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Re: Will Investment Returns Ever Revert to "Normal"?

Paradoxically, lower, less volatile returns could mean that investors can save less for retirement. Depending on which of the previous posts you read, the real return on stocks has been around 8%. Because of the sequence of returns problem, a result of volatility, the safe withdrawal rate considered...
by ourbrooks
Sun Sep 28, 2014 1:59 pm
 
Forum: Investing - Theory, News & General
Topic: Will Investment Returns Ever Revert to "Normal"?
Replies: 56
Views: 4144

Re: What is your best estimate of the SWR (Safe Withdrawal R

How do you make reasonable assumptions about the returns of stocks and bonds going forward without look at past returns? All the predictions I've read about lower returns in the future are based on something like PE10 and make the claim "when things looked like this in the past, here's how the...
by ourbrooks
Fri Sep 26, 2014 7:46 pm
 
Forum: Investing - Theory, News & General
Topic: What is your best estimate of the SWR (Safe Withdrawal Rate)
Replies: 77
Views: 3740

Re: Gas Water Heater Upgrade worth the $$$

The builder is thinking of tankless, condensing water heater? :annoyed My thought as well. $1400 sounds just about right for a whole house tankless. Indulge yourself. With the tankless, you can take a shower any time you want without worrying that your spouse has just started a tub of laundry or is...
by ourbrooks
Fri Sep 26, 2014 7:25 pm
 
Forum: Personal Consumer Issues
Topic: Gas Water Heater Upgrade worth the $$$
Replies: 31
Views: 1689

Re: What is your best estimate of the SWR (Safe Withdrawal R

Basing withdrawal rates on past history (ala the Trinity Study) doesn't make a lot of sense to me. Will the next 30 years resemble the historical past? A better approach, in my view, is to make reasonable assumptions about the returns of stocks and bonds going forward and plan from there. How do yo...
by ourbrooks
Fri Sep 26, 2014 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: What is your best estimate of the SWR (Safe Withdrawal Rate)
Replies: 77
Views: 3740

Re: What is your best estimate of the SWR (Safe Withdrawal R

Professor Cooley responded: You have hit the nail on the head! I've tried to explain that thought to journalists but they don't seem to get it. You've got it. Stay flexible my friend!, which is the advice we should give to retirees. That's one of the least content quotations I've ever read. What doe...
by ourbrooks
Fri Sep 26, 2014 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: What is your best estimate of the SWR (Safe Withdrawal Rate)
Replies: 77
Views: 3740

Re: What's Your Takeaway from 2014 High Valuation

Whenever I read about high valuations, I go back and read this article: http://www.philosophicaleconomics.com/2013/12/the-single-greatest-predictor-of-future-stock-market-returns/ The best 10 year predictor of stock market returns is not PE10; it's the percentage of stocks in investor's portfolios. ...
by ourbrooks
Wed Sep 24, 2014 9:52 pm
 
Forum: Investing - Theory, News & General
Topic: What's Your Takeaway from 2014 High Valuation
Replies: 52
Views: 4027

Re: Engineered Hardwood

If the underside of the engineered wood flooring is pressboard, then you're buying at the low end of the market. The better quality engineered flooring has 5 or 7 layer plywood. If you look at the edge of the board and can only see 2 or 3 layers and one of them is very thick, then it's the less expe...
by ourbrooks
Sat Sep 20, 2014 5:46 pm
 
Forum: Personal Consumer Issues
Topic: Engineered Hardwood
Replies: 13
Views: 1099

Re: Engineered Hardwood

As the others have already said, laminate is not the same as engineered hardwood. If the flooring store is telling you it's the same, find another store ASAP. If you have small children still spilling things all over the place, then I would not go with laminate or engineered hardwood. Since the flo...
by ourbrooks
Sat Sep 20, 2014 4:53 pm
 
Forum: Personal Consumer Issues
Topic: Engineered Hardwood
Replies: 13
Views: 1099

Re: Stable value funds with tickers?

