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Re: New HVAC

The big issue for me would be the reliability of the existing air conditioning unit. If you need to replace an air conditioning unit in the middle of a southern summer, you'll probably have to stay in a motel for a couple of weeks, while you're getting quotes, and you'll have to wait for them to put...
by ourbrooks
Sat Apr 18, 2015 8:07 pm
 
Forum: Personal Consumer Issues
Topic: New HVAC
Replies: 20
Views: 1209

Re: Retirement Budgeting

You could, of course, do things the other way around and start out with how much you can afford to spend each year. That's probably the closest you'll come to a hard number. Your largest expenses, travel and rent, are both things you can be very flexible about. Suppose that travel turns out to be mo...
by ourbrooks
Sat Apr 18, 2015 7:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retirement Budgeting
Replies: 9
Views: 1436

Re: Home stereo system conversion to digital

If you only want to listen to your music at one location, consider the following: Android tablet of your choice which supports an external thumb drive, on which you have your digitized music. Alternately, a couple of flash memory cards. There are players which support FLAC as well as MP3. They also ...
by ourbrooks
Fri Apr 17, 2015 4:09 pm
 
Forum: Personal Consumer Issues
Topic: Home stereo system conversion to digital
Replies: 27
Views: 1840

Re: Proof vinyl has higher music ceiling than mp3?

There are actually three different alternatives to consider: 1. Analog vinyl. 2. CDs, normally encoded in a format (.wav) sampled at 44 Khz per channel (22,000 Hz maximum frequency) 3. MP3 encoding MP3 encoding starts with some higher frequency format and then compresses it. The compression is lossy...
by ourbrooks
Thu Apr 16, 2015 6:37 pm
 
Forum: Personal Consumer Issues
Topic: Proof vinyl has higher music ceiling than mp3?
Replies: 36
Views: 2491

Re: Count Pension + SS as part of the Bond portion of AA?

If your mom is single, then $20,000 in Social Security has a present value of around $350,000... No it doesn't. If she passes away in the next year, how much does this SS entitlement add to her estate? That's right, ZERO... Here's the definition of present value: In economics, present value, also k...
by ourbrooks
Wed Apr 15, 2015 8:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Count Pension + SS as part of the Bond portion of AA?
Replies: 31
Views: 2104

Re: Count Pension + SS as part of the Bond portion of AA?

If your mom is single, then $20,000 in Social Security has a present value of around $350,000. With $300,000 in her IRA, this means to be "age in bonds" overall, she will have to hold $227,500 in stocks in her IRA. In other words, her IRA will have to be 76% stocks. Would she be comfortabl...
by ourbrooks
Wed Apr 15, 2015 6:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Count Pension + SS as part of the Bond portion of AA?
Replies: 31
Views: 2104

Re: Inexpensive Smartphone

Uh, how about $19.84 for the phone itself? Walmart periodically has the ZTE Zinger phone for that price, including a T Mobile SIM card. It runs Android 4.4 and does Google Maps, etc. but otherwise is a very low end phone. I bought one, made sure it works, and then put it on the shelf as backup in ca...
by ourbrooks
Wed Apr 15, 2015 5:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inexpensive Smartphone
Replies: 46
Views: 3933

Re: [retired guy said] terrible crash is coming

The EMH says that the market uses all available information in determining the price of an asset. Nowhere does it say that the "information" be correct, merely that it be believed to be correct by those participating in the market. Suppose you and everyone else who trades stocks hears from...
by ourbrooks
Wed Apr 15, 2015 5:19 pm
 
Forum: Investing - Theory, News & General
Topic: [retired guy said] terrible crash is coming
Replies: 71
Views: 8242

Re: How do you valuate a pension?

Actually, there are well known actuarial techniques for computing the present value of a life annuity, which is what a pension is. You don't have to make any assumption about how long the pension will be paid for; instead, the calculation uses mortality tables. Here's a link to a calculator which do...
by ourbrooks
Tue Apr 14, 2015 8:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you value a pension?
Replies: 18
Views: 1584

Re: Asset allocation for son who might buy a house in 5 year

Historically, over rolling five years periods, stocks have had a net loss 14% of the time. Unless you are willing to take that risk, I agree with dbr: assets which you expect to spend within five years should not be in stocks, at all.
by ourbrooks
Sun Apr 12, 2015 7:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocation for son who might buy a house in 5 years
Replies: 3
Views: 371

Re: What is Sammy Savers net worth?

