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Re: Rates on Bonds

Thanks all - great info and clears a lot up for me.

It seems to me that a strategy of buy, hold and reinvest, no matter what's happening with rates, over the longer term (20+ years), is a pretty good (read: safe) way to go - thoughts?
by forestlake
Mon Feb 11, 2013 11:44 am
 
Forum: Investing - Theory, News & General
Topic: Rates on Bonds
Replies: 9
Views: 668

Rates on Bonds

I'm a little confused about what was said recently in a webcast from Vanguard's CIO. The discussion was about bond rates going up ("bond cliff"). At the end of the discussion, he said: "If you're a buy and hold investor with a bond fund, and rates go up, you'll take a principal hit in...
by forestlake
Sun Feb 10, 2013 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: Rates on Bonds
Replies: 9
Views: 668

Re: renovating rental in historical district

We have been through this process with a historical building in a historical district. And my cousin does this type of thing for a living. The tax credits are very tempting, but, remember, you are then taking on the government as your partner. And with that comes all of the frustrations you might ex...
by forestlake
Thu Dec 27, 2012 9:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: renovating rental in historical district
Replies: 8
Views: 886

Re: Help with International Allocation

The reason to postpone taxes is that when you retire, your tax rate is likely to be lower. It is typically lower because the withdrawal from your savings is initially taxed at 0% (equivalent to your tax deductions), then 10%, then.... This becomes an average which is likely less than your current 2...
by forestlake
Sat Mar 10, 2012 6:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with International Allocation
Replies: 15
Views: 989

Re: Type of account to invest one large sum?

Also you can always set up a defined Benefit pension plan and put 100,000 plus a year away. Can you elaborate on this? I was under the impression that our Individual 401ks are pension plans. And I'd really like to know how to tuck away $100k. To be in the 15 to 25 percent bracket your income can no...
by forestlake
Sat Mar 10, 2012 11:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Type of account to invest one large sum?
Replies: 15
Views: 626

Re: Type of account to invest one large sum?

$20K/year ($10K per person) can go into Series I Savings Bonds, which'll provide some tax advantages varying by state & local details. Probably not a huge amount, but it's a few more bucks in a mildly-tax-advantaged location. Looked up iBonds here (http://www.bogleheads.org/wiki/I_Savings_Bonds...
by forestlake
Fri Mar 09, 2012 8:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Type of account to invest one large sum?
Replies: 15
Views: 626

Re: Type of account to invest one large sum?

JoeJohnson wrote:are you a corporation? partnership? what form do you use to pay taxes on the LLC?

We are an LLC joint venture (50/50 me and wife). Not sure on form (accountant handles that), but how is this relevant?
by forestlake
Fri Mar 09, 2012 8:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Type of account to invest one large sum?
Replies: 15
Views: 626

Re: Type of account to invest one large sum?

So provided that we already max-out our contributions to our Roths and to our Individual 401ks, is the consensus that the only thing left is putting it into a regular taxable account?
by forestlake
Fri Mar 09, 2012 7:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Type of account to invest one large sum?
Replies: 15
Views: 626

Re: Type of account to invest one large sum?

ok, you're self-employed...max out your SEP IRA (tax deductible)...you can also contribute $5k/year to traditional or Roth IRA Does wife work? Does she have a 401k? We both have Individual IRAs (not SEP) as we have this setup through a joint venture LLC and therefore the profit sharing portion is d...
by forestlake
Fri Mar 09, 2012 7:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Type of account to invest one large sum?
Replies: 15
Views: 626

Type of account to invest one large sum?

Thank you in advance for your information and advice. I sold a company a year ago and a portion (a large sum) was held back as part of an escrow agreement. When this gets distributed to me, I'm wondering what to do with it in terms of which type of account to put it in. * 15%-25% bracket. * Married....
by forestlake
Fri Mar 09, 2012 7:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Type of account to invest one large sum?
Replies: 15
Views: 626

Re: Individual 401k

What about treating the LLC as a joint venture between husband and wife, then allocate 50% of income and expenses to each spouse. In effect, this would let the LLC contribute once to each (whereas the individual contributions, combined, would remain the same total as before) and therefore, doubling ...
by forestlake
Fri Feb 17, 2012 4:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Individual 401k
Replies: 7
Views: 772

