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Re: Should a BH investor never use futures/options?

There is a one simple reason why I personally do not use futures or options. My brokerage account does not allow it. In order to enable it in my account, I would need to sign my name to a legal paper that, to put it bluntly, in my case would be a big old pack of fibs. I would have to be putting my ...
by madbrain
Sat Mar 28, 2015 6:27 am
 
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 50
Views: 2858

Re: Mortgage Debt in Retirement?

Doesn't the interest portion decrease with each house payment and the amount of principal payoff increases with each payment? If so, towards the end of the mortgage, the borrower is paying less interest, more principal, thus slightly more tax on the same income necessary for the house payment? That...
by madbrain
Fri Mar 27, 2015 8:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgage Debt in Retirement?
Replies: 71
Views: 4108

Re: Mortgage Debt in Retirement?

There is nothing "special" about mortgage debt, except its tax treatment. It's debt like any other debt. And of course, mortgage debt is secured debt. Th risk is that people hang on to more house than they can afford. Subtract the debt from your portfolio and compare your portfolio to you...
by madbrain
Fri Mar 27, 2015 6:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgage Debt in Retirement?
Replies: 71
Views: 4108

Re: Mortgage Debt in Retirement?

I'd love to hear some thoughts on both sides of this equation. I'd particularly be interested in anyone who has crunched the numbers and would care to share them. I'm still pretty far from my planned early retirement (about 15 years), and I haven't crunched the exact numbers on mortgage payment vs ...
by madbrain
Fri Mar 27, 2015 5:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgage Debt in Retirement?
Replies: 71
Views: 4108

Re: Should a BH investor never use futures/options?

You can sell out of the money puts on SPY and get paid to rebalance when markets fall. Assuming these short puts are cash-covered, this strategy does not necessarily outperform just putting that cash in the index, though. Just for the sake of being contrarian, take a look here: http://papers.ssrn.c...
by madbrain
Thu Mar 26, 2015 9:32 pm
 
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 50
Views: 2858

Re: Should a BH investor never use futures/options?

26USC wrote:You can sell out of the money puts on SPY and get paid to rebalance when markets fall.


Assuming these short puts are cash-covered, this strategy does not necessarily outperform just putting that cash in the index, though.
by madbrain
Thu Mar 26, 2015 8:45 pm
 
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 50
Views: 2858

Re: Should a BH investor never use futures/options?

Tanelorn wrote:Still doesn't make it a good idea unless you know something special about the future volatility or lack of upside prospects for the stock.


In which case, why would you own the stock in the first place ?
by madbrain
Thu Mar 26, 2015 8:08 pm
 
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 50
Views: 2858

Re: Opinions on SafeCo?

I have had them for a few years. They are the lowest by far for auto and home. About 30% less overall than the closest competitor, which is Mercury.
Obviously, this will vary depending on your location and personal situation.
by madbrain
Thu Mar 26, 2015 7:07 pm
 
Forum: Personal Consumer Issues
Topic: Opinions on SafeCo?
Replies: 7
Views: 786

Re: Can I Afford This House?

Expenses * Rental Property Total Expenses - $1800 * Mortgage + Taxes (assuming 3.6% rate) - $3450 * Home Insurance - $250 * Electricity - $300 * Gas - $250 * Water/Sewer/Trash - $100 * Cable/Internet - $200 * Cleaning Service - $200 * Cell Phones - $100 * Auto Insurance - $150 * Gasoline - $300 * M...
by madbrain
Thu Mar 26, 2015 6:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I Afford This House?
Replies: 13
Views: 1179

Re: Can I afford a $1M house?

With PITI at 29% of your gross income, of course you can afford it. Whether you should is a personal call.

How much bigger is the $1M house compared to your current one ?
How much would rent on such a house be ?
by madbrain
Thu Mar 26, 2015 6:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I afford a $1M house?
Replies: 64
Views: 5642

Re: Travel Insurance

Does anyone actually ever collect ? Yes, I have collected on at least 4 occasions for medical reasons. There is a bit of paperwork involved between the insurance company and the doctor. My most recent submission was for a trip that included 10 flights and 5 hotels - it was a lot of paperwork to sho...
by madbrain
Wed Mar 25, 2015 10:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Travel Insurance
Replies: 20
Views: 1174

Re: Travel Insurance

I always buy it as I get sick frequently. I have put in claims about 70% of the time on my travel dates which are usually in the winter when I'm more prone to getting illnesses.
by madbrain
Wed Mar 25, 2015 8:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Travel Insurance
Replies: 20
Views: 1174

Re: Any situations car leasing makes sense?

