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Re: Total bond vs intermediate tax exempt

They are not equivalent. Don't you think that the bond market would not demand more compensation from taxable bonds than equivalent tax-free bonds? Vanguard Total Bond Market Investor Shares: SEC yield 2.07%, Duration 5.6 years, 65% US Government Bonds. Vanguard Intermediate Term Tax-Exempt Investor...
by kenyan
Sun Apr 20, 2014 3:46 pm
 
Forum: Investing - Theory, News & General
Topic: Total bond vs intermediate tax exempt
Replies: 6
Views: 476

Re: GMO Forecasts now include Value and Growth

Let me know if I've got this right... According to GMO, a US small value index fund such as VBR will lose 63.7% of its NAV between now and April 2021. I get there from -5.1 real, minus 2.2 for inflation, minus 1.8 for dividends = a 9.1 annual loss in NAV = a 63.7 loss in NAV in 7 years. So VBR, whi...
by kenyan
Wed Apr 16, 2014 10:59 pm
 
Forum: Investing - Theory, News & General
Topic: GMO Forecasts now include Value and Growth
Replies: 17
Views: 1089

Re: New Housing Bubble and upcoming cycle peak

wilked wrote:As a for instance, then, do you peg both at 2% or 3% or so?


Typically, yes. I might slide it one way or another just to see how the results differ, but my real analysis will occur in the range of inflation +/- 1%.
by kenyan
Mon Apr 14, 2014 3:39 pm
 
Forum: Investing - Theory, News & General
Topic: New Housing Bubble and upcoming cycle peak
Replies: 74
Views: 6367

Re: New Housing Bubble and upcoming cycle peak

NYT calculator...I feel like you can skew the rent % increase or housing % gain to tell whatever story you would like. I honestly have no way of doing it with removing bias. I guess the only thing I find it useful for is 'scenario modeling', but even then it feels a bit loose You can do that, or yo...
by kenyan
Mon Apr 14, 2014 12:01 pm
 
Forum: Investing - Theory, News & General
Topic: New Housing Bubble and upcoming cycle peak
Replies: 74
Views: 6367

Re: Fundamental Indexing

by kenyan
Mon Apr 14, 2014 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Fundamental Indexing
Replies: 9
Views: 772

Re: New Housing Bubble and upcoming cycle peak

I am going to consider 14-16x a wash, and will have a hat time swallowing 17x or more The 15x is a fairly good rule of thumb, but I do think some allowances should be made for present day interest rates, as compared to historical rates. With very low rates, you can probably creep that number up a b...
by kenyan
Sun Apr 13, 2014 11:00 am
 
Forum: Investing - Theory, News & General
Topic: New Housing Bubble and upcoming cycle peak
Replies: 74
Views: 6367

Re: Anyone else very reluctant to buy right now?

Subscribe to my market-timing newsletter. I sold a bunch of Small Value and International Small Cap on April 1, buying Intermediate-Term Bonds in their place. From April 2-April 11, Small Value is down 5%, International Small is down 2%, and my bonds are up 1.5%. Boom. Or...maybe I just rebalanced w...
by kenyan
Sat Apr 12, 2014 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: Anyone else very reluctant to buy right now?
Replies: 124
Views: 11870

Re: New Housing Bubble and upcoming cycle peak

I am going to consider 14-16x a wash, and will have a hat time swallowing 17x or more The 15x is a fairly good rule of thumb, but I do think some allowances should be made for present day interest rates, as compared to historical rates. With very low rates, you can probably creep that number up a b...
by kenyan
Sat Apr 12, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: New Housing Bubble and upcoming cycle peak
Replies: 74
Views: 6367

Re: The market portfolio vs. value tilts

That brings about another question I have been pondering. If the small and value premium is a risk story and you are trying to increase returns by taking on more risk, why not just increase your equity percentage in a market portfolio? If the market portfolio is the most efficient and the equity ri...
by kenyan
Thu Apr 10, 2014 10:09 pm
 
Forum: Investing - Theory, News & General
Topic: The market portfolio vs. value tilts
Replies: 66
Views: 3170

Re: Vanguard REIT Index (VGSIX): a Good Investment, Now?

