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Re: Kiplinger: Why You Should Avoid Most Bond Index Funds

The older I get and the more I study investing, the less detailed my own plans become. I've got TBM for my 401 plan. Might pick up some TIPS in my Roth when I'm fully happy with my equity allocation. Probably get some short-term index as I get closer to retirement. Boom, done and I'm out to catch a ...
by digit8
Sat Jul 12, 2014 8:47 am
 
Forum: Investing - Theory, News & General
Topic: Kiplinger: Why You Should Avoid Most Bond Index Funds
Replies: 32
Views: 6553

Re: Invest in Roth IRA or Pay Down Rental Mortgage?

I look at your situation and I break it down in to "couple, early 30's, nearly $200k income and clearly very driven financially". I say, keep plugging on the Roth. It's a pretty good bet on the face of it that your earnings, the tax rate, or both will be up enough in 30 years to make it wo...
by digit8
Sun Jun 22, 2014 7:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Invest in Roth IRA or Pay Down Rental Mortgage?
Replies: 11
Views: 815

Re: Should one ever do a cash-out refi to invest?

There is a big difference, in my mind, between rolling the dice and playing Russian Roulette. Imagine 2008 Part 2 (Electric Boogaloo) hits. You are now underwater on your mortgage, the investments you put the cash out to have tanked, and you want to sell the home to take a new job. Have you got an o...
by digit8
Sun Jun 22, 2014 6:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should one ever do a cash-out refi to invest?
Replies: 38
Views: 4134

Re: Tax Exempt Bond Fund as Emergency Fund?

Plus one on the tiered concept, though I go NCUA savings->Ibonds->taxable equity funds. I've thought about adding in a bond fund,but for some reason I always focus on the negatives- less safe then the savings, less return then then equity.
by digit8
Sat Jun 21, 2014 11:46 am
 
Forum: Investing - Help with Personal Investments
Topic: Tax Exempt Bond Fund as Emergency Fund?
Replies: 8
Views: 618

Planning for unintentional retirement?

Looking for input as to whether this has some logic to it or is just fear taking over. Rough numbers, along with a 1 year emergency fund I'm putting over 20% of annual income to my 401k, also maxing out a Roth IRA and have been for my working life. As I round the corner to 40, however, having enough...
by digit8
Fri Dec 13, 2013 12:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Planning for unintentional retirement?
Replies: 12
Views: 1090

Re: Emergency fund allocation

If you set aside money for an emergency fund, why would you invest in things that will, on occasion, lose a lot of value? If your emergency fund is cut in half, it is not really much of an emergency fund, is it? That is why cash, money market, short term bonds, CDs, etc. are generally suggested. I ...
by digit8
Sun Dec 08, 2013 2:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Emergency fund allocation
Replies: 13
Views: 943

Re: Emergency fund allocation

If you're hit hard enough, long enough, any asset is part of your emergency fund. I would casually define my emergency fund as a years expenses in an MMSA, and soon some ibonds. But I've got a decent sized taxable index stock fund as well, and the fungible nature of money has let me call it anything...
by digit8
Sun Dec 08, 2013 12:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Emergency fund allocation
Replies: 13
Views: 943

Re: Scott Burns shows that costs matter

I read a book on the 1900's tycoons(or robber barons, as your viewpoint chooses), and the only piece that has stuck with me, thanks to mutual funds, was Dale Carnegie harping on cost control for his factories. To paraphrase- costs are the only thing you know up front, and the only control you have.
by digit8
Sun Nov 24, 2013 8:54 pm
 
Forum: Investing - Theory, News & General
Topic: Scott Burns shows that costs matter
Replies: 7
Views: 1117

Re: Money Market "Safety"?

Money Markets have followed the path of a lot of other financial products: introduced as a useful, even arguably necessary product. The product succeeds. The move is made to grow this success, far beyond what it should be. Over time, careful wording became borderline lies, and what was something hel...
by digit8
Sun Nov 24, 2013 7:51 pm
 
Forum: Investing - Theory, News & General
Topic: Money Market "Safety"?
Replies: 15
Views: 2197

Re: Are you buying I bonds in 2014? And if so, for what role

I have been continuously tempted to move a portion of my emergency fund over to Ibonds for the last few years. I put it off for simple laziness and preemptive fear of additional bookkeeping, as well as a bit of paranoia about the security of my (mortgage industry) job. For me, I'd like to place them...
by digit8
Sun Nov 24, 2013 2:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are you buying I bonds in 2014? And if so, for what role?
Replies: 11
Views: 1304

Re: Article -Almost no one can beat the market

I'd change the title- strike out the "Almost" and add "forever" to the end.
Some people beat the market. Some people do it for a very long time. But not many, and never over ones total investing lifetime.
by digit8
Sat Oct 26, 2013 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: Article -Almost no one can beat the market
Replies: 11
Views: 1559

Re: I Bonds or IRA for Emergency Fund? Or something else?

