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Re: Mr. Money Mustache answers early-retirement doubters

One thing I like about MMM is that he doesn't easily allow excuses. His lifestyle is a blueprint that I think can be followed by the vast majority of Americans. The wealthier a society is, the more vulnerable it is to excuses for failure. Will power is something that must be developed intentionally,...
by market timer
Sat May 25, 2013 12:11 am
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache answers early-retirement doubters
Replies: 10
Views: 1252

Re: Mr. Money Mustache answers early-retirement doubters

He then gives 1 million dollars as an example of quote "early-retirement level savings". So let's do the math for a moment here. The median household in the United States makes $50,000/year. Setting aside taxes, it would take that household ten years to just make half a million dollars, l...
by market timer
Fri May 24, 2013 10:07 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache answers early-retirement doubters
Replies: 10
Views: 1252

Re: Categorizing EE and I bonds in "Balances and Holdings"

Curious if anyone else has gone a different way with their classification of those. Choosing among Vanguard funds, I'd use VUSUX for EE bonds and VIPSX for I bonds. For newly issued EE bonds, I'd increase the value by 10%, and 5% for I bonds. E.g., $10K in EE bonds would be $11K worth of VUSUX, to ...
by market timer
Fri May 24, 2013 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: Categorizing EE and I bonds in "Balances and Holdings"
Replies: 10
Views: 494

Re: The costs of moving house.. bid offer spreads

So who gets the advantage of this "bid offer spread"? Almost all (used) home transactions are between private individuals. There is only a very small group (mostly bottom feeders) that provide liquidity by holding an inventory of houses for sale. In a transaction between private parties t...
by market timer
Fri May 24, 2013 12:20 am
 
Forum: Personal Finance (Not Investing)
Topic: The costs of moving house.. bid offer spreads
Replies: 11
Views: 917

Re: The costs of moving house.. bid offer spreads

The bid/ask spread is the agent commission, not all that different than for financial assets. The price is the same for the buyer and the seller. So doesn't really make sense to add anything for this on top of the commission. There are other costs in addition to the commission, but the bid/ask spre...
by market timer
Fri May 24, 2013 12:15 am
 
Forum: Personal Finance (Not Investing)
Topic: The costs of moving house.. bid offer spreads
Replies: 11
Views: 917

Re: I [messed] up - Now what? ($200k in student loan debt, e

Jack wrote:
market timer wrote:I don't follow this closely ...

So you quote Santelli? Via ZeroHedge? Have you no pride?

If you're saying it's false, I'd be curious to see the source. These numbers certainly don't jibe with nonnie's stats, but maybe her stats are conditional on the person exiting disability.
by market timer
Thu May 16, 2013 10:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: I [messed] up - Now what? ($200k in student loan debt, e

Why on earth would you say that and what are your sources? I don't follow this closely, but according to one article, 1% of Americans who were on disability in Q1 11 have left: http://www.zerohedge.com/news/2013-03-26/santelli-stunned-its-better-be-disability-work-minimum-wage It's possible that wh...
by market timer
Thu May 16, 2013 10:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: I [messed] up - Now what? ($200k in student loan debt, e

I do not drive because of my medical condition. I do not own a cell phone (too expensive), or even a land line other than magicjack. I do not have cable. I do not eat out (because I have a kitchen now thankfully). And I really do live on re-hydrated beans, mac & cheese, rice a roni, ramon noodl...
by market timer
Thu May 16, 2013 8:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: I [messed] up - Now what? ($200k in student loan debt, e

If he'd gone to work at a non-profit 10 years ago they'd be gone now. Given that he's presumably already made 15 years of payments, it's all the same going forward whether the forgiveness comes at 25 under IBR or 10 under PSLF. These programs are not retroactive. You actually have to say you are pa...
by market timer
Thu May 16, 2013 8:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: Can I retire?

