Search found 128 matches

by jimbojones
Wed Dec 13, 2023 7:44 pm
Forum: Personal Finance (Not Investing)
Topic: Hospital Stay (Medicare-eligible, hasn’t signed up)
Replies: 3
Views: 780

Hospital Stay (Medicare-eligible, hasn’t signed up)

Hello Bogleheads,

Asking this question for a relative… I have no experience in this area and am looking for resources and/or guidance to understand what options he has.

He is Medicare eligible, aged 66 with ~20 years of US work experience.

He is a UK citizen visiting the US on vacation. On day 1 of the vacation he experienced a cardiac arrest and will be in the hospital for at least 4 days. I expect it will be a large hospital bill!

Because he lives in the UK, he hadn’t thought to sign up for Medicare Part A. And he didn’t purchase travel insurance. Does anyone have any advice and/or resources for how the billing will play out?
by jimbojones
Tue Jul 28, 2020 5:22 pm
Forum: Personal Finance (Not Investing)
Topic: Homebuyers: Did you use a broker to help secure a mortgage?
Replies: 20
Views: 2257

Re: Homebuyers: Did you use a broker to help secure a mortgage?

totallynotsure wrote: Tue Jul 28, 2020 3:01 pm the amount will be $500-$600K (likely jumbo) on a 30-year fixed with a 80/20 LTV.

local credit union quote is 3.125% with $12K in closing costs.

Alliant CU has it at 3.375% with $12K closing costs.

do these sound like decent rates? can we do better? again, total noob here so any advice appreciated.
Better.com and Ally.com will give you quotes without running your credit. Test conventional loan amount and jumbo loan amount. With excellent credit, I would think 3% (or lower) 30-year loans are still available.
by jimbojones
Tue Jul 28, 2020 1:32 pm
Forum: Personal Finance (Not Investing)
Topic: Homebuyers: Did you use a broker to help secure a mortgage?
Replies: 20
Views: 2257

Re: Homebuyers: Did you use a broker to help secure a mortgage?

totallynotsure wrote: Tue Jul 28, 2020 1:15 pm
jarjarM wrote: Tue Jul 28, 2020 12:42 pm Nope, depending on your mortgage amount, there's a couple of threads on the forum right now that could help you find the best rate. The refinance mega thread (conforming or super conforming) or the relationship mortgage thread (mostly for jumbo).

We recently refinanced and the best rate was actually from Schwab's relationship mortgage, 2.375% for 10/1 ARM on jumbo.
jumbo loan in the amount of $500-$600K.

which thread would be better suited?

thanks.
I found many more options and lower rates with a conventional loan (max $510,400 in my area). Many banks weren’t even offering jumbo loans.
by jimbojones
Tue Jun 02, 2020 8:49 pm
Forum: Personal Consumer Issues
Topic: Real estate/home sale commission fee question
Replies: 12
Views: 1228

Re: Real estate/home sale commission fee question

The buyer’s brother will save on income tax by not having income to declare. Whether the buyer makes the brother whole is another matter...

Your broker gets shorted the $576 - doesn’t really seem fair to them. Maybe there is a way to make your broker whole?
by jimbojones
Fri Apr 10, 2020 7:27 pm
Forum: Personal Investments
Topic: Mid-term (7 to 10 year) investment goal. Is BND a good choice?
Replies: 14
Views: 1609

Re: Mid-term (7 to 10 year) investment goal. Is BND a good choice?