Some people believe that valuations of US-based REITs are too high, and the sector is bound for lower returns going forward. They also said that at the end of last year, and domestic REITs have been the top-performing asset class of the year thus far (after a terrible year last year). I suppose that...
by kenyan
Tue Apr 08, 2014 4:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard REIT Index (VGSIX): a Good Investment, Now?
Replies: 7
Views: 1151

Re: 180K and no clue

Sorry about the divorce. Your investments are actually not conservative overall. They're fine, but not conservative (~12-13% in bonds overall). Of course, you did state that you had 180K, and only listed 158K in investments. Your tax efficiency could definitely be improved, but your overall mix is f...
by kenyan
Tue Apr 08, 2014 12:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: 180K and no clue
Replies: 8
Views: 1673

Re: California Taxes - Am I Missing Something?

Taxes here in Missouri are only 6%. Nevertheless, I still want to move to Southern California. For Bogleheads living in California, do you think it would be a mistake to consider Riverside County for the sake of lower housing prices. Also the desert towns like Palm Desert have more affordable housi...
by kenyan
Mon Apr 07, 2014 10:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 8148

Re: Anyone else very reluctant to buy right now?

I think people get a bit carried away with the conviction about the futility of short term timing, and neglect to observe that reversion to the mean from starting valuations has been a tremendously accurate way to predict longer term returns. Tremendously accurate? I think you are vastly overstatin...
by kenyan
Mon Apr 07, 2014 9:53 pm
 
Forum: Investing - Theory, News & General
Topic: Anyone else very reluctant to buy right now?
Replies: 124
Views: 11870

Re: California Taxes - Am I Missing Something?

celia wrote:
The gas prices are higher because the gas has stricter refinery regulations than the rest of the country, ie. we now have cleaner exhaust.


Gas taxes are higher too. Only Pennsylvania and New York have higher state gasoline taxes.
by kenyan
Mon Apr 07, 2014 3:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 8148

Re: California Taxes - Am I Missing Something?

Sales taxes are just under 10% in most counties, though that is not the highest in the nation. Income taxes are very high, as noted the 9.3% bracket starts at relatively low income, and the top bracket is over 13% for millionaire incomes. State Disability taxes take a chunk of income, though I don't...
by kenyan
Mon Apr 07, 2014 3:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 8148

Re: Calculate effect of mortgage-interest deduction

If the taxpayer would itemize deductions with or without mortgage interest, then he/she is getting the benefit that everyone assumes. This is a relatively small fraction of people. The fraction of people who would itemize without either mortgage interest or property taxes (the relevant number when d...
by kenyan
Mon Apr 07, 2014 1:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Calculate effect of mortgage-interest deduction
Replies: 11
Views: 695

Re: Anyone else very reluctant to buy right now?

I did just sell a chunk of equities due to hitting rebalancing bands. Aside from that, buying every week/month as usual. If I come in to some extra money to invest in our Roth IRAs, it will go into the market as usual. Annual re-evaluation of my IPS is in July, but I don't think there will be any ch...
by kenyan
Mon Apr 07, 2014 11:15 am
 
Forum: Investing - Theory, News & General
Topic: Anyone else very reluctant to buy right now?
Replies: 124
Views: 11870

Re: 1 Nice car vs 2 Decent cars (daily driver/weekend car)?

Where is the annual registration fee in your math? We have to pay a few hundred $ per year to the state, per car, for the privilege of having it registered here.
by kenyan
Mon Apr 07, 2014 9:59 am
 
Forum: Personal Finance (Not Investing)
Topic: 1 Nice car vs 2 Decent cars (daily driver/weekend car)?
Replies: 34
Views: 2463

Re: Why pay off your house?

Non-interest costs of a house aren't going to change whether or not you have a mortgage. The question is whether or not you want a large collateralized loan against your property, when said loan is not necessary. The loss of a tax deduction? I would rather keep 100% of my money, than pay a bunch of ...
by kenyan
Sat Apr 05, 2014 1:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8529

Re: And suddenly, I'm done...

