Search found 1429 matches

by FinancialDave
Sat Sep 24, 2016 3:10 pm
Forum: Investing - Theory, News & General
Topic: Do Bogleheads Bucket?
Replies: 87
Views: 6928

Re: Do Bogleheads Bucket?

Two people could be doing exactly the same thing, and one could say they use buckets, and the other could say they don't use buckets. It's just mental accounting. It's semantics. That's a good point. I personally have one brokerage account dedicated to doing one thing and that is generating a retir...
by FinancialDave
Thu Sep 22, 2016 5:00 pm
Forum: Investing - Theory, News & General
Topic: Help understanding the attraction to W & W [Wellington/Wellesley]
Replies: 38
Views: 3837

Re: Help understanding the attraction to W & W [Wellington/Wellesley]

I think an underrated part is the fact it's a stable, disciplined, long-term strategy of Large Value plus high quality corporate bonds for a very cheap expense ratio, even for the investor shares. Especially relevant is that Wellington and Wellesley both seem to have done a consistently good job of...
by FinancialDave
Wed Sep 21, 2016 6:05 pm
Forum: Investing - Theory, News & General
Topic: Do Bogleheads Bucket?
Replies: 87
Views: 6928

Re: Do Bogleheads Bucket?

But yeah that is the big difference between buckets and a fixed AA. You aren't exposing your fixed income to risk by rebalancing into stocks, but you are also missing out on the potential gains from buying low. The big issue with buckets and ladders is that you need to come up with a goof refilling...
by FinancialDave
Wed Sep 21, 2016 5:56 pm
Forum: Investing - Theory, News & General
Topic: Do Bogleheads Bucket?
Replies: 87
Views: 6928

Re: Do Bogleheads Bucket?

...Pretty much, you want safe money to draw from when the stock market is down. In the event of a bear market, you want to allow enough time for the stocks to recover. In the Lucia and similar bucket strategies, does one rebalance into stocks when they are down significantly? So that then you have ...
by FinancialDave
Tue Sep 20, 2016 6:58 pm
Forum: Investing - Theory, News & General
Topic: Do Bogleheads Bucket?
Replies: 87
Views: 6928

Re: Do Bogleheads Bucket?

I recently read Jane Bryant Quinn’s book “How to Make Your Money Last” where she seems to espouse a form of bucketing withdrawal strategy that is calculated to prevent withdrawals of invested principal during sharp market downturns. Run the math on what would happen if you held a 50/50 portfolio du...
by FinancialDave
Tue Sep 20, 2016 4:27 pm
Forum: Investing - Theory, News & General
Topic: Do Bogleheads Bucket?
Replies: 87
Views: 6928

Re: Do Bogleheads Bucket?

Bucketizing is an artifice. It often amounts to an effective lowering of the stocks percentage of your AA, which isn't necessarily a bad thing in retirement. But then it present the question: how do I time the reloading of my buckets? That's right, I used the word time, as in market timing. Better ...
by FinancialDave
Fri Sep 16, 2016 2:37 pm
Forum: Investing - Theory, News & General
Topic: Pay mortgage down (PMI) or invest
Replies: 33
Views: 1800

Re: Pay mortgage down (PMI) or invest

Good point Dave. I think you're onto something here. The $10k will save you the initial $3k but won't do anything else for you until you sell. At first glance, it seems like a 30% return, but that $10k is then dead money that can't grow if you're in your house for another 30 years. Yes, Dave has a ...
by FinancialDave
Fri Sep 16, 2016 11:24 am
Forum: Investing - Theory, News & General
Topic: Pay mortgage down (PMI) or invest
Replies: 33
Views: 1800

Re: Pay mortgage down (PMI) or invest

Making normal payments the PMI is going to be around for about 5 years. Our budget is fairly tight but I could probably get that down to 3yrs or less with the extra money I could put towards it. We do like the home and plan to stay - no plans short or long to move right now. Both our cars are now p...
by FinancialDave
Fri Sep 16, 2016 10:40 am
Forum: Investing - Theory, News & General
Topic: Pay mortgage down (PMI) or invest
Replies: 33
Views: 1800

Re: Pay mortgage down (PMI) or invest

You are paying $1,608/year for PMI. That's about an annual 6.4% on $25,000. You are also paying mortgage interest of 3.75% on that $25,000. If you know of a risk-free investment of over 10%, please let me know. Pay down the mortgage. Edit: Actually, the effect interest rate of PMI gets even worse a...
by FinancialDave
Wed Aug 31, 2016 10:15 am
Forum: Investing - Theory, News & General
Topic: Do you follow a VWR formula?
Replies: 13
Views: 1250

Re: Do you follow a VWR formula?

