Search found 29 matches

by ploldo
Fri May 31, 2013 12:16 pm
Forum: Personal Finance (Not Investing)
Topic: Taxable investments account money in a prenup
Replies: 14
Views: 1817

Re: Taxable account money in a prenup

Yes I will definately be getting legal advice as well.

I just want to know where I'm at going into those discussions. I am hoping this is a common enough occurrence to be fairly straightforward but it's not looking that way.
by ploldo
Fri May 31, 2013 10:56 am
Forum: Personal Finance (Not Investing)
Topic: Taxable investments account money in a prenup
Replies: 14
Views: 1817

Taxable investments account money in a prenup

Can I identify taxable account investments as an asset in a prenup?

I understand this is more difficult to track than money in an IRA/401k. This is further complicated by how the investment/asset is tracked as it grows over time. For example if I have $100k as an asset now I wouldn't want this asset to still be $100k in 20 years if it has grown to $250k. I would think this should still be possible as long as I stop using this account once married.


I have searched the internet extensively and can only find an answer pertaining to money in retirement accounts or more static assets. Thanks!
by ploldo
Thu May 30, 2013 11:58 am
Forum: Investing - Theory, News & General
Topic: Why do Vanguard funds not weight foreign allocations right?
Replies: 5
Views: 835

Why do Vanguard funds not weight foreign allocations right?

Most index funds weight their investments by market cap. This seems to be universally true except for when it comes to the US/International blend. First, compare the US/Int'l blend of VFFVX (Target retirement fund) vs VTWSX (total world stock index). The world stock index has about 50% International (minus Canada) allocation. Fine (for now). But none of the target retirement date funds have this same allocation. They all have much more US allocation ranging from 59% to 63%. Shouldn't these always equal 50% as the total world stock index does? Maybe the idea is foreign stocks are more risky. Second and more important point: The market cap weighted investment in the US should only be about 34% NOT 50%. Based upon data here: http://data.worldb...
by ploldo
Thu Feb 14, 2013 12:40 pm
Forum: Personal Investments
Topic: Quantifying the gains of tax loss harvesting vs the costs
Replies: 49
Views: 4907

Re: Quantifying the gains of tax loss harvesting vs the cost

A like all the strategy here to minimize tax on a traditional IRA during retirement. Why wouldn't this work?

I plan to fully fund my 401k and roth every year and spend the rest leaving none in taxable. At retirement with 0 income can't I just convert my whole traditional to a roth at once and be paying 0% tax on this? It seems like there is a catch here but I don't see it.

Err nvm its taxed as regular income. So ill jsut convert the max for the min tax bracket I want.
by ploldo
Tue Feb 12, 2013 10:15 pm
Forum: Personal Investments
Topic: Quantifying the gains of tax loss harvesting vs the costs
Replies: 49
Views: 4907

Re: Quantifying the gains of tax loss harvesting vs the cost

I learned a lot here, thanks. And I did get the near instant trading to work with VBS. I realized I was missing one big thing though. I thought I could TLH based upon YEARLY losses of a fund, not the cost basis since initial purchase. So while VWO is down slightly this year, its still up since middle of last year when I acquired it. it appears that TLHing is mostly going to happen on recently purchased funds right? Because say, after holding something for 10 years, its very unlucky to dip below the amount you purchased at. I am in a situation where I will rarely be buying non tax deferred funds but still have 135k sitting in taxable. Last year was my first time TLHing. For simplicity sake, assuming this was an all time low for my fund, I ca...
by ploldo
Mon Feb 11, 2013 8:18 pm
Forum: Personal Investments
Topic: Quantifying the gains of tax loss harvesting vs the costs
Replies: 49
Views: 4907

Re: Quantifying the gains of tax loss harvesting vs the cost

I have a VBS account and all my taxable funds are ETFs in here. But I don't see how to exchange funds to avoid the 3 day period. I only see the option to buy, sell, or trade but for all of them my funds available is essentially 0 (from my money market).
by ploldo
Mon Feb 11, 2013 4:53 pm
Forum: Personal Investments
Topic: Quantifying the gains of tax loss harvesting vs the costs
Replies: 49
Views: 4907

Re: Quantifying the gains of tax loss harvesting vs the cost

Great replies livesoft, thanks.