"Don't just do something, stand there!" -Jack Bogle I got through this a couple of years ago, getting through all of the transactions to Boglefy my portfolio and plan. Things did calm down for a while, but it was a good feeling to have that plan executed. The plan has evolved over time, th...
by kenyan
Fri Apr 04, 2014 10:57 am
 
Forum: Personal Finance (Not Investing)
Topic: And suddenly, I'm done...
Replies: 24
Views: 4960

Re: Urge to buy a house every rent increase

You sound like someone who is better suited as a renter for now. You're thinking about settling down, but you'll probably need a bigger place when you have those kids. If you buy now, you'll need to buy a place that is bigger than you need, to accommodate future family changes. Either that, or you'l...
by kenyan
Fri Apr 04, 2014 10:39 am
 
Forum: Personal Finance (Not Investing)
Topic: Urge to buy a house every rent increase
Replies: 29
Views: 1499

Re: Using municipal bonds for short term saving

Really depends upon your flexibility - if your goal is flexible (time of purchase, price of house, etc), then I think you can get away with more risk than people on this forum usually recommend for near-term goals. We used 10-15/25-30/60 or so (stocks/muni bonds/cash+CDs) for our down payment saving...
by kenyan
Tue Apr 01, 2014 10:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using municipal bonds for short term saving
Replies: 6
Views: 818

Re: best vacuum cleaner

If you are on a budget, and don't have a cavernous house to vacuum, I would also highly recommend the Shark Navigator series. We have the Lift-Away Pro.

If you don't mind spending 2-3 times as much, a Dyson might treat you better.
by kenyan
Tue Apr 01, 2014 10:23 pm
 
Forum: Personal Consumer Issues
Topic: best vacuum cleaner
Replies: 23
Views: 1645

Re: Lending money to family

Reading between the lines (ignore this post if my assumption is incorrect): It sounds like you are not giving a gift; you are tendering an interest-free loan to a relative who does not have sufficient reserve requirements to qualify for a particular mortgage. Repayment of this loan is going to be fr...
by kenyan
Tue Apr 01, 2014 11:12 am
 
Forum: Personal Finance (Not Investing)
Topic: Lending money to family
Replies: 25
Views: 1908

Re: Being older/younger in class -- benefits, issues?

I was a year early - my parents took me to be assessed for early entry into 1st grade, which I entered at 5 (and a few months). I did suffer a bit (until high school) from being smaller than most of my peers; it certainly didn't help that I come from short stock. For a year or two in elementary scho...
by kenyan
Tue Apr 01, 2014 10:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Being older/younger in class -- benefits, issues?
Replies: 98
Views: 4837

Re: 401k vs Roth?

Contributions to pretax retirement plans do not exempt that income from Social Security and Medicare taxes. You also will likely be in the 25% bracket, not the 28%. The 28% bracket starts just under $149k in 2014. Your taxable income will be below that threshold, particularly if you contribute to th...
by kenyan
Mon Mar 31, 2014 4:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k vs Roth?
Replies: 12
Views: 926

Re: Amazon Prime Increase

For us, if Prime was purely about the shipping (it's not - we make ample use of both the streaming video and the free kindle books), it would be a tough sell at $99/year. We do appreciate the fast shipping, and order dozens of times per year. Many of those orders would require us to take extra trips...
by kenyan
Wed Mar 26, 2014 5:01 pm
 
Forum: Personal Consumer Issues
Topic: Amazon Prime Increase
Replies: 185
Views: 7633

Re: Road trip advice?

One other note - plan around Chicago traffic. The last thing you want to do at the beginning of your trip is sit in traffic for an extra hour+.
by kenyan
Wed Mar 26, 2014 3:39 pm
 
Forum: Personal Consumer Issues
Topic: Road trip advice?
Replies: 35
Views: 2221

Re: Road trip advice?

My wife and I are moving to Sacramento, CA from Lansing, MI in 2 weeks or so. We'll be driving our 2012 Civic with luggage to the west coast. We plan to take I-80 all the way (we should hit it after about 200 miles from Lansing) to Sacramento. How many days do you think we need to reach there? We a...
by kenyan
Wed Mar 26, 2014 3:36 pm
 
Forum: Personal Consumer Issues
Topic: Road trip advice?
Replies: 35
Views: 2221

Re: IRS: bitcoins are property for tax purposes in U.S.

Phineas J. Whoopee wrote:
chaz wrote:Does binary code have value?