Stable values funds operate by a variety of different mechanisms, but one common mechanism is to buy longer term bonds and insure them against loss if sold. Note the "if sold" part. What makes the insurance reasonable is that stable value funds almost never sell their bonds; they hold them...
by ourbrooks
Tue Sep 16, 2014 9:42 pm
 
Forum: Investing - Theory, News & General
Topic: Stable value funds with tickers?
Replies: 8
Views: 728

Re: Help with annuity questions

Okay, let's see if I can recast things into terms I'm more familiar with. I think "IRA annuity" is a term the insurance company made up. IRAs are structures for holding assets. You can put a wide range of assets into them. Some people put collectables into the their IRAs. You can also mix ...
by ourbrooks
Sat Sep 13, 2014 9:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with annuity questions
Replies: 14
Views: 1118

Re: Help with annuity questions

I don't think that you can legally put an Individual Retirement Account inside an annuity; more likely, it's the other way around. One of the investments in the IRA just happens to be a deferred annuity. If an investment inside an IRA makes regular payments for the life of the beneficiary and follow...
by ourbrooks
Sat Sep 13, 2014 7:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with annuity questions
Replies: 14
Views: 1118

Re: VDE [for 5% "casino money"?]

Note that VDE holds only oil/gas companies which do their finances in dollars. This removes currency factors from returns but it leaves out companies like British Petroleum and Royal Dutch Shell. The Vanguard Energy mutual fund (VGENX) would give you broader exposure.
by ourbrooks
Sat Sep 13, 2014 1:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: VDE [for 5% "casino money"?]
Replies: 11
Views: 950

Re: Pfau: Valuation-based market timing improves returns

If it's the 2011 paper, then, yup, market timing delivers both higher returns and higher risk adjusted returns. So why isn't everyone doing it? Well, the method is to look at PE10 at the beginning of each year. If it's higher than it's historical median, stay in cash/bonds for the year; if it's lowe...
by ourbrooks
Fri Sep 12, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: Pfau: Valuation-based market timing improves returns
Replies: 6
Views: 1192

Re: Reliable Portable CD Player Needed

Some tablets will let you connect an external USB DVD drive/player. You'd end up spending $35 for the drive and $150 for the tablet. This might be worth it because you could use the tablet to play MP3, read print books, download audio books from Librovox and the occasional Amazon freebee, etc. Note ...
by ourbrooks
Fri Sep 12, 2014 3:33 pm
 
Forum: Personal Consumer Issues
Topic: Reliable Portable CD Player Needed
Replies: 28
Views: 1409

Re: need help choosing options at TIAA-CREF

One way to think of TIAA traditional annuity is that it is a smoothed intermediate-term bond fund. Over the long term, it will have about the same return as the Vanguard total US bond index fund or perhaps slightly less. It will be less because you have to pay for the smoothing and the guarantee no...
by ourbrooks
Mon Sep 08, 2014 10:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: need help choosing options at TIAA-CREF
Replies: 34
Views: 1541

Re: need help choosing options at TIAA-CREF

The TIAA Traditional annuity is a very unusual investment. You can't purchase anything like it from Vanguard or Fidelity. It's goal is to produce retirement income and to do this, they make some very long term investments, such as 30 year leases on properties. That's why they have such tight rules a...
by ourbrooks
Mon Sep 08, 2014 7:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: need help choosing options at TIAA-CREF
Replies: 34
Views: 1541

Re: Texas - Recommendation Where To Live

I'd specifically recommend against the Lakeway area on Lake Travis near Austin. Just select the traffic view on Google Maps and look at the Oak HIll "Y" where 71 joins 290. You might be able to make it to the airport in the middle of the night in 45 minutes but not any other time. Getting ...
by ourbrooks
Sun Sep 07, 2014 10:10 pm
 
Forum: Personal Consumer Issues
Topic: Texas - Recommendation Where To Live
Replies: 56
Views: 2889

Re: Texas - Recommendation Where To Live

That's an interesting piece of journalism. Here are two quotes from it: … nearly two-thirds of Precinct 314 in West Austin voted Republican, with 65 percent voting for Mitt Romney and just 33 percent Nearly three-fourths of Precinct 314 voted straight party Republican in 2012; with 69 percent of vo...
by ourbrooks
Sun Sep 07, 2014 9:50 pm
 
Forum: Personal Consumer Issues
Topic: Texas - Recommendation Where To Live
Replies: 56
Views: 2889

Re: Texas - Recommendation Where To Live

The Woodlands was developed by George P. Mitchell. Some people believe that he did this because he was so disgusted at the laissez faire attitude towards zoning or any kind of urban planning that prevailed in Houston at the time and whose traces are still highly visible. He could fund the developmen...
by ourbrooks
Sun Sep 07, 2014 7:08 pm
 
Forum: Personal Consumer Issues
Topic: Texas - Recommendation Where To Live
Replies: 56
Views: 2889

Re: Texas - Recommendation Where To Live

Definitely not Austin. Anything within walking distance of any of the better high schools is more than $200 sq/ft so the size of house he's looking for would run $500,000 on up. Westlake Hills, the suburb with the best high school, is more like $300. Definitely not traditional family. Go and watch R...
by ourbrooks
Sun Sep 07, 2014 5:49 pm
 
