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Re: Ack! Bought a Dividend!

Total Stock Market has a 2% dividend yield, so its quarterly dividends are about 0.5%. They are usually completely qualified, which makes the tax cost 0.08%. If the risk-adjusted return of the stock market is 3% more than cash, then staying in cash for one week has an effective cost of 0.06%. Thus i...
by grabiner
Tue Sep 16, 2014 11:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ack! Bought a Dividend!
Replies: 25
Views: 2016

Re: Best Vanguard Value Fund in Taxable Account?

If you hold a value fund in a taxable account, it should be an index. The T. Rowe Price fund, and likewise US Value and Capital Value, will probably cost you 1% per year in taxes. Small-Cap Value Index and Value Index cover the whole value half of the market, so you can put them in whatever proporti...
by grabiner
Tue Sep 16, 2014 11:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best Vanguard Value Fund in Taxable Account?
Replies: 2
Views: 468

Re: Low down payment and invest or big down payment?

I've always been averse to debt and always thought putting 20% down minimum for home loan was the way to go, if not more. I was working towards 35%. A friend said he put 5% down, got 3% interest/30 yr fixed and invests what would have been the 20% downpayment. He thinks he can always get more than ...
by grabiner
Tue Sep 16, 2014 11:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low down payment and invest or big down payment?
Replies: 3
Views: 372

Re: Tax Stupid Investment

Thank you Artsdoctor for your response. I have to read that wiki several times to understand marginal tax rate. Thinking that that the govt owns 1 /3 of of our tax deferred funds makes sense actually and oddly makes me feel better, that we did not make sume huge mistake by being good savers for ret...
by grabiner
Tue Sep 16, 2014 11:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Stupid Investment
Replies: 12
Views: 1010

Re: Is USD the best currency to choose for index fund invest

Here's one way to look at the math. The euro is worth $2. You buy EUR 1000 of stock, which costs you $2000. The euro values of European markets don't move, but the euro falls to $1.60 by the time you sell. You sell your stock for EUR 1000, then convert it back to dollars, and have $1600. The euro i...
by grabiner
Tue Sep 16, 2014 9:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: [from Euro country, use USD to invest in US index funds?]
Replies: 16
Views: 932

Re: Should I put money in HSA account if health care is cove

My employer does not provide a HSA account, but I was able to create one via HSA bank. The fund is not carried over to the next year. Any amount I don't use it lost and it starts over again every year. The fund is owned by the plan. My employer has no relationship to the HSA account I have created....
by grabiner
Mon Sep 15, 2014 11:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I put money in HSA account if health care is covered?
Replies: 5
Views: 717

Re: Should I put money in HSA account if health care is cove

If your emplouer covers any medical expenses which would normally be subject to the high deductible, you probably aren't eligible for an HSA. Most often, coverage like this is through a Health Reimbursement Agreement (HRA), a plan which accumulates money that is used to pay for medical expenses; unu...
by grabiner
Sun Sep 14, 2014 1:24 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I put money in HSA account if health care is covered?
Replies: 5
Views: 717

Re: You may want to rethink the odds of ever needing LTCi

And everything said so far could also be said of homeowners insurance. Most people never use it, and when it is needed the coverage is often incomplete and some insurers are bad about paying claims. And when a home is damaged, often a person could afford to pay for repairs without insurance. And st...
by grabiner
Sun Sep 14, 2014 1:07 am
 
Forum: Personal Finance (Not Investing)
Topic: You may want to rethink the odds of ever needing LTCi
Replies: 54
Views: 4530

Re: 401(k) 20% Mandatory Tax Withholding

Only rollover distributions have mandatory withholding. Not true, or at least not true when I rolled mine over 20 years ago. Nothing was withheld. Direct rollovers (money sent from the 401(k) to the IRA custodian) have no withholding because they are not taxable. Withdrawals eligible for indirect r...
by grabiner
Sun Sep 14, 2014 12:50 am
 
Forum: Personal Finance (Not Investing)
Topic: 401(k) 20% Mandatory Tax Withholding
Replies: 24
Views: 1752

Re: 401(k) 20% Mandatory Tax Withholding

And if you are taking a distribution which is eligible for rollover, you don't need to take it in cash; have it rolled directly to your IRA (with no withholding), and then spend it from the IRA (also not withheld unless you request withholding) and pay the appropriate amount of estimated tax.
by grabiner
Sat Sep 13, 2014 5:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: 401(k) 20% Mandatory Tax Withholding
Replies: 24
Views: 1752

