Search found 326 matches

by Booper
Thu Mar 14, 2024 2:51 pm
Forum: Investing - Theory, News & General
Topic: 5M, probably enough to retire to a frugal lifestyle
Replies: 180
Views: 15189

Re: 5M, probably enough to retire to a frugal lifestyle

https://www.wsj.com/lifestyle/careers/career-post-achievement-work-life-balance-46fc0ce2?mod=hp_featst_pos4 "Hy, 44, says he’s sitting on about $5 million, probably enough to retire to a frugal lifestyle , but likely not enough to sustain his family forever in pricey, coastal California." What do BHers think about the above quote? I chuckled a little. I am under the assumption that 5M will sustain an American family at a more than modest lifestyle anywhere in the US, but maybe I'm wrong. We are shooting for 5M and hoping to call it quits, early 40s, but live in Portland, OR (a little less pricey but still HCOL/West coastal). You asked what people think of the quote. My thinking is that the person who said it has likely not studie...
by Booper
Tue Jan 23, 2024 6:14 pm
Forum: Personal Finance (Not Investing)
Topic: Psychological Aversion to Decumulation Phase
Replies: 73
Views: 7374

Re: Psychological Aversion to Decumulation Phase

It seems I could retire if I want to, according to the Fidelity Retirement Planning tool. I'm going to run my figures through another tool, but I'm sure I can retire if I want. And I actually would like to. There are many things I can think of that I'd like to do with my time. But after so many years of being frugal and saving, I start to panic when I think of taking money out of my accounts and drawing down the balances. It's the opposite of what I've trained myself to do. As an adult, in the few periods where I was unemployed, I noticed I felt very insecure about not having income. Did anyone else here experience a similar struggle and if so, how did you overcome it? I am far from traditional retirement age, but thanks to a windfall I co...
by Booper
Sun Jan 07, 2024 9:50 pm
Forum: Personal Finance (Not Investing)
Topic: Real Estate Windfall Amid Family Drama
Replies: 96
Views: 16961

Re: Real Estate Windfall Amid Family Drama

You should consult with a lawyer before signing anything. Presumably you need a specialist in the field, and I'm assuming that in this case that means a real estate attorney.

There seem to be a lot of replies like "It's a scam - run!" and "Oh, presumably you can sell it for *some* value". But the truth is that it really depends on a lot of factors, and you seem unqualified to make that assessment on your own. A lawyer can guide you through the process. And yes, you will have the pay the lawyer before receiving any benefit. And even after paying the lawyer, you might decide to not accept the property.
by Booper
Thu Jan 04, 2024 10:23 pm
Forum: Personal Finance (Not Investing)
Topic: Can you save too much in retirement accounts?
Replies: 53
Views: 9641

Re: Can you save too much in retirement accounts?

I do think you make a ton of good points. My parents didn't make that much money growing up for the area that we lived in, and I witnessed my parents struggle at various parts of their lives (in HS my father was out of a job for two years). My goal has always been to make sure that that doesn't happen to me, and I went on the path of researching personal finance which is what helped me find this board over a decade ago. I would say finding this forum was one of the most pivotal moments for me financially (except maybe the annual gifts my parents started giving me, which, yes, are annual windfalls). I followed the Bogleheads philosophy for a very long time which is why when I receive these annual windfalls, I never really though to spend it...
by Booper
Thu Jan 04, 2024 4:02 pm
Forum: Personal Finance (Not Investing)
Topic: Can you save too much in retirement accounts?
Replies: 53
Views: 9641

Re: Can you save too much in retirement accounts?

This: It is a significant amount for us with the rest of our bills given we make 240k annually. We basically live off the rest of it since our take home checks are much smaller due to the contributions. Have you considered that you do not need to save this much? Plus This: Kudos on your possible wealth/savings progression. However, curious on your career choices - having had such a great parental economic resources - what was the background on why you chose your career path(s) ? (btw - glad you did., curious still) Also - 20-30 years is such a long ways away — wouldn’t necessarily bank on straight line wealth progression. It’s a long story but the short story is that I didn’t grow up with wealth. My parents’ highest household income was may...
by Booper
Fri Dec 22, 2023 12:00 pm
Forum: Investing - Theory, News & General
Topic: How good a deal are muni bonds these days?
Replies: 10
Views: 2841

Re: How good a deal are muni bonds these days?