Given a college cost of circa $250,000 and average post college starting salaries of circa $41,000, college is a poor investment in most cases. You shouldn't take the high end of college cost (250k) and then the average starting salary. Among other benefits of college, graduate unemployment is much...
by market timer
Wed May 15, 2013 11:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I retire?
Replies: 78
Views: 6576

Re: I [messed] up - Now what? ($200k in student loan debt, e

EmergDoc wrote:I ran into a resident the other day whose student loans were up to $520K and growing at 7%. Can you imagine? That's $35K a year in interest.

Does this resident have plans of using IBR/PAYE or PSLF?
by market timer
Wed May 15, 2013 9:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: I [messed] up - Now what? ($200k in student loan debt, e

Perkins loans will only be a small fraction of the total outstanding. Half of OP's debt is Federal. Are there Federal loans that don't qualify for forgiveness? I know nothing of these things. My thinking was that if 5 years of teaching could erase the federal debt and OP used the Summers off to wor...
by market timer
Tue May 14, 2013 8:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: I [messed] up - Now what? ($200k in student loan debt, e

Perkins loans will only be a small fraction of the total outstanding. OP's problem is that half the loans are private, so even something like IBR/PAYE won't clean the slate. There are really only two roads out of this; get a high paying job in the US or start over somewhere else (edit: or deal with ...
by market timer
Tue May 14, 2013 7:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

I [messed] up - Now what? ($200k in student loan debt, etc.)

bigspender wrote:Question. When I was 18, my parents had to cosign the student loan. So unless things have changed, who cosigned your loan?

I received student loans at age 18 with no cosigner. This was in the late 90s.
by market timer
Tue May 14, 2013 7:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

I [messed] up - Now what? ($200k in student loan debt, etc.)

In this situation, I'd probably move overseas to teach English.
by market timer
Tue May 14, 2013 7:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: I [messed] up - Now what? ($200k in student loan debt, etc.)
Replies: 117
Views: 8486

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

As Ranger notes, the implicit financing costs of LEAPS are tied to interest rates. In the current environment, where interest rates are well below the dividend yield on SPY, there really isn't a market for long term call options on the stock market (typical deep-in-the-money 2015 call options should...
by market timer
Sat May 11, 2013 11:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 30
Views: 1620

Re: For those who started late.. how did you save for colleg

The best payoff is likely to come from motivating your son to get good grades and a high SAT score. For example, throughout high school in the mid 1990s my parents would pay $400/year ($100 per report card) for straight A's and offered me a prize of $1000 if I could score in the top 1% on the SAT, i...
by market timer
Sat May 11, 2013 3:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: For those who started late.. how did you save for college??
Replies: 26
Views: 2055

Re: How Much Did You Spend on Your Engagement Ring??

Both of us earn a very good salary so if I applied the 1/3 of yearly salary "rule" (which seems to high anyways) I would be buying an astronomically priced ring. What is a reasonable amount for a high income earner? We bought what I thought was an astronomically priced ring. I gave my wif...
by market timer
Wed May 08, 2013 9:23 pm
 
Forum: Personal Consumer Issues
Topic: How Much Did You Spend on Your Engagement Ring??
Replies: 252
Views: 9797

Re: Lessons from the last crash?

Don't use leverage. Don't risk what you can't afford to lose.
by market timer
Tue May 07, 2013 9:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lessons from the last crash?
Replies: 44
Views: 3791

Re: How Much Did You Spend on Your Engagement Ring??

Both of us earn a very good salary so if I applied the 1/3 of yearly salary "rule" (which seems to high anyways) I would be buying an astronomically priced ring. What is a reasonable amount for a high income earner? We bought what I thought was an astronomically priced ring. I gave my wif...
by market timer
Tue May 07, 2013 7:34 pm
 
Forum: Personal Consumer Issues
Topic: How Much Did You Spend on Your Engagement Ring??
Replies: 252
Views: 9797

Re: Advice on School Loans

Assuming the bulk of the loans would be forgiven after 10 years under PSLF, you should probably keep the money liquid until you figure out your career path.
by market timer
Mon May 06, 2013 7:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Advice on School Loans
Replies: 5
Views: 463