Re: Feeling smug until 10 year ROR from Vanguard

I checked this and found that Vanguard doesn't always include closed accounts in the figures. In December 2005, I had an employer plan switch from Vanguard to Fidelity. Vanguard displays no record of the plan, so the returns of the plan through 2005 are not there, and no outflow is listed in 2005. (...
by grabiner
Sat Sep 13, 2014 5:16 pm
 
Forum: Investing - Theory, News & General
Topic: Feeling smug until 10 year ROR from Vanguard
Replies: 78
Views: 6668

Re: treating all investment accounts as one pool of money

You can have one portfolio for each goal, but the portfolios do not correspond to accounts. If you have $500K invested, and plan to make a $100K down payment on a home next year, you might have $400K for retirement invested 80% in stock and 20% in bonds, and $100K for the house invested in cash or C...
by grabiner
Sat Sep 13, 2014 4:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: treating all investment accounts as one pool of money
Replies: 26
Views: 2214

Re: Consolidating Credit Card / Credit Score Impact

Thanks for the clarification. This makes sense in terms of my FICO score being significantly higher than my Credit Karma's score. This is usually the case. Both the Trans Union score (from Credit Karma) and traditional versions of FICO top out at 850, but the Trans Union score tends to be lower; th...
by grabiner
Sat Sep 13, 2014 4:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Consolidating Credit Card / Credit Score Impact
Replies: 7
Views: 644

Re: Credit Score and Individual History

I just checked my credit score, and I have a 769. I have an A on everything except Age of Credit History where I get a score of D. Are there any strategies for improving this aspect of the score, or is it merely a matter of having accounts open for significant periods of time? Thank you - Louis Pre...
by grabiner
Fri Sep 12, 2014 11:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Credit Score and Individual History
Replies: 4
Views: 449

Re: Consolidating Credit Card / Credit Score Impact

Both AAoA (accounts for both number and age of accounts) and utilization (accounts for both balances and limits) matter. http://www.myfico.com/crediteducation/whatsinyourscore.aspx It looks like I might be better off just leaving these two Freedom cards alone. According to Credit Karma, the age of ...
by grabiner
Fri Sep 12, 2014 11:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Consolidating Credit Card / Credit Score Impact
Replies: 7
Views: 644

Re: Can college force low-deductible health insurance plan?

As one can read in the thread title, I have a question. Folks with kids in college may have come up against this already. Colleges and universities are now requiring students to show proof of health insurance. I've come across a situation where a $2500 annual deductible insurance policy is not acce...
by grabiner
Fri Sep 12, 2014 11:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can college force low-deductible health insurance plan?
Replies: 12
Views: 554

Re: Are Mid Caps the NEW Small Caps

Mid-caps are the old small-caps. Here is the M* 9-box style grid for the Vanguard Small-cap Value Index fund: 00-00-00 18-16-05 32-22-07 That's 39% in mid-caps for a fund that has a name small-cap value index. This is a matter of definition. M* splits the market as 70/20/10; CRSP, which Vanguard us...
by grabiner
Fri Sep 12, 2014 11:12 pm
 
Forum: Investing - Theory, News & General
Topic: Are Mid Caps the NEW Small Caps
Replies: 15
Views: 1667

Re: Is USD the best currency to choose for index fund invest

Here's one way to look at the math. The euro is worth $2. You buy EUR 1000 of stock, which costs you $2000. The euro values of European markets don't move, but the euro falls to $1.60 by the time you sell. You sell your stock for EUR 1000, then convert it back to dollars, and have $1600. The euro is...
by grabiner
Fri Sep 12, 2014 11:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: [from Euro country, use USD to invest in US index funds?]
Replies: 16
Views: 932

Re: Interest rates - Bond effects?

Another way to look at the situation is to consider the effect in reverse; this example is from Yield to maturity on the wiki. Suppose you buy a bond for $10,000 which pays $500 per year and pays back the $10,000 at maturity; it has a 5% yield. Now, suppose that four years before maturity, the value...
by grabiner
Fri Sep 12, 2014 10:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Interest rates - Bond effects?
Replies: 7
Views: 855

Re: Why is REIT only sector fund recommended in slice & dice

Hi jay22, I am unsure if Small Cap Index is recommended, but most often Small Cap Value is mentioned. Best. Interesting. Any idea why Small Cap Value is recommended to tilt instead of Small Cap Index? Most tilters tilt towards both small-cap and value, and Small-Cap Value Index gives both. Another ...
by grabiner
Fri Sep 12, 2014 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why is REIT only sector fund recommended in slice & dice?
Replies: 113
Views: 7275

