Search found 2228 matches

by IlliniDave
Tue May 22, 2018 5:36 am
Forum: Investing - Theory, News & General
Topic: The Millionaire Next Door and civil servants
Replies: 68
Views: 9972

Re: The Millionaire Next Door and civil servants

Stanley did point out that teachers were among the more prodigious accumulators of wealth in his study, many of whom are essentially public employees. One can google the net worth statistics of congress members to see that few of them are UAWs. The richest counties in the US are disproportionately c...
by IlliniDave
Mon May 21, 2018 3:26 am
Forum: Investing - Theory, News & General
Topic: Edelman & Financial Engines merging
Replies: 30
Views: 2566

Re: Edelman & Financial Engines merging

I've resisted Financial Engines. Somehow or another they have become associated with my 401K, I guess my employer negotiated a discount rate to provide advising service to 401k participants. Since my employer seems very committed to providing a low cost plan, it will be interesting to see what happe...
by IlliniDave
Sun May 20, 2018 3:18 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 104
Views: 8540

Re: Three-fund portfolio returns and variance drain

IlliniDave, I’m no math whiz, but I disagree. The issue is not just looking at past returns as you wrote above. The issue is building efficient portfolios for the future. Looking forward, each potential portfolio addition has an expected return, a simple mean with a potential dispersion of outcomes...
by IlliniDave
Sun May 20, 2018 10:00 am
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 104
Views: 8540

Re: Three-fund portfolio returns and variance drain

To me it's just a quirk of the math. If I have $100 and lose half in one year (-50% return) then gain it back the next year (+100% return) my cumulative return is zero. That if I sum the two individual returns and divide by two I get 25% doesn't mean I somehow lost 25% due to "volatility drag". Like...
by IlliniDave
Sun May 20, 2018 9:12 am
Forum: Investing - Theory, News & General
Topic: Has Firecalc or I-ORP altered your retirement plans?
Replies: 35
Views: 3689

Re: Has Firecalc or I-ORP altered your retirement plans?

For me such tools, both homespun and online, have been part of the process from the beginning when I first transitioned from retirement/FI being a vague future notion to a specific plan. It's hard to point out individual influences because they were part of everything.
by IlliniDave
Fri May 18, 2018 3:48 am
Forum: Investing - Theory, News & General
Topic: Why do so many people quote "You will likely be in a lower tax bracket in retirement"
Replies: 426
Views: 20991

Re: Why do so many people quote "You will likely be in a lower tax bracket in retirement"

I just saw another comment where someone was touting the benefits of a pretax 401k vs a Roth where they said most people will be in a lower tax bracket in retirement so pretax is better. While that is a pair of factually correct statements. Most people will be in a lower bracket. And if you are in ...
by IlliniDave
Thu May 17, 2018 6:47 pm
Forum: Investing - Theory, News & General
Topic: Are you including annual increases in contributions in your projections?
Replies: 36
Views: 1563

Re: Are you including annual increases in contributions in your projections?

I made myself an excel spreadsheet to allow total flexibility. I pretty much do the same thing for the same reason. My "calculator" is very closely tailored to my situation, both in accumulation and (soon) retirement phasing in SS and pension at appropriate junctures, and a non-uniform withdrawal p...
by IlliniDave
Wed May 16, 2018 3:23 am
Forum: Investing - Theory, News & General
Topic: Would you be willing to temporarily change your AA?
Replies: 27
Views: 1484

Re: Would you be willing to temporarily change your AA?

A 50% drop in equities would change my AA with no action whatsoever from me. To restore my AA to plan (undo the change brought on by circumstance) would require moving money into stocks. In general I have no qualms about moderately adjusting my AA on occasion though fortunately perhaps I am rather l...
by IlliniDave
Tue May 15, 2018 7:36 am
Forum: Investing - Theory, News & General
Topic: 2018 401k limit is $55K - do you max it out? Why/why not?
Replies: 110
Views: 9919

Re: 2018 401k limit is $55K - do you max it out? Why/why not?

I'm late to the game on this one. But my employer does allow after-tax contributions above the annual limits, and I've accumulated a small amount from slight over contributions (our plan you can only specify contributions in integer percents). The plan does not a appear to allow for in-plan convers...
by IlliniDave
Tue May 15, 2018 6:49 am
Forum: Investing - Theory, News & General
Topic: 2018 401k limit is $55K - do you max it out? Why/why not?
Replies: 110
Views: 9919

Re: 2018 401k limit is $55K - do you max it out? Why/why not?

