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Re: Is my husband a spendthrift? Or I a tightwad?

Wow, I just don’t know where to start. Your story sounds like I would imagine many of the stories around me might be like. I live in an area where houses like you describe are not uncommon, where many have a second ski house, and as well the incomes at least on the surface would not necessarily appe...
by swaption
Wed Oct 01, 2014 12:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is my husband a spendthrift? Or I a tightwad?
Replies: 52
Views: 3208

Re: How to pay for Home Addition

the reason i think it may make financial sense to do this, is strictly b/c i bought 10 years ago, have some equity and it has appreciated. if i sold, i would do well, but when i bought a bigger house nearby i would simply be paying more for the next place. so my thinking was the 150k in appreciatio...
by swaption
Tue Sep 30, 2014 7:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to pay for Home Addition
Replies: 20
Views: 1648

Re: How can I stop feeling depressed about my finances?

You did not make any "fundamental mistake", in fact you have done nothing wrong. I think for some reason you seem to be equating the traditional measures of winning/losing with some measure of self worth. As a result, life seems to have become a burden because of the constant reminders of ...
by swaption
Mon Sep 29, 2014 5:29 pm
 
Forum: Personal Consumer Issues
Topic: How can I stop feeling depressed about my finances?
Replies: 93
Views: 6006

Re: Home Affordability [check my calculations]

Cool, was reading the entire thread with interest, made no note of the date, and then saw the follow up. Like a nice little short story with an ending and everything. This might not have been my choice, in fact when in a similar position and older, we continued to rent in NYC, and then later bought ...
by swaption
Sun Sep 28, 2014 6:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Home Affordability [check my calculations]
Replies: 85
Views: 5585

Re: Stubbornly Non-Boglehead Husband. What To Do?

Hi bluejello, You sound like you are all good, but for some reason I do feel compelled to offer my last 2 cents. No need to reply further, but I do hope you are still reading this. Ultimately I think about this 50/50 solution and while it may ultimately work out financially, it bothers me. To put it...
by swaption
Fri Sep 26, 2014 9:22 am
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7519

Re: Stubbornly Non-Boglehead Husband. What To Do?

A very thought provoking post. Being a finance guy myself (and for quite some time working amongst other finance guys), I think I pretty much understand the situation. I think the fundamental problem here is that the two of you have completely different objectives. Your objectives are those that ar...
by swaption
Wed Sep 24, 2014 2:05 pm
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7519

Re: Stubbornly Non-Boglehead Husband. What To Do?

A very thought provoking post. Being a finance guy myself (and for quite some time working amongst other finance guys), I think I pretty much understand the situation. I think the fundamental problem here is that the two of you have completely different objectives. Your objectives are those that are...
by swaption
Wed Sep 24, 2014 10:24 am
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7519

Re: Are SPIA's fairly priced? - A quick and dirty analysis

The OP's analysis fails in the most fundamental aspect: he has converted a problem with a crucial unknown, actual individual lifespan, into a problem that ignores this aspect completely, a fixed period annuity or mortgage. If we actually knew how long we will live, then financial planning would be ...
by swaption
Sat Sep 20, 2014 6:55 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3564

Re: When did you feel "Out of the Woods"?

I would say come to terms with the uncertainties inherent in life, because my bet is it ain't going to change for you any time soon. Being out fo the woods might not be so great anyway, so you might as well learn to enjoy the woods. Put differently, with no house and no kids yet, the way I see it yo...
by swaption
Fri Sep 19, 2014 4:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: When did you feel "Out of the Woods"?
Replies: 42
Views: 5326

Re: Are SPIA's fairly priced? - A quick and dirty analysis

I tend to agree with Prof Emeritus' sources that annuitizing is a beneficial concept but nonetheless, I would really like to know what the Insurance Company's cut on a typical SPIA is. Stated more simply: If an actuarily perfect SPIA for a certain set of conditions yields $1000 a month for life, wh...
by swaption
Fri Sep 19, 2014 4:04 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3564

Re: Are SPIA's fairly priced? - A quick and dirty analysis

My guess is that there are a whole bunch of things standing between this and the appropiate apples to apples analysis, but a couple of things come to mind off the top. I think it may be best to look at the cash flows as akin to a mortgage that amortizes over 20.4 years based on equal periodic paymen...
by swaption
Fri Sep 19, 2014 1:56 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3564

Re: What evidence would prove the Boglehead mentality wrong?