Every year your target will get closer and closer, but BND will maintain its duration ~6. Personally I’d consider a 50/50 stock/bond split. 7-10 years is a long time. But if you want purchasing power protection without equity risk, can you buy TIPS maturing in 7-10 years?
by jimbojones
Mon Dec 31, 2018 4:41 pm
Forum: Personal Consumer Issues
Topic: Corvette vs Cayman/Boxster......anyone owned both?
Replies: 57
Views: 6687

Re: Corvette vs Cayman/Boxster......anyone owned both?

edge wrote: Sun Dec 30, 2018 4:03 pm I agree
mdavis wrote: Sat Dec 29, 2018 3:55 am Get a used GT4. One of the best Porsche ever made....and absolutely thrilling to own and drive. 6MT.
GT4 is an $80K car used. I think OP is looking for a lower price point.
by jimbojones
Sun Dec 09, 2018 5:45 pm
Forum: Personal Consumer Issues
Topic: Certified Used BMW, Audi or Mercedes
Replies: 101
Views: 15005

Re: Certified Used BMW, Audi or Mercedes

Again, skip the CPO, and just get a used one under warranty. Just make sure you get all the known issues addressed in the final year of warranty, and you can find those on the countless forums and blogs devoted to these cars. As for Lexus vs German, lexus is cheaper to maintain, but its just not the same in the performance front. So if you want it for status symbol or for just a luxury ride and you dont care about performance I would go Lexus, but if you care about performance... I have two luxury german vehicles in the garage that are 10 and 11 years old. I do preventative maintenance, and have a great indy mechanic. I think the repairs are largely overblown, unless of course, you try to avoid doing repairs and you don't keep up with thei...
by jimbojones
Sun Dec 09, 2018 2:01 pm
Forum: Personal Consumer Issues
Topic: Certified Used BMW, Audi or Mercedes
Replies: 101
Views: 15005

Re: Certified Used BMW, Audi or Mercedes

Again, skip the CPO, and just get a used one under warranty. Just make sure you get all the known issues addressed in the final year of warranty, and you can find those on the countless forums and blogs devoted to these cars. As for Lexus vs German, lexus is cheaper to maintain, but its just not the same in the performance front. So if you want it for status symbol or for just a luxury ride and you dont care about performance I would go Lexus, but if you care about performance... I have two luxury german vehicles in the garage that are 10 and 11 years old. I do preventative maintenance, and have a great indy mechanic. I think the repairs are largely overblown, unless of course, you try to avoid doing repairs and you don't keep up with thei...
by jimbojones
Mon Oct 29, 2018 11:00 am
Forum: Personal Finance (Not Investing)
Topic: Should I get rid of PMI or pay off my car loan?
Replies: 28
Views: 2013

Re: Should I get rid of PMI or pay off my car loan?

Depending on the home purchase price (appraisal value), the effective interest rate on the mortgage is ~8%. No brainer to get rid of the PMI. Jimbojones, Pardon my ignorance. Could you please explain how it is 8%. Not questioning your knowledge, just trying to learn. Thanks PMI = $92/month or $1104/year Balance generating PMI: Current mortgage less 78% purchase price. 188000 - (205000 * 78%) = $28,100 PMI effective rate = PMI / Balance. 1104 / 28100 = 3.929% Base interest rate 4.125% (under current tax law, I’m assuming this wouldn’t be an itemized deduction) Total interest = 3.929 + 4.125 = 8.054% I’d pay off the $28,100 to save $1104/year PMI and reduced mortgage interest (check with your mortgage company for the actual procedure).
by jimbojones
Mon Oct 29, 2018 9:14 am
Forum: Personal Finance (Not Investing)
Topic: Should I get rid of PMI or pay off my car loan?
Replies: 28
Views: 2013

Re: Should I get rid of PMI or pay off my car loan?

Depending on the home purchase price (appraisal value), the effective interest rate on the mortgage is ~8%. No brainer to get rid of the PMI.
by jimbojones
Sat Aug 04, 2018 6:33 pm
Forum: Personal Consumer Issues
Topic: Random person gets mail to my house
Replies: 5
Views: 1352

Random person gets mail to my house

I get the occasional random junk mail addressed to someone else. It’s not a prior resident of my home. Then, after I moved, his mail forwarded too. I’ve checked my credit report, but nothing unusual is there. Hopefully nothing malicious is happening. But who should I contact to get this fixed?
by jimbojones
Thu Mar 01, 2018 7:50 pm
Forum: Personal Consumer Issues
Topic: Lease turn in vehicles a good buy?
Replies: 14
Views: 2184

Re: Lease turn in vehicles a good buy?

dsmclone wrote: Thu Mar 01, 2018 2:05 pm Just picked up a 2015 BMW 235ix with around 20k miles. Original sticker was $52k and I picked it up CPO for $34k. My previous car was a 2011 Infiniti M56x which had an original sticker north of $70k. I picked it up 3 years later for $35k and it had 18k miles. Luxury sedans are the best cars to buy 2 or 3 years old since they all lose so much in value.

