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Re: Prof Andrew Ang - Factor Investing Textbook Online

Thank you for sharing. Just read the preface and first chapter and learned a lot. A very interesting read and I look forward to the rest.
by ot1138
Mon Jun 02, 2014 1:52 pm
 
Forum: Investing - Theory, News & General
Topic: Prof Andrew Ang - Factor Investing Textbook Online
Replies: 9
Views: 1152

Re: How to decide your number?

What are your thoughts on how I am taking a shoot at this and how you would go about it? Start by calculating your SWR. If retiring younger, it will be lower. In my case, early 40s with wife and family, my SWR is 2.8%. For someone retiring at 65, probably around 4%. Invert that (1/SWR) to come up w...
by ot1138
Fri May 23, 2014 11:13 am
 
Forum: Personal Finance (Not Investing)
Topic: How to decide your number?
Replies: 61
Views: 7085

Re: Are Single Premium Annuities a good deal?

I don't think you're going to get a 8%-9% spend rate for a couple at age 60 with a 20 year guarantee. That's about what we would achieve today with today's rates if we implemented that plan. The way that is achieved is through using deferred annuities which result in a higher payout. A 10 year defe...
by ot1138
Thu May 15, 2014 9:20 am
 
Forum: Investing - Theory, News & General
Topic: Are Single Premium Annuities a good deal?
Replies: 91
Views: 4283

Re: The Great Bond prediction Bust of 2014

Interest rates can hold for another 6-18 months at these levels. If they go up slowly and/or don't increase as much as people thing, then a 4-5 duration bond position should exhibit positive returns. But then again, they might shoot up more than expected or more quickly. Who knows? Personally, I sti...
by ot1138
Thu May 15, 2014 8:31 am
 
Forum: Investing - Help with Personal Investments
Topic: The Great Bond prediction Bust of 2014
Replies: 12
Views: 1668

Re: "Fortune favors the bold" (or does it?)

Luck and Timing are the most important ingredients to success. As someone who first interviewed and studied a number of successful entrepreneurs before going out on my own, failing over and over again, struggling for a decade against string after unbelievable string of bad luck and setbacks... well...
by ot1138
Mon May 12, 2014 5:49 pm
 
Forum: Investing - Theory, News & General
Topic: "Fortune favors the bold" (or does it?)
Replies: 31
Views: 2490

Re: "Fortune favors the bold" (or does it?)

Entrepreneurship isn't as risky as it appears on the outside, at least if you are young enough (20s to early-30s). If you're smart, you'll do the first couple of ventures on a part-time basis. Those inevitably fail but you figure out if you're cut out for it or not. Stick with it and utilize the res...
by ot1138
Mon May 12, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: "Fortune favors the bold" (or does it?)
Replies: 31
Views: 2490

Re: 2.5 mil to 10 mil - are we on track

sure sounds like timing to me, based on the comments. timing and planning - very similar to some degree. bottom line - save and invest, and ignore the noise. Savings can affect this equation a lot. An extra 10% saved is significant. So you're assuming that markets will go up in your lifetime? Sure ...
by ot1138
Mon May 12, 2014 12:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: 2.5 mil to 10 mil - are we on track

sure sounds like timing to me, based on the comments. timing and planning - very similar to some degree. bottom line - save and invest, and ignore the noise. Savings can affect this equation a lot. An extra 10% saved is significant. So you're assuming that markets will go up in your lifetime? Sure ...
by ot1138
Mon May 12, 2014 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: 2.5 mil to 10 mil - are we on track

sure sounds like timing to me, based on the comments. timing and planning - very similar to some degree. bottom line - save and invest, and ignore the noise. Savings can affect this equation a lot. An extra 10% saved is significant. So you're assuming that markets will go up in your lifetime? Sure ...
by ot1138
Mon May 12, 2014 11:20 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: 2.5 mil to 10 mil - are we on track

So to add to what an earlier poster wrote, Bogle, Ferri, Swedroe, Asness, Hussman, Shiller, Grantham, etc. all think that the coming 10 years are likely not going to be that great. They base that on current valuations and certainlly people like Swedroe and Ferrri aren't saying for sure or "ver...
by ot1138
Mon May 12, 2014 10:41 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: The Importance of Sequencing in Withdraw Plans

This is a very interesting concept. I'm familiar with the sequence of returns concept before but never really thought about the impact of trying to avoid two down years in a row. Momentum-based index trading strategies might work very well for this. They do not increase returns significantly but the...
by ot1138
Mon May 12, 2014 9:53 am
 
Forum: Investing - Theory, News & General
Topic: The Importance of Sequencing in Withdraw Plans
Replies: 9
Views: 1138

Re: 2.5 mil to 10 mil - are we on track

It seems like there was a suggestion that investors can predict the future. I'm not seeing where you got this idea. I understand market timing - thats how I made money in the market. I held an iPod many many years ago and I bought the stock. I ate at panera and chipotle a long time ago (panera a re...
by ot1138
Mon May 12, 2014 8:42 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: 2.5 mil to 10 mil - are we on track

What are the boglehead triggers for market timing, and predictions, and how can we use those to change our expected returns. That information would be very helpful for future planning, as it may indicate that I need to plan to work longer or shorter. Returns will be better than average after a 50% ...
by ot1138
Sun May 11, 2014 7:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: What does it take to make a banker notice you ?