Forum: Personal Consumer Issues
Topic: Texas - Recommendation Where To Live
Replies: 56
Views: 2889

Re: Cash to draw on - Safe Withdrawal Rate

Hey, nisiprius, let's play fair and show the full output from the calculator. There's actually a HUGE difference between 100% cash and a 30/70 portfolio. In the 97% of the cases in which the portfolio doesn't run out of money, the average balance for the 30/70 portfolio is much, much higher; 25 year...
by ourbrooks
Sat Sep 06, 2014 3:32 pm
 
Forum: Investing - Theory, News & General
Topic: Cash to draw on - Safe Withdrawal Rate
Replies: 10
Views: 1080

Re: Couples of diff ages: how do you handle asset allocation

Surprisingly, all of the safe withdrawal rate studies in the Wiki and elsewhere used a fixed asset allocation which doesn't change with age. A fixed allocation of anywhere from 30% to 80% stocks seems to be equally safe. John Bogle has suggested that instead of a fixed allocation, people should use ...
by ourbrooks
Sat Sep 06, 2014 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: Couples of diff ages: how do you handle asset allocations?
Replies: 13
Views: 1181

Re: Why no more Vanguards

Because there's absolutely no incentive for anyone to start another Vanguard. Vanguard is a mutual company; it's owned by the people who invest in its funds. That's part of what keeps the costs low; there are no dividends to pay to share holders. If I start another Vanguard like company, all I'd get...
by ourbrooks
Fri Sep 05, 2014 1:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why no more Vanguards
Replies: 36
Views: 4872

Re: Graduating Debt-Free, or with Elite College Degree?

I've sat on a graduate school admission committee for a Ph.D. program. Faced with the choice between a candidate with a 2.5 from Harvard or Stanford and a 3.5 from a graduate of the honors program at the University of Michigan or the University of Texas, the Harvard/Stanford candidate was an easy re...
by ourbrooks
Thu Sep 04, 2014 5:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Graduating Debt-Free, or with Elite College Degree?
Replies: 92
Views: 4867

Re: Help with my parent's finances

When I add up the pension and SS, I get $68,400 a year. They're now living on $150,000. Are they planning to cut their spending in half? If not, they'd need an additional $81,600 a year. They've got about $723,000. To maintain their spending, they'd have to withdraw at 11% a year, not a sustainable ...
by ourbrooks
Thu Sep 04, 2014 4:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with my parent's finances
Replies: 21
Views: 1907

Re: 78 year old retired father

Buy an inflation indexed single premium immediate annuity (SPIA) to cover his regular expenses. He can then leave the rest as cash, invest it in stocks and bonds, or, even, give it to you now. Make sure that his home improvements will let him live in the house as long as possible. Home long term car...
by ourbrooks
Wed Sep 03, 2014 3:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: 78 year old retired father
Replies: 11
Views: 876

Re: LED recessed lighting question

I'd go with the retrofits as well. The prices on LED bulbs are dropping at an astonishing rate; BR30 bulbs which were $18 a piece a year ago are now going for as low as $10. Also, the newer bulbs are brighter and the color rendition is better. I wouldn't be at all surprised in the near future to see...
by ourbrooks
Mon Sep 01, 2014 2:26 pm
 
Forum: Personal Consumer Issues
Topic: LED recessed lighting question
Replies: 13
Views: 1140

Re: Age in Stocks: Should you have a Reverse Glidepath?

The reverse glidepath literature is interesting to me because it shows how little basis there is for conventional wisdom about glidepaths. Nonsense. If you include human capital in your allocation, then a constant allocation including human capital corresponds to a traditional glidepath for your as...
by ourbrooks
Mon Sep 01, 2014 2:16 pm
 
Forum: Investing - Theory, News & General
Topic: Age in Stocks: Should you have a Reverse Glidepath?
Replies: 21
Views: 1364

Re: Cold Brew Coffee and whole coffee beans

You might find this article interesting: http://www.seriouseats.com/2014/05/whats-the-best-way-to-brew-iced-coffee.html

Apparently it matters a lot whether you add milk/cream to your coffee.
by ourbrooks
Mon Sep 01, 2014 2:03 pm
 
Forum: Personal Consumer Issues
Topic: Cold Brew Coffee and whole coffee beans
Replies: 7
Views: 755

Re: Wifi lights and light switches

Wifi congestion really isn't an issue unless you have thousands of devices, there are at least 11 channels and devices will automatically switch to minimize interference. I can see 22 wireless networks from my office and I still get 50 mbit/s sustained speeds on my n router (broadband connection is...
by ourbrooks
Sat Aug 30, 2014 5:10 pm
 
Forum: Personal Consumer Issues
Topic: Wifi lights and light switches
Replies: 12
Views: 1435

Re: Induction Range Worth the Price?