I'm late to the game on this one. But my employer does allow after-tax contributions above the annual limits, and I've accumulated a small amount from slight over contributions (our plan you can only specify contributions in integer percents). The plan does not a appear to allow for in-plan conversi...
by IlliniDave
Tue May 15, 2018 3:54 am
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 72
Views: 7933

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

Those with a desire for a bequest must ask themselves whether it's worthwhile to work potentially many years longer and/or spending far less than necessary in order to avoid something (i.e. limited bequest) that historically only occurred perhaps 5% of the time. From my perspective, that seems like...
by IlliniDave
Mon May 14, 2018 3:47 am
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 72
Views: 7933

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

Interesting(at least to me) that what we witnessed in our parents gave us both pause. In my family, having money, was considered a good thing, but, it also made you suspect, in terms of character. There was always a follow up comment like, "well, you worked for your money not like some" or some oth...
by IlliniDave
Sun May 13, 2018 5:25 am
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 72
Views: 7933

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

I don't think you are weird and I share you sentiment. My current target is 1.6% But I have a goal of leaving a legacy. And even though the little woman is older than I, based on her mother, grandmother, great grand mother, I think planning for 50 years plus in retirement is reasonable. Heck her mo...
by IlliniDave
Sun May 13, 2018 5:07 am
Forum: Investing - Theory, News & General
Topic: Guidelines on ratio of Pre-tax, Roth, Post-tax Investing
Replies: 33
Views: 1624

Re: Guidelines on ratio of Pre-tax, Roth, Post-tax Investing

I think you have to make a guess of what your tax rate is going to be in retirement versus while working. If your best estimate is that your taxes will go down in retirement (my case) te priorities might be 1. Pre-tax investing ($01(k), TIRA, etc.) 2. Roth 401(k), Roth/Backdoor 3. Taxable. As a sing...
by IlliniDave
Sat May 12, 2018 9:03 am
Forum: Investing - Theory, News & General
Topic: Anything wrong with too many lots?
Replies: 47
Views: 4671

Re: Anything wrong with too many lots?

I still try to keep my lot numbers low, old habits, but now with brokers being required to track report them it is probably less of a hassle to keep up with large numbers of lots than it used to be if you trust the custodian. All my taxable stuff is covered shares in a Vanguard mutual fund account a...
by IlliniDave
Thu May 10, 2018 7:07 am
Forum: Investing - Theory, News & General
Topic: Stock & Bond Market Forecast
Replies: 18
Views: 2255

Re: Stock & Bond Market Forecast

In my home-spun calculator I'm currently using 3.5% real for stocks and 1.1% real for bonds. I don't model cash but if I did it would be about -0.4% real right now. I use a method similar to what Bogle has written about where I use dividend yield + real GDP growth (proxy for earnings growth) + "spec...
by IlliniDave
Thu May 10, 2018 3:45 am
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 72
Views: 7933

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

I just gave the article a bit more than a skimming. My takeaway was that for the time periods (historical) he looked at the ability to go for extended periods down at about a 2.5% WR seemed to be the smoothest way to survive. 50 years is a long time, longer than I'll be retired, but it is looking li...
by IlliniDave
Wed May 09, 2018 4:06 am
Forum: Investing - Theory, News & General
Topic: What Percentage CASH are you?
Replies: 168
Views: 16858

Re: What Percentage CASH are you?

I might have answered prior but I have something on the order of 3% of my financial assets in cash adding up the low tier of my emergency fund, a couple sinking funds, and "cash on hand" in my regular bank accounts. Literal cash in my wallet is about 0.0004%
by IlliniDave
Sun May 06, 2018 11:15 am
Forum: Investing - Theory, News & General
Topic: Retirement accounts changing funds without notice
Replies: 6
Views: 677

Re: Retirement accounts changing funds without notice

Agree with the sentiment that it shouldn't have happened that way--something I would call and ask about.
by IlliniDave
Sun May 06, 2018 8:03 am
Forum: Investing - Help with Personal Investments
Topic: Allocation to combine Dave Ramsey and Vanguard?
Replies: 79
Views: 6737

Re: Allocation to combine Dave Ramsey and Vanguard?

If you substituted a SCV index for the 500 it would be a pretty traditional tilt scheme. When he says growth he doesn't mean high P/B ala Morningstar, I think he means a riskier position for more potential financial growth. If I had the courage I might consider: 1. Total US fund (G+I in Ramsey Spea...
by IlliniDave
Sun May 06, 2018 7:22 am
Forum: Investing - Help with Personal Investments
Topic: Allocation to combine Dave Ramsey and Vanguard?
Replies: 79
Views: 6737

Re: Allocation to combine Dave Ramsey and Vanguard?