Re: Vanguard Tax Managed Balanced-Any owners

Vanguard eliminated the fees several years ago; now, the tax-managed funds are no harder to get out of than ordinary index funds. (And the two which were redundant were merged into the corresponding index funds, although I don't agree that Tax-Managed International was redundant.) The purchase/rede...
by grabiner
Fri Sep 12, 2014 10:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax Managed Balanced-Any owners
Replies: 50
Views: 10765

Re: No taxes when selling stocks in an Inherited IRA?

It doesn't even matter that the IRA is inherited. An IRA is tax-sheltered, so you don't pay taxes on anything which happens within the account, such as dividends and capital gains. With a traditional IRA, you pay tax at your full rate on all withdrawals (and a 10% penalty for some early withdrawals,...
by grabiner
Thu Sep 11, 2014 8:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: No taxes when selling stocks in an Inherited IRA?
Replies: 10
Views: 689

Re: Vanguard Tax Managed Balanced-Any owners

Tax-Managed Capital Appreciation has never distributed a capital gain, and Total Stock Market has not distributed a gain since it added the ETF class. (It did have occasional small gains back when you chose not to buy it.) Grabiner is correct. I checked my records and since I invested $5000 on 10/2...
by grabiner
Thu Sep 11, 2014 8:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax Managed Balanced-Any owners
Replies: 50
Views: 10765

Re: Why COULDN'T we just retire on Social Security?

I waited till 70 and this is what I got from SS website: Beginning December 2013, the full monthly Social Security benefit before any deductions is $3,212.20 . This is based on 34 years of earning. I am still working so it will likely go up slightly. So double that and you should be fine. Of course...
by grabiner
Thu Sep 11, 2014 7:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why COULDN'T we just retire on Social Security?
Replies: 66
Views: 5711

Re: What are the benefits of a good credit score?

Employers often perform a credit check as part of their verification. A bad score would disqualify you from many positions that involve dealing with money. I've been told that a bad credit score could disqualify one from any position as the person is not perceived as a responsible individual. I don...
by grabiner
Thu Sep 11, 2014 7:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: What are the benefits of a good credit score?
Replies: 16
Views: 1224

Re: Vanguard Tax Managed Balanced-Any owners

I would seriously reconsider any use of TM funds - I bought them years ago when they first started and had 3 of them until recently and now have 2. Taxable funds need to be a long term relationship and Vanguard does not believe that with these funds. They are very tough to change after a decent per...
by grabiner
Thu Sep 11, 2014 7:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax Managed Balanced-Any owners
Replies: 50
Views: 10765

Re: Vanguard Tax Managed Balanced-Any owners

I have had the tax Managed Capital Appreciation fund since it was first started some 20 years ago. It's performance has been fine, there may have been one year where it had to distribute capital gains, and all the rest of the distributions are are qualified dividends. I have used it as a long term ...
by grabiner
Thu Sep 11, 2014 7:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax Managed Balanced-Any owners
Replies: 50
Views: 10765

Re: Low Income Investor (Tax Concerns)

Thanks for all of the advice. I've already learned a lot in just my first post here. Would it be better to put $5,500 in Roth IRA vs. $10,000 in admiral shares of the VFIAX fund? I wasn't sure if it would be worth getting the lower expense fee with admiral shares.. or the tax benefits of the IRA ri...
by grabiner
Thu Sep 11, 2014 1:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Low Income Investor (Tax Concerns)
Replies: 31
Views: 1767

Re: Take money from investments to get better rate on refi?

This overlaps investments and personal finance. The question is: Should I refinancing my mortgage by taking money from my taxable investment account to increase my equity to 20%, get a better rate and avoid PMI? Absolutely. Taking money out of your investment account and using it to pay down your m...
by grabiner
Wed Sep 10, 2014 11:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Take money from investments to get better rate on refi?
Replies: 14
Views: 620

Re: ow Does Paying Off a Mortgage Affect Your Credit Score

It is also very system-dependent. When I opened my mortgage and checked my scores on Credit Karma, my Trans Union score dropped a few points (because of an inquiry and a new account), but my VantageScore jumped more than 50 points even before I made my first mortgage payment. And when I applied for ...
by grabiner
Wed Sep 10, 2014 11:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: ow Does Paying Off a Mortgage Affect Your Credit Score
Replies: 16
Views: 1396

Re: What are the benefits of a good credit score?