Buy yourself a counter top induction burner for $100 or so and try cooking things on it. Worst case, you end up with an extra induction burner that you can use on a regular counter when you need extra burners.
by ourbrooks
Sat Aug 30, 2014 4:41 pm
 
Forum: Personal Consumer Issues
Topic: Induction Range Worth the Price?
Replies: 14
Views: 1125

Re: Wifi lights and light switches

Keep in mind that all Wi-Fi uses just the 2.4 Ghz band and the 5.8 Ghz band. Those bands are already shared with some other devices; microwave ovens and Bluetooth devices are in the 2.4 Ghz plan. The modulation techniques used allow devices to share a channel up to a point; the more devices using a ...
by ourbrooks
Fri Aug 29, 2014 6:37 pm
 
Forum: Personal Consumer Issues
Topic: Wifi lights and light switches
Replies: 12
Views: 1435

Re: Programming and Database Classes

I've never taken any of those courses either. I have taught them at several universities. How did I get to teach them without taking them? Of course, I taught myself, but it was a lot of work. I kept wishing I could be a student in my own class. Do you actually need computer science theory to be a p...
by ourbrooks
Fri Aug 29, 2014 2:54 pm
 
Forum: Personal Consumer Issues
Topic: Programming and Database Classes
Replies: 15
Views: 1077

Re: Programming and Database Classes

You actually want to take three or four different courses. Here's what you want: 1. Software engineering methods/practices/tools This course will probably be taught at a school which offers a software engineering degree, as versus the much more common computer science degree. 2. Software Project Man...
by ourbrooks
Fri Aug 29, 2014 2:18 pm
 
Forum: Personal Consumer Issues
Topic: Programming and Database Classes
Replies: 15
Views: 1077

Re: Enough retirement income to avoid Medicaid

First, check whether your doctors/hospitals aren't available under Medi-Cal. From the Medi-Cal site: Medi-Cal offers 21 managed care health plans, some of which are also offered by Covered California. Your choices depend on the county in which you live. Most counties offer commercial plans, includin...
by ourbrooks
Fri Aug 22, 2014 7:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Enough retirement income to avoid Medicaid
Replies: 30
Views: 3041

Re: Cost, duration of grad school?

livesoft - re your UT link. Interesting, but note that cost for non-residents is ~$28K. Add $12K to live on (fairly modest for rent PLUS food PLUS some entertainment etc, and you're at $40K. We live in Missouri. The public universities here are not that strong. Not out of the question, but probably...
by ourbrooks
Wed Aug 20, 2014 9:57 pm
 
Forum: Personal Consumer Issues
Topic: Cost, duration of grad school?
Replies: 29
Views: 1452

Re: Unlimited cell plans dropping in price?

For the area I live in, it appears I need to look to the nationwide carriers in order to obtain good service. I just saw a Sprint ad for $50/mo for unlimited talk and text, this is about half of what I am paying now to T Mobile. Anyone happy with Sprint? Thank you, BFG Maybe all you need to do is c...
by ourbrooks
Wed Aug 20, 2014 4:02 pm
 
Forum: Personal Consumer Issues
Topic: Unlimited cell plans dropping in price?
Replies: 40
Views: 3312

Re: How much do you plan to save in your 529 plan?

I personally don't think it's worthwhile paying for a "2nd tier' expensive private college if a flagship public college is available. Agreed. Eldest felt differently after the athletic official visit to our best in state. So we could have forced the issue with the very real possibility of a fl...
by ourbrooks
Sun Aug 17, 2014 5:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: How much do you plan to save in your 529 plan?
Replies: 60
Views: 6946

Re: Moving after retirement.

You might be in the right city, but are you in the right house? What happens in 15 or 20 years when you aren't as spry as you are now? If what you have now is a two story house with a large yard and long driveway, then maybe you should consider moving to a one story house or condominium where someon...
by ourbrooks
Sat Aug 16, 2014 1:07 pm
 
Forum: Personal Consumer Issues
Topic: Moving after retirement.
Replies: 43
Views: 4380

Re: MFA and MLPs

Look up the total return for MFA on Morningstar. As REITs go, MFA is below average. Over the past 10 years, she'd have been better off with the Vanguard REIT index fund. Grandfather is forgetting that there are two elements to REIT/stock return: dividends and price appreciation. Grandfather is not c...
by ourbrooks
Wed Aug 13, 2014 3:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: MFA and MLPs [Master Limited Partnerships]
Replies: 11
Views: 613

Re: Should I "super-fund" my 529 for my kids?

