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Re: Thinking about retiring early - tell me what I've missed

Think your original post missed a couple of things. 1. Your solo 401K contribution is limited to net business income. You're running a loss 2. Business use of the home (depreciation, etc) is also limited to net business income. You're running a loss. 3. Run a loss for too long and they'll all be di...
by ot1138
Thu Apr 24, 2014 4:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

What I got out of looking at scenarios, was that a) past a certain point, working more years doesn't increase your expected wealth by much 19 yrs later. This is because, after a certain point, the gains mostly accrue from your money working for you, rather than from salary. This would be motivation...
by ot1138
Thu Apr 24, 2014 12:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

Not sure I have five years left in me. The reality is that I have it in me to make any business I touch become wildly successful. But it would be nice to spend more time worrying about how to make the people around me happier and less ensuring that I have seven figures in the bank when I'm 90. If y...
by ot1138
Thu Apr 24, 2014 12:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

A lot depends on how employable at a similar compensation if you decide to get back into the 'rat race" in 3 or 4 years. If you have the skills, talent, contacts to do that then you have little risk. If you don't you are taking a big chance. True, true. But what's the magic number? I will be a...
by ot1138
Wed Apr 23, 2014 10:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

To the OP: We're in a sort of similar situation as you (experts in our field, good income for now, but wanting to retire and do more rewarding work that won't pay well). We have enough now if we want to scrape by and we now have one foot in each world (it's a transition), which means we're just as ...
by ot1138
Wed Apr 23, 2014 9:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: What's your number?

42, 3 kids (one of them 19 and not going to college).

$3.1 million.

Should hit it in 3-4 years.
by ot1138
Wed Apr 23, 2014 9:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: What's your number?
Replies: 69
Views: 4367

Re: Why a million may not be enough

$1M to retire? Wow.

So what happens to all of your plans if the tax laws change? And suddenly you start paying 25% on your investment income?
by ot1138
Wed Apr 23, 2014 8:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why a million may not be enough
Replies: 33
Views: 4843

Re: Thinking about retiring early - tell me what I've missed

You also mentioned kids -- do you have any large expenses coming in the future, such as college tuition? Fixed liabilities like those can really hurt you, especially if there's a market downturn. You've got a good net worth, but I don't know that you have much safety margin yet. You're right, proba...
by ot1138
Tue Apr 22, 2014 11:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

Money wise he is right. Even a year or two more of savings and investment growth (or crash) will make your financial situation a lot clearer. Lifestyle wise is tricker. If your dream is to be a farmer go for it. I have no clue what your experience is but a lot of people love it. Other find it isn't...
by ot1138
Tue Apr 22, 2014 11:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: New Baby Girl - What Can/Should We Do?

9 year old and a 1.5 year old here. Just decided to start learning about 529s. To be honest, I will be surprised if my older daughter goes to college. She doesn't like school one bit. I think she wants to be a chef though... do 529s work for that? Now the youngest seems to have inherited my brains a...
by ot1138
Tue Apr 22, 2014 11:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: New Baby Girl - What Can/Should We Do?
Replies: 45
Views: 3228

Re: Thinking about retiring early - tell me what I've missed

Watty, you are a brilliant guy. tell me what I've missed 1) If you are running your own business they you can set up the retirement plan so that you can put about $50K into the retirement plan each year as an employer contribution in addition to your personal contribution. https://personal.vanguard....
by ot1138
Tue Apr 22, 2014 10:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

Is the $600k windfall from the sale of the house? If you are already at 2.1M why sale of house only leave you with $2.0M liquid? Assume by liquid you mean taxable account? Does this imply you have a tax deferred account? I don't think it is clear what your presumed withdrawal rate is factoring in t...
by ot1138
Tue Apr 22, 2014 10:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

Erhan wrote:You are young and in a very high income bracket. I would work couple more years. The impact is huge.