It's not zero fuel cost unless the solar panels were free. Maybe they were, or maybe you put in a huge solar array in a fit of madness and the power would go to waste otherwise, but probably not if it's "properly-sized". That's fair enough, the PV panels were not free. However, the electr...
by madbrain
Wed Mar 25, 2015 7:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Any situations car leasing makes sense?
Replies: 63
Views: 5034

Re: Where do I learn how much one SHOULD spend on a home?

What about my most recent idea of making it a rental property IF I ever decide to move for whatever reason? That should negate the idea behind not buying if you may possibly move That's fine as long as you are cash flow positive, but that is not necessarily always the case. Also, even if you are ca...
by madbrain
Wed Mar 25, 2015 1:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Where do I learn how much one SHOULD spend on a home?
Replies: 64
Views: 5079

Re: Any situations car leasing makes sense?

The bottom line is this: I rent a Mercedes that is always less than 3 years old for $20 a day. I think that's a pretty good deal. But not as good as the $7/day on a Nissan Leaf lease, and that's with $0 fuel cost too since I charge from my properly-sized solar array and have no electricity bill for...
by madbrain
Tue Mar 24, 2015 11:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Any situations car leasing makes sense?
Replies: 63
Views: 5034

Re: Cash or Heloc for the next house downpayment

Hi, We are in our mid 30s with 2 kids and gross combined income of ~150k/yr. we could probably save ~20k per year after all expenses and fully fund both 401ks and Roth IRAs. We currently own a start up home worth ~170k with 120k mortgage with 2.5% 5/1 ARM, and that is our only debt. since the inter...
by madbrain
Tue Mar 24, 2015 9:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Cash or Heloc for the next house downpayment
Replies: 3
Views: 256

Re: Where do I learn how much one SHOULD spend on a home?

In the core Seattle area, DS has discovered that rents approximates the cost of the monthly PITI of a 30 year mortgage. DS has figured out that if he later moves, he could rent the place out for the monthly price of the current 30 year mortgage and make a substantial profit over his ARM 7. So I gue...
by madbrain
Tue Mar 24, 2015 9:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do I learn how much one SHOULD spend on a home?
Replies: 64
Views: 5079

Re: Where do I learn how much one SHOULD spend on a home?

Would that turn that idea around? Because I'm somewhat thinking I can learn/research how and when to buy still, with the rough idea that IF I decide to move (no current plans to) that I can rent it out. Therefore not falling into the negative side of buying and then selling the house in 3-7 years. ...
by madbrain
Tue Mar 24, 2015 6:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do I learn how much one SHOULD spend on a home?
Replies: 64
Views: 5079

Re: Where do I learn how much one SHOULD spend on a home?

You cannot escape high rent by buying because the rent you pay to yourself will also be "high". This is simply not true. The rental market and resale market don't always move by the same amounts, or even in the same direction at the same time. And these markets are not necessarily affecte...
by madbrain
Tue Mar 24, 2015 3:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Where do I learn how much one SHOULD spend on a home?
Replies: 64
Views: 5079

Re: Where do I learn how much one SHOULD spend on a home?

Even if the first period is paying off interest, you hope for some growth in the market and home value. If I wanted to move I could just rent out the home. Is it not clearly the better decision? Interesting Yes, if you buy, you do "hope" for some growth in the home market value, but that ...
by madbrain
Tue Mar 24, 2015 2:19 am
 
Forum: Personal Finance (Not Investing)
Topic: Where do I learn how much one SHOULD spend on a home?
Replies: 64
Views: 5079

Re: How Do You Watch Television?

The poll seems to be missing the option of using an OTA antenna to receive free digital broadcasts, which is free.
by madbrain
Tue Mar 24, 2015 12:25 am
 
Forum: Personal Consumer Issues
Topic: How Do You Watch Television?
Replies: 81
Views: 5412

Re: Get rid of PMI or Max out 401K?