A good credit score (and a good report, for use by employers and landlords who won't use the score directly) has a signficant value, as several people have mentioned. But that doesn't mean that every point on your credit score is important once it is already good. Your employer, bank, or landlord wo...
by grabiner
Wed Sep 10, 2014 11:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: What are the benefits of a good credit score?
Replies: 16
Views: 1224

Re: how will paid-off house affect mortgage app for new home

Just off the top of my head, yes, if you are required to submit a financial statement (old fashioned assets minus liabilities = net worth) certainly all real estate, especially your principal residence would be listed under assets. But, unless one or both of the applicants are self-employed, I have...
by grabiner
Wed Sep 10, 2014 11:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: how will paid-off house affect mortgage app for new home?
Replies: 5
Views: 705

Re: Lump Sum exchange from VTIAX to VSS

It's not a bad idea to wait until after the dividend, but OTOH, VTIAX will pay a dividend, so you really are not saving yourself the taxes on a dividend. It doesn't matter much whether you sell before or after a dividend; if you receive the dividend, you pay tax on the dividend, but your capital ga...
by grabiner
Wed Sep 10, 2014 10:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lump Sum exchange from VTIAX to VSS
Replies: 2
Views: 329

Re: Fixed income placement

My wife's 401(k) has Vanguard Intermediate Bond Index VBIIX available at 0.20% ER, which is where our entire bond portfolio currently sits. The next best / only other reasonable option in her account is JPMorgan US Equity Fund Select JUESX, which works for allocation needs but carries a 0.79% ER. T...
by grabiner
Wed Sep 10, 2014 10:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fixed income placement
Replies: 7
Views: 859

Re: Low Income Investor (Tax Concerns)

This, from the wiki on timing of buying funds, may be useful so you don't pay unnecessary taxes http://www.bogleheads.org/wiki/Timing_of_transactions_to_reduce_taxes It's not relevant to the OP, who is in the 15% tax bracket and will pay no taxes on any qualified dividends he receives in September....
by grabiner
Wed Sep 10, 2014 10:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low Income Investor (Tax Concerns)
Replies: 31
Views: 1767

Re: So, when does a market timer get back in?

I just cashed out $50,000 from high-expense AmCent funds... I want to put this in my Vanguard taxable. If market timing is indeed bunk, do Bogleheads suggest re-allocating whole thing in bulk? Dollar-cost averaging ($10,000/mo x 5 months) seems more rational. Thoughts? There's a difference between ...
by grabiner
Wed Sep 10, 2014 10:06 pm
 
Forum: Investing - Theory, News & General
Topic: So, when does a market timer get back in?
Replies: 54
Views: 5497

Re: Vanguard Tax Managed Balanced-Any owners

Welcome to the forum! I'm single so I just have the 3300 in my HSA account (I know others have recommended using a total stock index fund in taxable and keeping total bond fund in tax advantaged accounts but there will be a ratio problem for me there) The ratio isn't a problem. You may prefer to hol...
by grabiner
Wed Sep 10, 2014 10:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax Managed Balanced-Any owners
Replies: 50
Views: 10765

Re: Why is REIT only sector fund recommended in slice & dice

The International REIT fund has been established with Vanguard for approximately 4 years. I would be interested in knowing if more Bogleheads have started to invest in this asset class since inception. I've been in the fund since it started, moving half my REITs from the US to the international fun...
by grabiner
Wed Sep 10, 2014 9:58 pm
 
Forum: Investing - Theory, News & General
Topic: Why is REIT only sector fund recommended in slice & dice?
Replies: 113
Views: 7275

Re: Master thread for Washington DC Area Bogleheads

Our next meeting is September 21, 3:00-5:30, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201; this is the same place as the previous meeting. The library is between the Virginia Square and Ballston stations on the Metro Orange/Silver ...
by grabiner
Tue Sep 09, 2014 9:46 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 6
Views: 1093

Re: spend or save HSA when changing to lower-paid career?

If you will be able to max out your retirement plans in your new job, then it's worth keeping the HSA for additional tax-deferred savings. If you won't max them out, then using the HSA for medical expenses is better because the money that wasn't used to pay medical expenses can go to an IRA or 401(k...
by grabiner
Tue Sep 09, 2014 9:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: spend or save HSA when changing to lower-paid career?
Replies: 4
Views: 323

Re: When do you have too many credit cards?