The way I look at it is why should I buy a new Accord(Which I love) for $35k when I can buy a 3 year old luxury car that has a 420hp V8, rides like a dream, reliable, all the technology, rare, etc. For someone that keeps a car forever, the Accord makes sense. For someone that loves cars and trades every few years, I always go the used route and it hasn't bit me yet.
The 235 has a 420hp v8?
by jimbojones
Fri Feb 23, 2018 8:48 pm
Forum: Personal Investments
Topic: Investment Priority: Back Door Roth vs Taxable.
Replies: 7
Views: 1207

Re: Investment Priority: Back Door Roth vs Taxable.

anoop wrote: Fri Feb 23, 2018 7:14 pm The money is not locked up. AFAIK, the contribution can be withdrawn at any time with no penalty.
https://www.schwab.com/public/schwab/in ... awal_rules
I thought a conversion to Roth had to wait 5 years before withdrawal.
by jimbojones
Fri Feb 09, 2018 12:40 pm
Forum: Personal Consumer Issues
Topic: Buying a rental house. Pay cash or mortgage?
Replies: 21
Views: 2912

Re: Buying a rental house. Pay cash or mortgage?

chevca wrote: Fri Feb 09, 2018 12:18 pm I thought you meant gifting the house to the parents.

I think gifting money to live in a house rather than call it rent would be bordering on illegal. Best not to even bring that up on the board.
I’m not suggesting breaking any laws. There are many ways to structure things for tax purposes. The dollar amounts are below gift tax reporting thresholds, so saving 37% is worth exploring.

The country is full of different rent/gift arrangements between friends and family.
by jimbojones
Fri Feb 09, 2018 12:14 pm
Forum: Personal Consumer Issues
Topic: Buying a rental house. Pay cash or mortgage?
Replies: 21
Views: 2912

Re: Buying a rental house. Pay cash or mortgage?

chevca wrote: Fri Feb 09, 2018 11:52 am So, treating it as a gift and getting no rent is better than paying taxes??
Getting a gift of $1100 per month from your parents is a lot better than getting rent of $1100 per month from your parents. I’m asking whether that’s true in terms of income tax.
by jimbojones
Fri Feb 09, 2018 11:48 am
Forum: Personal Consumer Issues
Topic: Buying a rental house. Pay cash or mortgage?
Replies: 21
Views: 2912

Re: Buying a rental house. Pay cash or mortgage?

Is there any flexibility for this to be treated as a gift? Seems a little unfair to pay 37% of that “rent” money to the IRS.
by jimbojones
Sat Dec 30, 2017 7:35 pm
Forum: Investing - Theory, News & General
Topic: Individual Stocks That Went Bust
Replies: 110
Views: 12415

Re: Individual Stocks That Went Bust

fposte wrote: Sat Dec 30, 2017 4:20 pm For sheer as-it-happens drama, GTAT. Here is the thread on The Contrarian Investor starting with the trading halt.
This is a scarier read than any horror story.
by jimbojones
Fri Dec 29, 2017 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: Another should i buy my dream porsche thread...
Replies: 240
Views: 20888

Re: Another should i buy my dream porsche thread...