MoonOrb,

Right, its just assuming average returns and there is risk. Looks like livesoft says you can negate most or all of this risk
by ploldo
Sun Feb 10, 2013 8:58 pm
Forum: Personal Investments
Topic: Quantifying the gains of tax loss harvesting vs the costs
Replies: 49
Views: 4907

Quantifying the gains of tax loss harvesting vs the costs

I trying to quantify how much a fund must drop before it is worth it to tax loss harvest. In particular there are at least two costs to tax loss harvesting that I would like to quantify. Those costs are the bid/ask spread and time you are out of the market (usually 3 business days minimum on Vanguard). Cost 1: Assuming you buy a similar fund and hold for 31 days and then buy back your previous fund, this is 2 bid/ask costs. Since most ppl have international in taxable i'll look at those spreads. VWO, VEU, and VSS are .02%,.02% and .14% respectively from Vanguard.com. (Although yahoo finance seems to say much much higher spreads when taking (ask - bid)/ask - am I doing that wrong?) So this is a .04 - .28% cost. Cost 2: When you are selling t...
by ploldo
Sat Dec 29, 2012 10:27 am
Forum: Personal Investments
Topic: Tax loss harvesting details
Replies: 19
Views: 2103

Re: Tax loss harvesting details

I hope I can ask two dumb TLH questions here.

How do I know if my TLH for this year "worked"? I have a loss in capital gains this year so I'm assuming thats partly because of TLHing.

The losses were over $3k. How do I know if these carry over yearly? Is this something Vanguard automatically keeps track of or should I be telling my CPA about this?
by ploldo
Fri Nov 23, 2012 2:29 pm
Forum: Personal Investments
Topic: maxed out 401k worth higher expense ratio (but less tax)?
Replies: 11
Views: 1216

Re: maxed out 401k worth higher expense ratio (but less tax)

Wow, interesting. Will probably go with traditional from now on.


I convert my SEP IRA to a ROTH this year. I was a full time student so hopefully this was smart.
by ploldo
Fri Nov 23, 2012 11:07 am
Forum: Personal Investments
Topic: maxed out 401k worth higher expense ratio (but less tax)?
Replies: 11
Views: 1216

Re: maxed out 401k worth higher expense ratio (but less tax)

Thanks, that makes sense. I thought the whole marginal tax rate argument was too simplistic.

Does this logic apply to Roth vs Traditional IRAs too? Roth seems to be much more preferred here but I can't figure out why.
by ploldo
Thu Nov 15, 2012 6:33 pm
Forum: Personal Investments
Topic: maxed out 401k worth higher expense ratio (but less tax)?
Replies: 11
Views: 1216

Re: maxed out 401k worth higher expense ratio (but less tax)

Great replies. Thanks.

I just got an email today saying my company will soon be offering Roth 401ks. I assume this is (usually) clearly the best case?

This is really good news for me. Will probaly save hundres of thousands in taxes. I'm 27 and converted my SEP to a ROTH last year, plus this ROTH 401k now - should have almost $200k in my ROTH in a few years. I've been very forunate and this forum has helped so much.
by ploldo
Tue Nov 13, 2012 8:52 pm
Forum: Personal Investments
Topic: maxed out 401k worth higher expense ratio (but less tax)?
Replies: 11
Views: 1216

maxed out 401k worth higher expense ratio (but less tax)?

I have plenty in my general investing account to try this for a few year if its worth it. To me it appears to be a tradeoff between tax savings now and higher expense ratios for many years. If i max out my 401k contributing ~17k I save ~$3200 in taxes a year. But then I have to invest in my companies 401k fund provider which is not a great one like Vanguard with low expense ratios. Is investing 17k tax deferred but with approx .3% higher expense ratios better than 17k invested in a standard non tax shielded investment account with low expense ratios? I am 27. If i was close to retiring obviously this would be worth it. A related question is whether or not I can instead invest this money for the 401k into Vanguard...but I'm guessing my compa...
by ploldo
Wed Feb 08, 2012 10:34 pm
Forum: Personal Investments
Topic: AA with both SEP and ROTH IRAs
Replies: 7
Views: 1043

Re: AA with both SEP and ROTH IRAs

Thank you for the clarification.