How do muni bond funds eg: the intermed and LT Vanguard funds compare to simply buying T bills? It appears as if the tax equivalent yield of muni bonds right now are ever so slightly higher than treasuries after taxes. In essence, a high tax bracket investor may earn a tiny bit more with munis than with treasuries. An argument could be made that munis are somewhat less safe than treasuries, but I think that the average bond in the large Vanguard funds are AAA. It also appears as if increasing duration on the muni bonds ie: purchasing the LT funds may yield greater tax equivalent yields than incresaing duration on the treasuries. Municipal bond ratings were mostly unchanged in past recessions but obviously this may be a concern going forwar...
by Booper
Fri Dec 22, 2023 10:55 am
Forum: Investing - Theory, News & General
Topic: Essentially target date funds become too conservative
Replies: 83
Views: 10586

Re: Essentially target date funds become too conservative

Yeah, he's the coauthor of a paper and he's doing the rounds of the financial-talk circuit. The paper is Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice and I think the first discussion in the forum was "In general, bonds add little or no value to the portfolio of ordinary long-term investors." The cult-of-equities crowd is always with us, particularly after years of a long bull market. (And the shortest bear market in history in 2020, giving the illusion that they are easy to get through). They were delighted when Kitces and Pfau published a paper suggesting that in certain backtests given certain figures of merit, it was better to have stock allocation rising rather than declining in retirement. Thes...
by Booper
Thu Dec 21, 2023 1:12 pm
Forum: Personal Investments
Topic: 10% Per Year "Safe" Strategy
Replies: 54
Views: 6037

Re: 10% Per Year "Safe" Strategy

lseactuary wrote: Thu Dec 21, 2023 1:09 pm What fund covers the lifestrategy growth?

Yup FIRE is more just for mental sanity -- I still plan to work. :)
This is the fund I was referencing: https://investor.vanguard.com/investmen ... file/vasgx.

Yeah, I hear you. For me FI made work a lot easier. The annoying stuff is less intense because I know I can just walk away (although the salary and benefits are still nice :). I suspect it has a similar effect for most people, and will for you too. Good luck.
by Booper
Thu Dec 21, 2023 1:05 pm
Forum: Personal Investments
Topic: 10% Per Year "Safe" Strategy
Replies: 54
Views: 6037

Re: 10% Per Year "Safe" Strategy

Just to clarify, I don't expect each year to pay 10%, it was more 'when I come back in 10 years ideally it is about 10% per year' i.e. one year may be -10%, another year maybe 25% and another may be 15% so if I came back after 3 years that would be 10% overall per year across the 3 years on average. Is it fair to also say that you are flexible about the end date as well? Like, if it's 8 or 12 years you'd also be OK? You might want to look at the "glide path" of the vanguard target date retirement funds: https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html The funds themselves are probably too conservative for an early retiree. And I still think the LifeStrategy Growth fund is likely your best bet (as it wi...
by Booper
Thu Dec 21, 2023 12:18 pm
Forum: Personal Investments
Topic: 10% Per Year "Safe" Strategy
Replies: 54
Views: 6037

Re: 10% Per Year "Safe" Strategy

Just to clarify, I don't expect each year to pay 10%, it was more 'when I come back in 10 years ideally it is about 10% per year' i.e. one year may be -10%, another year maybe 25% and another may be 15% so if I came back after 3 years that would be 10% overall per year across the 3 years on average. Is it fair to also say that you are flexible about the end date as well? Like, if it's 8 or 12 years you'd also be OK? You might want to look at the "glide path" of the vanguard target date retirement funds: https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html The funds themselves are probably too conservative for an early retiree. And I still think the LifeStrategy Growth fund is likely your best bet (as it wi...
by Booper
Thu Dec 21, 2023 11:14 am
Forum: Personal Investments
Topic: 10% Per Year "Safe" Strategy
Replies: 54
Views: 6037

Re: 10% Per Year "Safe" Strategy

I've read a bunch of articles on this forum and "The Bogle Heads Guide to Investing" but I'm a bit confused what strategy would be best for getting me compounded interest of about 10% (or more) per year in a relatively "safe" way? I don't plan on touching that money for ~10 years and am building that up to get to FIRE. Over the past few years I've either made good dividend amounts and reinvested them (but the overall fund didn't grow much) or very minor increases in overall value because of when I invested (usually chunks over time so there is dollar cost averaging). Given a lot of the funds are at a historical high now, I'm debating if I should even change my portfolio setup for now, or wait it out. Therefore just rese...
by Booper
Wed Dec 20, 2023 7:20 pm
Forum: Investing - Theory, News & General
Topic: Bonds in taxable accounts when retired?
Replies: 13
Views: 2058

Re: Bonds in taxable accounts when retired?

I understand that bonds should generally be kept in tax-deferred accounts. We have a large amount of BND in a taxable brokerage account that was inherited. We currently receive about $1,000/month in income from the investment. Does it make sense to keep it there and use the income it provides for expenses in retirement? We are mostly in the 22% Federal Tax bracket and 5% State. The income would supplement my pension and part-time income. It isn't needed to meet our mandatory expenses, but could be used for vacations and home improvements. Our IPS calls for an AA of 65/30/5. We are already too high on the stock percentage and will be rebalancing tax deferred accounts soon. Even with the step up in basis, we would have a large capital gain i...
by Booper
Wed Dec 20, 2023 8:21 am
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