Just curious what the thoughts and opinions are on getting rid of PMI on mortgage vs fully funding 401K. What should you do in this scenario? For numbers sake: 200K Mortgage - 10K Down Payment (5%) = 190K in Principal Balance Remaining PMI is $150/month Need to get to get to $160K in principal theo...
by madbrain
Tue Mar 24, 2015 12:19 am
 
Forum: Investing - Theory, News & General
Topic: Get rid of PMI or Max out 401K?
Replies: 13
Views: 1230

Re: Does an electric car make sense for commuting?

How far is your commute? An all electric might limit you since many employers won't allow charging at work. That was in the OP - 30 miles. And EV works fine for that even if you don't charge at work. I have a 26 mile commute, and I charge at home from my solar array - my net electric bill is $0. We...
by madbrain
Mon Mar 23, 2015 10:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does an electric car make sense for commuting?
Replies: 22
Views: 2470

Re: Company Savings plan-was Riffed, Now what

You may want to look at the expense ratio of the fund on your 401k website. It is possible that the 401k provider tacks on an additional fee to the expense ratio. The $80 may be a small part of your actual fee. It's also possible that the fund has a very low expense ratio, if it's institutional sha...
by madbrain
Mon Mar 23, 2015 7:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Company Savings plan-was Riffed, Now what
Replies: 14
Views: 1920

Re: Does an electric car make sense for commuting?

My educated guess is that a conventional car will have a lower cost of ownership than an all-electric car. A hybrid such as as Prius might be a much closer call. Having owned both a Prius and now (leasing) a Leaf, the math is clear that the Leaf will have lower total cost of ownership than a Prius....
by madbrain
Mon Mar 23, 2015 5:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does an electric car make sense for commuting?
Replies: 22
Views: 2470

Re: Any situations car leasing makes sense?

Lease deals *can* be good. For example there was an article in WSJ recently how dealers can't now unload Nissan Leaf's (Leaves? :D ) coming off lease at anywhere near the residual value Nissan assumed in offering those leases. If Nissan is losing, somebody is winning and it's the people who got tho...
by madbrain
Mon Mar 23, 2015 3:49 am
 
Forum: Personal Finance (Not Investing)
Topic: Any situations car leasing makes sense?
Replies: 63
Views: 5034

Re: Baby grand piano decision

If you can find a used one, I would recommend a Schimmel, especially the K series. They make a K169 . I used to have a GP169 which was the predecessor to the K169, and it was an excellent piano. I only sold my GP169 for $20k a few years ago to upgrade to a K280 . IMO, Schimmel is in the same league ...
by madbrain
Sun Mar 22, 2015 10:45 pm
 
Forum: Personal Consumer Issues
Topic: Baby Grand Piano
Replies: 28
Views: 1733

Re: Is it worth making a non-deductible IRA contribution?

As an aside, has anyone calculated the NPV advantage of making a $5500 contribution to a Roth versus investing it in a taxable account? I took a stab at it, and ended up with $1318, but I'm not terribly confident in my methodology. My assumptions were: 35 year time horizon, 4% nominal annualized re...
by madbrain
Sun Mar 22, 2015 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it worth making a non-deductible IRA contribution?
Replies: 14
Views: 1200

Re: Does it make sense to pay off this mortgage?

IMO, no, it does not make sense with a 2.75% rate, especially if your mortgage interest is tax-deductible . You can always pay off the loan later when you ER, but you cannot make up for missed 401k / IRA contributions later on. Wife and I are dual income no kids (and no plans for any). Mortgage int...
by madbrain
Sun Mar 22, 2015 10:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does it make sense to pay off this mortgage?
Replies: 24
Views: 2115

Re: Does it make sense to pay off this mortgage?

Does it make sense to keep up with the $12k extra mortgage payments on the 2.75% loan or should we use these extra ~4 years to fill up our retirement accounts and keep the mortgage on the remainder of the 15 years? IMO, no, it does not make sense with a 2.75% rate, especially if your mortgage inter...
by madbrain
Sun Mar 22, 2015 8:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does it make sense to pay off this mortgage?
Replies: 24
Views: 2115

Re: Does an electric car make sense for commuting?