Re: calculating SS benefit: $25k/yr x4 yr vs $100k yr once

Not precisely. Earlier earnings may be more heavily indexed than newer earnings further the max changes over time. But for rough estimation purposes especially over the span of a few years, yes. The SS cap grows at roughly the same rate as inflation, so contributions while earning 1/3 of max over 3...
by market timer
Sun May 05, 2013 8:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: calculating SS benefit: $25k/yr x4 yr vs $100k yr once
Replies: 17
Views: 1274

Re: Retiring in an up market

I'd be more inclined to retire when expected returns are lower. If stocks were cheap and bonds offered an attractive return, I'd rather keep working and investing.
by market timer
Sun May 05, 2013 8:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retiring in an up market
Replies: 21
Views: 1802

Re: calculating SS benefit: $25k/yr x4 yr vs $100k yr once

[ the origins of the question are: I can look up my SS earnings record, and see my estimated benefit. But that's based on SSA projecting my future earnings "until retirement." I want to know how to calculate a reduced benefit based on working less, ie earning less than they project, for a...
by market timer
Sun May 05, 2013 7:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: calculating SS benefit: $25k/yr x4 yr vs $100k yr once
Replies: 17
Views: 1274

Re: My life and investing

The fact that you've taken the time to start this discussion here makes me optimistic that you'll reach your goals. My suggestion is not to rush into anything, and to give up on trying to time the market. You seem to have a low tolerance for risk, so you should spend some time learning about bonds, ...
by market timer
Sat May 04, 2013 2:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: My life and investing
Replies: 23
Views: 2543

Re: I-bond duration

Let me see if I can use another analogy, and ask whether the prior posters think it is apt. I have an [item I decided I'd prefer not to name] whose market value is at most a few hundred of dollars, but which I cannot imagine selling at any price. It came into my hands from its previous owner at no ...
by market timer
Wed May 01, 2013 11:00 pm
 
Forum: Investing - Theory, News & General
Topic: I-bond duration
Replies: 39
Views: 2450

Re: I-bond duration

MT, we're getting into tricky territory here. I agree with most everything you wrote except when you get into this concept. I think your analogy between suddenly illiquid securities and the I Bond redemption value is a bit off. Your example is exactly the argument that banks and others used to mism...
by market timer
Wed May 01, 2013 9:29 pm
 
Forum: Investing - Theory, News & General
Topic: I-bond duration
Replies: 39
Views: 2450

Re: I-bond duration

This is not fundamentally different than including a liquidity premium for a security even when we have no intention of selling it. The mere fact that we don't intend to take advantage of it doesn't mean that it doesn't exist. Do you have an example in mind? Without any specific example, I'm imagin...
by market timer
Tue Apr 30, 2013 10:46 pm
 
Forum: Investing - Theory, News & General
Topic: I-bond duration
Replies: 39
Views: 2450

Re: I-bond duration

To draw the conversation back toward OP's question, because the treasury is the only issuer, and it limits amounts, it's hard to see how a black market could arise. Yes, this is a situation where a black market could arise, but due to nontransferability of savings bonds, it's not feasible in practi...
by market timer
Tue Apr 30, 2013 9:16 pm
 
Forum: Investing - Theory, News & General
Topic: I-bond duration
Replies: 39
Views: 2450

Re: BigMoney Jobs(high school student wants to be rich some

Tell him to start a business and invest well. Hardly anyone is getting rich just from wages. In particular, the three professions you listed are oversaturated and require the modern equivalent of indentured servitude--long hours, massive debt load, usually living in a shoebox and paying 40% or more ...
by market timer
Tue Apr 30, 2013 8:11 am
 
Forum: Personal Finance (Not Investing)
Topic: BigMoney Jobs(high school student wants to be rich some day)
Replies: 102
Views: 6466

Re: I-bond duration

PJW, when I go to the grocery store, I can buy as many eggs as I want at $2.69. Economic theory says that I'll buy eggs until my marginal benefit is $2.69 (allowing for purchases of fractional eggs, assuming diminishing marginal utility, etc.). With I bonds, on the other hand, I'm limited to $10K/ye...
by market timer
Mon Apr 29, 2013 9:23 pm
 