About 6 months ago I took some advice here to view my portfolio as one giant pot. Previously I had different AAs for my retirement accounts and taxable accounts. I'm finding that I miss the simplicty of putting all my retirement contributions in a target retirement fund and keeping my taxable accounts at 60-40. I'm in my 40s, single and (I suppose) meet the definition of financially independent: Retirement accounts: 7x Taxable accounts: 19x Right now I do a lot of transactions in and out of my acccounts (e.g. max 401k, ira, inherited ira rmd, when I have extra money left over I also invest it as well). Needing to sum up the AA between all my accounts on a regular basis in order to determine which fund to buy seems like a lot of work for ju...
by Booper
Mon Dec 18, 2023 6:28 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

About 6 months ago I took some advice here to view my portfolio as one giant pot. Previously I had different AAs for my retirement accounts and taxable accounts. I'm finding that I miss the simplicty of putting all my retirement contributions in a target retirement fund and keeping my taxable accounts at 60-40. I'm in my 40s, single and (I suppose) meet the definition of financially independent: Retirement accounts: 7x Taxable accounts: 19x Right now I do a lot of transactions in and out of my acccounts (e.g. max 401k, ira, inherited ira rmd, when I have extra money left over I also invest it as well). Needing to sum up the AA between all my accounts on a regular basis in order to determine which fund to buy seems like a lot of work for ju...
by Booper
Mon Dec 18, 2023 5:15 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

intendi wrote: Mon Dec 18, 2023 9:40 am I'm with you OP...mirrored with a 60/40 split.

I also enjoy the simplicity of the 401k target date fund and I've come to rely on the automatic investing the 401k provides to avoid behavioral mistakes (investing yips set in after I lump summed and the market declined). Fidelity is now offering automatic investing into ETFs so that's a bit of a wrinkle.
Thanks so much for sharing this! Glad it's not just me :D
by Booper
Mon Dec 18, 2023 2:58 pm
Forum: Personal Investments
Topic: Unsettling Claim by Fidelity re Stock Fund Dividends
Replies: 35
Views: 4709

Re: Unsettling Claim by Fidelity re Stock Fund Dividends

Call_Me_Op wrote: Mon Dec 18, 2023 1:54 pm
MrBobcat wrote: Mon Dec 18, 2023 1:51 pm
Call_Me_Op wrote: Mon Dec 18, 2023 1:48 pm
MrBobcat wrote: Mon Dec 18, 2023 1:35 pm
Call_Me_Op wrote: Mon Dec 18, 2023 1:24 pm

Why?
Because the actual chance there are no qualified dividends on VTI, etc. is nil and one has spend time calling customer support to confirm this. Now if they reported the 1099-div listing no qualified dividends, that would be a different story.
I wanted to make sure there was not an error in my account. Also, it is my time to spend as I see fit. Your comment comes across as quite arrogant.
I apologize for that, and it is indeed your time to spend as you see fit. I just loath calling customer support and was projecting my bias on others. My bad.
Thanks for that, friend. I perhaps reacted based upon my own sensitivities.
I with the rest of the internet could be this cordial. :sharebeer
by Booper
Sun Dec 17, 2023 9:16 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

So I just implemented this. By the end of tomorrow I should be at or near 60/40 in almost all my accounts. With the 401k, as I was about to move to target 2045 I remembered advice I'd heard here in the past: You can ignore the target date number, and select the fund closest to the AA you want! I chose target date 2030, as it's at 63% stock, which is close to 60/40 as I could find. I was glad that I remembered this advice at the last minute ... choosing the 85% stock fund wouldn't have been the end of the world. But the consistency is nice. And as I'm considering being unemployed for a bit, I think reducing risk, and being at 60/40 over all, and in all accounts, will help me sleep a bit better. It turns out that there's just 1 fund I chose n...
by Booper
Sun Dec 17, 2023 7:36 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

After reading the last reply and thinking about it a bit more ... in my 401k there is no life strategy fund. So the target retirement fund feels fine. Instead of being 60/40 it seems like in my age group it is 40 + <your age - 40> as a percentage in stock, which is really fine. It represents 13% of my total portfolio, so if it has 15% more stocks than every other account then I don't think it will have a major impact on how my portfolio responds to market events. But in my various IRAs LifeStrategy 60/40 *is* an option. I suppose that this is what people mean when they talk about "mirroring" your AA between accounts. Should I consider doing that instead of using a target date retiremetn fund? It's probably too late to do that in ...
by Booper
Sun Dec 17, 2023 3:56 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

I realize that the "one pot" advice is common and popular here -- but it should really be the end result after analyzing the needs from the portfolio. In your case, there are needs that are pretty much diametrically opposite, and choosing a single overall AA up-front to meet those needs will obscure how the portfolio is actually used. You have a retirement investment horizon measured in decades that needs to be addressed. You have a different need for money in the short to intermediate term that needs to be addressed. Make sure you cover both needs by investing appropriately for those needs, and the end result "one pot" AA will be a result -- not a goal or driver. FWIW, I'm retired and have identified six different need...
by Booper
Sun Dec 17, 2023 3:21 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

retiredjg wrote: Sun Dec 17, 2023 3:18 pm Would you be interested in holding only stock funds in taxable and holding a target fund with extra bonds in the 401k?
Well, my 401k is only 13% of my net worth. So that would mean I'd be at 87% stocks. And the results of my latest AA quiz on Vanguard told me I should have only 60% stocks.
by Booper
Sun Dec 17, 2023 3:11 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