Hi Everyone, For some reason I am getting tempted by electric cars. My commute is about 30 miles roundtrip. I am intrigued by the $7,500 fed tax credit. I live in MD and believe there may be some other advantages (HOV lane, sales tax credit, and charging station tax incentive). The main choices are...
by madbrain
Sun Mar 22, 2015 7:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does an electric car make sense for commuting?
Replies: 22
Views: 2470

Re: [New Member Observations- Covered Calls, Financial Advis

I did some math on selling cash-covered puts before, and it looked like things would fall apart around 2008 - ie. the losses at that time would have more than offset all the previous potential gains. I would never try naked puts - not that I would qualify for them. The CBOE publishes an index about...
by madbrain
Sun Mar 22, 2015 4:06 am
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15665

Re: COBRA vs ACA

I'm thinking of retiring early, and wondering about health insurance coverage. For the short-term, I could choose between COBRA (for 18 months) and the ACA Marketplace. My current work plan is reasonable, and even at 102% of the total employer+employee the cost may be a bit cheaper for me than the ...
by madbrain
Sun Mar 22, 2015 3:34 am
 
Forum: Personal Finance (Not Investing)
Topic: COBRA vs ACA
Replies: 35
Views: 2150

Re: VGPMX [Vanguard Precious Metals And Mining Fund]

garlandwhizzer wrote:As a result VGMMX recently sold for $8.50/share,
...
It is 470% below its all time high of $40/share in just 8 years ago.


Sorry, but the current share price is only 78.75% below it's all time-high.
What you meant is that the all time high was 470% of the current price.
by madbrain
Sun Mar 22, 2015 3:25 am
 
Forum: Investing - Theory, News & General
Topic: VGPMX [Vanguard Precious Metals And Mining Fund]
Replies: 24
Views: 2349

Re: What Movie Have You Recently Watched?

I watched "It follows" in the theater last night. Sadly, this horror movie did not live up to the reviews. I did not find it even a little bit scary.
My husband was just bored. The idea was original, but the movie just dragged on.
by madbrain
Sat Mar 21, 2015 11:58 pm
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 655
Views: 86366

Re: Route to an $8 Million Portfolio Started With Frugal Liv

He gave his 8MM to a local hospital and library-spending it in this way was the most enjoyable thing he could think of. The money went to the hospital after his death. The hospital enjoyed the use of the money, not him. He was dead, there was nothing left for him to enjoy, unless you believe in the...
by madbrain
Sat Mar 21, 2015 11:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Route to an $8 Million Portfolio Started With Frugal Living
Replies: 31
Views: 4943

Re: Route to an $8 Million Portfolio Started With Frugal Liv

He gave his 8MM to a local hospital and library-spending it in this way was the most enjoyable thing he could think of. The money went to the hospital after his death. The hospital enjoyed the use of the money, not him. He was dead, there was nothing left for him to enjoy, unless you believe in the...
by madbrain
Sat Mar 21, 2015 9:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Route to an $8 Million Portfolio Started With Frugal Living
Replies: 31
Views: 4943

Re: Where do I learn how much one SHOULD spend on a home?

Hey guys. I'm 26 now. I have no idea what range my first house should be in. I know it's an incredibly difficult question to answer and a lot of it is personal, but I'd like some guidance from more experienced people. Opinions are fine. I don't know the real estate prices, or property tax rates, in...
by madbrain
Sat Mar 21, 2015 9:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do I learn how much one SHOULD spend on a home?
Replies: 64
Views: 5079

Re: Citi Cash Rewards vs. Fidelity Amex

I always have points converted to cash in a Fidelty cash account, so it is an eye opener to learn that you only get 1% back if you use statement credit instead of 2% in the cash account. Definitely good to know. After logging in to the Fidelity web site, if you click on the card account, then the l...
by madbrain
Sat Mar 21, 2015 5:15 am
 
Forum: Personal Finance (Not Investing)
Topic: Citi Cash Rewards vs. Fidelity Amex
Replies: 23
Views: 2641