Ask Microsoft.
PJW


Reminds me of the Onion article where Microsoft patented ones, zeroes - forcing all competitors to work in analog.
by kenyan
Tue Mar 25, 2014 3:59 pm
 
Forum: Investing - Theory, News & General
Topic: IRS: bitcoins are property for tax purposes in U.S.
Replies: 26
Views: 1965

Re: New Housing Bubble and upcoming cycle peak

Seems to me that house resales are more indicative of the state of the housing market than new house sales, given that resales represent the vast majority of the market. The story is a little different using resales. That's not to say that there isn't a new bubble starting - who knows - but Case-Shi...
by kenyan
Tue Mar 25, 2014 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: New Housing Bubble and upcoming cycle peak
Replies: 74
Views: 6367

Re: PenFed 5/5 ARM advice

Thanks for the responses. It looks like the no closing cost deal is over at least for now. That being said there is a one-click rate lock available for an extra .25% which lets one lock the rate in for an additional 5 years after being in the current rate for 1 year. This can be done 5 times during...
by kenyan
Wed Mar 12, 2014 3:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: PenFed 5/5 ARM advice
Replies: 14
Views: 1028

Re: New callable CD offering

So, again comparing them to treasuries, you are getting a slight premium in order to expose yourself only to the downside risk of duration, without benefit on the upside (since the bank will call them if interest rates drop). If you can guarantee a holding period of ~13 years, and don't mind having ...
by kenyan
Wed Mar 12, 2014 11:08 am
 
Forum: Investing - Theory, News & General
Topic: New callable CD offering
Replies: 18
Views: 1269

Re: New callable CD offering

I suppose that from my limited understanding, those sound almost too good to be true. A 9% 15-year CD? Bond-like risk or not, that's nuts. If they call it, you avoid the downside of duration risk anyhow. Hopefully, someone with more understanding will chime in and explain why this product exists, g...
by kenyan
Wed Mar 12, 2014 11:03 am
 
Forum: Investing - Theory, News & General
Topic: New callable CD offering
Replies: 18
Views: 1269

Re: New callable CD offering

I suppose that from my limited understanding, those sound almost too good to be true. A 9% 15-year CD? Bond-like risk or not, that's nuts. If they call it, you avoid the downside of duration risk anyhow. Hopefully, someone with more understanding will chime in and explain why this product exist...
by kenyan
Wed Mar 12, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: New callable CD offering
Replies: 18
Views: 1269

Re: New callable CD offering

Are those brokered CDs?
by kenyan
Wed Mar 12, 2014 10:42 am
 
Forum: Investing - Theory, News & General
Topic: New callable CD offering
Replies: 18
Views: 1269

Re: After Tax Investing vs. Pre Tax Investing

By investing pretax over taxable, you are avoiding capital gains taxes, as well as the millstone of recurring taxes (can be minimized but usually not avoided altogether). There are other benefits - easy investment changes/rebalancing, protection from lawsuits, FAFSA, etc. You do miss out on potentia...
by kenyan
Wed Mar 12, 2014 10:32 am
 
Forum: Investing - Theory, News & General
Topic: After Tax Investing vs. Pre Tax Investing
Replies: 26
Views: 1139

Re: PenFed 5/5 ARM advice

Thanks for the responses. It looks like the no closing cost deal is over at least for now. That being said there is a one-click rate lock available for an extra .25% which lets one lock the rate in for an additional 5 years after being in the current rate for 1 year. This can be done 5 times during...
by kenyan
Wed Mar 12, 2014 9:58 am
 
Forum: Personal Finance (Not Investing)
Topic: PenFed 5/5 ARM advice
Replies: 14
Views: 1028

Re: PenFed 5/5 ARM advice

Recently refinanced into this product after having our 30-year fixed for only four months. Our refinance was from a 4.75% fixed into the 5/5 at 2.625%. No closing costs were paid, as advertised. Like you, we plan to prepay, at least while the interest rate is exceedingly low. The prepayment we are p...
by kenyan
Tue Mar 11, 2014 9:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: PenFed 5/5 ARM advice
Replies: 14
Views: 1028

Re: What video games are you currently playing?

I had my MMORPG phase, including several stints with WoW. During the last iteration, I got wrapped up in endgame raiding (for perhaps 6 months), and it did eventually feel akin to a second job in terms of responsibility, albeit one that was usually more enjoyable than a paying job. I finally quit fo...
by kenyan
Tue Mar 11, 2014 4:30 pm
 
Forum: Personal Consumer Issues
Topic: What video games are you currently playing?
Replies: 99
Views: 4228

Re: House too small; what to do?