If you don't mind, what do you use to hold your emergency fund? A years expenses in an MMSA, and what is currently a couple of years worth in a taxable Total Stock Market index fund. Monthly I dump some cash to the MMSA and yearly any extra there goes to the TSM. I used to have CD's rolling every t...
by digit8
Sat Oct 26, 2013 8:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: I Bonds or IRA for Emergency Fund? Or something else?
Replies: 20
Views: 1478

Re: I Bonds or IRA for Emergency Fund? Or something else?

I hate, hate, HATE the whole idea of IRA's as an emergency fund. Certainly, in a big enough emergency, it's open season on any and all funds available. But looking at ones IRA as a piggybank from the start is even more hazardous in the long term then looking at ones home that way.
by digit8
Fri Oct 25, 2013 9:31 am
 
Forum: Investing - Help with Personal Investments
Topic: I Bonds or IRA for Emergency Fund? Or something else?
Replies: 20
Views: 1478

Re: Stick with a savings account?

I sat down an did the math for my own savings at one point....looking at CD's, Ibonds, the whole gamut for short term savings. And after about five hours work I realized that with some careful shifting in planning, I could make about an extra 20 bucks annually. So I cooked at home instead of going o...
by digit8
Fri Oct 25, 2013 9:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Stick with a savings account?
Replies: 30
Views: 3918

Re: Fidelity Freedom 2030

They are a rare find indeed. Only available in some employer sponsored plans, as far as I can tell. Fidelity.com doesn't let you get a look at 'em, either, as you've discovered. In Fidelity's defense, if they made a reasonable all-index fund more easily available....they would earn much less in fee...
by digit8
Mon Oct 14, 2013 12:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fidelity Freedom 2030
Replies: 14
Views: 1623

Re: Is VMMXX safe?

A money market fund should never be mistaken for a bank account, and not just on occasions of (arguably) panicky news stories. There is always a risk of loss involved. However, the risk is (relative to equity or bond funds) the risk is minimal, actively fought against by fund companies that are will...
by digit8
Sun Oct 13, 2013 3:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is VMMXX safe?
Replies: 9
Views: 1098

Re: FID FREEDOM 2030

I bailed out of the Freedom Fund largely because the bond portion is tilted towards the junk side in a reach for yield. And I do believe that the effort involved in going all index is worth the effort. With that said, however, I think there are definitely worse choices that can be made, and that ult...
by digit8
Sun Oct 13, 2013 3:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fidelity Freedom 2030
Replies: 14
Views: 1623

Re: Vanguard Prime Money Market Capital Gain

Not a big deal, but certainly a good illustration that money markets being like a bank account 97% of the time means that they are emphatically not a bank account 3% of the time....
by digit8
Wed Sep 25, 2013 11:56 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market Capital Gain
Replies: 11
Views: 1918

Re: Roubini: Overweight United States. Malkiel: Don't.

Experts! Gotta love 'em. Hours, months, years spend discussing the unknown - we see that right here in Bogleheads - would be put to much better use IF spent focused on increased savings rate. Over time, a 2000% cumulative change in $0 is still $0 (not more/less). +1. One of my martial arts instruct...
by digit8
Wed Sep 25, 2013 3:27 pm
 
Forum: Investing - Theory, News & General
Topic: Roubini: Overweight United States. Malkiel: Don't.
Replies: 38
Views: 4492

Re: Six lessons You Should Have Learned

A nice article, though it can all be summed up in one sentence: "this time" is never all that different. All 6 lessons were known and easily available to anyone paying attention long before the crisis, and will maintain validity long after it has been forgotten. On a side note, though Spir...
by digit8
Wed Sep 25, 2013 3:08 pm
 
Forum: Investing - Theory, News & General
Topic: Six lessons You Should Have Learned
Replies: 12
Views: 3306

Re: short term cash

Leave it where it lies and start thinking about where to put any new extra cash, like a taxable index fund. With a year safe and sound (if boring) you've got freedom to seek a lot more extra yield. These days anything safe and liquid enough to make a reasonable emergency fund won't earn you enough t...
by digit8
Thu Sep 05, 2013 7:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: short term cash
Replies: 12
Views: 1075

Re: Retirement: How do you gauge whether you are on track?