Re: [New Member Observations- Covered Calls, Financial Advis

An alternative income-generating option strategy to covered call writing is naked put writing. Put premiums tend to be significantly richer than those for calls because of the higher risk of large short-term market moves (AKA crashes!). I did some number crunching on this a while back and someone w...
by madbrain
Sat Mar 21, 2015 2:12 am
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15665

Re: [New Member Observations- Covered Calls, Financial Advis

No, I was talking about the OP's strategy of selling calls 8% out of the money, not at the money. These calls wouldn't have been worth 8%, even with VIX at 31 . [(Removed) --admin LadyGeek] You are forcing me to do work. Plugging in VIX at 31 and 8% out of the money into black scholes gets me 3.18%...
by madbrain
Fri Mar 20, 2015 10:07 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15665

Re: [New Member Observations- Covered Calls, Financial Advis

For example if you wrote SPY calls in august 2008, you might have collected a fairly small option premium at the time. At the money calls for 3 month in august 2008 would have been around 8%. (VIX was trading at 31) No, I was talking about the OP's strategy of selling calls 8% out of the money, not...
by madbrain
Fri Mar 20, 2015 8:10 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15665

Re: [New Member Observations- Covered Calls, Financial Advis

5) Rick Ferri's quote about getting hammered in a downturn must be a joke? You would outperform in a downturn by writing covered calls 100% of the time. Was this taken out of context? Sure, you would outperform during the downturn, however not necessarily by much - it all depends on your timing, wh...
by madbrain
Fri Mar 20, 2015 6:30 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15665

Re: TradingPlaces' advice on travel awards

I have a few questions for you and others who may know: 1. Did you try to call airlines and book these trips through customer service representatives? No. Actually some of these small airlines, in Asia in particular, didn't even have phone numbers that could be called from the US. I'm thinking abou...
by madbrain
Fri Mar 20, 2015 6:10 pm
 
Forum: Personal Consumer Issues
Topic: TradingPlaces' advice on travel awards
Replies: 193
Views: 16758

Re: Anyone dropping Kaspersky computer security?

The following product should be intimately embedded in the operating system: - malware / rootkit detector, - antivirus, - firewall, - a number of other tools. The idea of installing a third party software, giving it root access, etc, is just ... well, crazy. Agree. These slow your system significan...
by madbrain
Fri Mar 20, 2015 6:05 pm
 
Forum: Personal Consumer Issues
Topic: Anyone dropping Kaspersky computer security?
Replies: 29
Views: 3034

Re: TradingPlaces' advice on travel awards

After tinkering with it for several hours (numerous combinations of routes, dates, and flights), I could not make it work. This won't be much help to you, but for what it's worth, last year when I was trying to book a trip with 10 legs, the "multi-destination" searches on travel sites was...
by madbrain
Fri Mar 20, 2015 12:36 am
 
Forum: Personal Consumer Issues
Topic: TradingPlaces' advice on travel awards
Replies: 193
Views: 16758

Re: Observations from a first time poster, long time reader.

A bought call option with no dividend between now and expiry in theory should never be exercised early no matter how far it goes in the money. The premium paid is sunk cost, so shouldn't enter into the exercise decision. And as for the option itself, it can gain just as much as the underlying if th...
by madbrain
Fri Mar 20, 2015 12:29 am
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15665

Re: What Movie Have You Recently Watched?

Really enjoyed Whiplash as did my wife, and it is rare for us to enjoy the same movie. +1 that schillinger is a fantastic actor and I'm thrilled he's finally getting the recognition he deserves whatever his real name is. and my wife didn't like it one bit. J.K. Simmons is his real name, and he won ...
by madbrain
Fri Mar 20, 2015 12:25 am
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 655
Views: 86366

Re: Anyone dropping Kaspersky computer security?

I dropped it before as I'm boycotting all Russian products . I can't go into why in this forum without getting political. This is just one more reason, IMO. I use AVG now. IMO, in terms of security, unfortunately, all those commercial anti virus / security products are very opaque in what they do. A...
by madbrain
Thu Mar 19, 2015 8:43 pm
 
Forum: Personal Consumer Issues
Topic: Anyone dropping Kaspersky computer security?
Replies: 29
Views: 3034
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