Bogleheads.org

Bonds provide income. Stocks and real estate provide real growth and income. Commodities provide no income and best keep up with inflation, but they might provide a portfolio benefit from occasional low correlation. Some might argue that bonds don't produce income either, at today's interst rates. ...

AS to the rubbish comment. The simple equation I will show will show how why this is simple common sense. Don't need anything more than this equation Expected Returns = Expected Cash Flows/Price So if you have the same PRICE (market value) the firm with higher expected cash flows (higher profitabil...

That rent/buy NPV analysis looks questionable. Any such analysis is going to be very sensitive to the terminal value. It's also going to be somewhat sensitive to inflation. IMO the analysis is assuming a high rate of return on investments and then using that to discount the cash flows on an investme...

Exception #2: Your earnings from age 60 onward are not indexed for wage inflation. So earning the maximum in those years actually counts for more, assuming wage inflation is positive (because, if they were indexed, they'd have to be indexed downward ). Can you please explain this? Seems like a max ...

When we contrast the four-year cost figure versus say, household median income figures for the years 1975 through 2011, we see an interesting comparison arise. Firstly, note that the median household income rose about 424.2% during that time (source: http://www.census.gov/hhes/www/income/data/histo...

Perhaps we young investors know that US Treasuries at 2% aren't going to get us to retirement in real dollars in a country with a major aging demographic problem and long term debt issues. I'll pass on loaning Uncle Sam money at 2%, thanks. Amen bro - I don't think it's market timing to pass on an ...

IMO, you need clarity of thought about what you really mean by "reaching your number". Using that phrase connotes the idea that there is a precise dollar amount beyond which the marginal utility of wealth is zero. I doubt that is true for most people. I agree. It's not a precise target. I...

Counted all FDIC instruments as one.

I thought the following article might be of interest. I've been concerned that corporate profit levels (and therefore stock market valuations) might be at unsustainable levels, yet I've had a nagging feeling that the raw profit/GDP ratio was bound to be misleading due to globalization. The author at...

We get that you didn't file 8606. The remaining point of our confusion is, did you report the rollover distribution, for which you would have received a 1099R?

I've had to do a 1040X for an unrelated error. It's straightforward - TurboTax will do it, simply indicate that you want to create an amended return instead of a regular one, then go through the steps to enter the differences vs the return you filed. If you didn't report the distribution for the rol...

I've never had a problem. I'm assuming the OP is seeing the "distribution" reported as extra income, subject to a double tax. This shouldn't happen - it should show, on lines 15a and b, the total amount of $5k and the taxable amount of 0. You do need to get through the income section and i...

A more realistic worry is that theses funds will end up exposing you to floating nav per new regs.

I think the show might have been better as a series hitting some of the issues raised in more depth, to wit (a) decline in traditional pension schemes, (b) high fees, (c) insufficient savings rates, and finally (d) the effects of the serial-bubble economy we've had during most of these folks peak ea...

As a regular W2 worker, you'd have a better shot accumulating a pension benefit of equivalent value in a government DB plan. You'd certainly have a good shot if you had the DB plan and a DC plan. But in a job with just a DC plan, most have almost no possibility of saving $51k per year - try $17-20k ...

I've been receiving letters from the California Franchise Tax board addressed to someone else (who I've never met) at my home address. I've been returning them unopened with WRONG ADDRESS - RETURN TO SENDER written on the envelope. Yet the letter keep on a' comin'. I can only guess at the contents a...

Duckie wrote:

dmcmahon wrote:Question: what address should she send the corrected 8606 forms to?

The same address she would send her 1040 form (the one if "not enclosing a check or money order").

Not the address for amended returns then. Because we are talking about fixing forms for 5 years prior.

I have a friend whose just discovered she made a very similar mistake. Fortunately no tax is due in the earlier years - she caught it for 2012 when she rolled the IRA over into a Roth, so the tax is due this year.

Question: what address should she send the corrected 8606 forms to?

If the trusts are revocable why are you doing extra tax returns and dealing with K1s? Or is that a concern off in the future? FWIW I think you may be on to something - given the higher limits now and the way the law gives a couple a large combined limit, the classic A-B structure makes sense in fewe...

"Unfunded obligations" is one of the most misleading claims out there. No time period is given (is this per year, over an infinite horizon or what?), no context is given (is $500 billion over a long time period a lot in a $15 trillion a year economy?), almost no obligation is funded (what...

I think those who are in their peak earning years are usually better off with a regular 401K because they are deducting taxes at their marginal rate that will later be paid at rates less than their marginal rate. Assuming a retiree is living off nothing but Roth 401K and 401K distributions, he won'...

Although not directly responsive to your questions, this thread on military investing may be of general interest to you:

viewtopic.php?f=10&t=48901

Thank you for your service.

Yes, they were comparing apples to apples, very like homes in the same neighborhood so that it would be a valid model. They were specifically trying NOT to do what you mentioned. That may be true, but the point is that there's still a consumption aspect to the decision. When I bought my house I was...

Wins by a whopping 1% after 30 years, using a best-case estimate of the ER, and (if its a stock) neglecting the negative cap gains treatment. Discounting that extra $1 back 30 years to present value, it's near enough to zero. Pass.

A variable annuity might make tax sense for REITs, because REIT income is almost all taxed at your top rate. However, given the higher cost of the variable annuity compared with the low cost of the mutual fund or ETF, it would take a very long time for the tax deferral to outweigh the expenses. Tha...

Wow, that dividend really fell off a cliff! What's up with that? Total over 2012 was 2-3x higher than the 50 cents implied by the most recent dividend. Was going to buy after the dividend so as not to buy a distribution. But if this is the new normal...ugh.