I would say, before 50, it's more about "am I putting away as much as I can", not "am I putting away enough?". Sure, look at some calculators, talk to a financial planner, get some best-guess ideas together. It's nice to have some kind of general idea. But to my mind, up until th...
by digit8
Mon Sep 02, 2013 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement: How do you gauge whether you are on track?
Replies: 27
Views: 2829

Re: Safety Net Funds, why Traditional Advice is Wrong.

Meh. Once I had my basic EF in the bank, I started putting a little here and there into a taxable index fund as some extra cushion, and it is nice to see that bit earning some decent returns over time. But when disasters have hit(or even seem likely) it's always that safe, boring pile earning me doo...
by digit8
Mon Sep 02, 2013 5:52 pm
 
Forum: Investing - Theory, News & General
Topic: Safety Net Funds, why Traditional Advice is Wrong.
Replies: 17
Views: 1676

Re: Worthwhile or a waste of time?

If you're going to go, review that flyer with a microscope first for "attending this obligates you to..." etc flyspeck writing. Popping for Ruth's Chris just makes my natural tendency to say "no" to this type of stuff more emphatic-going that high end, there has got[i] [/i] to be...
by digit8
Sun Aug 18, 2013 6:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Worthwhile or a waste of time? [Advisor Solicitation]
Replies: 24
Views: 2793

Re: Eggs All in One Basket?

If things as they are work for you, there is no drop-the-mic crusher argument that says it's CLEARLY the best choice to consolidate.It's always worth thinking about the "why" of your choices, but that doesn't mean anything needs to change.
by digit8
Sun Aug 18, 2013 6:38 pm
 
Forum: Investing - Theory, News & General
Topic: Eggs All in One Basket?
Replies: 16
Views: 1948

Re: Bad idea to buy i-bond now?

So say one has $20,000 in a MM emergency savings, and wants to convert that to something with a better rate. Two options I see are a 5 year CD at 1.5% and i-bonds currently yielding 1.18%. Which would you take? Keep in mind both cases would be purchased like a ladder, in smaller increments over the...
by digit8
Fri Aug 09, 2013 7:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bad idea to buy i-bond now?
Replies: 39
Views: 4055

Re: Move from Target to Index funds?

Honestly, if I was in your position, I'd call it a day and stick with the target fund. .94% is high but not cuckoo crazy for 401's, and at the low 6 figures in your 40's retirement is a done deal so long as you keep plugging money in faithfully. At the very least, I would wait awhile, continue to pu...
by digit8
Sat Aug 03, 2013 11:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Move from Target to Index funds?
Replies: 13
Views: 2977

Re: Why international stock in the 3 fund portfolio?

I can only speak for myself: I suspect, going forward, that globalization and industrialization will only increase, and that it will matter less and less where the investments I've made technically call "home" in some dusty file somewhere. I can prove, however, that up through today some o...
by digit8
Sun Jul 28, 2013 10:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Why international stock in the 3 fund portfolio?
Replies: 24
Views: 1746

Re: A Dangerous Misunderstanding about Bond Rates?

OMG!!! I read all these posts about bonds. I've read books about bonds. Just when I think I know, then I don't think I know. May be if I took a graduate level course about bonds, I'd eventually get it. :shock: I'm sticking with a 60/40 or 70/30....and going to bed. +1. Somebody has to come up with ...
by digit8
Sun Jul 21, 2013 8:40 pm
 
Forum: Investing - Theory, News & General
Topic: A Dangerous Misunderstanding about Bond Rates?
Replies: 124
Views: 10497

Re: Total Intl Lags Active

You don't specify which active international funds you are talking about, but I'll assume you're talking about the International Value and International Growth funds. Here is the 10-year results of the three: Total International (VGTSX): 8.31% International Value (VTRIX): 8.72% International Growth...
by digit8
Fri Jul 12, 2013 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Total Intl Lags Active
Replies: 22
Views: 1607

Re: Where do you store your emergency fund?