You're killing me because I know you're right. Maybe I should put together a year-by-year cost/benefits analysis? Not even sure where I would start with that one.
by ot1138
Tue Apr 22, 2014 10:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

wow with a 275K income, I would probably work 5 more years... If you are healthy, whatever you want to do at 42 could be delayed to 47 easily. You should be able to grow hops after work or on weekends can't you? This is a really fair point and one I've been wrestling with, to be honest. I can - and...
by ot1138
Tue Apr 22, 2014 10:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

Not really retirement but self employment. Microbreweries are very trendy these days. You are going to gross $20k from the business and pay yourself $15K? Not sure how that will work leaving only $5k for everything else? I probably missed something. I plan to run at a loss for the first 4-5 years.
by ot1138
Tue Apr 22, 2014 10:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Thinking about retiring early - tell me what I've missed

Well, you don't know how much your new brewing business will make you, so I wouldn't count $15k in salary as a sure thing. If you move, will managing the rental property be possible? You may need to hire a management company which will eat into your rental income... Plus, what if you lose your rent...
by ot1138
Tue Apr 22, 2014 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Thinking about retiring early - tell me what I've missed

Hi Bogleheads, I'm 42 and am thinking about retiring early. I think I've got the big picture of how this could work so I'm hoping maybe someone could poke holes in it and tell me where I may have gone wrong or missed something. Some background: * I have ~$2.1M in net worth right now * I am expecting...
by ot1138
Tue Apr 22, 2014 5:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 41
Views: 4347

Re: Poll: When did you retire? Would you do it all over agai

Do what you love as long as your good at it.


Best advice ever.
by ot1138
Tue Mar 25, 2014 8:09 am
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10710

Re: Poll: When did you retire? Would you do it all over agai

So the concept of retirement is interesting to me. If I were to liquidate everything today, I might be a bit shy given that I have a family of five. Let's say, maybe $85k/year in safe withdrawals. I wait 2 years, that jumps to $120k/year. Wait another six and that jumps to $160k (today's dollars). ...
by ot1138
Mon Mar 24, 2014 6:52 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10710

Re: Poll: When did you retire? Would you do it all over agai

fmhealth, I am so very intrigued by your post. I am wondering about a couple of things and maybe someone like you who has been there before me can help point the way. I am 42 and have just about 300k travel miles at this point so I'm a ways behind you. Still have a few places I'd like to check off t...
by ot1138
Sun Mar 23, 2014 10:48 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10710

Re: Investing in stocks--A surprising Google report ?

Bogleheads: I put two questions in Google about stocks and came up with these results: 1. "Stocks. 'I made a lot of money'" = 958,000 hits. 2. "Stocks. 'I lost a lot of money'" = 4,840,000 hits. I am surprised at the results because the long-term trend of stocks has been UP (har...
by ot1138
Mon Mar 17, 2014 4:48 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in stocks--A surprising Google report ?
Replies: 37
Views: 4094

Re: Bubble Behavior?

No. In the late 90's people all around me were daytrading stocks in their cubes. Can't remember the last time I have heard anyone even mention a stock. Had lunch with some new employees about a month back. One of them told me he had a buddy who sold his house and car and started a day trading busin...
by ot1138
Mon Mar 17, 2014 4:46 pm
 
Forum: Investing - Theory, News & General
Topic: Bubble Behavior?
Replies: 18
Views: 2014

Re: Bubble Behavior?

Imagine that a cap-weighted package of S&P 500 stocks was selling for quadruple the total of the same stocks priced individually. Imagine that your friends were buying it, and that when you asked them why it seemed to be selling for four times what it was worth, one of them says "Who cares...
by ot1138
Mon Mar 17, 2014 9:38 am
 
Forum: Investing - Theory, News & General
Topic: Bubble Behavior?
Replies: 18
Views: 2014

Re: Poll: When did you retire? Would you do it all over agai

I haven't but have been thinking about it. I'm 42 and the only thing that's stopping me is that I don't really know what I do. I hear bad stories about a lot of retirees who slowly get dull (I'm guessing the group of brilliant overachievers on this board are the exception rather than the rule). I'll...
by ot1138
Wed Mar 12, 2014 7:59 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10710

Re: Lump Sum Investing in this Market

Valuations are anywhere from slightly low to sky high depending on who you ask. But nobody knows for sure. My personal opinion is that valuation is somewhat high but we have plenty of runway before things get "frothy". But what does my opinion matter? I recommend you VCA in. There's no evi...
by ot1138
Tue Mar 04, 2014 8:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lump Sum Investing in this Market
Replies: 14
Views: 1233

Re: Warning about P2P Lending [Peer-to-Peer]

14.5% after adjusting for defaults/grace periods after 13 months. Stay the course.
by ot1138
Thu Feb 20, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 4819

Re: Do you roll your own investing "Dashboard?"