I presume that Sammy is a renter. If he had a home, then you could ask whether the value of the house was part of his net worth. In addition to trading options and buying hedge funds, the other use of net worth numbers would be in divorce proceedings. I do know that future pensions and Social Securi...
by ourbrooks
Fri Apr 10, 2015 6:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: What is Sammy Savers net worth?
Replies: 41
Views: 3593

Re: What is Sammy Savers net worth?

If Sammy wants to trade options at a brokerage, it's only $500,000. The requirements for trading options at brokerages are defined as follows ( http://www.regulatorycompliance.com/newsletter/2012/jan-2012/WhatIsNetWorth.html ) Liquid Net Worth – In reviewing whether or not a person is suitable to ma...
by ourbrooks
Fri Apr 10, 2015 4:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: What is Sammy Savers net worth?
Replies: 41
Views: 3593

Re: Kitchen upgrade - granite selection help

Let me put in another good word in favor of tile. It costs about 1/4 of what granite costs installed. If you have a negative reaction to tile, based on 4 inch tiles and lots of dirt catching grout joints, you might want to go out and look at some modern tile. You can now get tile up to two feet by t...
by ourbrooks
Fri Apr 10, 2015 4:29 pm
 
Forum: Personal Consumer Issues
Topic: Kitchen upgrade - granite selection help
Replies: 52
Views: 4201

Re: Do CPI-Indexed Single-Premium Deferred Annuities exist?

Why not buy an inflation indexed SPIA at retirement to cover your core expenses and invest/spend the rest any way you like? A fundamental issue with withdrawal strategies like Siegel's (or any PMT based method, such as VPW) is that there's large year to year variation in the amount of your withdrawa...
by ourbrooks
Sun Apr 05, 2015 8:34 pm
 
Forum: Investing - Theory, News & General
Topic: Do CPI-Indexed Single-Premium Deferred Annuities exist?
Replies: 27
Views: 2141

Re: smartphones

Well, there are smartphones and there are smartphones. For $19, you can get a smartphone which runs on the T Mobile network and runs Android 4.4. It's slow and the screen resolution is lousy but it will make and receive phone calls, text using an on screen keyboard and show you where you are using G...
by ourbrooks
Sun Apr 05, 2015 1:14 pm
 
Forum: Personal Consumer Issues
Topic: smartphones
Replies: 24
Views: 1775

Re: Pay Off Mortgage to Save for Bigger House

It depends on the housing market near you. If the market is very active and you're a buyer and there are other offers, the contingency counts against you. Why should the seller take a risk on the contingency falling through when they could take an offer without contingencies? Also, the interest you ...
by ourbrooks
Sat Apr 04, 2015 3:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pay Off Mortgage to Save for Bigger House
Replies: 10
Views: 1544

Re: [how to handle a $100] purchase from Guatemala?

The US Postal Service offers international money orders for $4.50 for up to $700.
by ourbrooks
Sat Apr 04, 2015 2:56 pm
 
Forum: Personal Consumer Issues
Topic: [how to handle a $100] purchase from Guatemala?
Replies: 24
Views: 1620

Re: Paying for childrens' college

I think the bottom line I would take away is that the student clearly is the most important factor in the outcome, but to state that the school doesn't matter is going too far. The school does matter. If a student is good, generally, he'll do better in a selective school because: - he'll have bette...
by ourbrooks
Sat Apr 04, 2015 1:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying for childrens' college
Replies: 121
Views: 7868

Re: Do CPI-Indexed Single-Premium Deferred Annuities exist?

