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Re: Need Income-Wellesley & Wellington or just Wellesley

One of the things you might not know about the Wellesley fund is that if interest rates rise, the value of your shares will drop, although you'll continue to receive the same amount of interest. This might or might not upset you, but if it does, one of the ways to avoid this is to not hold Wellesley...
by ourbrooks
Mon Jan 26, 2015 10:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Income-Wellesley & Wellington or just Wellesley
Replies: 18
Views: 2777

Re: Vanguard Energy ETF

I bought some VDE which by the way is an index fund at around $105 per share. At less than 2% of our portfolio it won't make us rich or ruin us. It is a domestic energy fund but tracks VGENX fairly well. No, VDE is not an index fund, if by "fund" you mean mutual fund; it's an Exchange Tra...
by ourbrooks
Mon Jan 26, 2015 9:49 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Energy ETF
Replies: 6
Views: 933

Re: Vanguard Energy ETF

The problem with VDE is that it only covers American companies. That leaves out #2, BP and #3, Shell. You might be better off with the VGENX mutual fund, which includes BP and Shell. I note that every company in either of these vehicles is in some other widely held index, such as the S&P 500, De...
by ourbrooks
Mon Jan 26, 2015 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Energy ETF
Replies: 6
Views: 933

Re: Parents Retirement Advice 62 y.o.

Most people on this forum recommend delaying social security but I am not one of them. Comparing ages 62 to 66, you get 75% of the age 66 benefit if you take SSA "early." However, using actuarial life tables (I use the SSA ones but know there is debate as to whether the actuarial society ...
by ourbrooks
Fri Jan 23, 2015 1:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Parents Retirement Advice 62 y.o.
Replies: 8
Views: 945

Re: Hedging home value risk

Another problem with the Case-Shiller index is that it's national, but price drops can be local. If you walk away from a mortgage, even if the mortgage company writes off the debt, you'll probably never be able to get a mortgage for the rest of your life. You might not even be able to rent in your o...
by ourbrooks
Fri Jan 23, 2015 1:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Hedging home value risk
Replies: 23
Views: 1084

Re: Parents Retirement Advice 62 y.o.

I'm guessing that the mortgage payment is somewhere in the neighborhood of $450 a month + taxes. If they paid off their mortgage, their monthly expenses would go down to $1950 a month. If your mother took her pension, that'd leave about $850 a month for your dad to cover, less than he's bringing in ...
by ourbrooks
Fri Jan 23, 2015 12:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Parents Retirement Advice 62 y.o.
Replies: 8
Views: 945

Re: Why are people buying 10 year Bunds?

Most of the people who buy German bonds have Euros in their bank accounts. They'd have to convert them to dollars first. The Euro is at recent historical lows, so they'd have to pay a lot for the dollars. Once they've got the bonds, there's another risk. The dollar might go back down relative to the...
by ourbrooks
Thu Jan 22, 2015 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: Why are people buying 10 year Bunds?
Replies: 14
Views: 1375

Re: Surviving the Tax Bite of RMD Withdrawals in Retirement

The required withdrawal percentage goes up as your life expectancy goes down; the first year it's about 3.65%; when you're 71, it goes up to 3.77%, and so on. Let's suppose that you're in the middle of the 15% bracket for your first withdrawal. You take out more than the required 3.65% Next year, wh...
by ourbrooks
Thu Jan 22, 2015 4:32 pm
 
Forum: Investing - Theory, News & General
Topic: Surviving the Tax Bite of RMD Withdrawals in Retirement
Replies: 75
Views: 6050

Re: Is a Traditional Annuity ever worth it?

Look up the history of TIAA. It was founded in 1918 and it's a mutual insurance company; the owners are the holders of the accounts. The TIAA Traditional product also was first offered in 1918. Vanguard, in contrast, has yet to be through a Great Depression so no one is really sure how it will hold ...
by ourbrooks
Tue Jan 20, 2015 10:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is a Traditional Annuity ever worth it?
Replies: 18
Views: 1381

Re: Ditch Wells Fargo banking for online banking?

We have an Ally account and a free Wells Fargo account (Our mortgage is through Wells Fargo). We love Ally, it was the best decision that we have made. The only downfall is the lack of an ability to move cash into your bank account. Our work around at the moment is to move it to our free Wells Farg...
by ourbrooks
Tue Jan 20, 2015 9:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Ditch Wells Fargo banking for online banking?
Replies: 25
Views: 1937

Re: “How Does Aging Affect Financial Decision Making?”