...The problem is, interest rates are so low that even saving the 55% (temporarily) .... If you're talking about a short time horizon, then the savings is modest/temporary, but if it's longer, then the compounded growth on the tax savings is not temporary but yes partly dependent on current yields....

I seriously considered them last year, and the door is still open. It's not just the higher investment taxes I'm facing - California's income taxes also apply and were raised last year retroactive to Jan 1 2012. The state income tax ranges from 9.3-13.3% and applies to all income, including capital ...

How big a problem is it to let the dividends accumulate as cash and then reinvest them along with new money as you go along? With typical payouts in the 2% range, you're only talking about $200 over a year on a $10k account. If the concern is rebalancing, can't you mostly get that done with new mone...

I like the intra-day liquidity of ETFs if I'm shifting assets. It's frustrating having to wait for the market closing price on a Mutual Fund, especially over the past few years when you could see relatively large price swings during the trading day. It was especially frustrating to have to wait seve...

As a long term investor in ETFs, I don't consider it a problem that hedge funds invest heavily in them with high turnover. That lowers the bid-ask spreads! Ditto. I appreciate the liquidity and price discovery function, and don't mind if some fractional amount is skimmed from my trades because I do...

I'll caveat my responses by noting that I'm not a tax expert, not an accountant, and not a lawyer. Just "some guy on the internet". Heck, I could be a dog! 1. I invested some $$ in stocks/bonds using wells-trade retail site last tax-year (2012) but never SOLD any shares - DO I STILL NEED T...

The statement from my broker is, shall we say, less than clear on the point. I see this transaction commingled on a list that includes others involving more recently acquired shares. The list doesn't provide specific values for the relevant "box" - instead, a general statement is made abou...

Some years ago, due to a fat-fingered mistake trading some shares, I ended up entering a sale instead of a buy. So I had to buy back the shares, plus make my original buy. Unfortunately, this left me with a small wash sale loss on the block of shares sold, which I've kept track of until finally sell...

larryswedroe wrote:ftrobin
How else to you propose the typical investor bet against Treasuries?
Larry

How about a mortgage?

Sheepdogs approximate 50% increase in 12 years seems about right. Only major item not on the list is housing. If you're renting, at least in my area, you've seen about that much of an increase. If you are looking to buy a house, it's far far worse. Almost as bad would be college costs.

You can use "open form" feature to open up 1040-ES voucher 1 and use "right click" on each field to override the entries. Thanks, I tried a variant of that and was unable to type into the field, but hadn't thought to right click. Sheesh - what's next, features that work when you...

Did TT do that all by itself, or did you have a hand in it? Did TT just make up the numbers out of whole cloth? A bit of both. It makes up the number using some estimation formula based on the prior year's tax. However since mom's income is variable, it's of little use. I haven't used TT recently, ...

Or, alternatively, to coax TT to spew forth blank forms? The downloaded version of TT has a "forms" option (near the upper right of the screen) and it allows you to open year 2013 1040-ES forms. I assume you can do the same for your state's. First thing I tried. Forms are filled out thoug...

I'm doing my mom's taxes and I've hit a snag. I use TurboTax, and as usual, it wants to spew out so-called vouchers for estimated tax payments. Problem is, it fills in the amounts, which are, as usual, wrong. Normally I work around this problem by downloading the relevant forms from the IRS web site...

I'm a fan of paying off or paying down the mortgage. Did so myself, and no regrets. But would not have done so if it meant zeroing out my bond holdings. Also don't forget to keep enough cash for emergencies. The warning about paying off an acquisition mortgage is correct - if you later decide to tak...

If your only goal is to dampen the volatility of a 60/40 portfolio, why not just use short term bond ETF, especially in the current environment? How much in return would you really give up? Exactly my thinking FWIW. Interest rates on intermediate bonds are so low, cutting them to zero has a negligi...

There's nothing wrong with not wanting to get out of an obviously overvalued asset class--witness large growth stocks in the late 1990s. The problem, of course, is when to know when the peak is.. You don't really need to call the peak, you can begin strolling for the exits or practise the type of &...

...the extremely short term focus caused by quarter to quarter scrutiny of results. Private companies can focus on achieving long term investment results while public companies can not. This would seem to be a good trend for the real economy. Except that the general investing public will increasing...

Well, I'll confess to shortening my maturities and reducing my allocation. You "contest" doesn't allow for the latter, which is an obvious response to an overvalued assets class. Your time frame of one year is way too short. I believe as follows (JMHO): Bonds are priced to give subpar retu...

I've always scored the deduction phase-out as approximately the same as a 1% bump in the top tax rate. A dollar above the limit removes 3 cents of deductions, which, at a rate of 35% or thereabouts, is a net increase of 1 cent of tax liability. Someone with few deductions might eventually see this d...

Here's an idea: start two funds with aggressive swing-for-the-fences strategies, and leverage them out the ying-yang. The catch: they use opposite bets! The one that loses big is quietly buried. The winner is hyped as prove of genius.

Willing to replace the printer, I had nothing left to lose, so I went in and cleaned the ink cartridge assembly as best I could with alcohol. The task would have been far easier if it had been designed for removal, or if it was at least possible to access the underside of it. Whoever designs these t...

Thanks for all the responses. I'd been wondering about going with a laser due to my sporadic usage, and the discussion seems to confirm that idea. I confess I do like the color output of the ink jet, even for tax forms where there are just a few colored areas, but I guess this isn't really all that ...

My inkjet printer has seemingly failed after less than a year of use. The black color will not print. Replaced the cartridge at some expense despite the suspicion that this wouldn't fix the problem, which it did not. So now I'm junking yet another printer. It's cheap but the utter waste of plastic a...