I was confusing things in my head. Between my SEP and my Roth I will put the funds with the highest expected return in the Roth. This is what I was thinking of. Emailing my CPA about a conversion. Thanks!
by ploldo
Wed Feb 08, 2012 8:34 pm
Forum: Personal Investments
Topic: AA with both SEP and ROTH IRAs
Replies: 7
Views: 1043

Re: AA with both SEP and ROTH IRAs

Thanks for the great reply. “How much are you looking to contribute each year?” I’m looking to max out each every year. I’m a self employed online poker player but with it being blocked in the US now my income from this has drastically decreased and is more uncertain. After this year it will be very little (under 10-20k). I do plan on maxing out my Roth forever though. Interesting information on SEP withdrawal/conversion tax rates. As a student my income should be very low this year so I will look into a conversion. You pretty much answered my main question as I was worried about tax rates at withdrawal. “Tax efficiency isn't an issue inside tax advantaged accounts like SEP-IRA or Roth IRA. It's only an issue when you add taxable accounts. ...
by ploldo
Tue Feb 07, 2012 7:29 pm
Forum: Personal Investments
Topic: AA with both SEP and ROTH IRAs
Replies: 7
Views: 1043

AA with both SEP and ROTH IRAs

It just came to my attention that my SEP IRA is actually a tradition IRA, unlike my ROTH. I have about 90% of my tax sheltered in my SEP now, but that will change. Soon all of my contributions will only consist of me maxing out my ROTH. I'm guessing since the traditional IRA (SEP) is taxed at withdrawal, I want the funds with lowest taxes in the ROTH? my funds for tax sheltered: (in order from lowest to highest in taxes, I believe) VEA,VWO,VIOO,VTSAX,VMVAX,VSIAX So I plan on maxing out my ROTH with those funds from left to right, unless I'm mistaken. One final question I have is about converting a traditional IRA to a ROTH. Is there a way to convert my SEP to a ROTH? Google makes this seem possible but this seems like a loophole to allow an...
by ploldo
Sun Jan 22, 2012 3:26 pm
Forum: Personal Investments
Topic: tax loss harvesting questions I haven't seen elsewhere
Replies: 12
Views: 1129

Re: tax loss harvesting questions I haven't seen elsewhere

Are you guys buying similar funds during the 31 day waiting period? In the wiki example cash is held but I don't see how this can be better. I'm guessing for ETFs the bid/ask spread might negate any value but for indexes this seems superior.

Now I see that you can trigger a wash sale if dividends are reinvested. I hope I am not over thinking things, but is this something to worry about? Do you just choose to stop reinvesting dividends right before selling a fund to TLH?
by ploldo
Sat Jan 21, 2012 11:03 pm
Forum: Personal Investments
Topic: tax loss harvesting questions I haven't seen elsewhere
Replies: 12
Views: 1129

Re: tax loss harvesting questions I haven't seen elsewhere

Thanks for the great responses I learned a lot.

When you get to a TLH opportunity and do it, you will be wondering why you thought it was so difficult when you find out how really easy it actually is.
This is reassuring. The basics seemed easy after rereading the wiki. Good to know.


