Bogleheads.org

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,...

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...

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 ...

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...

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...

August 1998 was when Russia defaulted: http://en.wikipedia.org/wiki/1998_Russi ... ial_crisis

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.

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...

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...

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...

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...

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?

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...

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 ...

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.

In this situation, I'd probably move overseas to teach English.

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...

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...

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...

Don't use leverage. Don't risk what you can't afford to lose.

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...

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.

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...

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.

[ 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...

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, ...

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 ...

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...

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...

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...

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 ...

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...

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...

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 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 ...

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...

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...

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...

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...

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...

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 ...

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...

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.

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...

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.

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.

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...

Gold down another $50 tonight in futures market.

Sounds similar to value averaging.

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?