1000 sf per person is nuts, unless you're living alone. My brother has that (4000 sf, two adults + two children), and his house is cavernous. However, he does plan on filling it with many more children. 1.5 bathrooms would be rough for 7 people; we didn't want 1.5 for four of us. Our house is about ...
by kenyan
Tue Mar 11, 2014 10:14 am
 
Forum: Personal Consumer Issues
Topic: House too small; what to do?
Replies: 38
Views: 3062

Re: Happy fifth birthday! [since the 2008-2009 market crash]

I was just starting to ramp up my savings rate in early 2009, and had very little saved at that time. As a result, my 5-year (estimated from Vanguard, which isn't all of my assets) isn't that great comparatively (~15%), since the bulk of my money didn't see that 60% gain from March until year end 20...
by kenyan
Mon Mar 10, 2014 10:37 am
 
Forum: Investing - Theory, News & General
Topic: Happy fifth birthday! [since the 2008-2009 market crash]
Replies: 54
Views: 3349

Re: What video games are you currently playing?

I'm 40 and I grew up playing video games. If you're my age (or within a few years), you were part of the first generation to grow up playing video games. My parents got me an Atari when I was 7 or 8. I took a hiatus in college but other than that, never stopped playing. Because of the evolution of ...
by kenyan
Mon Mar 10, 2014 9:53 am
 
Forum: Personal Consumer Issues
Topic: What video games are you currently playing?
Replies: 99
Views: 4228

Re: Son moving to LA - neighborhood/town recommendations?

He should go to one of the South Bay Beach Cities; Manhattan, Hermosa or South Redondo. It is expensive but he will have the time of his life. They are a mere hop, skip, and a jump from west Torrance. An easy drive. He'll find the way! Indeed. And, if you wish to get technical, Torrance is a beach ...
by kenyan
Sun Mar 09, 2014 1:39 am
 
Forum: Personal Consumer Issues
Topic: Son moving to LA - neighborhood/town recommendations?
Replies: 43
Views: 3060

Re: What video games are you currently playing?

Bogleheads.org - it's packed with fun-filled adventure with the potential for surprises along the way including the dreaded "Lock". :D I'm not sure if you were implying that this thread might be a candidate for a lock, but I think it fits this subforum perfectly. "Welcome to the Pers...
by kenyan
Fri Mar 07, 2014 7:07 pm
 
Forum: Personal Consumer Issues
Topic: What video games are you currently playing?
Replies: 99
Views: 4228

Re: What video games are you currently playing?

The Walking Dead - based on the comics and TV show... Zombies have taken over the world, and you have to survive with a bunch of other people... And some of them don't get along.. Some of them are freaking out over the end of the world and endangering everyone else. It's more about the relationship...
by kenyan
Fri Mar 07, 2014 6:59 pm
 
Forum: Personal Consumer Issues
Topic: What video games are you currently playing?
Replies: 99
Views: 4228

Re: What video games are you currently playing?

League of Legends. A true boglehead game, free to play. I've played thousands of hours and have spend exactly zero cents. Other recent games have been BF4 and Diablo3. I didn't mention it, but I do play this as well. I often stick to the Computer opponents, as it's mindless, easy, and avoids the ex...
by kenyan
Fri Mar 07, 2014 5:46 pm
 
Forum: Personal Consumer Issues
Topic: What video games are you currently playing?
Replies: 99
Views: 4228

What video games are you currently playing?

Ok, we have long threads on TV show and book recommendations, but nothing on video games. Perhaps this forum does run a bit older than the primary video game crowd, but I have to believe that there are other Bogleheads out there who prefer to spend a good chunk of their 'vegging' time in front of a ...
by kenyan
Fri Mar 07, 2014 5:07 pm
 
Forum: Personal Consumer Issues
Topic: What video games are you currently playing?
Replies: 99
Views: 4228

Re: Son moving to LA - neighborhood/town recommendations?

West Torrance is great. I used to live there, but couldn't afford to buy a house there. As mentioned, close to the beach as well - so nightlife can still be had a short drive away if he's not too keen on staying suburban.
by kenyan
Fri Mar 07, 2014 4:51 pm
 
Forum: Personal Consumer Issues
Topic: Son moving to LA - neighborhood/town recommendations?
Replies: 43
Views: 3060

Re: Will this affect your Tipping?

One of my pet peeves already is the take-out only/fast-food or other similar establishment that leaves a tip line on the credit card receipt. I recently patronized a sit-down restaurant that also does a fair amount of take-out business, and the cashier was so kind to cross out the tip line before he...
by kenyan
Wed Mar 05, 2014 4:39 pm
 
Forum: Personal Consumer Issues
Topic: Will this affect your Tipping? [Suggested Tip Amounts]
Replies: 123
Views: 7555
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