_______________

So is it typical, for a boglehead, to do a monthly check of all taxable funds for TLH? I would imagine unless it is a very good year, there are tons of TLH opportunities.

edit: how many years can losses from TLH harvesting carry over?
by ploldo
Sat Jan 21, 2012 5:35 pm
Forum: Personal Investments
Topic: tax loss harvesting questions I haven't seen elsewhere
Replies: 12
Views: 1129

tax loss harvesting questions I haven't seen elsewhere

Can I do this more than once per year for each fund? I understand it might not be worth it once exceed $3000 in benefits. The bogleheads wiki example shows a repurchase of the identical fund. I've read elsewhere the fund can be similar but not identical. I'm looking for clarification. I had plan on having only one fund in my taxable account. (Fortunate to have a large SEP IRA). However adding two other funds, which are only SLIGHTLY less tax efficient, would triple (ignoring correlation) the opportunity for TLH throughout the year. I'm thinking the increased chances of saving $3000/year outweigh the tiny bit more in taxes I would pay yearly. Thoughts on this? The funds that I believe to have similar tax costs are VSS, VEA and VTMSX (all wit...
by ploldo
Sat Jan 21, 2012 4:33 pm
Forum: Personal Investments
Topic: Age 26, AA with small cap and EM tilt breakdown
Replies: 9
Views: 801

Re: Age 26, AA with small cap and EM tilt breakdown

Thanks for all the great replies. I am looking into everything mentioned. I have been having trouble finding the tax costs of these funds. Is table 1 near the bottom of this site the best estimate? http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement If thats true my funds from highest tax cost to lowest are: (assuming 25% rate) VMVAX VTSAX VWO VTMSX VEA VSS I find it surprising that xUS small cap (VSS) is the most tax efficient. I suspect this is due to foreign tax credit and being an ETF though? One thing I realized is that I looked at expense ratios of ETF vs index funds before looking at tax costs of each. Is this the correct way to go about this? In an IRA I would think so since the expense ratio is taken out every...
by ploldo
Fri Jan 20, 2012 7:03 pm
Forum: Personal Investments
Topic: Age 26, AA with small cap and EM tilt breakdown
Replies: 9
Views: 801

Re: Age 26, AA with small cap and EM tilt breakdown

One question I forgot to add:

Can I buy the ETFs on Vanguard or do I need a broker account for this? If I need a broker account, how to I transfer funds from an IRA on vanguard to a different company?
by ploldo
Fri Jan 20, 2012 7:01 pm
Forum: Personal Investments
Topic: Age 26, AA with small cap and EM tilt breakdown
Replies: 9
Views: 801

Age 26, AA with small cap and EM tilt breakdown

The matrix of this portfolio is this, with a 60/40 international split:

12/13/12
15/13/9
10/8/8

for comparison, the US total market:
25/24/23
6/7/7
3/3/3

VEA 10% - All world xUS tax-managed
VSS 30% - all world xUS small cap (includes 25% EM small cap)
VWO 20% - emerging markets (0% small cap)
VMVAX 13% - US midcap value
VTMSX 15% - US small cap tax managed
VTSAX 12% - US total market

I put a lot of research into EFT or index, tax managed or not, rankings of tax efficiency, and the AA. Its not perfect, but given what vanguard had and how I could reduce expense ratios and taxes it is pretty close to what I want. I would appreciate any feedback.
by ploldo
Tue Nov 01, 2011 2:44 pm
Forum: Investing - Theory, News & General
Topic: Lifecylce investing (investing with leverage while young)
Replies: 4
Views: 743

Re: Lifecylce investing (investing with leverage while young

I thought this was fascinating, at least in theory.

No one else? Is this simply too impractical?
by ploldo
Tue Nov 01, 2011 2:42 pm
Forum: Investing - Theory, News & General
Topic: index fund improvements (enhanced & non market-cap indexing)
Replies: 0
Views: 258

index fund improvements (enhanced & non market-cap indexing)

Enhanced indexing: http://en.wikipedia.org/wiki/Enhanced_indexing Dimensional Fund Advisors does this but not for individual investors, although I believe they have some ETFs. What are peoples thoughts on these? Are there more options out there? I am having trouble finding them. Non market cap indexing: http://www.valueweightedindex.com/ This sentence stood out to me: "A market index that bases its investment weights solely on market capitalization (and therefore market price) will systematically invest too much in stocks when they are overpriced and too little in stocks when they are priced at bargain levels. " However, I have not seem many options for other types of indexes. (All are market cap, right?) Both of these methods see...
by ploldo
Tue Nov 01, 2011 2:14 pm
Forum: Personal Investments
Topic: ETFs vs index funds for taxable and tax deffered accounts?
Replies: 10
Views: 1076