I was burned pretty badly by a major bank back in 2008. I went there based on the advice of someone I thought knew better. In 2012, I reconnected with my best friend from college. Turns out he is a wealth manager. The bank wined and dined me and in the end got my business. They got my checking accou...
by ot1138
Sun May 11, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: What does it take to make a banker notice you ?
Replies: 32
Views: 4322

Re: 2.5 mil to 10 mil - are we on track

It is interesting that people comment on private school - my question didn't ask about that, and I know the cost - I am writing the check, so obviously I am aware of the cost. Anyway, I appreciate your judgment and concern for my kids and their alternatives. It is also interesting that people think...
by ot1138
Sun May 11, 2014 5:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: 2.5 mil to 10 mil - are we on track

You need to get Jim Otar's retirement calculator. It will give you an answer you can be confident of very quickly.
by ot1138
Sun May 11, 2014 5:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9420

Re: Economist Gary Becker has died

This is one of the reasons I love this forum. Smart people talking about even smarter people who created the ideas behind why I think I'm so smart.

Human capital is one of the most personally uplifting concepts I took my 20 years of education.
by ot1138
Tue May 06, 2014 9:08 pm
 
Forum: Investing - Theory, News & General
Topic: Economist Gary Becker has died
Replies: 6
Views: 1144

Re: Is it okay to keep all your assets with one fund company

Guess I should add that I agree that JPM and ML were rife with criminal activity. As were most of the others (GS comes to mind). I was a floor trader, I've just seen too much stuff firsthand to think otherwise. Vanguard and Fidelity have my respect in this regard. Been approached by young turks at a...
by ot1138
Tue May 06, 2014 9:06 pm
 
Forum: Investing - Theory, News & General
Topic: Is it okay to keep all your assets with one fund company?
Replies: 48
Views: 5936

Re: Is it okay to keep all your assets with one fund company

I am 50-50 between Fidelity and Vanguard. I realize I pay a few extra dollars a year for having holdings at Fidelity but my discomfort with that is dwarfed by the fear of having to work for the rest of my life if for some ungodly reason one of them folds. My bigger worry is that if one goes under, s...
by ot1138
Tue May 06, 2014 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: Is it okay to keep all your assets with one fund company?
Replies: 48
Views: 5936

Re: Variable Percentage Withdrawal (VPW)

I have been modeling this a lot lately and have discovered a few things: * If you have more than 33x your initial income (withdrawal amount including taxes) then you're very likely to have a large estate when you die. Between 25-33x, you are taking a risk. Below 25x and you stand a very high chance ...
by ot1138
Tue May 06, 2014 6:42 pm
 
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 454
Views: 48924

Re: Maybe Bonds Are Normal Now

Five years of very active Fed intervention in the bond market is not normal. If it does become the norm we are in deep doo doo. Not true. The federal government has been interfering with bond markets since the 1790s. It is quite normal. The Fed has been influencing interest rates for a long time. I...
by ot1138
Tue May 06, 2014 6:25 pm
 
Forum: Investing - Theory, News & General
Topic: Maybe Bonds Are Normal Now
Replies: 19
Views: 3274

Re: Maybe Bonds Are Normal Now

http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=zEh http://research.stlouisfed.org/fred2/graph/?g=zEh Five years of very active Fed intervention in the bond market is not normal. If it does become the norm we are in deep doo doo. Not true. The federal government has been interfering with...
by ot1138
Mon May 05, 2014 6:48 pm
 
Forum: Investing - Theory, News & General
Topic: Maybe Bonds Are Normal Now
Replies: 19
Views: 3274

Re: Regret - Stock % too high in taxable, and too low in Rot

Now reverse that so that equities are in TAA and bonds are in taxable. This is the mistake and is exactly what my example was meant to illustrate. If you simply switch the location where each asset is held, the second portfolio has a higher effective allocation to stocks since a Roth account is mor...
by ot1138
Fri May 02, 2014 5:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3086

Re: Enough to retire? Advise on LTC and investing inheritan

1) Do we have enough to retire? We have no investing experience, have always been employees, and frankly are a bit frightened of the prospect of living without a paycheck. Yes, you have 36x annual expenses, a pension, and social security coming. The question is not whether you have enough to retire...
by ot1138
Fri May 02, 2014 4:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Enough to retire? Advise on LTC and investing inheritance
Replies: 18
Views: 2298

Re: Regret - Stock % too high in taxable, and too low in Rot

Portfolio 1 100% equities in taxable, investor has 25% marginal tax rate Portfolio 2 80% equities in Roth 20% money market fund in Roth These have about the same riskiness. Whatever happens with equities, the taxable portfolio will gain/lose about the same amount as the Roth portfolio. If you ignor...
by ot1138
Fri May 02, 2014 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3086

Re: Regret - Stock % too high in taxable, and too low in Rot

Ketawa wrote:
ot1138 wrote:The assumption that stocks return more than bonds will result in a riskier portfolio returning more.