I use Mint for daily (close enough to real time) updating. Works great. I've created my own spreadsheet for tracking asset classes and rebalancing. I have since added a number of worksheets to this which include: * Transaction history - very useful for calculating IRR * Rental property income and fo...
by ot1138
Thu Feb 06, 2014 8:26 pm
 
Forum: Investing - Theory, News & General
Topic: Do you roll your own investing "Dashboard?"
Replies: 14
Views: 1438

Re: Just got a free consultation by Personal Capital. Though

I don't know about everything else but IMO I agree with them that your bond allocation is too high and your alternatives are too low. I base this on my own computer modeling which came up with a similar split as them. Don't for the life of me see what the advantage is of owning 60 individual stocks ...
by ot1138
Tue Feb 04, 2014 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Just got a free consultation by Personal Capital. Thoughts?
Replies: 49
Views: 4840

Re: Option selling vs. buy-and-hold

As a former option trader, I would advise caution here. I knew several guys who made good money every month doing this. Until they didn't.

One of those guys was me...
by ot1138
Thu Jan 30, 2014 8:20 am
 
Forum: Investing - Theory, News & General
Topic: Option selling vs. buy-and-hold
Replies: 14
Views: 1163

Re: Bonds - Throw it all on the table!!!

1) List the bond funds, individual bonds, CD's, etc. that you invest in Vanguard total bond market and Vanguard tax exempt. 2) In which account what fixed income securities are held I keep all fixed income in taxable accounts. This is the opposite of what the wiki suggests. My reasoning for this is ...
by ot1138
Wed Jan 29, 2014 7:53 pm
 
Forum: Investing - Theory, News & General
Topic: Bonds - Throw it all on the table!!!
Replies: 84
Views: 7469

Re: Do Bogleheads see this market dip as a buying point?

No changes here... my equity position is only down about 2.3% from ideal.
by ot1138
Wed Jan 29, 2014 7:48 pm
 
Forum: Investing - Theory, News & General
Topic: Do Bogleheads see this market dip as a buying point?
Replies: 127
Views: 13441

Re: Your thoughts - WSJ: A New Era in the Bond Market

If you use bonds to lower the risk of your portfolio, then this is good news Last year, the Barclays BARC.LN -0.86% U.S. Aggregate Bond Index, the most commonly used benchmark for the bond market, lost 2.1%. That marked its first decline since 1999 and the worst performance since 1994. I am sure I ...
by ot1138
Wed Jan 22, 2014 10:28 pm
 
Forum: Investing - Theory, News & General
Topic: Your thoughts - WSJ: A New Era in the Bond Market
Replies: 30
Views: 4592

Re: Evaluate my finances. Young guy.

OP should consider the fact that he is getting advice from a forum populated with an absurdly high percentage of millionaires and an even higher percentage of people with 20+ years of market experience. He sounds a bit overconfident. Simple answer: Pay off the debt. Who cares if it's from a relative...
by ot1138
Wed Jan 22, 2014 1:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Evaluate my finances. Young guy.
Replies: 49
Views: 3677

Re: "The market is at an inflection point"

When I was much younger, I got my hands on an exceedingly rare copy of one of Elliott's early works. There was no mention of waves at the time. Not one. This book discussed his method for multiplying each significant high and low by various "golden ratios". I did this using his method with...
by ot1138
Wed Jan 22, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: "The market is at an inflection point"
Replies: 16
Views: 1911

Re: Deferred Income Annuity/Longevity Insurance

You can get longevity insurance adjusted to the CPI but it's probably far simpler and cheaper to just build in a reasonable inflation expectation into your projections.
by ot1138
Tue Jan 21, 2014 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: Deferred Income Annuity/Longevity Insurance
Replies: 32
Views: 1757

Re: Deferred Income Annuity/Longevity Insurance

Oh, almost forgot to add one of the best things I learned in my research. If you can, wait to purchase annuities until interest rates are high. You'll get a much higher payout then. Should interest rates eventually come down (and they always do), you'll be way ahead of the game.
by ot1138
Tue Jan 21, 2014 2:43 pm
 
Forum: Investing - Theory, News & General
Topic: Deferred Income Annuity/Longevity Insurance
Replies: 32
Views: 1757

Re: Deferred Income Annuity/Longevity Insurance

Great question and some great answers. I looked quite a bit into this a few months ago. My calculations showed that on an infinite time frame, you would of course make more money by investing and withdrawing modest amounts as per the usual Boglehead approach. However, SPIAs come in handy when your t...
by ot1138
Tue Jan 21, 2014 2:32 pm
 
Forum: Investing - Theory, News & General
Topic: Deferred Income Annuity/Longevity Insurance
Replies: 32
Views: 1757

Re: Impending Bond Crash - What NOT to do!