I don't think they exist and they are unlikely to exist in the future. The problem is that they appear to be an unattractive financial proposition. Deferred annuities look really good; for my $120K investment, I get a 34% annual payment. I'm paying relatively little for the insurance. Inflation adju...
by ourbrooks
Sat Apr 04, 2015 12:29 pm
 
Forum: Investing - Theory, News & General
Topic: Do CPI-Indexed Single-Premium Deferred Annuities exist?
Replies: 27
Views: 2141

Re: Paying for childrens' college

ktd You need to face up to the very real possibility that the college "experience" you pay for is four years of "relaxation." If you child ends up in, say, the top 25% of his/her high school, then the odds are very, very good that they will receive some form of merit scholarship ...
by ourbrooks
Sat Apr 04, 2015 11:28 am
 
Forum: Personal Finance (Not Investing)
Topic: Paying for childrens' college
Replies: 121
Views: 7868

Re: Glide path design

Jaysams, Please take to heart the advice often seem on this forum to consider a 50% drop in stock prices. I believe Warren Buffet once wrote "Do not invest in stocks unless you are willing to lose half the money that you have invested in stocks". Larry Swedroe has said that such a loss co...
by ourbrooks
Fri Apr 03, 2015 9:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Glide path design
Replies: 23
Views: 1492

Re: How to find the true value of a stock

Why do you want to know? There is no principle, rule or, even, empirical observation that the market price of a stock has to converge on or be anywhere near the asset value.
by ourbrooks
Fri Apr 03, 2015 7:59 pm
 
Forum: Investing - Theory, News & General
Topic: How to find the true value of a stock
Replies: 17
Views: 1483

Re: Glide path design

Yup, 70/30 in perpetuity. You need to be worried about multiple risks. There's the risk of volatility in the stock market, like the 39% drop in 2008, and there's the risk of running out of money before you die. Suppose that twenty years from now there was a big burst of inflation. Bonds have a lower...
by ourbrooks
Fri Apr 03, 2015 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Glide path design
Replies: 23
Views: 1492

Re: Glide path design

Some people don't use a glidepath at all; they keep their asset allocation the same throughout retirement. In particular, all of the safe withdrawal rates studies were done with fixed asset allocations. The famous 4% rate is based on a fixed allocation. No one has done any studies on what would be a...
by ourbrooks
Fri Apr 03, 2015 6:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Glide path design
Replies: 23
Views: 1492

Re: Paying for children college

As other posters have pointed out, if your kids are top students, paying for college won't be a problem. if you kids can get into Stanford or Yale, you'll be able to afford to send them there. Stanford has recently announced that tuition is free for students from families making less than $125,000 a...
by ourbrooks
Fri Apr 03, 2015 6:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying for childrens' college
Replies: 121
Views: 7868

Re: Occasional big expenses after retirement

I'm also interested in this topic and I've done a bit of spreadsheet work. I think the following concept is important: "Saving" out of retirement withdrawals from investment accounts isn't saving at all; you've ALREADY saved the money. What it is is (a) a shift in asset allocation from sto...
by ourbrooks
Fri Apr 03, 2015 5:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Occasional big expenses after retirement
Replies: 32
Views: 2684

Re: Investing in the industry you work in

If your work involves contact with other companies, be careful about trading based on what you hear from them. It may not be obvious that what they tell you is, in fact, insider information. Also, in addition to government regulation, companies may have their own policies about investing in supplier...
by ourbrooks
Wed Apr 01, 2015 6:47 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in the industry you work in
Replies: 21
Views: 1748

Re: Article on "New Patterns" of Boomer Retirement Spending

Sounds to me that most of the people in the survey are not at all like Taylor. Taylor's approach would lead to relatively level spending, although perhaps not at exactly 4%. The people mentioned in the study, in contrast, go between extremes. It's hard to imagine that people do this based on a ratio...
by ourbrooks
Tue Mar 31, 2015 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: Article on "New Patterns" of Boomer Retirement Spending
Replies: 9
Views: 1637

Re: Risk Questionnaires: How they work?

One way to do it might be to take a large group of investors and survey them. The investors would have to already have asset allocations that they were comfortable with along with known goals (retirement, college, legacy, …) and known time frames (next year, 5 years, 10 years, …). Then the survey c...
by ourbrooks
Mon Mar 30, 2015 8:34 pm
 
Forum: Investing - Theory, News & General
Topic: Risk Questionnaires: How they work?
Replies: 27
Views: 1682

Re: Bonds with Sinking fund = rising interest rate protectio

Most sinking fund provisions specify purchasing the bonds at either market price or at par, whichever is lower. Now, when bond prices are above par, most of the purchases are likely to be at par. It is my vague understanding that when redemptions take place at par that the bond issuers choose the bo...
by ourbrooks
Mon Mar 30, 2015 7:30 pm
 
Forum: Investing - Theory, News & General
Topic: Bonds with Sinking fund = rising interest rate protection?
Replies: 3
Views: 406