I worry about any method which relies on a set of instructions for someone else as long as I can still change the instructions. One of the results of the study is that there's no decline in confidence about financial decisions; I'd be just as confident about changing my ISP to pick individual stocks...
by ourbrooks
Tue Jan 20, 2015 9:31 pm
 
Forum: Investing - Theory, News & General
Topic: “How Does Aging Affect Financial Decision Making?”
Replies: 54
Views: 2749

Re: Moca Adapters

Powerline Ethernet does the same thing, but over electrical wiring. You plug one end into a wall socket near the Cox box and run an Ethernet cable to the Cox box. Upstairs you plug another powerline adapter into a wall socket and run an Ethernet cable from the adapter to your router. The powerline a...
by ourbrooks
Mon Jan 19, 2015 8:58 pm
 
Forum: Personal Consumer Issues
Topic: Moca Adapters
Replies: 12
Views: 906

Re: Risk of Losing Principal of Annuity

You might want to look at this article: http://www.advisorperspectives.com/newsletters12/How_Safe_are_Annuities.php Strangely enough, insurance companies fail much less often than banks; what makes banks reasonable places to put your money are the federal guarantees. Companies don't even have to fai...
by ourbrooks
Mon Jan 19, 2015 8:44 pm
 
Forum: Investing - Theory, News & General
Topic: Risk of Losing Principal of Annuity
Replies: 2
Views: 354

Re: Malkiel's recommendations, 1990 to 2015

After thinking about it a bit, I've concluded that Malkiel's 2015 recommendations are LESS risky then his 1990 ones. As I a retiree, I'm primarily worried about one thing, running out of money before I die. It would be truly nice if holding a smaller proportion of stocks always reduced that risk but...
by ourbrooks
Sun Jan 18, 2015 1:44 pm
 
Forum: Investing - Theory, News & General
Topic: Malkiel's recommendations, 1990 to 2015
Replies: 40
Views: 3805

Re: Best Book To Learn R Programming

R, like S on which is based, is a scripting language for statistical analysis. The idea is that the language contains a library of statistical analyses and that you use R to combine them together to do custom analyses. R is like the SAS JMP scripting language. Part of learning R is learning statisti...
by ourbrooks
Sun Jan 18, 2015 12:58 pm
 
Forum: Personal Consumer Issues
Topic: Best Book To Learn R Programming
Replies: 32
Views: 2987

Re: Is $50 oil really the norm?

Actually, hydraulic fracturing has been done commercially since the 1950's. Horizontal drilling is somewhat newer but was definitely commercial by the 1980s. Around 1990, George P. Mitchell was able to drill a number of profitable wells in "shales" using the combination of the technologies...
by ourbrooks
Sat Jan 17, 2015 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: Is $50 oil really the norm?
Replies: 41
Views: 3471

Re: Is $50 oil really the norm?

What is clear is that, in the future, oil will become increasingly difficult to produce; all of the "easy" oil has already been pumped. The newer areas are less accessible; the formations are deeper and the hydrocarbons don't flow into the well as easily. Some comparisons: A typical Saudi ...
by ourbrooks
Sat Jan 17, 2015 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: Is $50 oil really the norm?
Replies: 41
Views: 3471

Re: Malkiel's recommendations, 1990 to 2015

Things do change. In 1970, you couldn't hold Vanguard funds in your IRA because (a) there were no Vanguard funds and (b) there were no IRAs! Although the 1990 portfolio would have produced low volatility, it is actually a quite risky portfolio from the point of view of running out of money. It's at ...
by ourbrooks
Sat Jan 17, 2015 3:31 pm
 
Forum: Investing - Theory, News & General
Topic: Malkiel's recommendations, 1990 to 2015
Replies: 40
Views: 3805

Re: Confused: Why does anyone buy German bonds?

You mean German residents? Currency risk, potential tax issues on both sides - much the same stuff you see here to justify not investing outside the US. +1 Also, Germany has lower per capita government debt than the U.S. If you think level of government debt directly affects the safety of governmen...
by ourbrooks
Fri Jan 16, 2015 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: Confused: Why does anyone buy German bonds?
Replies: 24
Views: 2648

Re: Confused: Why does anyone buy German bonds?