I'm one of those folks who doesn't have an emergency fund per se even though I am still working. I try to keep all my cash invested in equities and bond funds. I might have about 2 to 4 weeks worth of expenses in a checking account. I try to keep at least 30 years of expenses in equities, just in c...
by digit8
Sun Jul 07, 2013 6:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where do you store your emergency fund?
Replies: 33
Views: 2443

Re: Instead of a CD Ladder

CD's are part of my emergency fund, so I've always gone with the 3 month-1 year ladder option. If you've got one just reaching for extra yield, no CD option is going to be all that attractive. If I had an "extra cash" one, I'd stick to a 3 month, max. The rate difference is so miniscule ri...
by digit8
Sat Jul 06, 2013 11:46 am
 
Forum: Investing - Help with Personal Investments
Topic: Instead of a CD Ladder
Replies: 18
Views: 2911

Re: What do you wish you had learned sooner?

That actually saving for retirement is far, far more important then specifically how you do so. I frittered about two years away between realizing I needed to invest for retirement, and when I actually felt I had a good enough plan to do so. Looking back, it's clear that I could have invested in lit...
by digit8
Sun Jun 30, 2013 7:51 pm
 
Forum: Investing - Theory, News & General
Topic: What do you wish you had learned sooner?
Replies: 104
Views: 12673

Re: Spanked on Retirement, Gen X Still Doesn't Get It

My takeaways: -45% of Gen X net worth from '07 to '10 averages to the princely sum of 33k? -When an article or commentator cites the spendthrift nature of a broad social group, I'm never quite clear on what that data source is for such conclusions. I didn't have a "what's your demographic, and ...
by digit8
Fri Jun 28, 2013 4:13 pm
 
Forum: Investing - Theory, News & General
Topic: Spanked on Retirement, Gen X Still Doesn't Get It
Replies: 60
Views: 11521

Re: If only the ER for Vanguard funds was a bit higher.

If I'm given a formula where, dollar for dollar, every bit of extra expense goes to better customer service....I stick with the cheaper option. A pickpocket with a winning smile is still a pickpocket. Seriously, I've been lucky and never had a problem where I had to get Vanguard on the phone, so I c...
by digit8
Sun Jun 09, 2013 1:37 pm
 
Forum: Investing - Theory, News & General
Topic: If only the ER for Vanguard funds was a bit higher.
Replies: 32
Views: 3052

Re: Should You Trust Your Retirement To A Target Date Fund?

I think the number of people who could do better on their own is substantially smaller then the number of people who could do worse.....but if I ever go all-Target, I will be upping my contributions to compensate for the removal of my own guiding genius. :D Although the jury is still out, I think ov...
by digit8
Mon Jun 03, 2013 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: Should You Trust Your Retirement To A Target Date Fund?
Replies: 34
Views: 3430

Re: Financial Literacy, or the lack of...

For all my faith and hope that increased education holds the solution to all financial ills, my practical experience tends to doubt it.
by digit8
Sun Jun 02, 2013 4:31 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Literacy, or the lack of...
Replies: 45
Views: 3220

Re: What's the right allocation to international bonds?

Several of the early books I read on investing mentioned how 2 or 3 indexes are all you needed for investing, but warned it was dull cocktail party conversation. Sometimes I think some of the planners at Vanguard are just looking to spice up their parties.....this strikes me as another racing-stripe...
by digit8
Fri May 31, 2013 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: What's the right allocation to international bonds?
Replies: 39
Views: 2755

Re: VG Total International Bond Fund is open

20% might be a decent long term goal. But I'd max out at not much above 5% right now. Between natural new product shyness, Vanguards tendency to drop costs over time, and the likely (slight, not disastrous!) upcoming dip in bond returns, figure five years before everything shakes out to the point I'...
by digit8
Fri May 31, 2013 11:55 am
 
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 82
Views: 11339

Re: Poll: Interest rates and debts worth paying off

Our goal is to stay debt free except the mortgage. When I worked in collections, I saw way too many examples of people going off the rails because they couldn't keep up with the car or credit card payments.The money I don't use by keeping the mortgage in play is balanced out by significant goodies f...
by digit8
Sun Apr 28, 2013 6:30 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Interest rates and debts worth paying off
Replies: 8
Views: 812

Re: Do you trust Mint.com or similar services?

