic risk. I don't have data on such things, but . . .
by dbr
Mon Jul 21, 2014 9:40 am
 
Forum: Investing - Theory, News & General
Topic: Stable Value Fund vs Total Bond Market
Replies: 27
Views: 2063

Re: Bond Fund or Money Market Fund?

I appreciate the answers so far. However, my intention for rolling over from TSP to Vanguard is to increase my flexibility for withdrawals. So using the G fund doesn't cut it for me. For clarification: all of my rollover will be into a traditional. IRA For simplicity of portfolio management I want ...
by dbr
Mon Jul 21, 2014 9:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond Fund or Money Market Fund?
Replies: 7
Views: 557

Re: Income for my 81 Year Old Father

I too am in my 80's with a good bit of cash and i bonds and never thought of dividing the total by 20 in order to see what i could draw down on an annual basis with no risk involved since i own no equities.I would be very comfortable .Thank you Lady Geek! Bob Yes, It is amazing how many people agon...
by dbr
Sun Jul 20, 2014 6:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Income for my 81 Year Old Father
Replies: 11
Views: 1432

Re: Income for my 81 Year Old Father

As an FYI an 81 year old man could get that $600/month for about $70K invested in an SPIA. That does not mean this is advice off the bat to do so, but it would supply the income (not inflation indexed) and leave $100K for reserve and contingencies. He wouldn't have to go for all the income by such m...
by dbr
Sun Jul 20, 2014 3:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Income for my 81 Year Old Father
Replies: 11
Views: 1432

Re: Can I retire early?

You have four million dollars in investable assets. Yes, you can retire now. I agree, but why not move to 50/50 now? Actually, there is not a game to be played with asset allocation nor does a couple of years in a bond ladder have anything to do one way or the other. Why is there no mention of SS? ...
by dbr
Sun Jul 20, 2014 2:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Can I retire early?
Replies: 28
Views: 3791

Re: Which kind of bike for recent retiree?

I think riding more upright simply compresses your spine more and is more dangerous for your vertebrae especially when going over bumps. A bent-over position is better for your spine, helps distribute your weight between the two wheels, and also helps to take your weight off your saddle. Of course,...
by dbr
Sun Jul 20, 2014 12:57 pm
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2498

Re: Which kind of bike for recent retiree?

goblue100 wrote:
Based on what you are describing, a commuter style bike might be a good fit.
http://www.trekbikes.com/us/en/bikes/to ... n_utility/

http://www.specialized.com/us/en/bikes/ ... rus/sirrus


Those look like great suggestions based on the OP.
by dbr
Sun Jul 20, 2014 10:42 am
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2498

Re: Stable Value Fund vs Total Bond Market

The stable value fund in my 401(k) has 4x the expense ratio of the total bond fund, and information on it is more opaque. Those factors and my time horizon led me to choose the total bond fund. Megacorp recently abandoned their SV fund due to (according to them) high costs and have substituted an i...
by dbr
Sun Jul 20, 2014 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Stable Value Fund vs Total Bond Market
Replies: 27
Views: 2063

Re: Which kind of bike for recent retiree?

I started riding 4 years ago at the age of 49. I road cycle long distances. Some of those road bikes are what they call relaxed geometry, meaning they are not setup as aggressively as a "race" bike, but they have the drop handlebars. That is what I got, and I've been quite happy with it. ...
by dbr
Sun Jul 20, 2014 9:44 am
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2498

Re: Which kind of bike for recent retiree?

I ride a road bike, clipless pedals, shorts, and all. I find it the most comfortable and enjoyable way to enjoy biking as a sport. I don't think my digestion could tolerate an actual lunch in the middle of riding. That sort of bike is actually optimized for biking rather than for biking and doing ot...
by dbr
Sun Jul 20, 2014 9:19 am
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2498

Re: Retiring soon setting aside 3 years living expenses

This article may lend some perspective regarding what are and what aren't bad times to retire: http://www.kitces.com/blog/Why-Merely-Mediocre-Returns-Can-Be-Worse-Than-A-Market-Crash/ The gist is that protracted period of poor returns is more damaging than large drops in the market which recover soo...
by dbr
Sat Jul 12, 2014 8:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5180

Re: Safe 401k withdrawal rate?