Let me ask the question differently, what evidence would convince you that someone could systematically beat the house and make money betting on horse racing or college football? The mechanism by which betting odds and lines are established is not all that different than the mechanism that sets the ...
by swaption
Wed Sep 17, 2014 9:47 am
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 109
Views: 7628

Re: Why do so many think their home is a foolproof investmen

But alas those decisions are co-mingled all the time in real life housing decisions. I agree, they are distinct in principal if not in practice. Fine, so the next time there is a thread comparing index funds to active funds, let's make sure we use a disproportionate mix of large growth funds in tha...
by swaption
Tue Sep 16, 2014 5:35 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6452

Re: Why do so many think their home is a foolproof investmen

What really blows my mind is the inanity of the repeated posts on this topic. Forget about whether a house can be considered an investment. Any further thoughts I could possibly provide here would be the equivalent of shooting a toy water pistol at a forest fire. I think the far more interesting qu...
by swaption
Tue Sep 16, 2014 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6452

Re: Why do so many think their home is a foolproof investmen

What really blows my mind is the inanity of the repeated posts on this topic. Forget about whether a house can be considered an investment. Any further thoughts I could possibly provide here would be the equivalent of shooting a toy water pistol at a forest fire. I think the far more interesting qu...
by swaption
Tue Sep 16, 2014 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6452

Re: Why do so many think their home is a foolproof investmen

What really blows my mind is the inanity of the repeated posts on this topic. Forget about whether a house can be considered an investment. Any further thoughts I could possibly provide here would be the equivalent of shooting a toy water pistol at a forest fire. I think the far more interesting que...
by swaption
Tue Sep 16, 2014 3:08 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6452

Re: Angry when stock market is down

Does anyone else get angry/edgy/cranky on days where the stock market is down? In the last couple of days, I find little things "set me off". But maybe it could also be other factors in my life. For instance, it's annoying to see REITs down 1.8% today. I won't sell, but I'm just annoyed. ...
by swaption
Fri Sep 12, 2014 6:06 pm
 
Forum: Investing - Theory, News & General
Topic: Angry when stock market is down
Replies: 79
Views: 4164

Re: Angry when stock market is down

I work in a very volatile environment. Every day, I show up and ask the crowd what they think of me. On some days, they tell me I'm a loser and my decisions will inevitably lead to failure and the collective lack of respect from the world at large. On other days, they proclaim me a wise man that wil...
by swaption
Fri Sep 12, 2014 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: Angry when stock market is down
Replies: 79
Views: 4164

Re: Rental rate of return

I tell you, there is a Boglehead joke in here somewhere. Something like "How would a Boglehead value a company? He would give you a long speech about how it is waste of time and then recommend you read a book." In this case the annual cash flows are -$18,600, -$17,800, -$16,000, -$15,200,...
by swaption
Fri Sep 12, 2014 11:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Rental rate of return
Replies: 17
Views: 1461

Re: Neighborhood kid around 13 throwing rocks at my house

Criminal defense lawyer here: Please don't call the police. A charge, even a misdemeanor one like trespassing or criminal mischief, can have lifetime consequences for a kid who is probably just bored. Approach him directly and firmly and say, "Hey kid, I know you're throwing rocks at my house....
by swaption
Fri Sep 12, 2014 10:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Neighborhood kid around 13 throwing rocks at my house
Replies: 55
Views: 3131

Re: Rental rate of return

I tell you, there is a Boglehead joke in here somewhere. Something like "How would a Boglehead value a company? He would give you a long speech about how it is waste of time and then recommend you read a book." In this case the annual cash flows are -$18,600, -$17,800, -$16,000, -$15,200,...
by swaption
Fri Sep 12, 2014 10:26 am
 