EnjoyIt wrote: Fri Dec 29, 2017 5:25 pm

The 3 biggest financial mistakes people make
1) Too much house
2) Too much car
3) Divorce
Haha- minor quibble about #3: marrying the wrong person might be a better description. If you do, divorce may be the lesser of two evils. :sharebeer
by jimbojones
Fri Dec 29, 2017 10:39 am
Forum: Personal Investments
Topic: Suddenly my mortgage doesn't seem that great
Replies: 66
Views: 12891

Re: Suddenly my mortgage doesn't seem that great

Rich Cape Cod wrote: Fri Dec 29, 2017 9:45 am After reading through these posts I'm pleased to see that our tax code has been greatly simplified with these new changes.

Rich
:oops: they had their chance...
by jimbojones
Fri Dec 29, 2017 8:39 am
Forum: Personal Investments
Topic: Suddenly my mortgage doesn't seem that great
Replies: 66
Views: 12891

Re: Suddenly my mortgage doesn't seem that great

Those of us likely to deduct mortgage interest in 2017 but not 2018 would benefit from making a mortgage payment today. My normal due date is the 1st of the month, but by paying today I will be able to deduct the interest as paid in 2017. That’s a benefit of a few hundred dollars for me. :moneybag
by jimbojones
Tue Sep 05, 2017 12:03 pm
Forum: Personal Investments
Topic: Roth IRA or Backdoor Roth?
Replies: 22
Views: 2871

Re: Roth IRA or Backdoor Roth?

Thanks everyone for your input. Funding Roth IRA via tIRA seems to be the best move for me. Account setup and funding was simple.
by jimbojones
Sun Sep 03, 2017 10:07 pm
Forum: Personal Investments
Topic: Roth IRA or Backdoor Roth?
Replies: 22
Views: 2871

Re: Roth IRA or Backdoor Roth?

TomatoTomahto wrote: Sun Sep 03, 2017 9:02 pm Is there a downside to doing ved's #2? That's what I was going to suggest to my son, who has a Roth but no pre-tax IRAs (of any flavor).

It seems to be a no-harm-no-foul situation that works whether you're over income limits or not. You get an extra year or so in the market, as opposed to waiting until the following year when you know your earned income precisely.
The biggest downside to me seems to be the pain of setting up new traditional IRA accounts and doing the extra funds transfer. But others have said it's not that difficult. FWIW, I'll be using Vanguard.
by jimbojones
Sun Sep 03, 2017 8:35 pm
Forum: Personal Investments
Topic: Roth IRA or Backdoor Roth?
Replies: 22
Views: 2871

Re: Roth IRA or Backdoor Roth?

JW-Retired wrote: Sun Sep 03, 2017 7:41 pm
jimbojones wrote: Sun Sep 03, 2017 7:00 pm Thanks - correct- no existing Traditional IRAs.
Including no rollover IRAs? (which are traditional IRAs.......... but you might need to read the 8606 form instructions fairly carefully to find that in print.)
JW
Correct, no rollover IRAs either.
by jimbojones
Sun Sep 03, 2017 7:00 pm
Forum: Personal Investments
Topic: Roth IRA or Backdoor Roth?
Replies: 22
Views: 2871

Re: Roth IRA or Backdoor Roth?

ved wrote: Sun Sep 03, 2017 6:54 pm First of all, do you have any traditional IRAs (including SEP, Simple IRAs) currently with $ in them? If so, doing a back-door Roth will trigger the pro-rata rule, and may make the backdoor Roth conversion impractical.

Assuming you dn't have any traditional IRAs, there are 2 ways:

1. Wait until April 2018 to contribute to 2017 Roth IRA directly or through backdoor (depending on your 2017 income)
2. Contribute to a non-deductible traditional IRA now, and backdoor that to Roth. The process is not onerous.
Thanks - correct- no existing Traditional IRAs.
by jimbojones
Sun Sep 03, 2017 6:09 pm
Forum: Personal Investments
Topic: Roth IRA or Backdoor Roth?
Replies: 22
Views: 2871

Roth IRA or Backdoor Roth?

My income will be near the Roth IRA income limits by year end, depending on year end bonus. I'm looking to fund our Roth IRAs now. How should I fund the Roth IRAs without knowing whether my adjusted AGI will exceed the limit? Standard contribution that may be invalid or Backdoor IRA contribution that may be unnecessary? Or some other method?