I couldn't agree with you more. But a large fund has to deal with slippage and operating overhead, not the least of which includes salary. An individual doesn't. On a small scale, there is ample evidence that it is possible to reduce portfolio volatility and slightly enhance returns through TAA (an...
by ot1138
Fri Jan 17, 2014 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

Predicting equity returns: my current favorite paper says p/e (traditional and 10 year) is the best measure we have and it explains about 40% of the time variation in net-of-inflation returns. https://personal.vanguard.com/pdf/s338.pdf Most academic research I've seen also says p/e (or its variants...
by ot1138
Fri Jan 17, 2014 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

Grt2bOutdoors wrote:I agree with the others, your fixed income choices as defined above are far more riskier than bonds.


I'm not disputing that. Per my early response, these aren't really fixed income. Maybe I should just call them "non-equities".
by ot1138
Fri Jan 17, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

How would you use this to make billions from grateful clients? This statement tells me that you aren't grasping what I am really saying. Simple: start a balanced MF or hedge fund promising enhanced risk-adjusted returns through tactical allocation. Deliver on that promise, grab half of the extra fo...
by ot1138
Fri Jan 17, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

ot1138: There are only two relevant pieces of Boglehead "dogma" (more like core beliefs): 1) You can't time the market. No matter how many research reports you receive. #1. I believe it is quite possible to forecast 10-year equity and bond returns with surprising accuracy. Lot of academic...
by ot1138
Thu Jan 16, 2014 6:14 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

ot1138, it's sort of irrelevant unless you are willing to make some quantitative statements about the actual percentage you think bonds are overvalued, and by how much you think they will crash. To state it in Boglehead terms, please make those estimates for the Vanguard Total Bond Market Fund and/...
by ot1138
Thu Jan 16, 2014 4:52 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

ot1138: There are only two relevant pieces of Boglehead "dogma" (more like core beliefs): 1) You can't time the market. No matter how many research reports you receive. 2) Bonds are an efficient way to reduce volatility in a portfolio. Which do you disagree with? #1 is reinforced by your ...
by ot1138
Thu Jan 16, 2014 4:40 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

Personally, I lowered my bond allocation dramatically in accordance with these facts and others (eg: I forecast 10 year real equity returns @ 3.6%, availability of higher yield alternative fixed income assets, etc). May I ask what fixed-income vehicles you're using in lieu of bonds? Sure. But befor...
by ot1138
Thu Jan 16, 2014 4:36 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

What NOT to do? 1. Don't forget that we already had a bond crash last year. 2. Don't forget that you forgot about last year's bond crash till I reminded you of it because it was such a non-event. We had a crash? I didn't forget. I never knew about it because I don't follow my portfolio that closely...
by ot1138
Thu Jan 16, 2014 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

You are free to call it whatever you'd like, but the rest of the world generally calls it a 30-year bond bull market. Here's just one webpage taken at random which is representative. FWIW, I receive research reports from three different banks (Fifth Third, Barclays, and Credit Suisse) who all refer ...
by ot1138
Thu Jan 16, 2014 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: Impending Bond Crash - What NOT to do!

This is the same logic that gamblers use when they buy a penny stock and it goes up. The macro environment is against bonds right now in a big way. QE is tapering down for one thing. End of a 30-year bull run is another. Uncharted territory yet another. And the academic research squarely supports th...
by ot1138
Thu Jan 16, 2014 10:21 am
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6374

Re: "What Five Days of Trading Tell Us About 2014"

Seems to me that there might be some truth to this, although not for the obvious reasons. If the market has an ever-so-slight upward drift (let's say 3%), then the best prediction for one year from today would be today's price + 3%. If the first five days of the year are up, then the market has a he...
by ot1138
Thu Jan 16, 2014 10:07 am
 
Forum: Investing - Theory, News & General
Topic: "What Five Days of Trading Tell Us About 2014"
Replies: 18
Views: 1767
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