Forum: Personal Finance (Not Investing)
Topic: Rental rate of return
Replies: 17
Views: 1461

Re: Rental rate of return

I tell you, there is a Boglehead joke in here somewhere. Something like "How would a Boglehead value a company? He would give you a long speech about how it is waste of time and then recommend you read a book." In this case the annual cash flows are -$18,600, -$17,800, -$16,000, -$15,200, ...
by swaption
Fri Sep 12, 2014 9:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Rental rate of return
Replies: 17
Views: 1461

Re: Rental rate of return

Easiest way is to assume you sell the property at the end of year 6. You can assume $100k or whatever. Then you just do a simple IRR using the actual cash flow.
by swaption
Thu Sep 11, 2014 8:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rental rate of return
Replies: 17
Views: 1461

Re: The Inner Game of Tennis and Investing

Lifetime tennis player here, even now in my 50’s enjoying the game and pushing myself. Currently reading W. Timothy Gallwey’s (now updated) classic The Inner Game of Tennis. Essentially, the book centers around a Self 1 and a Self 2 approach. At the risk of paraphrasing, the Self 1 tends to try and...
by swaption
Wed Sep 10, 2014 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: The Inner Game of Tennis and Investing
Replies: 7
Views: 656

The Inner Game of Tennis and Investing

Lifetime tennis player here, even now in my 50’s enjoying the game and pushing myself. Currently reading W. Timothy Gallwey’s (now updated) classic The Inner Game of Tennis. Essentially, the book centers around a Self 1 and a Self 2 approach. At the risk of paraphrasing, the Self 1 tends to try and ...
by swaption
Wed Sep 10, 2014 12:35 pm
 
Forum: Investing - Theory, News & General
Topic: The Inner Game of Tennis and Investing
Replies: 7
Views: 656

Re: relo property and "illegal" partially finished basement

Not surprised to see the requisite indignation on something like this "illegal" basement. But let me share my view from here in NY. Was the basement included in the square footage of the listed house? My guess would be no. Standard operating procedure in my neck of the woods is that finis...
by swaption
Fri Sep 05, 2014 10:22 am
 
Forum: Personal Finance (Not Investing)
Topic: relo property and "illegal" partially finished basement
Replies: 23
Views: 1290

Re: relo property and "illegal" partially finished basement

Not surprised to see the requisite indignation on something like this "illegal" basement. But let me share my view from here in NY. Was the basement included in the square footage of the listed house? My guess would be no. Standard operating procedure in my neck of the woods is that finish...
by swaption
Fri Sep 05, 2014 9:35 am
 
Forum: Personal Finance (Not Investing)
Topic: relo property and "illegal" partially finished basement
Replies: 23
Views: 1290

Re: Holding Cash because Tried to time Market

What I meant was that I can't take the risk of not investment in the market. I know many wealthy individuals who can live on their assets indefinitely (or will eventually inherit money that savings are not an issue). While everyone wants more money, these individuals see the market as more of a gam...
by swaption
Thu Sep 04, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 6386

Re: Fantasy football debt owed

I am the commissioner in my league and I think this is the 14th season. All good friends going back more than 30 years. I now do beginning of year collection. In the past, when I collected at the end, I would not disburse funds until all checks were in. Having said that, in this case I would suggest...
by swaption
Tue Sep 02, 2014 3:00 pm
 
Forum: Personal Consumer Issues
Topic: Fantasy football debt owed
Replies: 27
Views: 1974

Re: Trip to the Caribbean - Suggestions

I'll chime in with a couple good points about my home Island of Aruba - it's very easy to get around, and it is VERY safe, especially compared to the rest of the Caribbean Natalee Holloway. +1. I am kind of shocked that the normally level-headed and evidence-based members of this forum are worried ...
by swaption
Sun Aug 31, 2014 8:36 am
 