Appreciate any insights!
by jimbojones
Sat Aug 06, 2016 10:50 am
Forum: Investing - Theory, News & General
Topic: Margin investing - how risky is it really?
Replies: 33
Views: 5483

Re: Margin investing - how risky is it really?

I'm curious: where could you actually get margin at 1%? TD Ameritrade's margin rate is 6.5% for $1M+.

https://www.tdameritrade.com/pricing/ma ... rates.page
by jimbojones
Tue Apr 19, 2016 2:47 pm
Forum: Non-US Investing
Topic: Resident Alien Expatriates (Unofficially)
Replies: 10
Views: 2123

Re: Resident Alien Expatriates (Unofficially)

Thanks for the responses. Turns out he hasn't filed form I-407 to formally abandon the green card. In fact no forms have been filed. So... does he count as an expat then? Just needs to catch up on past tax returns and then consider whether to officially "leave" the US? If he wants to do things cleanly, he should file back tax returns and FBARs. Then he should submit I-407 to end the obligation to file any more tax returns and FBARs. He will also need to file 8854, and pay any exit tax, if due. Holding on to the green card likely does not provide him any advantage at this point. If he has been out of the US for the past 7 years, then it is probably not valid for re-entry to the US any more. One question with regard to accessing so...
by jimbojones
Sat Apr 16, 2016 3:25 pm
Forum: Non-US Investing
Topic: Resident Alien Expatriates (Unofficially)
Replies: 10
Views: 2123

Re: Resident Alien Expatriates (Unofficially)

Thanks for the responses. Turns out he hasn't filed form I-407 to formally abandon the green card. In fact no forms have been filed.

So... does he count as an expat then? Just needs to catch up on past tax returns and then consider whether to officially "leave" the US?
by jimbojones
Sun Apr 10, 2016 2:38 pm
Forum: Non-US Investing
Topic: Resident Alien Expatriates (Unofficially)
Replies: 10
Views: 2123

Resident Alien Expatriates (Unofficially)

Hello - looking for some advice for a friend. He was a resident alien (green card holder) from 1988-2009. In 2009, he returned to his home country and relinquished his green card. However, it does not appear he took any action with regard to the IRS. Now, as he approaches retirement, he's thinking about his US IRA, company pension, and social security. I think before he can access the retirement accounts, he needs to straighten out his tax situation. It seems to me that since he hasn't filed any forms, he has still been subject to US income tax since 2009. I've tried reading through IRS Publication 519 (U.S. Tax Guide for Aliens), but I'm having a difficult time trying to figure out all the forms he'd need. Here's what I'm seeing so far, bu...
by jimbojones
Sun Feb 14, 2016 9:32 am
Forum: Personal Consumer Issues
Topic: Rugby fans?
Replies: 5
Views: 692

Re: Rugby fans?

beIN Sports is a premium channel that shows a lot of rugby. Currently Europe's biggest tournament is playing: the Six Nations.
by jimbojones
Mon Jul 21, 2014 9:15 pm
Forum: Personal Consumer Issues
Topic: If you own a car, do you have a car payment?
Replies: 112
Views: 12311

Re: If you own a car, do you have a car payment?

I bet there are people out there that happily brag about no car payments while carrying a 4%+ mortgage. Makes no sense to me when cheaper money is available by securing a loan with a vehicle. I plan on getting a Pen Fed used car refinance as soon as the current 0% loan is paid off.
by jimbojones
Wed Apr 09, 2014 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: To MBA or not MBA?
Replies: 57
Views: 9018

Re: To MBA or not MBA?