Re: ETFs vs index funds for taxable and tax deffered account

The ETF vs index fund calculator is here: https://personal.vanguard.com/us/faces/JSP/Funds/Tools/FundsToolsEtfCostSelectionContent.jsp I must have only looked at Emerging Markets previously which have considerably higher costs in an index, probably due to purchase fees in this sector. Index fund appear to be slightly cheaper for everything besides EM and ex US small cap. This is assuming admiral shares. A lot of good criticism in here. “Have you actually calculated extra expected returns versus risk for this portfolio versus a more mainstream one?” I have only used a compound interest calculator. I would like to use one given different standard deviations if that exists. I’ll probably tone my portfolio down a bit. I realize that 35 years (m...
by ploldo
Tue Nov 01, 2011 11:11 am
Forum: Personal Investments
Topic: ETFs vs index funds for taxable and tax deffered accounts?
Replies: 10
Views: 1076

Re: ETFs vs index funds for taxable and tax deffered account

Thanks for your reply. I should have mentioned that I am 26 and not concerned about any additional risk assuming it brings higher returns. Of course I am in this for the long run of 35+ years minimum. What brought me to this decision was a finance course I took. I'm looking to switch from a total stock market index, so something with more risk/return since I'm in this for the long haul. ETFs: yes that makes sense. I also found a comparison on Vanguard between the two and ETFs seems quite a bit cheaper due to lower fees. Capital gains: got it, thanks. So my initial thinking was that funds in my IRA should be that with the highest expected return. But based upon these CG taxes due to trading, it sounds like funds in my IRA should be a weighte...
by ploldo
Sun Oct 30, 2011 5:46 pm
Forum: Investing - Theory, News & General
Topic: Lifecylce investing (investing with leverage while young)
Replies: 4
Views: 743

Lifecylce investing (investing with leverage while young)

Excellent PDF from Yale professors about this:

http://papers.ssrn.com/sol3/papers.cfm? ... id=1139110

Assuming they are correct in that borrowing money to invest while young will reduce risk and increase return, I am wondering the best way to go about this. They recommend buying calls on S&P500 index futures. However, since I would rather invest in small cap stocks, (for example) I am wondering how to obtain this leverage for a less common index.

Instead of buying calls should I borrow money from my broker? I don't have a job yet but when I do should I borrow against my 401k? Basically I'm looking for any ways to borrow large sums of money longer term.

Thanks for your help.
by ploldo
Sun Oct 30, 2011 5:37 pm
Forum: Personal Investments
Topic: What is your age and AA?
Replies: 219
Views: 73406

Re: What is your age and AA?

Age 26, 200k to invest. Trying to maximize risk/return for the next 40+ years. I expect returns of the rest of the world in these sectors to surpass those of the US.

60% - FTSE world ex US small cap - VSS
30% - Emerging markets - VWO
7% - US small cap value - VBR
3% - US mid cap value - VOE
by ploldo
Sun Oct 30, 2011 2:40 pm
Forum: Personal Investments
Topic: ETFs vs index funds for taxable and tax deffered accounts?
Replies: 10
Views: 1076

ETFs vs index funds for taxable and tax deffered accounts?

I have 200k invested that I'm looking to move to the follow sectors: 55% world small cap ex US, 25% emerging markets, 15% value ex US, 5% US micro cap. Currently 50% is in an SEP IRA and I expect my future contributions to be mostly weighed to this tax deferred account. US micro cap - DFSCX Intentional value - VTRIX FTSE all world ex US small cap index - VFSVX (considering DFISX instead) Emerging markets - Whatever the vanguard index one is called. My question is which of these should I put into my IRA? I am also wondering when ETFs are better than index funds and if it depends on whether or not the accounts are tax deferred or not. I have heard that apparently Vanguard ETFs are not as tax efficient as the average ETF. A related stupid ques...