Forum: Personal Consumer Issues
Topic: Trip to the Caribbean - Suggestions
Replies: 39
Views: 2607

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

To me it is like setting your alarm clock ahead to "trick" yourself into getting up early; just a behavioral gimmick that only works if somehow you pretend to forget you did it. :happy But honestly Rodc, I think your creative efforts are being put to waste here. At this point on this topi...
by swaption
Fri Aug 29, 2014 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16155

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

This statement is where I disagree with you. At the time of a disaster you just don't know. The knowledge you gain in 13 years after the disaster is not relevant at the point when you live the disaster. In the fall of 2001, Lower Manhattan was devastated physically, financially, and emotionally. Th...
by swaption
Tue Aug 26, 2014 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16155

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

This statement is where I disagree with you. At the time of a disaster you just don't know. The knowledge you gain in 13 years after the disaster is not relevant at the point when you live the disaster. In the fall of 2001, Lower Manhattan was devastated physically, financially, and emotionally. Th...
by swaption
Tue Aug 26, 2014 11:01 am
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16155

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

Can someone define what a "2nd tier expensive private college" is? Names for example? Well, this is an easy way to offend large numbers of alumni, but here are some examples often considered to fall in this group: + Northwestern + Middlebury + Rice + Johns Hopkins + Emory + Tufts Those sc...
by swaption
Mon Aug 25, 2014 9:02 am
 
Forum: Personal Finance (Not Investing)
Topic: How much do you plan to save in your 529 plan?
Replies: 60
Views: 6948

Re: New Investor!! Did I make a mistake?

OP - you may have accidently done a brillant move. If you have little to no other income, then consider exchanging the rest of the Star fund for some other Vanguard fund/etf as you will get the capital gains benefit at 0% (long term ones). So later in 10-50 years when you sell the same units/shares...
by swaption
Tue Aug 19, 2014 8:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: New Investor!! Did I make a mistake?
Replies: 39
Views: 1595

Re: B&H Photo - NY City Experience

Well worth a visit if you ever are in NY. One of these uniquely NY experiences. Truely an impressive operation.
by swaption
Tue Aug 19, 2014 4:49 pm
 
Forum: Personal Consumer Issues
Topic: B&H Photo - NY City Experience
Replies: 35
Views: 2380

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

Can someone define what a "2nd tier expensive private college" is? Names for example? Well, this is an easy way to offend large numbers of alumni, but here are some examples often considered to fall in this group: + Northwestern + Middlebury + Rice + Johns Hopkins + Emory + Tufts Interest...
by swaption
Tue Aug 19, 2014 6:26 am
 
Forum: Personal Finance (Not Investing)
Topic: How much do you plan to save in your 529 plan?
Replies: 60
Views: 6948

Re: Shiller on Lofty Market Elevations

I'll give him credit for rethinking all this. But not seeing much in terms of real thought. We have interest rates, and then he offers up the following, which appears to be nothing more than speculative nonsense: I’ve looked for untraditional answers. Perhaps today’s prices have something to do with...
by swaption
Mon Aug 18, 2014 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: Shiller on Lofty Market Elevations
Replies: 55
Views: 5129

Re: Girls gymnastics: what to expect

I have fond memories of that coach telling my wife that my daughter should try out for the pre-team. Our path changed dramatically from there. She made the pre-team and competed at what was then Level 4. Nothing can really prepare you for the tears when everone on the team got medals (most multiple)...
by swaption
Mon Aug 18, 2014 10:01 am
 
Forum: Personal Consumer Issues
Topic: Girls gymnastics: what to expect
Replies: 28
Views: 2418

Re: Is earnings yield real or nominal

Is E/P using trailing earnings a nominal value or a real rate? It's actually neither, but closer to real. The real yield would use the forward earnings. Intuitively this may seem like nominal because this is the entire yield, but there is a phantom component where the underlying assets should appre...
by swaption
Sun Aug 17, 2014 9:48 am
 
Forum: Investing - Theory, News & General
Topic: Is earnings yield real or nominal
Replies: 6
Views: 496