... I'm probably in the 32% bracket (but after standard deduction and 401k contribution and adding in investment income who knows ?) If you want to know your Federal and CA state tax brackets, see the links below. Compare your "taxable income" from your IRS Form 1040 and CA 540 to the numbers in the tables for your filing status (Single, Married filing jointly, etc.). Federal: https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets California: https://www.nerdwallet.com/article/taxes/california-state-tax?trk_location=ssrp&trk_query=california%20tax%20bracket&trk_page=1&trk_position=1 Adding the two percentages will provide your total marginal tax rate. This rate is often used in investing decisions. Regar...
by Booper
Sun Dec 17, 2023 3:00 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

After reading the last reply and thinking about it a bit more ... in my 401k there is no life strategy fund. So the target retirement fund feels fine. Instead of being 60/40 it seems like in my age group it is 40 + <your age - 40> as a percentage in stock, which is really fine. It represents 13% of my total portfolio, so if it has 15% more stocks than every other account then I don't think it will have a major impact on how my portfolio responds to market events. But in my various IRAs LifeStrategy 60/40 *is* an option. I suppose that this is what people mean when they talk about "mirroring" your AA between accounts. Should I consider doing that instead of using a target date retiremetn fund? It's probably too late to do that in m...
by Booper
Sun Dec 17, 2023 2:11 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

Re: "One pot" vs. Retirement / Taxable split

Im not a fan of Total Bond in taxable. I'd stick with either a muni fund or a treasury fund, that way you're getting either federal or state tax free money. Personally I stick with Treasurys in Taxable. While munis are slightly better for me, it only ends up being 10-20 basis points for my tax bracket...not worth it. This is especially true for muni money markets where their returns looks like a sine wave. There are times its better than a Treasury for me, times they are worse. I also do not look at my accounts as 'one big pot' as I'm planning on also drawing from taxable prior to 59 1/2. I keep my 'retirement' accounts 70/30, and my taxable 60/40. Yes, I realize I can sell bonds in my 401k and buy stocks in my taxable, or visa versa, to k...
by Booper
Sun Dec 17, 2023 1:00 pm
Forum: Personal Investments
Topic: "One pot" vs. Retirement / Taxable split
Replies: 23
Views: 4110

"One pot" vs. Retirement / Taxable split

About 6 months ago I took some advice here to view my portfolio as one giant pot. Previously I had different AAs for my retirement accounts and taxable accounts. I'm finding that I miss the simplicty of putting all my retirement contributions in a target retirement fund and keeping my taxable accounts at 60-40. I'm in my 40s, single and (I suppose) meet the definition of financially independent: Retirement accounts: 7x Taxable accounts: 19x Right now I do a lot of transactions in and out of my acccounts (e.g. max 401k, ira, inherited ira rmd, when I have extra money left over I also invest it as well). Needing to sum up the AA between all my accounts on a regular basis in order to determine which fund to buy seems like a lot of work for jus...
by Booper
Wed Dec 13, 2023 1:02 pm
Forum: Personal Finance (Not Investing)
Topic: Job/Finance after a major illness
Replies: 9
Views: 1752

Re: Job/Finance after a major illness

A close friend was diagnosed a type of cancer recently. He was clearly devastated by the bad news, and seriously considered quitting his job and focused on his treatment. In the past we chatted about personal investments/finance matters, so he sought me out for my reaction (from the perspective of personal finance) about whether it's a good thing to quit outright. But those questions are beyond my pay grade. My friend doesn't look very ill yet but it's clear he doesn't have the mental power to stay on his job. Both of us know a bit about those 'usual' stuff like getting cobra, POA, wills, etc. The question is that given he's decided to quit, is there anything he might get help from financially, like long-term disability benefit, SS disabil...
by Booper
Tue Nov 28, 2023 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: Coastfire opinion.
Replies: 38
Views: 6690

Re: Coastfire opinion.

I am approaching 50 and not happy at my current job. I want to switch jobs and go part time. I would like to reduce stress and have more time and energy to do other things. My goal would be to cover expenses and let the portfolio grow over the next 5-10 years. Not sure when I want to retire. Thinking that if I can find something tolerable part time I can keep working for years to come. Part time + wife’s income would cover expenses. Current portfolio 3.7 mil in mix of stocks, bonds, cash. I have a small gov pension for 20k at 62 and social security of about 33k per year at 67 based on earnings until this year. House paid off. Currently saving 150-200k per yr as couple. Plugging numbers into compound interest calculator for some scenarios: ...
by Booper
Mon Nov 27, 2023 12:23 pm
Forum: Investing - Theory, News & General
Topic: T-Bills or Munis?
Replies: 14
Views: 1289

Re: T-Bills or Munis?