You mean German residents? Currency risk, potential tax issues on both sides - much the same stuff you see here to justify not investing outside the US. +1 Also, Germany has lower per capita government debt than the U.S. If you think level of government debt directly affects the safety of governmen...
by ourbrooks
Fri Jan 16, 2015 2:09 pm
 
Forum: Investing - Theory, News & General
Topic: Confused: Why does anyone buy German bonds?
Replies: 24
Views: 2648

Re: Great Krugman column on Swiss currency debacle

What good would it do to put money under the mattress? It'd deflate there as well. Instead, you ought to buy stock in a candy company, in particular, Nestle. Most of it is probably made in their biggest market, the U.S., but their home currency is the Swiss Franc! It will be interesting to see what ...
by ourbrooks
Fri Jan 16, 2015 1:32 pm
 
Forum: Investing - Theory, News & General
Topic: Great Krugman column on Swiss currency debacle
Replies: 8
Views: 1229

Re: What to do with 1.2M to be used for Private School?

Fourteen years is almost, but not quite, long enough to put money in stocks and still have a very low chance of loss. If you look at rolling historical periods of the U.S. stock market, in 14% of five year periods the market has loss money. Only when you get out to 20 years has every period had a po...
by ourbrooks
Fri Jan 16, 2015 9:49 am
 
Forum: Investing - Help with Personal Investments
Topic: What to do with 1.2M to be used for Private School?
Replies: 28
Views: 3678

Re: New retirement home timing

If the first banker you talk to says no, try several others, maybe even another one from the same bank. When we did the same thing about four years ago, our banker had to try several different programs at the bank before she found one that would accept us. We ended up with a "no fee" HELOC...
by ourbrooks
Thu Jan 15, 2015 6:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: New retirement home timing
Replies: 5
Views: 547

Re: R value of a wall

This article says that the standard is unclear: http://www.greenbuildingadvisor.com/blogs/dept/musings/what-s-definition-r-20-wall They suggest using a "framing factor" to adjust for the density of studs in the wall, e.g., the 85/15 ratio in the OP's example. Unless it's a code compliance ...
by ourbrooks
Thu Jan 15, 2015 6:30 pm
 
Forum: Personal Consumer Issues
Topic: R value of a wall
Replies: 5
Views: 671

Re: How would you put a value on a pension?

Pensions are life annuities; there are standard accounting formulas for calculating the present value of a life annuity based on the age of the annuitant. Here's one: http://www.webfinancialtools.com/life_annuity.html . Note that you don't have to enter the present value or the interest rate; you ca...
by ourbrooks
Wed Jan 14, 2015 6:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: How would you put a value on a pension?
Replies: 11
Views: 1354

Re: Selling mineral rights to land?

One low effort thing you might do is find the land on Google Maps and turn on the satellite view and zoom out a bit. If you see a lot of little roads that dead end and don't have houses/barns at the ends, those might be wells. In the Marcellus Shale, they're likely to be 0.25-1.0 miles apart. Google...
by ourbrooks
Sun Jan 11, 2015 2:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Selling mineral rights to land?
Replies: 53
Views: 5538

Re: TIAA-CREF and Vanguard funds - any extra fees ?

You don't necessarily have to do anything with the 403(b) when he goes elsewhere; he may be able to just let it sit. TIAA-CREF's original mission was to support wandering academics who moved from institution to institution. I held on to my TIAA CREF account for several decades and I recall hearing a...
by ourbrooks
Sun Jan 11, 2015 11:13 am
 
Forum: Investing - Theory, News & General
Topic: TIAA-CREF and Vanguard funds - any extra fees ?
Replies: 8
Views: 993

Re: Who's buying Oil stocks?

How about MEMP or BBEP or LINE or VNR or any others of the E&P MLPs? These MLPs are all heavily hedged a few years out against oil price drops. Some of them have cut their dividends, but that appears to be more to accumulate cash for acquisitions than it does because they are receiving lower oil...
by ourbrooks
Sat Jan 10, 2015 5:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Who's buying Oil stocks?
Replies: 57
Views: 5047

Re: Social Security and Pension Question:

?..if the SS and pension amounts were considered to be part of the bond ratio. If one assumed a 4% withdrawal from investments, it would take $2,375,000 in investments to theoretically sustain that withdrawal rate. That number is probably too high. You have to figure age in there since pensions and...
by ourbrooks
Sat Jan 10, 2015 5:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Social Security and Pension Question:
Replies: 36
Views: 3585

Re: Distressed energy investing

At least some of the companies will go bankrupt and default on their paper. You could still make money if you bought the paper cheaply enough and the company's assets are enough to cover the purchase price and your profit. In those cases, you'll have to wait until the bankruptcy proceedings are comp...
by ourbrooks
Sat Jan 10, 2015 3:32 pm
 
Forum: Investing - Theory, News & General
Topic: Distressed energy investing
Replies: 3
Views: 609

Re: Home Energy Audit - worth it?