In theory, I think the only problem is, you're sharing your information with one additional entity, and additional risk is inevitable when you do so. On a gut level, it feels riskier, and I won't be doing it. I'd love something Mint-like that would allow me the same benefits without requiring automa...
by digit8
Fri Apr 26, 2013 10:23 pm
 
Forum: Investing - Theory, News & General
Topic: Do you trust Mint.com or similar services?
Replies: 29
Views: 3609

Re: Meet Mr. Money Mustache, the man who retired at 30

His blog is one of the ones I check in with every week or so. The "retired vs. financial free vs it's all just spin for a blog gimmick" debate there is....basically the same that pops up, in different forms, over every financial blog eventually. It's one of those hideous topics that can ne...
by digit8
Fri Apr 26, 2013 10:10 pm
 
Forum: Investing - Theory, News & General
Topic: Meet Mr. Money Mustache, the man who retired at 30
Replies: 253
Views: 26909

Re: Charles Ellis says stay out of bonds

So, when someone like Ellis says "an intermediate bond fund could go down 25% in value" and stops there , he is applying a double standard. If we should take into account the idea that stocks will likely recover from a crash, we should place even more weight on the idea that bonds will re...
by digit8
Sun Apr 14, 2013 12:11 am
 
Forum: Investing - Theory, News & General
Topic: Charles Ellis says stay out of bonds
Replies: 122
Views: 10879

Re: Changing your bond allocation? [POLL]

No change. Over the multiple decades before I tap into my investments, I expect to see them all go up, down, and all around several more times at least. Isn't that part of the whole reason behind diversification?
by digit8
Sat Apr 13, 2013 9:56 pm
 
Forum: Investing - Theory, News & General
Topic: Changing your bond allocation? [POLL]
Replies: 23
Views: 1921

Re: Taking it too far? Saving so aggresively I feel stretche

I've heard it said a good guideline is to save enough that it hurts just a little. File that under "not for the general public"(which tends to feel pain a little too quickly) but probably not a bad one for the financially mature.
by digit8
Sat Apr 13, 2013 9:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taking it too far? Saving so aggresively I feel stretched...
Replies: 54
Views: 4771

Re: Is "Age in Bonds" dead? (From "The Affluent Investor:")

If I had to do it all over again and I started in my 20s (which I did not). I would have been 100% equities until age 30 and then add 10 to 20% bonds and wait until 40 and then 70/30 or 65/40 until 60 and then 50/50 for life. And of course all the time maxing out my 401K or IRA.. I think if one cou...
by digit8
Sun Mar 31, 2013 7:47 pm
 
Forum: Investing - Theory, News & General
Topic: Is "Age in Bonds" dead? (From "The Affluent Investor:")
Replies: 60
Views: 8439

Re: Is "Age in Bonds" dead? (From "The Affluent Investor:")

Age in bonds can probably still be considered a decent rule of thumb if one also follows the rule of thumb of saving 15-20% of their pay. (Granting, of course, as has been well pointed out here, that all such rules are imperfect, imprecise, and prone to individual exceptions.) But it probably will s...
by digit8
Sun Mar 31, 2013 12:51 am
 
Forum: Investing - Theory, News & General
Topic: Is "Age in Bonds" dead? (From "The Affluent Investor:")
Replies: 60
Views: 8439

Re: Choosing the "right" international allocation

Generally I stay to about 30%. I've seen some convincing arguments to go 50/50, and some equally intelligent points for staying out of international entirely. When in doubt, split the difference.
by digit8
Sun Mar 31, 2013 12:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Choosing the "right" international allocation
Replies: 48
Views: 2706

Re: [POLL] What would you like Vanguard to change or improve

I'd strongly vote against the money market rate bump. In the current environment, the only thing that would do for me is set off alarm bells. How would Vanguard cover that? Making crazy-risky bets, or draining money from somewhere else to supplement it? Either way, it's bad hoodoo. Money market rate...
by digit8
Fri Mar 15, 2013 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: [POLL] What would you like Vanguard to change or improve?
Replies: 92
Views: 6904

Re: Vanguard Lowers Fees

Total World down to .35%, nice. Still too much, but...
by digit8
Fri Mar 01, 2013 7:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Lowers Fees
Replies: 16
Views: 1717
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