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

but one of my common surgeries adds up to about $30,000 going by my "cash" office fee schedule and insurance pays me between $3000-7000 depending on the insurance. And the patient usually has to pay maybe $1500 up front as their portion. I have no idea how my office comes up with that $15...
by swaption
Thu Aug 14, 2014 6:55 pm
 
Forum: Personal Consumer Issues
Topic: Are hospitals allowed to do this? [Costs quoted vs. actual]
Replies: 98
Views: 6759

Re: $65k bonus for student loans...considering not taking it

I think this is another fascinating situation. Often times, people are faced with a choice between what they can do versus what they should do. What I find fascinating is that for so many, the answer is quite easy, do whatever you can do as long as it is within the law. Be it this, or tax loss harve...
by swaption
Thu Aug 14, 2014 5:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: $65k bonus for student loans...considering not taking it
Replies: 30
Views: 3329

Re: Renting forever: financial suicide?

They do, but long-time landlords in California have their property taxes locked in at artificially low levels by Prop 13, compared to new owners. These landlords can afford to offer properties for rent for less than more recent landlords, and still be profitable. Yes, but why would they offer their...
by swaption
Thu Aug 14, 2014 10:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Renting forever: financial suicide?
Replies: 92
Views: 11072

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

The BIG difference is my payments stop once the mortgage is paid off, Brian Lund, ya knuckle head. Which is exactly why one should only consider the interest expense in calculating the monthly cost. In this case, the monthly interest expense comes out to $1,005, before taking into account any tax d...
by swaption
Sat Aug 09, 2014 12:06 pm
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16155

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

Not relevant to me. I bought a house because I want to own one and can afford it. To me, it's a durable consumer good. Durable consumer goods are also investments. They may be good or bad but an automobile that you buy instead of rent is a classic investment. A subsistence farmer invests in land an...
by swaption
Sat Aug 09, 2014 11:52 am
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16155

Re: Dilbert Creator: If everyone indexed...

I guess it comes down to the probability of liquidity events. You can get a dividend, you can sell the share or the whole company can be sold (liquidating the assets and earnings). If you eliminate trading, then you're down to just one option for non-dividend stocks (assuming they would never start...
by swaption
Thu Aug 07, 2014 8:26 pm
 
Forum: Investing - Theory, News & General
Topic: Dilbert Creator: If everyone indexed...
Replies: 28
Views: 3279

Re: Dilbert Creator: If everyone indexed...

In my view, buying a stock is buying a share of future earnings , plus a share of the fixed capital . Earnings need not be paid out as cash dividends in order to exist. I do agree that stocks have value without dividends, and that it is in the fixed asset value and in the earnings (even if not dist...
by swaption
Thu Aug 07, 2014 3:50 pm
 
Forum: Investing - Theory, News & General
Topic: Dilbert Creator: If everyone indexed...
Replies: 28
Views: 3279

Re: When is a 3.75% load worth it?

We have no guarantees in any of our investments, yet we still make them. Because in part of its past performance. The mantra around here of stay the course...guess what that course is based on? Past performance. What other course are you staying? The one that you think/hope it will repeat! Won't re...
by swaption
Thu Aug 07, 2014 9:57 am
 
Forum: Investing - Theory, News & General
Topic: When is a 3.75% load worth it?
Replies: 79
Views: 5399

Re: What to tell friends who think "it's all a scam"

Instead of trying to convince him, ask him to convince you that he knows enough to make that determination.
by swaption
Mon Aug 04, 2014 4:43 pm
 
Forum: Investing - Theory, News & General
Topic: What to tell friends who think "it's all a scam"
Replies: 64
Views: 5774

Re: CFA June 2014 results

I am a software engineer by profession and knew nothing of finance before starting to study for the exam. This exam seemed like a good challenge and I had been wanting to learn more about the field anyway. So I decided back in January to write it. In hindsight, this exam was extremely tough for me ...
by swaption
Thu Jul 31, 2014 2:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: CFA June 2014 results
Replies: 28
Views: 2961
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