Forum: Investing - Theory, News & General
Topic: I-bond duration
Replies: 39
Views: 2450

Re: Meet Mr. Money Mustache, the man who retired at 30

There is no reason for a 30 year old to retire. A few of the reasons I'm leaving the corporate world in my early 30s: Spend time with my child, travel, read, write, learn a foreign language, get in shape (gained 25 pounds working the past 4 years), maybe finally push hard enough to become ranked as...
by market timer
Mon Apr 29, 2013 8:07 am
 
Forum: Investing - Theory, News & General
Topic: Meet Mr. Money Mustache, the man who retired at 30
Replies: 253
Views: 18591

Re: I-bond duration

As far as I can tell, there are two reasons to consider duration: (1) to balance equity risk (modern portfolio theory), (2) to meet future liabilities. We have previously argued ad nauseam as to whether nonmarketable securities, such as I bonds, can be thought to offset equity risk (I'm in the camp ...
by market timer
Sun Apr 28, 2013 5:27 pm
 
Forum: Investing - Theory, News & General
Topic: I-bond duration
Replies: 39
Views: 2450

Re: Choosing a medical school with debt or a tuition-free MD

By my ballpark calculations, you'd need to save over $85K/year your first four years out of residency for the MD to be financially preferable to the MD/PhD. Assumptions for 12 years: MD/PhD path: Live on stipend for 8 years, save nothing; live on resident pay for next four years, save nothing; zero ...
by market timer
Fri Apr 26, 2013 7:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Choosing a medical school with debt or a tuition-free MD/PHd
Replies: 24
Views: 1251

Re: [physician wants to explore career options]

Financially, I think you will be fine no matter what you do. That realization may be what is prompting this existential crisis. When we have everything we want, we create reasons to be unhappy. Your concerns about the future of medicine are probably exaggerated by this--I have no doubt you will cont...
by market timer
Wed Apr 24, 2013 9:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: [physician wants to explore career options]
Replies: 58
Views: 4428

Re: Article: EE Bonds are the best Long Term bond

Thank you again Market Timer for your observations. I wish I had time (work is coming to bear for the next 4 days or so), but when I do I will think about this again. Let me ask you though, for someone who is not in a position to consider shorting anything, can you still say, or is there a point wh...
by market timer
Sun Apr 21, 2013 10:18 pm
 
Forum: Investing - Theory, News & General
Topic: Article: EE Bonds are the best Long Term bond
Replies: 77
Views: 4977

Re: CommodIties?

Quite honestly, I don't see the point. Commodities went to hell in 2008 right along with other risk assets. Not sure this is the kind of diversification I need in my portfolio. From an asset-liability matching standpoint, commodities make a great deal of sense. I recall flight tickets I bought in e...
by market timer
Sun Apr 21, 2013 8:04 pm
 
Forum: Investing - Theory, News & General
Topic: CommodIties?
Replies: 26
Views: 1080

Re: Article: EE Bonds are the best Long Term bond

We're on the same page when it comes to the possibility of selling prior to maturity. I'm still having trouble though wrapping my brain around the notion of valuing per the yield curve as if our EE bonds were marketable. I just can't see any logic to giving them this ability to change in value (and...
by market timer
Sun Apr 21, 2013 1:54 pm
 
Forum: Investing - Theory, News & General
Topic: Article: EE Bonds are the best Long Term bond
Replies: 77
Views: 4977

Re: Article: EE Bonds are the best Long Term bond

I understand what you're saying and doing, I just have a lot of trouble accepting it for my own purposes. Not saying you're wrong or committing an error by any means. I debate in my mind simply whether I ought to prorate the 3.53% 20-yr return anually (given my iron-clad committment to holding 20 y...
by market timer
Sat Apr 20, 2013 3:55 pm
 
Forum: Investing - Theory, News & General
Topic: Article: EE Bonds are the best Long Term bond
Replies: 77
Views: 4977