Individual 401k

My wife and I own and operate an LLC with no employees that is taxed as a sole proprietorship. My wife and I file jointly (if that matters). We understand that an Individual 401k is the most advantageous retirement plan for us to use (for example, as opposed to a SEP) because a Solo 401k allows for ...
by forestlake
Fri Feb 17, 2012 12:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Individual 401k
Replies: 7
Views: 772

Re: Help with International Allocation

You have 2 strikes in this at bat - as far as tax INefficiency. ⋅ REIT (VNQ) and Nominal Bonds (BND) and two funds you should NOT hold in a Taxable account. I'm aware (now, after the fact) that holding a REIT (in my case, Vanguard REIT ETF) in a taxable is not a great idea. This was my fa...
by forestlake
Mon Feb 06, 2012 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with International Allocation
Replies: 15
Views: 989

Re: Help with International Allocation

KyleAAA wrote:...but why would you only choose to own European stocks? VXUS is a much better choice.


I'm not sure why (I'm new to this). I'd like to read opinions on this to help me along the way.
by forestlake
Mon Feb 06, 2012 1:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with International Allocation
Replies: 15
Views: 989

Dividends in Taxable: Reinvest or to Cash?

I need some help with understanding the basic philosophy of what to do with dividends in a taxable account. A little about me: * I am long term. * I also like to re-balance mostly, if not entirely, with new contributions (maybe 1-2 times/year) * I also like to take advantage of (or like the idea of)...
by forestlake
Mon Feb 06, 2012 1:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dividends in Taxable: Reinvest or to Cash?
Replies: 13
Views: 1368

Help with International Allocation

Taxable Account: ~ 57% S&P (Vanguard S&P 500 Index ETF - VOO) ~ 26% REIT (Vanguard REIT ETF - VNQ) ~ 16% Bond (Vanguard Total Bond Market ETF) ~ 1.5% Cash (Vanguard Tax-Exempt Money Market Fund (VMSXX) 42-years-old Married No Kids Self Employed 25% Tax Bracket During my first post here as a ...
by forestlake
Mon Feb 06, 2012 12:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with International Allocation
Replies: 15
Views: 989

Re: REITs in Roth and Taxable Accounts

So the Roth is somewhere around $15k? And the total taxable is ~$120k? Is there anything else? And is that taxable account allocation what you desire for the overall allocation? (If so, that's one heck of an overweighting of REITs, while completely leaving out mid-caps, small-caps, and internationa...
by forestlake
Thu Feb 02, 2012 9:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: REITs in Roth and Taxable Accounts
Replies: 20
Views: 2073

Re: REITs in Roth and Taxable Accounts

So the answer to your questions depends on the total amount of tax-sheltered space you have, as well as the total allocation that you want for REITs. It also depends on your tax bracket and the size of the capital gain. My Roth I just started it a little over a year ago. I contributed max each year...
by forestlake
Thu Feb 02, 2012 7:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: REITs in Roth and Taxable Accounts
Replies: 20
Views: 2073

Re: REITs in Roth and Taxable Accounts

My other question/problem still stands: I also hold VNQ in my Taxable Account. I understand this is a mistake. I've seen it suggested here that I should sell this as soon as possible (which would be August of 2012 for capital gains). If this is true, would then having any REIT such as VGSIX or rath...
by forestlake
Thu Feb 02, 2012 7:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: REITs in Roth and Taxable Accounts
Replies: 20
Views: 2073

Re: REITs in Roth and Taxable Accounts

In a Roth, either the index fund or the ETF would be just fine -- it's just a matter of personal preference. But I see that the expense ratios for the VNQ ETF and Admiral Shares VGSLX are .12%, while Investor Shares VGSIX is .26% - so in this case, if you have just $5,000 to invest, what's going to...
by forestlake
Thu Feb 02, 2012 6:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: REITs in Roth and Taxable Accounts
Replies: 20
Views: 2073

REITs in Roth and Taxable Accounts

First post :D I have a Vanguard Roth IRA. Is it better to hold VNQ or VGSIX there (if you had the choice and a $5,000 limit)? I'm a little confused as to the fee structure/advantages/disadvantages between an ETF and a mutual fund - especially when you're never selling. I also hold VNQ in my Taxable ...
by forestlake
Thu Feb 02, 2012 3:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: REITs in Roth and Taxable Accounts
Replies: 20
Views: 2073

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