What if your kids don't use all of the money? Suppose that your kids turn out to be only "above average" and can't get in to a top private school. Would you want to send them to a second tier private university, just to burn up the money? What if they decide to go to a public university wh...
by ourbrooks
Tue Aug 12, 2014 11:31 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I "super-fund" my 529 for my kids?
Replies: 13
Views: 1372

Re: The Worst Investment You Can Make: Buying a Home

Nah, kids aren't the worst investment; food is. Food is clearly an investment, because it has a return, your health and/or life. Setting a financial value on a human life is done routinely in damage suits and the like. To calculate the return on food, take the value of your life and subtract out wha...
by ourbrooks
Fri Aug 08, 2014 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16148

Re: Mulch, Rubber Mulch, or Rocks in Landscaping?

I may be wrong about this, but something tells me that the torch weed removal method is not compatible with rubber mulch.
by ourbrooks
Fri Aug 08, 2014 4:07 pm
 
Forum: Personal Consumer Issues
Topic: Mulch, Rubber Mulch, or Rocks in Landscaping?
Replies: 36
Views: 1714

Re: Buying land and building house

If you're thinking of this as a retirement home, and you retire at around 65, you might want to think of something different. Big issues are: Access to medical care How far is it to the nearest doctor's office? Does that doctor even accept Medicare? How far will you have to travel to see a specialis...
by ourbrooks
Fri Aug 08, 2014 2:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Buying land and building house
Replies: 22
Views: 2572

Re: Buy a house with cash and then do cash-out refinance?

Check carefully on the laws of the state in which you live. In Texas, you can't get a mortgage on a property to which you already have title; the best you can do is a home equity loan and those are limited, by law, to 50% of equity. Also, the buyer may want evidence that you do, indeed, have the cas...
by ourbrooks
Fri Aug 08, 2014 1:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Buy a house with cash and then do cash-out refinance?
Replies: 18
Views: 2296

Re: Mulch, Rubber Mulch, or Rocks in Landscaping?

The problem with rocks or any inorganic material, even with landscape fabric underneath, is that soil gets blown or washed in and weeds take root there. Either you've got to pull the weeds constantly or spray the whole area with weed killer regularly. Look in your buddy's neighborhood in a year or t...
by ourbrooks
Fri Aug 08, 2014 12:39 pm
 
Forum: Personal Consumer Issues
Topic: Mulch, Rubber Mulch, or Rocks in Landscaping?
Replies: 36
Views: 1714

Re: How to Invest Potential Future Home Purchase

If you look at rolling 5 year periods starting in 1926, the U.S. stock market lost money in 14% of them. Only when you get out to 15 years was every period positive but the worst case return was 0.62%. Stocks probably aren't a good idea for your time horizons. How about 5 year CDs, especially if the...
by ourbrooks
Fri Aug 08, 2014 12:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to Invest Potential Future Home Purchase
Replies: 5
Views: 316

Re: Historical question about recessions

This is considered one of the definitive papers on the Great Depression: http://www.nber.org/papers/w4814

Notice the author. Before he entered public office, Prof. Bernanke was know for his economic analyses of the Great Depression.
Was George Bush prescient in nominating him?
by ourbrooks
Fri Aug 08, 2014 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Historical question about recessions
Replies: 19
Views: 1112

Re: Legality of sending personal information via email

You could, of course, simply refuse to sign until the lawyer sent the documents by USPS, certified mail with signed return receipt. Something fun to think about: Tell the lawyer that your email account has been hacked and then send back an edited version of the document that specifies that the sales...
by ourbrooks
Fri Aug 08, 2014 11:28 am
 
Forum: Personal Consumer Issues
Topic: Legality of sending personal information via email
Replies: 38
Views: 2045

Re: Electronic person-to-person payments

Yup, Venmo is the cool, hip young person thing. Paypal is for old foggies. Venmo, LLC is an authorized delegate of PayPal, Inc. If you have a complaint, first contact the consumer assistance division of PayPal, Inc. at the address above; if you still have an unresolved complaint regarding PayPal, In...
by ourbrooks
Thu Aug 07, 2014 6:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Electronic person-to-person payments
Replies: 19
Views: 1566
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