Re: Variable spending strategies paper by Pfau

So let me re-assert my previous claim: the most spendable money for my hypothetical couple would be from constant dollar withdrawals. Yes, in theory, variable withdrawal schemes would permit higher total dollar withdrawals. In practice, though, that won't happen. To reduce volatility, the couple mus...
by ourbrooks
Tue Mar 24, 2015 5:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 3851

Re: Variable spending strategies paper by Pfau

Sigh. I had hoped for a lot better. What this article and others neglect is to provide any measure of the year to year volatility in spending. In a bad year, they need all of their investment returns to cover their medical care expenses, taxes, insurance, basic food expenses and utilities. What cou...
by ourbrooks
Mon Mar 23, 2015 6:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 3851

Re: Variable spending strategies paper by Pfau

Sigh. I had hoped for a lot better. What this article and others neglect is to provide any measure of the year to year volatility in spending. It's all well and good to assume that if they have extra money people will find something to spend it on, but that's only true to a very limited extent for p...
by ourbrooks
Sun Mar 22, 2015 8:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 3851

Re: Cryptocurrency

You don't really need to use crypto currencies to achieve nearly all of the benefits of crypto currencies for transferring money. The Automated Clearing House (ACH) system is a digital currency which is quickly converted from/to dollars at each end. Using ACH, no physical currency is ever moved arou...
by ourbrooks
Fri Mar 20, 2015 5:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Cryptocurrency
Replies: 8
Views: 979

Re: The Most Likely Portfolio Peril — Inflation or Deflation

You might want to choose a different country for comparison than Germany; it's the second most frequent destination for immigrants after the U.S. Relative to the native population, it has a higher rate. The large number of immigrants has been a cause of social friction recently. The amount of immigr...
by ourbrooks
Fri Mar 20, 2015 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: The Most Likely Portfolio Peril — Inflation or Deflation?
Replies: 40
Views: 3862

Re: Who's buying Oil stocks?

Tillerson (Exxon CEO) thinks prices will stay low for two years. I'd be more inclined to call that a "short period" rather than an "extended period" and Warren Buffett often touts the advantages of holding investments for the long term. I'd be reluctant to conclude that Warren Bu...
by ourbrooks
Wed Mar 18, 2015 8:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Who's buying Oil stocks?
Replies: 106
Views: 11598

Re: Market-timing an SPIA purchase

SPIA payouts are heavily dependent on age. An approximate formula for the payout percentage is 1/remaining-life-expectancy + 10-year-TBill rate. For someone age 65, that works out to 1/19.4 + 1.91% = 6.99%, fairly close to what immediateannuities.com is paying. As you get older and remaining life ex...
by ourbrooks
Wed Mar 18, 2015 8:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Market-timing an SPIA purchase
Replies: 18
Views: 1687

Re: Retirement Withdrawals

What I'd like to spend has nothing to do with it. I can't tell my Medicare Advantage plan that I'm cutting my spending by 23% without losing important benefits. I can't tell the city I'm cutting my taxes by 23% either. So the real prerequisites for VPW are: 1. Non-investment income sources that cove...
by ourbrooks
Sun Mar 08, 2015 9:28 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement Withdrawals
Replies: 16
Views: 2072

Re: 3 D Printing

Thanks, I'm going to use it to make a plug from which I'll pull a mold. The mold will be used to make carbon fiber parts for a business I'm in. Right now we make the molds from plugs we build up by hand. That takes awhile, and I thought the 3D printer might cut down on the time required to make a p...
by ourbrooks
Sun Mar 08, 2015 8:32 pm
 
Forum: Personal Consumer Issues
Topic: 3 D Printing
Replies: 25
Views: 1484

Re: Retirement Withdrawals

I've looked at VPW and decided it doesn't fit my needs at all, but, perhaps, I'm not interpreting it correctly. Suppose that I started retirement in 2007 with a 60/40 portfolio. That year, I'd withdraw 4.8%. The next year, the stock market dropped 39% so my overall portfolio dropped by 23%. In 2008,...
by ourbrooks
Sun Mar 08, 2015 7:55 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement Withdrawals
Replies: 16
Views: 2072

Re: 3 D Printing

If you want to design your own parts, learning 3D CAD software will be the hard part. Designing a part for actual manufacturing is much harder than producing a picture of a 3D part. Surfaces have to line up exactly and not just look like they line up, etc. Even simple things can be really hard to do...
by ourbrooks
Sun Mar 08, 2015 6:44 pm
 
Forum: Personal Consumer Issues
Topic: 3 D Printing
Replies: 25
Views: 1484

Re: How is Your Pension Counted when Calculating Net Worth.