I wonder if this is a case where a Treasury Floating Rate Note might be appropriate: https://www.treasurydirect.gov/marketable-securities/floating-rate-notes/ I have never purchased one myself, but it appears that you can sell them before they redeem. The rate is calculated as: How we calculate the floating interest rate The interest rate of an FRN is the sum of two components: an index rate and a spread. Index rate. This rate is tied to the highest accepted discount rate of the most recent 13-week Treasury bill. We auction the 13-week Treasury bill every week, so the index rate of an FRN is reset every week. Spread. The spread is a rate we apply to the index rate. The spread stays the same for the life of an FRN. The spread is determined a...
by Booper
Fri Nov 17, 2023 7:43 pm
Forum: Personal Finance (Not Investing)
Topic: How do you calculate your savings rate?
Replies: 25
Views: 2643

Re: How do you calculate your savings rate?

I’ve seen so many variants for instance: Gross savings rate: Amount saved + company match/(gross pay plus company match) Or Amount saved + company match/(gross pay) And net seemingly has more variations, I’ve seen take home pay, take home plus benefits, take home plus benefits and taxes. Also how do folks account for a pension? I consider it to be savings, but ignore the matching component. One reason I bought Quicken was to compute this exact number. But after inputting everything into Quicken I realized that the computation is really just too complex to try and answer. The big thing for me was adding in all my payroll deductions into Quicken. So much of my paycheck goes to payroll deductions (taxes, benefits and retirement). I mean, shou...
by Booper
Wed Nov 15, 2023 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Coast FI jobs
Replies: 66
Views: 9865

Re: Coast FI jobs

swayswift wrote: Wed Nov 15, 2023 2:21 pm Thanks this has became a nice long thread with so many good feedbacks. For software engineering in particular are there any places to look for these kind of jobs ? A search on linkedin is typically filled with big corporate craps. Any niche site that has these jobs ?
Your best bet is probably to search for a career counselor. I do not know any offhand. They can probably help you refine your search, have worked with others in your situation who have made similar changes, etc.

Another option is to start talking to your peers / coworkers about this, and ask them if they know any people who left for more satisfying, lower-paying work.
by Booper
Tue Nov 14, 2023 5:43 pm
Forum: Personal Finance (Not Investing)
Topic: Coast FI jobs
Replies: 66
Views: 9865

Re: Coast FI jobs

For folks out there who are doing Coast FIRE, what are you guys working on ? I have been working for money way long in my career and would love to do something that gives a sense of doing greater good. Of top of my head I can think of jobs like - FIRE Department, Police, Teachers etc. where there is a deeper sense of meaning to life, something that can be Ikigai. Since I have been a software engineer all my life and know nothing about rest of the world, would love to know some ideas that folks have been doing. It will be great to find something even if it pays 100K but is deeply lot more fulfilling than working for corporate (FANGs etc.) which seems to be rat race to make more money till you die. Unfortunately the replies here are not that...
by Booper
Tue Oct 17, 2023 5:07 pm
Forum: Personal Investments
Topic: To Emergency Fund or not...
Replies: 53
Views: 8288

Re: To Emergency Fund or not...

Hello team: I've been reading and watching quite a bit about investing (as a beginner), and one thing that comes up frequently is the idea of an 'emergency fund'. Some people suggest having an emergency fund set up in an HYSA (for example) and to keep it separate from your checking account and investments. Curious to get your take on this concept. Wouldn't it make sense to look at part of your portfolio as an emergency fund anyway (provided you have some stocks and not only bonds / other non-liquid assets) and just simply sell some stocks if/when you need the extra cash? Wouldn't your well balanced portfolio be making (we hope) more than 4-5% interest over time? Does anyone have the aforementioned setup, with a fully separate account / ent...
by Booper
Fri Oct 13, 2023 4:37 pm
Forum: Investing - Theory, News & General
Topic: Vanguard -- "Are Bonds a Good Investment Right Now?
Replies: 66
Views: 14349

Re: Vanguard -- "Are Bonds a Good Investment Right Now?

nedsaid wrote: Wed Oct 11, 2023 8:14 pm We could see Total Bond Market Index have a losing year for a second year in a row. It was down a lot in 2022 and might be down a little bit, maybe 1% or so in 2023.
Total bond is currently down 3 years in a row:

2018 0.01
2019 8.72
2020 3.76
2021 -1.5
2022 -13.2
2023 -1.26
by Booper
Tue Oct 10, 2023 9:56 pm
Forum: Personal Investments
Topic: Bond Funds Here on Out
Replies: 286
Views: 22310