Probably the most comprehensive book on this subject is Jim Otar's Unveiling the Retirement Myth. See his website and book here: http://www.retirementoptimizer.com/ You can look for articles on the forum and in the literature by people like Kitces and Pfau for more recent updates to this sort of wor...
by dbr
Sat Jul 12, 2014 8:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Safe 401k withdrawal rate?
Replies: 5
Views: 868

Re: Who else hates choosing a car?

I drive a fifteen year old car that perhaps might need to be replaced in sooner more than later. As of now I can't identify any car, used or new, on the market that I would want to pay money to own. I guess I can identify wanting to continue to own the car I have. The more expensive the car the more...
by dbr
Sat Jul 12, 2014 4:44 pm
 
Forum: Personal Consumer Issues
Topic: Who else hates choosing a car?
Replies: 75
Views: 6270

Re: Please help differentiate rate of returns

If the idea was supposed to be that you have charged the client $50 each year that would have stayed invested then I think the loss is like investing $50 each year for 40 years at 25% return each and every year. The future value of that is $1,504,433. Of course the money is not invested at 25% every...
by dbr
Sat Jul 12, 2014 1:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please help differentiate rate of returns
Replies: 5
Views: 840

Re: Merton: 401(k) retirement plans face crisis

I am not conflating anything. I was simply trying to indicate reaching a level of savings that could assure a future level of income, long before that income is needed. 4% is as good a rule of thumb as any. Why do you persist in this binary view that those who do not hunker down with a TIPS ladder ...
by dbr
Sat Jul 12, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16728

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 dbr
Sat Jul 12, 2014 12:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5180

Re: Retiring soon setting aside 3 years living expenses

In retirement, I need distributions from my investments to go along with my Social Security to meet expenses. Because I don't want to have to sell investments when markets are down, I have kept up to 5 years of normal investment distributions in money market and short term bond funds (presently in ...
by dbr
Sat Jul 12, 2014 12:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5180

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 dbr
Sat Jul 12, 2014 10:14 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5180

Re: True or False? Your risk tolerance only increases with t

midareff wrote: it matters not once liability matching has occurred.


It matters if you screwed up your estimate of liabilities or life throws some curveballs.
by dbr
Sat Jul 12, 2014 9:59 am
 
Forum: Investing - Theory, News & General
Topic: True or False? Your risk tolerance only increases with time
Replies: 30
Views: 2324

Re: Merton: 401(k) retirement plans face crisis

By the way, the same thing applies on the other side of the hill. An adaptive withdrawal strategy will ensure you never run out of money, though there might be some income variation along the way. I like that. :D :D :D BobK My view is that the retirement plan has to be able to meet requirements for...
by dbr
Sat Jul 12, 2014 9:57 am
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16728

Re: Ditch car and commute to work in 250cc scooter in Raleig

18 miles each way? You are a perfect candidate for an electric car. Leaf, Focus, Spark, etc., all get +100 MPGe and have more than enough range to not have to charge at work and still leave room for errands after work or detours on the way. Scooter is a serious accident waiting to happen. While it ...
by dbr
Sat Jul 12, 2014 9:53 am
 
Forum: Personal Consumer Issues
Topic: Ditch car and commute to work in 250cc scooter in Raleigh?
Replies: 68
Views: 4333

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 dbr
Sat Jul 12, 2014 9:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Retiring soon setting aside 3 years living expenses
Replies: 49
Views: 5180

Re: True or False? Your risk tolerance only increases with t

What is risk tolerance? I think Swedroe is a real genius to come up with the three part answer of need, ability, and willingness. If you explore those three concepts and how they might evolve as a person ages you will find that "risk tolerance" can simultaneously increase, decrease, and re...
by dbr
Sat Jul 12, 2014 9:27 am
 
Forum: Investing - Theory, News & General
Topic: True or False? Your risk tolerance only increases with time
Replies: 30
Views: 2324

Re: Higher mathematics ?

Bogleheads: I wonder how many of us understand higher mathematics skills? I don't, and I was Chief of the Financial Division of SBA (S. Florida). Perhaps a better question is: Does in-depth analysis of past performance help us be better investors? Best wishes. Taylor What is higher mathematics and ...
by dbr
Sat Jul 12, 2014 9:19 am
 
Forum: Investing - Theory, News & General
Topic: Risk Adjusted Return?
Replies: 61
Views: 4388

Re: Family member as Financial Advisor

I think what I would do is keep your account with your Dad and start a new account with Vanguard. Keep the peace and keep your Dad happy. An alternative would be to stay with your Dad and buy ETF indexes or pay the fee and buy index funds. I like the first alternative the best. No need to yank the ...
by dbr
Sat Jul 12, 2014 9:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Family member as Financial Advisor
Replies: 29
Views: 2350

Re: Risk Adjusted Return?