I am currently using a form of variable withdrawal, driven by the IRS RMD tables. I have combated the problem of low initial withdrawals by starting at age 73 in the RMD table which is a starting withdrawal rate of 4.05%. I also have diversified the withdrawal bucket with half the money in dividend ...
by FinancialDave
Tue Aug 30, 2016 6:50 pm
Forum: Investing - Theory, News & General
Topic: Fidelity competing harder w/Vanguard
Replies: 92
Views: 8892

Re: Fidelity competing harder w/Vanguard

...which I think is still probably double the cost I could buy a non-Vanguard Mutual fund from my Vanguard account. I think Vg charges on buy & sell but Fido only on the buy. Fidelity wins the fee game (in a negative way) since the $50 front end transaction cost compounds against you for the wh...
by FinancialDave
Tue Aug 30, 2016 12:46 am
Forum: Investing - Theory, News & General
Topic: Fidelity competing harder w/Vanguard
Replies: 92
Views: 8892

Re: Fidelity competing harder w/Vanguard

...which I think is still probably double the cost I could buy a non-Vanguard Mutual fund from my Vanguard account. I think Vg charges on buy & sell but Fido only on the buy. Fidelity wins the fee game (in a negative way) since the $50 front end transaction cost compounds against you for the wh...
by FinancialDave
Mon Aug 29, 2016 7:20 pm
Forum: Investing - Theory, News & General
Topic: Fidelity competing harder w/Vanguard
Replies: 92
Views: 8892

Re: Fidelity competing harder w/Vanguard

Fidelity and Vanguard are both great companies. It's hard to go wrong with either one of them. Any difference between the two will be dwarfed by your personal asset allocation decisions. This is generally true but you just have to have a little narrower focus when using Fidelity because their costs...
by FinancialDave
Sat Jul 30, 2016 9:32 pm
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 139
Views: 14947

Re: What rate of return do you use when planning for retirement?

Michael, The challenge then is still there. Not only do you have to chose a mean rate of return (US historical, Global historical, something based on current valuations, something pessimistic to be conservative, the list of options is endless) you also have to chose a standard deviation (another en...
by FinancialDave
Sat Jul 30, 2016 9:26 pm
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 139
Views: 14947

Re: What rate of return do you use when planning for retirement?

I have settled on 7% nominal up to retirement, subject to some "tweaking" based on a person's asset allocation, then a 4% SWR after that. I also like Jim Otar's retirement calculator for actual retirement conservative projections, though you do have to be aware of the "buttons" ...
by FinancialDave
Sat Jul 30, 2016 3:21 pm
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 139
Views: 14947

Re: What rate of return do you use when planning for retirement?

I have settled on 7% nominal up to retirement, subject to some "tweaking" based on a person's asset allocation, then a 4% SWR after that. I also like Jim Otar's retirement calculator for actual retirement conservative projections, though you do have to be aware of the "buttons" t...
by FinancialDave
Sat Jul 30, 2016 11:11 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 222
Views: 14371

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

We do know if the markets are highly valued. US markets, both stock and bond markets are very highly valued. Especially the bond market. What we don't know is are they TOO HIGHLY valued and we don't know the direction of the next move. Larry Larry, You are making predictions that are yet in evidenc...
by FinancialDave
Fri Jul 29, 2016 11:58 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 222
Views: 14371

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Larry, I am glad I jumped to the end of the article, because as it points out - "we don't know!" As Louis Rukeyser so appropriately pointed out on more than one occasion - "when stock prices are going up people want to buy them, and when they are going down, people want to sell them.&...
by FinancialDave
Fri Jul 29, 2016 11:44 pm
Forum: Investing - Theory, News & General
Topic: Dividend stocks or real estate rental
Replies: 51
Views: 2714

Re: Dividend stocks or real estate rental

The 'life long renter' post and I discussion I had with my daughter and future son-in-law caused me to think: Would you rather invest $500,000 in T and VZ and 'make' $2000 per month (paid quarterly) in dividends or would you rather buy a house and rent it out for $2000 (I'm guessing rent depends on...
by FinancialDave
Wed Jul 20, 2016 9:11 pm
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- 2016 Mid-Year Report
Replies: 26
Views: 2864

Re: BOGLEHEAD CONTEST

Taylor Larimore wrote:Dave:

Thank you for the alert.

I have e-mailed the programmer, Ralph Arvesen.

Best wishes.

Taylor


Taylor,
Any word on what happened to the "feed" for this contest?? It is still blank.