In defense of sticking to the Dave Ramsay way: There is great value in picking a strategy and sticking to it, even if, strictly speaking, the strategy is illogical and not really in line with best research on the field. Pick a diet and stick to it. Pick a training program and stick to it. Pick an a...
by IlliniDave
Sun May 06, 2018 6:57 am
Forum: Investing - Help with Personal Investments
Topic: Allocation to combine Dave Ramsey and Vanguard?
Replies: 79
Views: 6737

Re: Allocation to combine Dave Ramsey and Vanguard?

One must remember that Dave isn't a fan of bonds. However, he frequently recommends holding real estate (physical buildings, not REITSs). The cash flows from rental units can be very bondlike. In addition he also suggests everything be paid for in cash, which tends to cause his followers to hold a ...
by IlliniDave
Sun May 06, 2018 6:55 am
Forum: Investing - Help with Personal Investments
Topic: Allocation to combine Dave Ramsey and Vanguard?
Replies: 79
Views: 6737

Re: Allocation to combine Dave Ramsey and Vanguard?

I'll make a generic statement. I take my investment advice from people who have a primary academic background in finance and statistics, not someone who has disparate interests and no background by which to make a substantive comments. I think Ramsey does have a finance degree and has been a licens...
by IlliniDave
Sun May 06, 2018 6:47 am
Forum: Investing - Help with Personal Investments
Topic: Allocation to combine Dave Ramsey and Vanguard?
Replies: 79
Views: 6737

Re: Allocation to combine Dave Ramsey and Vanguard?

If you are certain that your temperament is suited for maintaining a 100% stock allocation, and one that could prove a little more volatile than the market overall, that's probably not a bad way to implement something that parallels his strategy. Whether or not it is a good strategy depends on a lot...
by IlliniDave
Sun May 06, 2018 5:51 am
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2660

Re: Chart: When 90% of the Stock Market is Indexed

I posted about the Samuelson and Shiller concerns, and I gratefully accept the emendation of both nisiprius and illiniDave regarding the aforementioned distinction. But I do so only in the formal sense. In the practical sense, and conceding also that there is no one I admire more for honesty and co...
by IlliniDave
Sat May 05, 2018 7:53 pm
Forum: Investing - Theory, News & General
Topic: Paying down your mortgage as a way to balance your portfolio?
Replies: 72
Views: 3842

Re: Paying down your mortgage as a way to balance your portfolio?

IMHO paying down your mortgage unbalances your portfolio. It concentrates a larger percentage of your net worth in a single, illiquid real estate asset. If you buy bonds or equities with the money, your net worth when you make the investment is the same, but it is diversified into more assets, and ...
by IlliniDave
Sat May 05, 2018 7:29 pm
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2660

Re: Chart: When 90% of the Stock Market is Indexed

Whether completely indiscriminate buying of stocks could create an asset bubble in stocks as a whole is a worthwhile question, but it is not an argument against using index funds. It is an argument against trying to fund retirement through automatic stock purchases in 401(k) plans. +1 This needs to...
by IlliniDave
Sat May 05, 2018 7:25 pm
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2660

Re: Chart: When 90% of the Stock Market is Indexed

I have trouble getting my head around this stuff sometimes because index and passive often get used interchangeably when they really are not necessarily the same thing. I don't follow the extreme definition of active (anything but worldwide cap weighting is active), but see it primarily as a turnove...
by IlliniDave
Sat May 05, 2018 7:12 pm
Forum: Investing - Theory, News & General
Topic: How does stock buyback benefit investors?
Replies: 78
Views: 5972

Re: How does stock buyback benefit investors?

So over the past 15 years or so, share buybacks in aggregate have "stuck," as you term it. Though, since a significant proportion of these share repurchases have been made with money borrowed at very low interest rates, one factor that could potentially slow down or even reverse this trend might be...
by IlliniDave
Sat May 05, 2018 3:10 pm
Forum: Investing - Theory, News & General
Topic: How does stock buyback benefit investors?
Replies: 78
Views: 5972

Re: How does stock buyback benefit investors?

... (and a benefit to executives for increasing the shareprice making options more valuable). Methinks you have identified the primary driver. :greedy That's what I think too! Just financial engineering by the corporate officers to game the system in their favor. I wonder if anyone has compiled dat...
by IlliniDave
Sat May 05, 2018 2:42 pm
Forum: Investing - Theory, News & General
Topic: Dividend Drag?
Replies: 22
Views: 1443

Re: Dividend Drag?