If the audit wasn't free, ask for your money back. I agree absolutely that you need some kind of measurement such as blower door or infrared. I'd be willing to pay a couple of hundred bucks for that. Past experience is that they find things not externally visible, like uninsulated wall cavities, etc...
by ourbrooks
Sat Jan 10, 2015 10:23 am
 
Forum: Personal Consumer Issues
Topic: Home Energy Audit - worth it?
Replies: 22
Views: 2284

Re: Ridiculous closing costs on cash deal?

Try Googling title insurance rates for your state. Some the rate quotations I've seen specifically ask whether it's a cash deal.
by ourbrooks
Fri Jan 09, 2015 6:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Ridiculous closing costs on cash deal?
Replies: 15
Views: 2723

Re: Who's buying Oil stocks?

The efficient market hypothesis says that the market incorporates into the price of a security all the information that is known about the security. It does not require that the information be correct. It isn't enough just to have correct information; if you're the only one who has it, the market wi...
by ourbrooks
Fri Jan 09, 2015 5:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Who's buying Oil stocks?
Replies: 57
Views: 5047

Re: Ridiculous closing costs on cash deal?

Alas and alak, at least some of those costs are reasonable. The title insurance is for the buyer of the property to protect him/her against a defect in the title, which could result in someone else claiming ownership of the property. Even if there's no mortgage, it's very reasonable for the buyer to...
by ourbrooks
Fri Jan 09, 2015 5:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Ridiculous closing costs on cash deal?
Replies: 15
Views: 2723

Re: TIAA-CREF and Vanguard funds - any extra fees ?

Turns out, it's not a simple question. Educational institutions negotiate their 403(b) plans individually with TIAA and each plan has different funds, charges, etc. Some plans don't offer access to Vanguard funds; some plans do. TIAA needs to know which institution your son works for in order to ans...
by ourbrooks
Fri Jan 09, 2015 3:06 pm
 
Forum: Investing - Theory, News & General
Topic: TIAA-CREF and Vanguard funds - any extra fees ?
Replies: 8
Views: 993

Re: Oil Price Hedging - How does an individual do it?

The problem with shipping is that it has a boom/bust cycle that doesn't necessarily track the price of oil but, rather, overall economic activity. When there's a lot of activity, a lot of oil gets shipped and a lot of tankers get built; when there's a recession/depression, less oil is shipped and ta...
by ourbrooks
Thu Jan 08, 2015 9:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Oil Price Hedging - How does an individual do it?
Replies: 31
Views: 3246

Re: Selling mineral rights to land?

Take your time in finding a lawyer. If there's oil/gas there, it won't go away, particularly with the current low oil prices. I'm guessing that your mother is being seriously hussled. The property might be worth four or five times what she'd being offered. The fact that they want to purchase the min...
by ourbrooks
Thu Jan 08, 2015 7:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Selling mineral rights to land?
Replies: 53
Views: 5538

Re: Lightbulbs in Fully Enclosed Recessed Fixtures

I use incandescent light bulbs from Walmart. No problem. Then switching over to LEDs now should be a no brainer. LEDs last about 11 times as long as incandescents; at current prices, they're equivalent on just bulb replacement costs. Add to it the fact that LEDs use an eighth as much power and you ...
by ourbrooks
Sat Jan 03, 2015 11:12 pm
 
Forum: Personal Consumer Issues
Topic: Lightbulbs in Fully Enclosed Recessed Fixtures
Replies: 57
Views: 4226

Re: Aiming for $5k tax refund in I-bonds, but $800 short

You probably would prefer using EFTPS instead of paper vouchers and paper checks. https://www.eftps.gov/eftps/ It uses ACH to take the money out of your bank account and it gives you an online record of what payments the IRS thinks you have made. When you make a payment, you can specify which tax ye...
by ourbrooks
Sat Jan 03, 2015 10:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Aiming for $5k tax refund in I-bonds, but $800 short
Replies: 9
Views: 1069

Re: Lightbulbs in Fully Enclosed Recessed Fixtures

What do you mean by a "totally enclosed fixture?" If the hallway were inside, wouldn't the fixtures be open at the bottom? The only fixtures I can think of which completely surround the bulb would be bathroom fixtures and some of them have vents at the top. On the Home Depot site, there's ...
by ourbrooks
Sat Jan 03, 2015 5:54 pm
 
Forum: Personal Consumer Issues
Topic: Lightbulbs in Fully Enclosed Recessed Fixtures
Replies: 57
Views: 4226

Re: Why not put 2x amt. of emergency funds in the market?