Re: Article: EE Bonds are the best Long Term bond

For those who hold a lot of equity (I'm at about 80%, if I include REITs) I believe that LT bonds can help balance this volatility and facilitate rebalancing opportunities, but it kills me how EE bonds can't do this in that they don't have a marketable value that goes up and down. Take "kills ...
by market timer
Sat Apr 20, 2013 11:35 am
 
Forum: Investing - Theory, News & General
Topic: Article: EE Bonds are the best Long Term bond
Replies: 77
Views: 4977

Re: Article: EE Bonds are the best Long Term bond

So I know EE bonds have a fixed rate but if you keep them for 20 years they automatically double, giving a rate of around 3.5-3.6% basically. But then you have the option to keep them to 30 years...so what rate do you get between years 20 and 30? The fixed rate it was when it was issued? And are ta...
by market timer
Thu Apr 18, 2013 9:20 pm
 
Forum: Investing - Theory, News & General
Topic: Article: EE Bonds are the best Long Term bond
Replies: 77
Views: 4977

Re: Article: EE Bonds are the best Long Term bond

letsgobobby wrote:I'm still very hesitant. If I buy and hold for 15 years and in years 10-15 inflation really heats up and then reaches 10% in year 15, what do I do?

If you don't like the risk/return profile of the bonds in 10-15 years, you could short Treasuries with a duration of 5-10 years as a hedge.
by market timer
Thu Apr 18, 2013 9:11 pm
 
Forum: Investing - Theory, News & General
Topic: Article: EE Bonds are the best Long Term bond
Replies: 77
Views: 4977

Re: harvard med school vs. penn med+full tuition scholarship

I've never had the job security of a Harvard MD, but graduating with $200K in debt was a major psychological burden for me until I became solvent. Let's face it, every job starts to become a chore after a while, and you are an indentured servant with that debt, which you likely won't even begin payi...
by market timer
Wed Apr 17, 2013 9:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: harvard med school vs. penn med+full tuition scholarship
Replies: 107
Views: 6831

Re: Poll: How many $100 dinners out per year?

Pretty much every time I go out for dinner with friends (assuming you mean $50/person). These days, I guess that's about once per month.
by market timer
Tue Apr 16, 2013 9:15 pm
 
Forum: Personal Consumer Issues
Topic: Poll: How many $100 dinners out per year?
Replies: 152
Views: 8505

Re: A nice talk about gold in ones portfolio

Today was a 5-sigma loss for the Permanent Portfolio. From 2004 through today, the daily standard deviation has been just under 0.5%, and I calculate a 2.5% loss for the portfolio. This was the worst day since December 2008.
by market timer
Mon Apr 15, 2013 7:43 pm
 
Forum: Investing - Theory, News & General
Topic: A nice talk about gold in ones portfolio
Replies: 103
Views: 5835

Re: A nice talk about gold in ones portfolio

Just out of curiosity, I logged onto the Apmex website and noticed A) the bid/ask spread on gold and silver has gone way way up, and B) they are out of stock of many denominations that were in stock earlier this week. I guess it is sort of like when a stock crashes and you want to short it but ther...
by market timer
Mon Apr 15, 2013 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: A nice talk about gold in ones portfolio
Replies: 103
Views: 5835

Re: A nice talk about gold in ones portfolio

Gold down another $50 tonight in futures market.
by market timer
Sun Apr 14, 2013 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: A nice talk about gold in ones portfolio
Replies: 103
Views: 5835

Re: Investing on the Curve

Sounds similar to value averaging.
by market timer
Sun Apr 14, 2013 5:32 pm
 
Forum: Investing - Theory, News & General
Topic: Investing on the Curve
Replies: 29
Views: 2209

Re: Gold is crashing!

clacy wrote:Gold is down I believe because real interest rates are turning slightly positive and trending up. Deflation is starting to rear its ugly head, IMO.

Where do you see this?

Image
by market timer
Sat Apr 13, 2013 11:26 am
 
Forum: Investing - Theory, News & General
Topic: Gold is crashing!
Replies: 15
Views: 1786
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