• wayyyyyy too expensive esp for online degree and no name brand. you either need to go cheap, or pay more for real name brand (USC, Dartmouth, NYU, etc). I paid $35-40k cash for my state school MBA
tommy_gunn wrote:
Unsure about the value of their online program, but brick&mortar IU is consistently ranked ahead of USC in the MBA rankings. It carries a lot of weight in the Midwest.
by jimbojones
Sat Mar 29, 2014 5:35 pm
Forum: Personal Finance (Not Investing)
Topic: Pay credit cards or student loans
Replies: 11
Views: 1154

Re: Pay credit cards or student loans

It's true: paying interest on student loans often leads to paying less income tax via the Student Loan Interest Deduction. But ask yourself this: does it make sense to pay $1,000 in interest to save $250 in income taxes? Of course it doesn't. If these are the only two options, pay off the student loan.
by jimbojones
Thu Mar 13, 2014 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Net Worth Calculation
Replies: 37
Views: 6514

Re: Net Worth Calculation

Assets - Liabilities = Net Worth

Houses and cars are assets, regardless of what you intend to do with them or how much debt you have secured by them.

Mortgages and all other loans are liabilities, regardless of what assets they are secured by.

All of your other property types (jewelry, furniture, etc) are also assets. It's up to you to determine whether it's worth it to tabulate everything.

Some assets accrue deferred taxes due to unrecognized gains. Estimate these and list them as liabilities.
by jimbojones
Sat Mar 08, 2014 7:50 pm
Forum: Personal Consumer Issues
Topic: Please help with my SUV purchase
Replies: 40
Views: 4818

Re: Please help with my SUV purchase

Thought I'd provide an update: ended up buying a new 2013 CX-9 Grand Touring. Got a nice deep discount as it was the last 2013 left on the lot. Zoom-zoom.

Thank you everyone for your thoughts and ideas!
by jimbojones
Mon Mar 03, 2014 7:21 am
Forum: Personal Consumer Issues
Topic: Please help with my SUV purchase
Replies: 40
Views: 4818

Re: Please help with my SUV purchase

I'd be happy with a new MDX, but they're a little too expensive for us. Looking for under $50K (total over 5 years) on Edmunds Cost to Own. But I'm having a tough time translating the Edmunds Cost to Own from its default assumption of 15K miles per year to the 5-7K miles per year that I expect. The factors:

Depreciation (favors used)
Taxes & Fees (favors used)
Financing (favors used)
Fuel (depends)
Insurance (favors used)
Maintenance (favors new)
Repairs (favors new)

I don't mind paying for quality, but if a used model has all the necessary features and doesn't require a lot of repair (BIG, unknown assumption), then I'd lean that way. Admittedly I'm hesitant to trust the condition of used vehicles.
by jimbojones
Sun Mar 02, 2014 9:38 pm
Forum: Personal Consumer Issues
Topic: Please help with my SUV purchase
Replies: 40
Views: 4818

Re: Please help with my SUV purchase

Thanks all for your responses! These are the types of things I want to hear about. Do all these have the 3rd row? My spouse insisted on a 3rd row and had a Camry wagon, then a Ford Freestyle. All, but the RX have the 3rd row. I was pleasantly surprised at some of the local low-mileage older RX vehicles in the area, so it made it on to the draft list. Wife certainly doesn't mind a Lexus as an option. I think the GMC Acadia and it's Chevy and Buick cousins are pretty nice. Not sure how many of the new models are on the used car market yet. Yes, I do like the Acadia, etc. The new 2014 models are a little pricier than the other options, I think, but it's definitely worth considering. I don't know that you can go wrong with any of the vehicles y...
by jimbojones
Sun Mar 02, 2014 8:02 pm
Forum: Personal Consumer Issues
Topic: Please help with my SUV purchase
Replies: 40
Views: 4818

Please help with my SUV purchase

Let's not spend too much time debating the merits of an SUV: happy wife = happy life. Goal: acquire a people and stuff transporter for a reasonable price (total cost of ownership). I've looked at Edmunds True Cost of Ownership calculator and the used options didn't beat the new options as much as I expected them to. So I'm still undecided between new and used. Requirement: safety of occupants Wants: Leather; 3rd-row seats; navigation; good cargo space (somewhat flexible on all, except cargo space) General use: shuttling infants, toddlers, children, and occasional out-of-town guests. I'd guess 5-7K miles per year total driving, in a warm climate. I'm considering news and used vehicles, but would like to restrict the ideas to vehicles with le...
by jimbojones
Fri Feb 21, 2014 9:20 pm
Forum: Investing - Theory, News & General
Topic: Economist covers Bogle's Arithmetic
Replies: 13
Views: 2417