I suspect a chart that reflects periodic (twice monthly) investments of a smallish amount over a 30-year period will show much less variability in the final outcome than the fate of a fixed single investment over 30 years. It will also much better reflect the reality of retirement saving. L. It mig...
by dbr
Sat Jul 12, 2014 8:58 am
 
Forum: Investing - Theory, News & General
Topic: Risk Adjusted Return?
Replies: 61
Views: 4388

Re: Risk Adjusted Return?

The one I saw had the two distributions for stocks and for bonds superimposed. Quite enlightening. Looking at Norstad's chart, I wonder how it would look if the vertical ($ amount) axis was logarithmic? Would the lines (median, +- one SD etc then be straight? Thank you for your contribution in this...
by dbr
Fri Jul 11, 2014 7:35 pm
 
Forum: Investing - Theory, News & General
Topic: Risk Adjusted Return?
Replies: 61
Views: 4388

Re: Conversion Taxes

livesoft wrote:What do you mean "investment account"? Is it even eligible to be rolled over into an IRA?


Or . . . maybe it is an IRA now, that being what it was converted to.
by dbr
Fri Jul 11, 2014 6:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Conversion Taxes
Replies: 4
Views: 585

Re: Marriage - Asset Allocation Question

She has two rather large accounts with MerrilLynch, high 6 figures split evenly between them. The first is a brokerage account that holds six large-cap individual stocks (primarily oil companies purchased long ago), all of which have very high unrealized gains (gifting from grandparents previously)...
by dbr
Fri Jul 11, 2014 6:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Marriage - Asset Allocation Question
Replies: 11
Views: 1243

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

One aspect of this is that big companies with huge plans mostly, but not always, have pretty good plans. So are the reasons: 1. Big plans are inherently more efficient which allows profits to the provider at lower cost to the participants. 2. Big plans have lots of clout and can drive a harder barga...
by dbr
Thu Jul 10, 2014 8:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Why do companies put up with high expense 401k choices?
Replies: 15
Views: 1477

Re: How I look at $ in the real world vs my retirement accou

The comment that equities are not money is exactly right. However, I am not sure that helps a person with the idea that they have exchanged actual money for equities and now don't know what they will get back. Part of the answer lies in the fact that a capitalist economy offers the opportunity of ga...
by dbr
Thu Jul 10, 2014 8:33 am
 
Forum: Personal Finance (Not Investing)
Topic: How I look at $ in the real world vs my retirement accounts
Replies: 45
Views: 5631

Re: Undestanding the Vanguard Total Bond Market fund (VBMFX)

I'm curious to hear from anyone who can explain why and how the total US bond market functions. My guess is that it has something to do with allocation of capital and the profit motive. Some people need to borrow money; other people have money to lend. The terms for doing so are settled in the mark...
by dbr
Thu Jul 10, 2014 8:23 am
 
Forum: Investing - Theory, News & General
Topic: Undestanding the Vanguard Total Bond Market fund (VBMFX)
Replies: 21
Views: 3980

Re: Vanguard Target Fund in 401k vs Rollover IRA

Given how often we hear of bad 401K plans, it sometimes comes as a surprise that costs can be better in a good 401K than in an IRA. That just sets the measure for how bad the bad plans really are.
by dbr
Thu Jul 10, 2014 8:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Target Fund in 401k vs Rollover IRA
Replies: 2
Views: 332

Re: How I look at $ in the real world vs my retirement accou

It might be helpful to contemplate what one should do with one's investment money if one is not going to put that money in a market where the value fluctuates. Along the way, one should also do the arithmetic in real dollars so that one does make the mistake of thinking that the value of currency in...
by dbr
Wed Jul 09, 2014 10:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: How I look at $ in the real world vs my retirement accounts
Replies: 45
Views: 5631

Re: Vanguard Internet

It has always seemed to me that keeping a close eye on things is better than the opposite.

I don't really have a good understanding of how frequency of use affects liklihood of getting hacked.
by dbr
Wed Jul 09, 2014 10:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Internet
Replies: 23
Views: 2670
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