Re: Bond Funds Here on Out

The risk profile didn't change but rather the world endured a global pandemic and all the disruption that had to be endured to deal with it. Well, on the one hand I guess I can say that I don't know of a formal definition of "risk profile" that I can point to. But I think that every description of fund risk and performance that I've seen has included a statistic of "worst year". If you really look at this image and don't think that the risk profile of this investment changed in 2022, then I'm not sure that I have a common framework on the issue to talk with you further about it. https://i.postimg.cc/TpvXxD99/agg-chart.png Yes, I see your point. What I am getting at is that the nature of the investment did not change but...
by Booper
Tue Oct 10, 2023 9:25 pm
Forum: Personal Investments
Topic: Bond Funds Here on Out
Replies: 286
Views: 22310

Re: Bond Funds Here on Out

dbr wrote: Tue Oct 10, 2023 9:01 pm The risk profile didn't change but rather the world endured a global pandemic and all the disruption that had to be endured to deal with it.
Well, on the one hand I guess I can say that I don't know of a formal definition of "risk profile" that I can point to. But I think that every description of fund risk and performance that I've seen has included a statistic of "worst year". If you really look at this image and don't think that the risk profile of this investment changed in 2022, then I'm not sure that I have a common framework on the issue to talk with you further about it.

Image
by Booper
Tue Oct 10, 2023 8:53 pm
Forum: Personal Investments
Topic: Bond Funds Here on Out
Replies: 286
Views: 22310

Re: Bond Funds Here on Out

This post will be interesting to look back to in 5 years. I often go back and read posts from 2007-2009, or even the Mr. Jitters' post from 2011. It is interesting to review the historical mindset during downturns. The greatest investment decision I ever made was to continue to invest in my 401k during the GFC. I was much younger and making a good living with a lot of human capital back then. It worked out well to "stay the course". Not sure I would have the same temerity today at my age. It's important to have an AA that doesn't tempt you to panic. Bonds will come back. It requires a lot of patience. I agree that bonds will come back. But the OP's point is different: the risk profile of one of the most commonly recommended funds...
by Booper
Tue Oct 10, 2023 8:29 pm
Forum: Personal Investments
Topic: Bond Funds Here on Out
Replies: 286
Views: 22310

Re: Bond Funds Here on Out

Many of the best-informed personal investors did not fully understand the full real-world risk of bond funds before the last couple of years. If one does not have an economic/financial/mathematic background or mind, one did the best they could. Of course, everything has risk, driving to Taco Bell has a risk. But the prospectuses, Boglehead recommended books, and discussions here did not fully disclose. One could read into one's bond fund prospectus or description and see terms like NAV, Coupon, Yield, Duration. I think that we all knew that NAV and Yield were inversely correlated. Yet Bond funds were always in the conventional wisdom the place to go as one approached their horizon, be it a college fund or retirement. I, and many other fair...
by Booper
Mon Oct 09, 2023 6:17 pm
Forum: Personal Investments
Topic: Thoughts on generating passive income from $500k?
Replies: 82
Views: 12898

Re: Thoughts on generating passive income from $500k?

Total Stock Market, send dividends to your bank account. If that isn’t sufficient, set up a scheduled automatic withdrawal that is also sent directly to your bank account. Or for more consistency, reinvest dividends and just use the automated withdrawal. If all stocks is too stressful, substitute one of the LifeStrategy funds that are 80/20, 60/40, 40/60 or 20/80 stocks/bonds. The OP could also roll their own LifeStrategy Fund, but replace Total Market with a dividend focused fund since they value the income. SCHD seems to get mentioned here a lot lately, probably because the dividend payouts have a history of increasing. And the balance has increased as well (even without dividend reinvestment). Who knows if that will continue, but it see...
by Booper
Mon Oct 09, 2023 2:13 pm
Forum: Personal Investments
Topic: Thoughts on generating passive income from $500k?
Replies: 82
Views: 12898

Re: Thoughts on generating passive income from $500k?

Total Stock Market, send dividends to your bank account. If that isn’t sufficient, set up a scheduled automatic withdrawal that is also sent directly to your bank account. Or for more consistency, reinvest dividends and just use the automated withdrawal. If all stocks is too stressful, substitute one of the LifeStrategy funds that are 80/20, 60/40, 40/60 or 20/80 stocks/bonds. The OP could also roll their own LifeStrategy Fund, but replace Total Market with a dividend focused fund since they value the income. SCHD seems to get mentioned here a lot lately, probably because the dividend payouts have a history of increasing. And the balance has increased as well (even without dividend reinvestment). Who knows if that will continue, but it see...
by Booper
Sat Sep 23, 2023 8:50 pm
Forum: Investing - Theory, News & General
Topic: Aren't you an above-average investor?
Replies: 169
Views: 17518

Re: Aren't you an above-average investor?