I have no problem with that assumption.

However, I assumed nothing. My model did all the work for me. And it was based on after-tax returns (obviously).
by ot1138
Fri May 02, 2014 2:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3086

Re: Regret - Stock % too high in taxable, and too low in Rot

I followed the standard Boglehead advice about putting stocks in taxable accounts and bonds in TAA for a few years. Then I modeled what would happen over a 10 year time frame and came to the same conclusions as you... it's silly for someone in accumulation phase to follow this advice. The after-tax ...
by ot1138
Fri May 02, 2014 12:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3086

Re: Convince me to lump sum into the market

I'm not aware of any convincing research that shows DCA provides any benefit. I would recommend VCA'ing into the market though as it has been shown to enhance returns (slightly). VCA requires a prediction of returns. It is entirely impossible to prove it does anything. Of course, it can be tuned to...
by ot1138
Wed Apr 30, 2014 1:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Convince me to lump sum into the market
Replies: 57
Views: 11036

Re: Why will stocks/bonds do worse than in the past?

Using a PE10 model we should expect the mean of the distribution curve for stocks for the next 10 years to be 6.17% nominal. (1/PE10 + 10yr treasury yield - 10yr TIPS yield) Using an attribution model stocks should return (dividend yield + productivity growth rate + population growth rate + inflati...
by ot1138
Wed Apr 30, 2014 11:35 am
 
Forum: Investing - Theory, News & General
Topic: Why will stocks/bonds do worse than in the past?
Replies: 30
Views: 5539

Re: Convince me to lump sum into the market

I'm not aware of any convincing research that shows DCA provides any benefit. I would recommend VCA'ing into the market though as it has been shown to enhance returns (slightly).
by ot1138
Wed Apr 30, 2014 11:31 am
 
Forum: Investing - Help with Personal Investments
Topic: Convince me to lump sum into the market
Replies: 57
Views: 11036

Re: Time to go on defense? Win by not losing?

You didn't say what your thought process is behind "going defensive". Is this motivated by the size of your portfolio or your opinion of equity prices?

70/30 seems just fine to me and I see little practical difference from 50/50.
by ot1138
Tue Apr 29, 2014 9:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time to go on defense? Win by not losing?
Replies: 7
Views: 1353

Re: POLL: the WORST financial advice you've given/received?

2007: my wealth manager gives me the following great advice: 1. Diversify by purchasing three actively managed hedge funds. 2. Instead of bonds, buy a privately traded REIT. Several months later, we met and he seemed absolutely shocked that my account was up $40k. That should've been a warning sign....
by ot1138
Tue Apr 29, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: the WORST financial advice you've given/received?
Replies: 61
Views: 15082

Re: Most reliable way to double a portfolio in 12 years

If you wanted to double the size of a portfolio in 12 years how would you invest the money. If it goes over that's fine but not necesssary. The goal is to fine the most likely and least risky investment option to achieve this goal. I'm glad you said "least risky" because there's currently...
by ot1138
Tue Apr 29, 2014 5:58 pm
 
Forum: Investing - Theory, News & General
Topic: Most reliable way to double a portfolio in 12 years
Replies: 55
Views: 14788

Re: Bernstein retirement plan

I get the logic of reducing exposure to equities as it reduces volatility. Reduce it too much and your portfolio will deplete much faster. If you have 30x savings, you have more years of padding. It's all a tradeoff. But I don't get the logic of keeping the funds separate from the rest of the portfo...
by ot1138
Tue Apr 29, 2014 5:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bernstein retirement plan
Replies: 41
Views: 6939

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

Hi everyone, I wanted to thank you for your feedback. This thread inspired me to take a self-guided crash course in retirement planning. One point I had completely misunderstood was that the "4% rule" just doesn't apply to someone as young as myself. I've looked at a few different approach...
by ot1138
Tue Apr 29, 2014 5:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 42
Views: 5825

Re: Does it make any sense to hold "cash" as an asset?

Speaking from personal experience: 1) You need some cash for day-to-day needs. 2) If you are VCA'ing into the market, you will be holding on to a significant amount of cash for 3-5 years. Personally, I'm still 25% in cash and won't be fully invested in the market for 2 more years. 3) If you follow t...
by ot1138
Fri Apr 25, 2014 9:48 pm
 
Forum: Investing - Theory, News & General
Topic: Does it make any sense to hold "cash" as an asset?
Replies: 39
Views: 9143

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: 42
Views: 5825

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: 42
Views: 5825

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: 42
Views: 5825

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: 42
Views: 5825

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: 42
Views: 5825

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: 147
Views: 31480

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: 6334

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: 42
Views: 5825

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: 42
Views: 5825

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: 49
Views: 4728

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: 42
Views: 5825

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: 42
Views: 5825

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: 42
Views: 5825

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: 42
Views: 5825
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