There are some really dedicated "dividend investors" out there, and a crowd equally dedicated to opposing them. I suggest taking whatever is the most comfortable financial path for yourself that you can put togther. If that's a "spend the dividends" arrangement, and you sleep great at night, it's a...
by IlliniDave
Sat May 05, 2018 1:16 pm
Forum: Investing - Theory, News & General
Topic: Dividend Drag?
Replies: 22
Views: 1443

Re: Dividend Drag?

There are some really dedicated "dividend investors" out there, and a crowd equally dedicated to opposing them. I suggest taking whatever is the most comfortable financial path for yourself that you can put togther. If that's a "spend the dividends" arrangement, and you sleep great at night, it's a ...
by IlliniDave
Sat May 05, 2018 11:54 am
Forum: Investing - Theory, News & General
Topic: Paying down your mortgage as a way to balance your portfolio?
Replies: 72
Views: 3842

Re: Paying down your mortgage as a way to balance your portfolio?

I would think of it as de-leveraging before I would think of it as portfolio balancing. Even at 3% I'd probably pay the loan off as fast as I could prudently do so (i.e., without doing something silly like setting myself up for a liquidity crisis).
by IlliniDave
Sat May 05, 2018 5:15 am
Forum: Personal Consumer Issues
Topic: Warning: avoid Windows 10 update 1803
Replies: 91
Views: 8848

Re: Warning: avoid Windows 10 update 1803

I don't know if I had this update or not. Other than the annoyance of some of the updates being extremely long and their propensity to happen only when I am in a hurry to do something, I haven't had any update problems. But it my be significant that my laptop was built as a Windows 8 machine and tha...
by IlliniDave
Fri May 04, 2018 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: How old is too old for a vehicle, even for a well running one ?
Replies: 83
Views: 4908

Re: How old is too old for a vehicle, even for a well running one ?

All good points worth repeating. I just wanted to chime in on this risk of crippling repair, and if you think the car is too old, it's probably already nearly worthless. It's not just repairs that aren't worthwhile, but some moderate maintenance items might not be worth doing at some stage. If the ...
by IlliniDave
Thu May 03, 2018 7:53 pm
Forum: Personal Finance (Not Investing)
Topic: How old is too old for a vehicle, even for a well running one ?
Replies: 83
Views: 4908

Re: How old is too old for a vehicle, even for a well running one ?

I know the boglehead way is to drive a car to the ground getting the most value out of it after its high depreciation years are over. How old is too old though ? At some point, driving a 15+ year old car , even one which is running well only with regular maintenance might not be worth it. For one, ...
by IlliniDave
Tue May 01, 2018 5:42 am
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15673

Re: Trinity Study updated to 2018

I'm the kind of guy that would be greatly comforted my an immutable mathematical formula that would "tell me" what I should spend out of a portfolio, but I don't think there is one. There are many (Trinity at the forefront of them) that are useful in the planning stages, but I don't think there's on...
by IlliniDave
Tue May 01, 2018 3:36 am
Forum: Investing - Theory, News & General
Topic: Portfolio Changes After Retirement
Replies: 11
Views: 1131

Re: Portfolio Changes After Retirement

Hi Barefootgirl, I agree with the general tone of keeping it simple unless you just have a desire to make investing one of your leisure pursuits/hobbies. I've kicked around the idea of carving out a little "play money" (~3% of the total) to invest a little more aggressively as a retirement hobby, bu...
by IlliniDave
Mon Apr 30, 2018 6:47 am
Forum: Investing - Theory, News & General
Topic: Mental elasticity as you age & free choice paradigm
Replies: 17
Views: 2957

Re: Mental elasticity as you age & free choice paradigm

Old age is not the time I want to be continually retooling my portfolio and chasing something better. It is the time I want to simplify and get as close to set/forget as possible, and be most resistant to people that approach me with "data" indicating they have something new and better.
by IlliniDave
Sun Apr 29, 2018 7:24 am
Forum: Investing - Theory, News & General
Topic: What's wrong with this critique of indexing?
Replies: 110
Views: 6274

Re: What's wrong with this critique of indexing?

I think going from EMH->all stocks have equal risk adjusted return is a non-sequitur, or at minimum is really stretching it. I also think index investing does not require EMH to be successful. IIRC, Jack Bogle is on record as an EMH 'skeptic'. Index investing "works" because of cost, i.e., the "Cost...
by IlliniDave
Sun Apr 29, 2018 6:17 am
Forum: Investing - Theory, News & General
Topic: How does one optimally prepare for predictable, lumpy expenses while consistently investing?
Replies: 22
Views: 2048

Re: How does one optimally prepare for predictable, lumpy expenses while consistently investing?