Re: Economist covers Bogle's Arithmetic

I. Not much different than other decisions we make. Some bogleheads prefer to pay someone else to change the oil in our car's yet is easy enough for almost anyone to do. The DIY mechanic is stunned at all the money wasted by these bogleheads. People are paying a premium (in terms of lower net returns) to let someone else do the research and implementation of asset allocation. For many of us here it is easy to manage their own money. For others, it is not. I am not an advocate of active management and prefer people do their own research on investments. The reality is that a lot of people are not willing to do the research themselves and thus pay someone else to do so. The article claims "If you are good at choosing a good fund, and you...
by jimbojones
Sat Feb 15, 2014 11:08 am
Forum: Investing - Theory, News & General
Topic: Pay down debt by selling taxable vs keeping investment
Replies: 16
Views: 1911

Re: Pay down debt by selling taxable vs keeping investment

I think you'll find that 6% / (1 - 15%) will give you the correct answer.
by jimbojones
Thu Feb 06, 2014 7:09 am
Forum: Personal Finance (Not Investing)
Topic: Student Loan Payoff or Roth IRA
Replies: 7
Views: 970

Re: Student Loan Payoff or Roth IRA

Obviously this is a simplified example, but walk with me through this. Under Pay As You Earn, your minimum payment is based off your prior year's AGI. So for 2014, it's $0. For 2015, it uses your 2014 income which you estimated at $24,000. I used the PAYE calculator on studentloan.gov to get the minimum payment for each year. Year PYIncome MinPayment 2014 $0 $0 2015 $24000 $56/mth 2016 $48000 $256/mth 2017 $48000 $256/mth 2018 $150000 $1106/mth 2019 same 2020 same 2021 same 2022 same 2023 same Total payments: $86,448 And everything else is forgiven! You won't pay down a dollar of principal in this scenario. Don't pay a dollar more to your loans than you have to. There are other factors that will impact this total (loan interest rate, state ...
by jimbojones
Wed Feb 05, 2014 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Student Loan Payoff or Roth IRA
Replies: 7
Views: 970

Re: Student Loan Payoff or Roth IRA

Loan forgiveness after 10 years is a very attractive option! Can you give us an estimated salary chart from years 1-10? Or go to the studentloan.gov site and estimate your future minimum payment using their repayment estimator. Using minimum payments, I'd surprised if you paid back more than $100K. Anything else to the loan would be wasted money. Just don't forget to thank the taxpayers for your bailout!
by jimbojones
Tue Jan 28, 2014 8:47 am
Forum: Personal Investments
Topic: Investing vs. Paying High Interest Student Loans
Replies: 7
Views: 912

Re: Investing vs. Paying High Interest Student Loans

You can probably get a mortgage for 5% down. I don't see the point of paying down a 4.XX% mortgage when you have 6.5% student loans. Aggressively pay down the student loan if these are your only two options.

I'd also reduce your cash on hand down to $20K to pay down the debt. Liquidate your taxable investments too. Those loans will be gone before you know it.
by jimbojones
Tue Jan 21, 2014 7:22 pm
Forum: Investing - Theory, News & General
Topic: If you use credit cards...you are using leverage to invest.
Replies: 59
Views: 5543

Re: If you use credit cards...you are using leverage to inve

My point is that they belong to the same theory. There is an optimal amount of leverage that everyone should utilize and that is depending on your income, your savings rate, your assets, and how well you can stomach magnified gains/losses. IF you are responsible with credit cards...you should utilize credit card leverage. Right? Well, if you are responsible with investing on margin...you should utilize margin leverage. There is at least one factor in determining the "optimal" amount that you did not list: the interest rate, which is 0% for credit cards that are paid in time, but higher than 0% for "normal" leverage. If it is indeed optimal to use some leverage when 0% interest is available, that does not necessarily mea...
by jimbojones
Tue Jan 21, 2014 6:21 pm
Forum: Investing - Theory, News & General
Topic: If you use credit cards...you are using leverage to invest.
Replies: 59
Views: 5543

