Bogleheads.org

It feels a little weird to me for you to be laying claim to this money and investing it as if it were yours while your mother is still alive. If this is just money that she's keeping around in case of an emergency and which she doesn't need to draw down to live on, then it should be invested like an...

It's lovely down there. The Dutch side is a lot rowdier than the French side--between the casinos, strip clubs, and discount jewelry shops, it was a little too "in your face" for my taste. But there's a lot of great beaches there and great resorts. Plane-watching at Maho beach is a must. O...

I think he should let the new company make the first offer. If it's not within the expected range, then he should come prepared to ask for more with all the facts and arguments listed here.

Well first of all, you should choose an investment whose risk/return profile matches your goals. If the choice is between investing in equity in your Roth 401k and buying I-Bonds, then that choice should be determined by whether you actually want to buy stocks or bonds. Assuming that the choice, the...

Hello Bogleheads! I've been promising to help my mother sort out her finances for a couple years now, and so I'm going to finally try and follow through. After more than twenty years teaching in the public schools, she is very much tired of working and ready to retire. The goal is to find a way to m...

Yeah, they are federal loans with no prepayment penalties.

Thanks for the response!

Quick question about student loans. My fiancee just finished graduate school and has to make a choice of repayment schedules for her two student loans. She can pick between a 10 year or 25 year term, and for either term, can pick either a fixed constant payment, or a graduated payment which increase...

So I've just accepted a new job offer, starting in September, at a new company which offers a very generous 401k match, which applies at the same rate to all contributions I make to it. My current employer does not match 401k contributions. I've already contributed $8500 to my 401k for 2012, and pla...

Given your income level, I wonder if you're not missing the forest for the trees with this question. I obviously don't know the details of your budget, but it seems to me like you should be able to pay off the debt much sooner than 9-10 years and still continue to max out your 401k.

Oh no! We'd better buy whatever that site tells us we need to, and fast!

I don't want to subsidize her financial mistake and getting a mortgage for my paid for house is something I find unnecessary. Wow. If you want financial advice, dm200 got it exactly right in the first response to this post--between you, you have more than enough assets to recover from the loss in t...

It sounds like Seattle is where you and your family want to be, and that you have a secure financial situation. Do it. The point of making money is to live the life that you want to have.

I don't agree with the "cover your fraction of the costs" rule. While you might enjoy your time there, the money that the bride, groom, and/or their parents spend on the wedding is definitely not being spent "on you". Wedding travel costs are probably the biggest line-item in my ...

House Blend's proposed allocation looks right to me. The only thing I'd suggest is that you try and boost your savings rate, if possible... 25K/year on income of $150k-$200k is a bit shy of the 20% people typically advise around here. And unlike "Optimistic", I wouldn't pay down debt unles...

That plan looks reasonably sound, but it's way more complicated than it needs to be. I'd go with something much simpler: taxable: (25k) $14000 total stock market $9000 total international roth: $6250 total bond $19846 vanguard target retirement 2030 401k: $26268 vanguard target retirement 2030 The t...

It's a shame that that article gets cited so much on this board, because William Bernstein's writing is so good, and this is the one example where he's just wrong, and it causes people here a lot of confusion. The example I like to use is this one--suppose that the tax rate on your traditional IRA w...

I'd go with the American Fund for the emerging markets exposure.

But it's not a decision I think you need to lose a lot of sleep over.

I'd go with exactly the portfolio suggested by Beantown85. Nice and simple. At some point you'll probably have to rebalance into some bonds in your 401k, but that's an easy plan for future contributions at least.

You're talking about two months here... it doesn't matter, and you should let the choice be dictated by convenience.

This is about as clear a presentation of the question as I've ever seen:

http://www.bogleheads.org/wiki/Paying_d ... _investing

Here's a very quick sketch of how I might structure this portfolio. First of all, I'd pay off your outstanding car loans right away. Doing that is a guaranteed 5% return for the life of the loan, which is a great deal. I'd also think about using your taxable holdings to pay down the mortgage. Otherw...

Is that loan tax-decuctible? Have you looked into refinancing it at a lower rate?

Even if you're stuck with the 6.55%, I'd still absolutely stick with the minimum payment--that extra $6K/year is extremely generous, and I'd want to remain eligible for it as long as possible.

Payday loans can have effective APR's an order of magnitude worse than this one.

I believe that the annual limit is set to $15,000 times the inflation rate between September 2005 and September of the prior year.

Unless I'm way off, then, it's going to be $16,500 again, since the September '10 CPI was less than the Sept. '08 number, when they set it to $16.5K for '09.

I have about 5% of my portfolio in Europacific in an old 401k. It's done very well, but should I see performance dropping off more than I like, I'll replace it with an index fund. However, you could simply invest in it and monitor its performance, comparing it to other funds, such as Vanguard Total...

I count 401(k) at 80% of face value.

I don't really understand why people don't adjust. It's clearly wrong not to. How hard is it to multiply by 0.8 once or twice a year?

I venture that most people will vote for whatever their current commute time is plus ten minutes.