According to Credit Karma, 1-5 credit cards receive the lowest rating - an "F". The highest rating ("A") is reserved for those having 22+ cards. This is total accounts, both open and closed. It is also greatly oversimplified. Credit scoring also counts the number of open account...
by grabiner
Tue Sep 09, 2014 9:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: When do you have too many credit cards?
Replies: 16
Views: 1358

Re: Less than 30% of active fund managers beat their benchma

100% of index funds did not beat their benchmark. Fees matter. :wink: It seems that some do ... :twisted: Vanguard Institutional Index Fund Institutional Plus Shares Vanguard's super low fee institutional 500 funds beat the benchmark index pretty regularly even after expenses (with additional incom...
by grabiner
Tue Sep 09, 2014 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: Less than 30% of active fund managers beat their benchmarks
Replies: 18
Views: 886

Re: So, when does a market timer get back in?

But the logic on my side is: both parties miss 60% of drawdowns, they just do it in different time slices. Yes, sometimes my drawdown potential is deeper, but other times it is zero while the buy-and-holder continues to suffer through every drawdown to some extent. However, the probability distribu...
by grabiner
Tue Sep 09, 2014 8:48 pm
 
Forum: Investing - Theory, News & General
Topic: So, when does a market timer get back in?
Replies: 54
Views: 5497

Re: Do I invest or pay higher mortgage downpayment?

For some reason, the general thinking on this forum tends to be dead set against investing on margin, but much more supportive of borrowing on houses, cars, and even 401Ks to invest. I don't really understand the difference - maybe someone can explain. The main reason is the tax system. If you can ...
by grabiner
Tue Sep 09, 2014 8:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I invest or pay higher mortgage downpayment?
Replies: 55
Views: 3203

Re: Do I invest or pay higher mortgage downpayment?

However, in your situation, once you have maxed out the retirement plans, it's probably better to make extra payments on the student loans. If your rate is 3.5% with 25 years left to pay, you presumably are paying too much interest to deduct it all, so you get the full 3.5% return on loan payments,...
by grabiner
Tue Sep 09, 2014 8:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I invest or pay higher mortgage downpayment?
Replies: 55
Views: 3203

Re: Do I invest or pay higher mortgage downpayment?

My wife and I stockpiled money to make sure we could afford the 20% downpayment required to avoid PMI. We successfully saved enough but we saved more than needed for 20%. I assume this question has been asked before but what should we do with the extra money: do we put 30% down(fixed 4.1% for 30 ye...
by grabiner
Mon Sep 08, 2014 11:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I invest or pay higher mortgage downpayment?
Replies: 55
Views: 3203

Re: Specific identification of shares and Vanguard

Nevertheless, there are circumstances for which you cannot blindly enter cost basis numbers from a brokerage 1099-B on your Form 8949, even when the shares are covered. Here's another example, which Vanguard got wrong with non-covered shares for me. I don't know whether Vanguard gets it right now w...
by grabiner
Mon Sep 08, 2014 11:39 pm
 
Forum: Investing - Theory, News & General
Topic: Specific identification of shares and Vanguard
Replies: 9
Views: 741

Re: Need advice on short-term (bond) mutual funds

If you're feeling a little more adventurous, you could hold some REITs (e.g. Vanguard's REIT Index fund) to get substantially more yield, with the understanding that if they crash hard, the price of your future home is likely to do the same -- and the opposite tradeoff on the appreciation side. You...
by grabiner
Mon Sep 08, 2014 12:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Need advice on short-term (bond) mutual funds
Replies: 10
Views: 778

Re: Bond Funds and Interest Rates Question

If the FEDS raise interest rates to 4% what will be the corresponding percentage drop in an average bond index fund, for example VTAPX? For any bond fund, the change in value is equal to the change in yield for the bonds in that fund multiplied by the change in rates; this is the definition of dura...
by grabiner
Sun Sep 07, 2014 11:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Bond Funds and Interest Rates Question
Replies: 17
Views: 1243

Re: Home Depot Breach - zip codes revealed

I believe the zip codes associated with the card numbers are zip codes of retail locations where the card numbers were stolen, not customer addresses. I don't know how the people collecting the card numbers would be able to get address information for each card. People usually shop close to home, s...
by grabiner
Sun Sep 07, 2014 11:20 pm
 
Forum: Personal Consumer Issues
Topic: Home Depot Breach - zip codes revealed
Replies: 36
Views: 4673
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