Re: If you use credit cards...you are using leverage to inve

You are REALLY stretching here, tech. Agreed but the logic still applies. Using a credit card is borrowing the money at 0% interest for 21 days to invest (in a checking account) So once we agree upon that, then we can agree that everyone is borrowing money (or leveraging) to invest. Then, we can agree that there is an optimal amount for each individual to borrow money (or leverage) to invest Using your logic - an investor has $100,000 mortgage - if you've read the forum, you'd agree that the borrower is "negative fixed income/bonds". Now, the same investor is long $100,000 in US Treasuries - the negative cancels out the positive, they are net zero in fixed income. There is no leverage. $100,000 mortgage is not a negative asset; i...
by jimbojones
Tue Jan 21, 2014 5:51 pm
Forum: Personal Finance (Not Investing)
Topic: Only debt left is upside-down mortgage: What next?
Replies: 24
Views: 3149

Re: Only debt left is upside-down mortgage: What next?

jimb: isn't it self-evident that earning 8% while borrowing at 4% will always look good, especially when projected out 30 years? How does it look if you only earn the same rate as the mortgage? And don't forget to pay your tax on your fanciful ending investment balance!

The two key factors determining which option is mathematically better are:

1. Investment return vs mortgage return
2. Current tax rate vs future tax rate

OP: I would pay down your loan to get into a situation where you could easily sell at any time. It's terrible to have to pass up great job opportunities because of your house. Then focus on retirement contributions since a mortgage loan is usually a cheap way to finance your investments.
by jimbojones
Tue Jan 21, 2014 3:42 pm
Forum: Personal Investments
Topic: Evaluate my finances. Young guy.
Replies: 96
Views: 16453

Re: Evaluate my finances. Young guy.

It's funny. I bet the responses would be much different if the OP said "I'm debt-free, except for my $79K mortgage at 3.XX%." What most people fail to realize is that all debt is leverage. I don't like lending between friends and family, but if both parties are happy and understand the risks/rewards, then it shouldn't be a problem. A 3% return for your relative isn't bad if they think the default risk is low. I don't think a mortgage is comparable to margin/credit card/personal loans in any sense. The 1% credit card loan changes to 10%+ when the initial promo period is over; the margin can become astronomically worse at any moment; the personal loan is only as good as the person who wrote it (who knows when they may need that mon...
by jimbojones
Tue Jan 21, 2014 3:28 pm
Forum: Personal Investments
Topic: Evaluate my finances. Young guy.
Replies: 96
Views: 16453

Re: Evaluate my finances. Young guy.

It's funny. I bet the responses would be much different if the OP said "I'm debt-free, except for my $79K mortgage at 3.XX%." What most people fail to realize is that all debt is leverage.

I don't like lending between friends and family, but if both parties are happy and understand the risks/rewards, then it shouldn't be a problem. A 3% return for your relative isn't bad if they think the default risk is low.
by jimbojones
Sat Jan 18, 2014 9:41 am
Forum: Personal Finance (Not Investing)
Topic: List or omit mortgage balance as liability in net worth?
Replies: 26
Views: 2368

Re: List or omit mortgage balance as liability in net worth?

Your mortgage is a loan, just like any other loan. It may be a secured loan, unlike CC debt or student loans, but it's still just an ordinary loan with standard P&I components. The mortgage is financing your whole life, not just your house. Every dollar you put into your 401K is borrowed, at your mortgage rate. By combining your mortgage with an estimate of the value of your house, you're obscuring the way you've chosen to finance your life. It won't change the net worth total at the bottom of the spreadsheet, but you should definitely list the loan separately.