I do method 1) from the OP. I typically don't have overly large expenses so the opportunity cost isn't so much that I feel like I'm missing much. I just like the convenience of knowing when my property tax due or it's time for vacation or whatever that I have money on hand to pay it without affectin...
by IlliniDave
Sat Apr 28, 2018 4:59 am
Forum: Investing - Theory, News & General
Topic: Can indexing be considered as active management ?
Replies: 21
Views: 1516

Re: Can indexing be considered as active management ?

Sure, you can go so far as to say logging into a website for the fist time an electing to take part in your employer's 401(k) plan to start with was an active investing decision if you want. It's just missing the point. In context, when you talk about a fund or a portfolio the difference between act...
by IlliniDave
Fri Apr 27, 2018 5:35 pm
Forum: Personal Finance (Not Investing)
Topic: Quick question: inherited real estate - how to get a tax basis?
Replies: 17
Views: 1426

Re: Quick question: inherited real estate - how to get a tax basis?

Previous post really helped clarify your situation & prompted several thoughts. I'm not familiar with Illinois land or assessment process in the county where the land is. But, I do know that it is not unusual for their to be multiple "values" for the same piece of land. I would expect the "farm" va...
by IlliniDave
Fri Apr 27, 2018 9:46 am
Forum: Personal Consumer Issues
Topic: Wedding - financial burden on couple and attendees
Replies: 168
Views: 10167

Re: Wedding - financial burden on couple and attendees

Didn't read the whole thread so apologies if this is a rehash. Maybe they sent out announcements but not invitations because they don't want/expect large numbers of people to attend, and "getting away" was how they chose to do that. My youngest daughter struggles with panic attacks and didn't want t...
by IlliniDave
Fri Apr 27, 2018 9:17 am
Forum: Investing - Theory, News & General
Topic: Financial Freedom
Replies: 22
Views: 2792

Re: Financial Freedom

The biggest knob for me was learning how to lower the amount I had to spend to have a lifestyle I am happy with. The less money you have to spend to be happy, the more financially free you truly are. At the same time the more money you have available the more financially free you are. You can look a...
by IlliniDave
Fri Apr 27, 2018 8:08 am
Forum: Personal Finance (Not Investing)
Topic: HSA family max contribution lowered to $6850 for 2018 [and changed to $6900 again]
Replies: 128
Views: 13690

Re: HSA family max contribution lowered to $6850 for 2018 [and changed to $6900 again]

Well, I'm glad they put it back. Even though mine is done incrementally throughout the year by payroll deduction, we select the total contribution at benefits election time the prior year, and they make it a PITA to change on the fly (easy to add extra money above the deduction, not so easy to modif...
by IlliniDave
Fri Apr 27, 2018 7:58 am
Forum: Investing - Theory, News & General
Topic: "Tax-Adjusted Asset Allocation: Is It Necessary?"
Replies: 51
Views: 2672

Re: "Tax-Adjusted Asset Allocation: Is It Necessary?"

I don't bother. Asset allocation to me is not a precision sport. I tend to think more like, for example, "about half" rather than 50.000 +/- 0.001%. I already crunch numbers far more than is probably healthy for me, last thing I need is one more level of refinement to stew about. Neither taxes nor r...
by IlliniDave
Fri Apr 27, 2018 7:39 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Financial Perils Of Old Age
Replies: 94
Views: 10807

Re: Larry Swedroe: Financial Perils Of Old Age

I've concluded my choices are basically to work until I'm as close to death as possible, or accept retiring with the risk that if I draw the short straw, healthcare at the end might drain my assets. Another way to look at those numbers is that on average retirees spend an amount on healthcare equal ...
by IlliniDave
Fri Apr 27, 2018 6:40 am
Forum: Personal Finance (Not Investing)
Topic: Quick question: inherited real estate - how to get a tax basis?
Replies: 17
Views: 1426

Re: Quick question: inherited real estate - how to get a tax basis?

Thanks, everyone. This piece of property has a transfer deed which will become effective in two more days (required we still be living 30 days after Mom's death to be deemed to have survived her), so there wasn't any appraisal as part of the estate. A relative contacted a local real estate attorney ...
by IlliniDave
Thu Apr 26, 2018 11:07 am
Forum: Personal Finance (Not Investing)
Topic: Quick question: inherited real estate - how to get a tax basis?
Replies: 17
Views: 1426

Quick question: inherited real estate - how to get a tax basis?

Me and my siblings inherited an interest in some farm property from our mom. We do not intend to sell the property at this time. I think I need (or want) to establish a tax basis in the event of a future sale. The property has not been appraised since 1993 when my grandmother passed away. I had thou...