Suppose the market drops 50%, you lose your job, and you need the full six months of emergency funds. You've actually wiped out the 12 months of emergency funds you started with. Suppose, instead, you put 6 months worth in the high yield savings account and another six months in an index fund. When ...
by ourbrooks
Sat Jan 03, 2015 5:35 pm
 
Forum: Investing - Theory, News & General
Topic: Why not put 2x amt. of emergency funds in the market?
Replies: 19
Views: 2187

Re: Need Advice to buy house or not?

Buy a rental property in Bangalore and rent it out, or, better still, buy shares in several rental properties. When/if you retire to India, sell the rental properties and buy your personal residence. The rental properties are likely to appreciate as much as other real estate. Even if you have to pay...
by ourbrooks
Sat Jan 03, 2015 2:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need Advice to buy house or not?
Replies: 8
Views: 1278

Re: Here's a Handy Dandy Annuity Calculator useful for more

I'm with nisiprius here; this is equivalent to the PV function in Excel and only works for a fixed number of payments. To use this for pensions or life annuities you have to make a longevity assumption, always a tricky business. An actuarially accurate calculator for pensions or life annuities uses ...
by ourbrooks
Sat Jan 03, 2015 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: Here's a Handy Dandy Annuity Calculator useful for more
Replies: 4
Views: 736

Re: New Const or Renov cost/sf

Figure $125 - $200 per sq. ft. for the actual construction costs, assuming that you've already got the land, with utility hookups. Why such a larger range and how do you pin it down further? The large range is due to the large possible variation in building materials and labor costs. A composite roo...
by ourbrooks
Fri Jan 02, 2015 5:49 pm
 
Forum: Personal Consumer Issues
Topic: New Const or Renov cost/sf
Replies: 7
Views: 1049

Re: Investing at TIAA-CREF

For most of my early investing life, I was contributing 60% TIAA Traditional/40% CREF stock fund. This used to be the default allocation for TIAA-CREF participants. The idea back then was that the TIAA Traditional would turn into a life annuity/pension. If you did well with the 40% stock, well, then...
by ourbrooks
Fri Jan 02, 2015 12:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing at TIAA-CREF
Replies: 13
Views: 1259

Re: Investing at TIAA-CREF

Note how nice and smooth the lines are for the TIAA Traditional Fund. What that means is that your balance in the TIAA Traditional fund never changes unless you add or remove money yourself; interest changes, etc., which affect bond prices, have no effect. Note in particular the 2008/2009 time perio...
by ourbrooks
Thu Jan 01, 2015 9:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing at TIAA-CREF
Replies: 13
Views: 1259

Re: Investing at TIAA-CREF

You've got two investment choices from TIAA CREF that are unique and not available at all from Vanguard or any other mutual fund companies. One is the TIAA Traditional; the other is the TIAA Real Estate (not to be confused with TIAA Real Estate Securities). In particular, the TIAA Traditional Annuit...
by ourbrooks
Thu Jan 01, 2015 6:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing at TIAA-CREF
Replies: 13
Views: 1259

Re: XSOE: Emerging Markets ex-State-Owned Enterprises

As emerging market countries continue to grow and transform, investors will demand more ways to gain access to this unique asset class. Recently, some investors have expressed concern over state-owned enterprises and they have sought tools to limit their exposure, even after understanding the valua...
by ourbrooks
Thu Jan 01, 2015 1:32 pm
 
Forum: Investing - Theory, News & General
Topic: XSOE: Emerging Markets ex-State-Owned Enterprises
Replies: 12
Views: 1096

Re: XSOE: Emerging Markets ex-State-Owned Enterprises

Quite a few former SOEs are now completely private; BP was initially government owned and the final government share wasn't sold until 1988. In fact, since then, the Kuwaiti government has purchased around a 20% share. The question to ask is, what motivates the government in selling private shares? ...
by ourbrooks
Wed Dec 31, 2014 5:28 pm
 
Forum: Investing - Theory, News & General
Topic: XSOE: Emerging Markets ex-State-Owned Enterprises
Replies: 12
Views: 1096

Re: Should my 71 yo mom pay off her mortgage?

Okay, let me take the contrary position: She should pay off the mortgage entirely even if it uses up all her liquid assets temporarily. She's paying $1900 a month in mortgage; I suspect that includes taxes and the actual payments are more like $13,000 or $14,000 a year. That's a lot of liquidity. No...
by ourbrooks
Wed Dec 31, 2014 1:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should my 71 yo mom pay off her mortgage?
Replies: 16
Views: 2354
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