The theory of passive indexing and Bogleism is that you can't beat the market because you're average, so why bother trying? Just give up and accept average. But aren't you above average? After years, decades of study and research, don't you finally qualify as above average? Can't you beat the market? And if you don't try, how can you ever learn? For me personally the key issue is this: major events that will significantly impact investment returns are both frequent and unpredictable. And how they will impact investment returns over both short and long terms are also unpredictable. Recent examples are: Russia invading Ukraine, COVID-19 and trade policy between the US and China. I am sure that countless books will be written about each of th...
by Booper
Sat Sep 09, 2023 7:57 pm
Forum: Personal Investments
Topic: Calculating Amount Drawn from Retirement to Match Pre-Retirement Take-home Pay?
Replies: 9
Views: 1072

Re: Calculating Amount Drawn from Retirement to Match Pre-Retirement Take-home Pay?

To get the same take-home pay as now, after retirement, there are a lot of calculations. I will no longer be contributing to retirement accounts, so that amount can be subtracted. I will also be collecting SS so that can be subtracted, and no longer paying the 7.65% FICA. Of course this brings my taxable income down so I will also be owing less Fed and State income tax. Also not all of my SS will be taxed so that changes the amount too. Are there formulas or calculators for figuring this out? I recommend using Quicken for this: https://www.quicken.com/. I started using it earlier this year and it makes it easy (ish) to see things like this. Basically, you hook it up to your bank account. And when you pay is deposited into your account, you...
by Booper
Fri Aug 25, 2023 10:37 pm
Forum: Investing - Theory, News & General
Topic: Does Anyone Actually Run Down Funds in Retirement?
Replies: 361
Views: 49554

Re: Does Anyone Actually Run Down Funds in Retirement?

Of all the retirees I know who follow a reasonable SWR (<4%), no one's financial assets are getting depleted. I get that a retiree doesn't necessarily want to watch their accounts dwindle to zero net worth. However, everyone I know has stable or increasing net worth - even into advanced years. On one hand, good news not to deplete assets. On the other hand, are retirees leaving too much on the table - meaning they could fly business instead of economy, take that special vacation, play a round of golf at Pebble Beach, drive a better car, etc? Isn’t 4% proofed against the worst case scenario? That’s not a probable outcome. I am leaning towards VPW for this exact reason. No. The 4% rule has failed about 5% of the time (so once every 2 decades...
by Booper
Fri Aug 25, 2023 9:23 pm
Forum: Investing - Theory, News & General
Topic: Does Anyone Actually Run Down Funds in Retirement?
Replies: 361
Views: 49554

Re: Does Anyone Actually Run Down Funds in Retirement?

tibbitts wrote: Fri Aug 25, 2023 9:04 pm
stocknoob4111 wrote: Fri Aug 25, 2023 8:28 pm I'm not even withdrawing, in fact I contributed a huge amount of money since 2022 and I'm still down. How is it possible to not be depleted and withdrawing?
It's not possible unless measuring over a favorable timeframe.
That's true but not the whole story. Annual returns are *more often than not positive*. So the longer the time horizon, the more likely that returns are positive. That's why most people who followed the 4% rule over 30 years have wound up with more money than they started with (even after accounting for inflation). And why only 5% of the people who followed it ran out of money.
by Booper
Fri Aug 25, 2023 8:05 pm
Forum: Investing - Theory, News & General
Topic: Does Anyone Actually Run Down Funds in Retirement?
Replies: 361
Views: 49554

Re: Does Anyone Actually Run Down Funds in Retirement?

Of all the retirees I know who follow a reasonable SWR (<4%), no one's financial assets are getting depleted. I get that a retiree doesn't necessarily want to watch their accounts dwindle to zero net worth. However, everyone I know has stable or increasing net worth - even into advanced years. On one hand, good news not to deplete assets. On the other hand, are retirees leaving too much on the table - meaning they could fly business instead of economy, take that special vacation, play a round of golf at Pebble Beach, drive a better car, etc? The *median* person who followed the 4% rule had substantially more money after 30 years - even after adjusting for inflation. About 10-20% more, depending on which source you look at. Here are two res...
by Booper
Mon Aug 14, 2023 11:54 am
Forum: Investing - Theory, News & General
Topic: Guidelines for % of bonds in Munis?
Replies: 61
Views: 7372

Re: Guidelines for % of bonds in Munis?

Where I'm at now is that I changed my AA to 70-30, made it global across all my accounts, and made my 401k just be Vanguard Total Bond Market. I also have some I-Bonds. I have about an equal amount of room for bonds in my taxable account. Doing some quick math, it looks like the bonds in taxable is now ~15% of my total portfolio. Hi Booper, I'm in a very similar situation -- live in CA, same AA, similar tax rate. Did you sell bonds in your taxable acct in order to buy the Muni fund? What were the tax implications of that if you don't mind? Fantastic question. The truth is that I lost a lot of money. I received a windfall in 2021, invested it 60-40 using Total Bond, and when I sold it it appears as though I realized a small short-term loss ...
by Booper
Fri Jun 30, 2023 6:21 pm
Forum: Personal Finance (Not Investing)
Topic: Review of book "Die with Zero"
Replies: 179
Views: 24129

Re: Review of book "Die with Zero"