Suppose you were a member of a religious order and had taken a vow of poverty in exchange for the church providing your support for life, including after you retire. After looking at your records, you discover that the church will be providing you with about $30,000 a year in retirement, if you coun...
by ourbrooks
Sun Mar 08, 2015 12:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: How is Your Pension Counted when Calculating Net Worth.
Replies: 40
Views: 3009

Re: Backpedaling: Rising Equity Allocation During Retiremen

What there seems to be darn little of is studies like Hannes Schwandt, 2014, Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations . Despite the scorn sometimes expressed for "volatility as risk," this paper suggests that volatility might literally be hazardous to hea...
by ourbrooks
Fri Mar 06, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Backpedaling: Rising Equity Allocation During Retirement
Replies: 38
Views: 3864

Re: Backpedaling: Rising Equity Allocation During Retiremen

Well, if Pfau and Kitches have backpedaled, it's not by much. Here's what they say in their March, 2015 JFP article: •When retirements begin in overvalued market environments (which reflected the situation for new retirees in 2015), an accelerated rising equity glide path shows potential to provide...
by ourbrooks
Thu Mar 05, 2015 9:06 pm
 
Forum: Investing - Theory, News & General
Topic: Backpedaling: Rising Equity Allocation During Retirement
Replies: 38
Views: 3864

Re: Backpedaling: Rising Equity Allocation During Retiremen

Well, if Pfau and Kitches have backpedaled, it's not by much. Here's what they say in their March, 2015 JFP article: •When retirements begin in overvalued market environments (which reflected the situation for new retirees in 2015), an accelerated rising equity glide path shows potential to provide ...
by ourbrooks
Thu Mar 05, 2015 5:07 pm
 
Forum: Investing - Theory, News & General
Topic: Backpedaling: Rising Equity Allocation During Retirement
Replies: 38
Views: 3864

Re: Help for a relative

If she doesn't care about a bequest, then the best option might be to use the IRA money to purchase an inflation adjusted Single Premium Immediate Annuity. The payments will last as long as she does, no matter how long she lives. If the purchase is done from within the IRA, the taxes will be due on ...
by ourbrooks
Sun Mar 01, 2015 7:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help for a relative
Replies: 4
Views: 508

Re: Oil ETF?

Well, if you want to take on more risk, why just do it with wimpy things like sector ETFs? If you're really serious about investing in oil, why not buy into a joint venture drilling an oil well? If the well is successful, for your one time investment, you own a share in all of the oil that comes out...
by ourbrooks
Fri Feb 27, 2015 9:16 pm
 
Forum: Investing - Theory, News & General
Topic: Oil ETF?
Replies: 9
Views: 828

Re: Oil ETF?

Search for the other threads which have discussed OIL; in the past, it has not tracked the price of oil very well. Why do you think OIL or any other energy related ETF is a good investment now? Everyone can read the same web sites you read. If a lot of people thought energy stocks were a good long t...
by ourbrooks
Fri Feb 27, 2015 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Oil ETF?
Replies: 9
Views: 828

Re: Immediate Pension Benefit Offering

I'm surprised that none of the actuaries who read this forum have piped up yet, but assuming a single age for an annuity can substantially undervalue an annuity; death rates are not evenly distributed around the median. The correct approach is to weight each payment by the probability of receiving i...
by ourbrooks
Fri Feb 27, 2015 4:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Immediate Pension Benefit Offering
Replies: 8
Views: 1197

Re: Safe Withdrawal Rate as it relates to Size of Portfolio

Just to preempt any confusion: The 4% rule comes from a study that showed if one withdrew 4% of his portfolio in his first year of retirement, then continued to withdraw this dollar amount adjusted for inflation in subsequent years, he would not outlive his money in 95% of 30-year historical scenar...
by ourbrooks
Thu Feb 26, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate as it relates to Size of Portfolio
Replies: 25
Views: 2929
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