Dave
by FinancialDave
Mon Jul 18, 2016 6:32 pm
Forum: Investing - Theory, News & General
Topic: Anti-Boglehead Claims There is a Better Way to Invest
Replies: 82
Views: 9973

Re: Anti-Boglehead Claims There is a Better Way to Invest

Last week I interviewed Paul. He was gracious and demonstrated a real care for the average investor. Moreover, he said that a target retirement fund is a wonderful option for many investors, as is a three fund portfolio. For others, he suggested various configurations of his ultimate buy and hold s...
by FinancialDave
Wed Jul 13, 2016 4:52 pm
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- 2016 Mid-Year Report
Replies: 26
Views: 2864

Re: BOGLEHEAD CONTEST -- 2016 Mid-Year Report

Both contests are still showing ZERO prices??
by FinancialDave
Wed Jul 13, 2016 9:18 am
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- 2016 Mid-Year Report
Replies: 26
Views: 2864

Re: BOGLEHEAD CONTEST -- 2016 Mid-Year Report

What has happened to the "price feeder" for both the Boglehead contest and the Hedgefund contest, both have been showing zero prices for everything?
by FinancialDave
Mon Jun 20, 2016 11:55 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Now, to give some credit to the un-informed tax accountant she did save you some money by pulling money out of your IRA in a down market. That's fuzzy thinking. You put pre tax money into your tIRA. When you take money out you pay the (future value of the) tax on the original contribution on which ...
by FinancialDave
Sat Jun 18, 2016 3:19 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Celia, This is not a "flippant" response though you may want to check it amongst other Bogleheads because I have been accused of not being able to do math, and the fact of the matter is at 64 I can make mistakes, so my response is just educational in nature. First if this ever really happe...
by FinancialDave
Fri Jun 17, 2016 7:25 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Dave, How much would I then have to pay in taxes for that scenario? Assuming my calculations are correct, I have $5968.75 withheld and $2531.25 in the Roth. That leaves only a shortfall of only $1,500 to account for all of my $10,000, which is the short term loss from when the market went down 20%....
by FinancialDave
Fri Jun 17, 2016 11:51 am
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: Do DFA Funds Generate Risk-Adjusted "Alpha?"
Replies: 30
Views: 2184

Re: Factor-Based Investing: Do DFA Funds Generate Risk-Adjusted "Alpha?"

Here is what Morningstar reports on buy and hold DFA portfolio (no rebalancing) I built slightly over 5 years ago: http://socialize.morningstar.com/NewSocialize/PortfolioSharing/SharedPortfolioSnapshot.aspx?q=3C4FCE48781B645F It does not really look all that pretty for DFA compared to its category o...
by FinancialDave
Fri Jun 17, 2016 10:38 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Celia,

You've got it! Losing money can be so much fun.

:sharebeer
by FinancialDave
Thu Jun 16, 2016 6:03 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

It never matters when you convert your stock from the IRA to the Roth - I mistakenly thought I was doing myself a favor in picking the actual 52 week low for the stock to convert it to the Roth. But now we are straying from the original topic (at least somewhat.) But since I brought it up: http://i6...
by FinancialDave
Thu Jun 16, 2016 5:45 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Dave, After wading through your unnecessarily long and wandering examples, I still don't understand them. I especially feel like the "$4,500 is really $6,000" statement is incomprehensible. I have a headache now. :confused Gotta go check on my Roths to see if they are still there. What pa...
by FinancialDave
Thu Jun 16, 2016 3:02 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Bfwolf, It is not an argument, it is a point of view based on all the risks along the way. I think I have presented all the facts and have not distorted any of the numbers, so I might conclude that anyone who actually reads the article to the end may come away with some knowledge to help them make a...
by FinancialDave
Thu Jun 16, 2016 12:19 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Celia, I forgot to thank you for pointing out the obvious and asking an important question as to why the IRA seems to be so much less after the Recharacterization, and this by the way happens to the same degree whether you started with money from your taxable or not. I will explain in a minute. &quo...
by FinancialDave
Wed Jun 15, 2016 6:10 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Let me just admit defeat at this point and provide a better example that shows that you really only end up with $375 in your taxable account from the same transaction, if that is your goal: http://i68.tinypic.com/24wab0m.jpg Dave, This is another example I don't understand. In particular, how did y...
by FinancialDave
Wed Jun 15, 2016 10:03 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

I am going to wind up my final post with the following equivalent example using money from a taxable account. :sharebeer In all examples the investor only had the capability to earn $10,000 so it needed to be split up if putting it in a taxable account to compare the two examples. Of course if the i...
by FinancialDave
Wed Jun 15, 2016 1:08 am
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2353

Re: Your HSA and you

Spirit Rider, It is quite possible that the "person," the "beneficiary," and the "executor" are one in the same, especially on smaller estates. Dave That may be true, but it is not a relevant point. Who is the beneficiary is determines who will pay the taxes. As you wi...
by FinancialDave
Wed Jun 15, 2016 1:03 am
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 842

Re: RMD's and Charity Contributions

celia wrote:How does it work if you donate in-kind (ie, stocks or bonds or mutual fund shares)?