I like having money to keep me out of pain, not necessarily to allow me to indulge in pleasure. I can find many other sources of enjoyment beyond spending money on crap I don't need. Your best use of money is to stay out of pain? Ok to each their own. I wonder if you could even come up with a way to use money to enhance these existing sources of enjoyment. @simplesimon If you wanted to understand a bit more about @FreddieFIRE's perspective then I highly recommend reading the book "The Psychology of Money": https://www.amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681/ It really broadened my appreciation for the wide variety of ways that people view money, how they're all rational, and often formed in the first ...
by Booper
Tue Jun 27, 2023 7:58 pm
Forum: Personal Investments
Topic: Placement of funds in Taxable accounts
Replies: 21
Views: 2531

Re: Placement of funds in Taxable accounts

Can you also tell us the % of your total net worth in each account? From your earlier message it looks like you have 4 tax-deferred accounts, 2 tax-free accounts and 1 taxable account. What I'd like to show you is that once you've decided what you AA is, and you know the % of your net worth in each account .... then if you decide to do asset location, then what is stored in your taxable account is, in some sense, pre-determined. It's literally just "whatever's left over". When doing this for myself, the easiest way to visualize it was to create a table like this: [table] [tr][th]Account[/th][th]Amount[/th][th]Stock[/th][th]Bond[/th][/tr] [tr][td]Grand Total[/td][td]$100[/td][td]$70[/td][td]$30[/td][/tr] [tr][td]Tax Deferred[/td][...
by Booper
Tue Jun 27, 2023 3:15 pm
Forum: Personal Investments
Topic: Placement of funds in Taxable accounts
Replies: 21
Views: 2531

Re: Placement of funds in Taxable accounts

I just did the same thing. I think you are missing some steps at the beginning. The first step is to decide on your overall desired AA. You can get that by taking the quiz here: https://investor.vanguard.com/tools-calculators/investor-questionnaire Then calculate your net worth. Then calculate the amount of each asset/fund you want to own. E.g. if you want 50% stocks, with 60% of that in US stocks, you want to own net worth * .5 * .6 of Total Stock. In short, then you need to know the ideal amount of each asset. I then created an Excel sheet that had the first row as the ideal amount of each asset. The columns were things like "US Stock", "Intl. Stock", etc. Then the next row were the tax deferred accounts (401k, IRA). ...
by Booper
Tue Jun 27, 2023 1:30 pm
Forum: Personal Investments
Topic: Placement of funds in Taxable accounts
Replies: 21
Views: 2531

Re: Placement of funds in Taxable accounts

Until recently, I have had essentially no taxable account except for my bank account. Recently, I received some money and now have some taxable account to invest. This mean I should reallocate my portfolio. I typically own 4 funds. * Total Stock Market index or S&P500 index. Note that I hold both because my 401K has limited selection. * Total International index * Total Bond index * TIPS index fund My accounts are * 401K * old 401K * Traditional IRA * Roth IRA * Inherited Traditional IRA * Inherited Roth IRA * Taxable account I am in the 24% tax bracket. I live in the state of IL that do not tax IRA distributions. I have read through https://www.bogleheads.org/wiki/Tax-efficient_fund_placement. I understand that the most aggressive fun...
by Booper
Mon Jun 26, 2023 10:42 am
Forum: Personal Finance (Not Investing)
Topic: Quicken, Taxable Accounts and Savings Rates
Replies: 10
Views: 718

Re: Quicken, Taxable Accounts and Savings Rates

The cash flow report is what I generally use. You can organize it a few different ways (on the display tab). Another way you can do this, which requires more than one report, is to look at the change in your net worth and adjust that for investment income/gains. Example: NW 1/1/2022: $500,000 NW 12/31/2022: $525,000 2022 Dividends and capital gains (including unrealized) and interest: $10,000 Savings: 525k-500k-10k= $15k Are the taxes on the dividends really that much? Even the dividends in my taxable account aren't that much (most of my $$$ is in retirement accounts). FWIW, I counted principal paid on my mortgage as savings when I had a mortgage. Paying down a debt vs. saving the money is the same to me functionally. Right now, based on S...
by Booper
Sun Jun 25, 2023 7:39 pm
Forum: Personal Finance (Not Investing)
Topic: Quicken, Taxable Accounts and Savings Rates
Replies: 10
Views: 718

Re: Quicken, Taxable Accounts and Savings Rates

People get really wrapped up when trying to think of “savings”. For me, the 401k deduction is savings. The dividends in your taxable account are income, and if you didn’t spend them, they are also savings. Mortgage interest and property taxes are expenses. Payment toward the principle is savings. (I’m sure I’ll get flamed on that one). But really, it’s just nit that important. You can come up with lots of other things that are savings as well. Your HSA contribution, etc. Everybody needs to think in the amount of detail and fidelity that is useful to them, and do it consistently. Nobody cares what your savings rate is, just be honest with yourself. There is no golden BH achievement award for the highest or most correct rate. In terms of com...