Here's what I do. Let's say you made $50K and put $6K in a 401k. That's 12% of your available money saved. Your remaining gross pay was $44K; let's say that of this, after taxes, your paychecks actually totaled $40K. If you put $5K in your Roth, you saved 12.5% of that $40k. So you saved 12%, plus a...

I typically just ask, "now, would we be just dating, or would we be 'Vanguarding'"?

Here's a link to their actual data: http://news.morningstar.com/PDFs/spy0810.pdf It seems to me that the data makes more of a case for active management than the article does (though maybe it’s just because of my Boglehead prejudice that I read it that way). What I see in the data is: - Expensive fu...

I would disagree (quibble?) that the "house fund" needs to be kept in something risk-free. Risk-free would be appropriate if a fixed amount of money was needed at a fixed date, but with a home purchase, you can afford to take a little risk, since you can always delay the home purchase or g...

One would imagine that people on this forum would tend to be more affluent (and thus would be able to buy earlier) but more debt-averse (and thus would prefer to save and buy later) than the population as a whole... IMHO, houses are not investments , and therefore the time of purchase is not primar...

It looks like you have some good options there, and people on this board will probably encourage you to look for the lowest-cost options. It's hard to give specific advice, though, since you don't provide much of a picture of your situation. If you post in the format at (http://www.bogleheads.org/fo...

Interesting question. One would imagine that people on this forum would tend to be more affluent (and thus would be able to buy earlier) but more debt-averse (and thus would prefer to save and buy later) than the population as a whole; I'll be interested to see how the distributions compare. The ans...

As long as you can afford the mortgage and expenses associated with the new house, it looks like a no brainer to me. It's not much more expensive, certainly not extravagant, and after all, the point of making money in the first place is so that you and your family can be comfortable and happy.

Sure, it's easy! To "move" your bonds to your IRA, simply sell them in your taxable account, and use the proceeds to buy stocks in your taxable account. Then take the same dollar value of the stocks you already hold in your IRA, and transfer them to bonds in your IRA. You don't have to wor...

Asset location is not that important, and shouldn't drive asset allocation decisions. You should invest in bonds, even if that means paying taxes on them. If you make your stocks taxable, you pay a low rate on a high amount; if you put your bonds in taxable, you pay a high rate on a low amount. Whic...

There's really two issues at work here, and a lot of people are getting confused by the interplay between them. (1) How much is it worth to you to not have liabilities? (2) How low would bond rates have to be in order for you to want to increase your target stock allocation? Suppose that OP hadn't s...

As usual, Grabiner's analysis is right on, and bears repeating. OP acknowledges that it wouldn't make sense to take this loan and invest it in bonds, since their return wouldn't likely be high enough for him to come out ahead. But he already holds bonds, so if he took out this loan and bought more s...

I think the rule of thumb around here would be to give 93% stocks and 7% bonds.

I just did a whipped-together monte carlo simulation of rebalancing vs. not rebalancing, and found no statistically significant difference in either return or risk--actually, rebalancing caused a slight increase in risk.

Not that I think these results mean much...

As others have said, you can with only minimal difficulty get your principal back from your Roth, so why don't you set up an IRA savings account at your local bank, and put your emergency fund there? That way you've got your money where you don't need to worry about losing it, and you've also taken ...

Generally I agree; going out of your way to save a couple cents on gas is the very picture of penny wise and pound foolish. I don't really see what that has to do with the efficient market hypothesis, though. I'm not an economist, but motorists aren't buying gas to resell it, they're buying it to co...

Agree with both of the comments so far. Another idea might be to use the american funds balanced, which is 35% bonds, to get some bonds into your 401(k). Something like this ought to work: 401(k), ~85%: 50% amer funds balanced r4 20% amer funds euro pacific r4 10% vanguard short bonds 5% vanguard to...

in this example, what if the bonds are switched from the 401k to the roth ira after 29.9 years? account balances stay the same (say, $250 and $750, roth and 401k, resp) but now bonds have swung over to the 401k and it's all equities in the roth IRA. same market exposure. no taxes due on this rebala...

Since I've started reading this forum, the number of accounts that I've had has proliferated, and I wonder what passes for normal around here. For the purposes of this poll, both savings and debt count, but different accounts at the same bank only count as one--basically I'm interested in how many w...

I filed my tax return in early January as soon as I had all my W-2's; I was due a large refund and figured it would be better to get that sooner rather than later. I didn't file my state return yet. The week after I filed, I received a 1099-MISC listing my "nonemployee compensation", a pay...

If you pay it back before you buy the house, it shouldn't affect your credit rating at all, right? Also, you should try running a hypothetical credit score check assuming you take the loan using the fico score estimator on bankrate.com (or elsewhere), just so you can get a sense of how much your cre...

I was able to service a similar size debt (at an even higher rate--one day late on an online payment and the CC company pounced) by taking out an unsecured loan from my local credit union at 9.5%. Then I promptly applied for a new card with an introductory 0% APR and started using it for all my purc...

This should be an easy question, but I can't seem to find a definitive answer anywhere. I'm definitely going to make the full 5K contribution to my Roth for 2009 before April 15 (I graduated and started a new job last fall, and have been taking care of debts first, so I didn't have the spare cash un...