There is no reason to do that. In fact the way I understand it, say from Vanguard, they send you a check, but it is made out to your charity, so obviously the stocks or bonds have already been sold.
by FinancialDave
Wed Jun 15, 2016 12:16 am
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 842

Re: RMD's and Charity Contributions

I believe the max is $100k annually. Pub 590-B page 13.
by FinancialDave
Tue Jun 14, 2016 9:34 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Spewin, Let me just admit defeat at this point and provide a better example that shows that you really only end up with $375 in your taxable account from the same transaction, if that is your goal: http://i68.tinypic.com/24wab0m.jpg I make one concession for you in the above from the fact that the t...
by FinancialDave
Tue Jun 14, 2016 12:34 pm
Forum: Investing - Theory, News & General
Topic: "Jane Bryant Quinn: Plan for a long retirement and maybe even a 101st birthday party."
Replies: 66
Views: 6617

Re: "Jane Bryant Quinn: Plan for a long retirement and maybe even a 101st birthday party."

Wow,

I guess hoping for some comments on the interview or her book (which I think has some good ideas) is a bit much to ask?
by FinancialDave
Tue Jun 14, 2016 11:34 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

I absolutely disagree with that statement because it is flat out wrong. Imagine Person 3 with $10000 in an tIRA and $2500 in taxable. If they convert and pay the taxes from the IRA then they have $7500 in RothIRA and $2500 in taxable, while if they pay the money from taxable, they have $10000 in Ro...
by FinancialDave
Mon Jun 13, 2016 8:45 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2353

Re: Your HSA and you

Spirit Rider,

It is quite possible that the "person," the "beneficiary," and the "executor" are one in the same, especially on smaller estates.

Dave
by FinancialDave
Mon Jun 13, 2016 6:58 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

The reason recharacterizing losses after the conversion helps is that you don't know there will be a loss when you do the conversion.* So compared to not converting, if you convert and it goes up you win, if you convert and it goes down you recharacterize and don't lose. * If you know the investmen...
by FinancialDave
Mon Jun 13, 2016 6:42 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Dave I probably missed it. But are you including your capital loss that you can apply to other capital gains if you have them or your income if you do not? Regards QJ QJ, No we are not adding the taxable account in the mix, that makes it comparing apples to oranges as far as whether it is smart to ...
by FinancialDave
Mon Jun 13, 2016 4:33 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Maybe taking numbers off the size of the taxable account will help - I hope so! Before Transaction 1 above you have amount "T" in your taxable account which will be plenty to pay for the conversion tax. You do the conversion, but for some reason decide to undo it. You now still have amount...
by FinancialDave
Mon Jun 13, 2016 4:25 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Mark, the numbers in your table give exactly the reason that you always hear advisors saying pay the taxes with outside money. Spewin I think we already agreed in a previous thread that it makes no difference where the taxes are paid from, on an apples to apples comparison. There is a spreadsheet i...
by FinancialDave
Mon Jun 13, 2016 4:21 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Spewin, It is not an apples to apples comparison is the only point to be made. Try compartmentalizing the transactions because the first half of your logic is spot on - if the tax rates are equal there is no advantage. Transaction #1 you make a $10,000 conversion and pay tax X from an outside accoun...
by FinancialDave
Mon Jun 13, 2016 3:41 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 5117

Re: The Myth of the Recharacterized Roth Conversion after a Loss

If you take the money from the IRA, it is alot easier to understand your point.


Mark,
I was going to try that next - thanks for the comment.

I did post a spreadsheet view of just what you explained in the Non-Linear Tax Code thread.

Dave
by FinancialDave
Mon Jun 13, 2016 3:35 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2353

Re: Your HSA and you

One of the downsides to a large HSA, is if the beneficiary is not your spouse and you die while it is quite large, it will immediately be liquidated and ordinary income taxes paid, its not like a TIRA in that respect. That could have quite a tax consequence to a son, daughter, or siblings. Dave It ...
by FinancialDave
Mon Jun 13, 2016 3:30 pm
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 842

Re: RMD's and Charity Contributions

I still have to wait about 6 years. I just hope they don't change the tax law, because it's like an HSA for charities rather than medical expenses - tax-free in and tax-free out.

fd
by FinancialDave
Mon Jun 13, 2016 2:44 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2353

Re: Your HSA and you

I have an HSA bank account from when I had a HDHP through my previous employer. I am now at a different employer that does not offer a HDHP. Can I still contribute to my HSA? I have not been contributing, only drawing it down via co-pays and deductibles since the previous servicer (before HSA bank ...

Go to advanced search