Search found 193 matches

by Lobster
Thu Apr 20, 2017 9:55 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

The eye opener for me was when Charles Ellis explained it as such: You get an 8% return from the stock market but you pay 1% in fees. That's 1/8 = 12.5%. You've just given your advisor 12.5% of your return. I also very much appreciated Charlie Ellis' explanation in Winning the Loser's Game. In beha...
by Lobster
Thu Apr 20, 2017 8:16 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

Your chart's great and I'm one of the people who likes to post the Vanguard sliding scale chart. The only improvement I could suggest for your chart is to lower the total amount from $1 million to something more in line with what someone might accrue in regular corporate America. Certainly, the cha...
by Lobster
Thu Apr 20, 2017 7:54 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

This result (FV) does not change if you change the rate of return; changing the rate of return changes the amount you start with (PV) to get to $250K. Kevin I put a concrete $ amount on the Y-axis simply to provide an anchor point to help someone understand the significance of returns lost. It has ...
by Lobster
Thu Apr 20, 2017 7:41 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

Perhaps. But only if you enter the correct data, Lobster. :( In cells D3 & D4 of your Google Docs spreadsheet you copied the 0.5% and 1% fee numbers for 30 years (13.9% and 25.8%). You should have copied the numbers for 40 years (18.1% and 32.8%) as you did for 0.1%, 2%, and 3% fees. :oops: Cor...
by Lobster
Thu Apr 20, 2017 3:55 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

Kevin M wrote:Still not quite right. Independent of rate of return for a lump sum investment, but not for a given, fixed periodic investment.


Ah, that is what I meant but I'll try to reword for clarity
by Lobster
Thu Apr 20, 2017 3:33 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

It is a nice chart. The intuitive way to understand this is that the impact of fees compounds, so with annual investments more of your money is subject to fees for less time, and the fees have less impact on final value. You're are absolutely right, thanks! I edited my original post to state that t...
by Lobster
Thu Apr 20, 2017 3:20 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

The likelihood of this example happening is about as likely as an annual 15% growth every year. Yes, our stock markets could become like Japan's, but in that case, we would change what we do with our money. The graph illustrates what portion of your portfolio returns will be taken by an advisor. An...
by Lobster
Thu Apr 20, 2017 2:30 pm
Forum: Investing - Theory, News & General
Topic: Evaluating my lack of jitters
Replies: 26
Views: 1572

Re: Evaluating my lack of jitters

My question, and thank you if you've read this far, is: does this read like sound logic to you, behind why I am 15% bonds? *besides TLH, of course. The rationale makes sense to me. My advice is to define your bond allocation in terms of a glidepath towards retirement. In this case you might say age...
by Lobster
Thu Apr 20, 2017 11:36 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

There is one major distortion in the way this data is presented and labeled in the graph. In a case where 10K was invested at 10% with no advisor, the investor winds up with approx 452K after 40 years. If the advisor got 2%, the investor winds up with 239K and the advisor nets 56K. Still outrageous...
by Lobster
Thu Apr 20, 2017 9:58 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

Nice chart Lobster. The only minor point I have is that your percentage is correct as far as the investor is concerned but the advisor does not get all the rest. Part of the dark blue area is due to opportunity costs. That is money you could have earned if you reinvested the advisor fees. If the ma...
by Lobster
Thu Apr 20, 2017 9:44 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

Your chart's great and I'm one of the people who likes to post the Vanguard sliding scale chart. The only improvement I could suggest for your chart is to lower the total amount from $1 million to something more in line with what someone might accrue in regular corporate America. Certainly, the cha...
by Lobster
Thu Apr 20, 2017 12:44 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

Excellent work. Perhaps a similar document can me made to show the ratio of principal and interest for a 5%, 30 year mortgage paid in 5, 10, 15, 20, 25, 30 years. Then perhaps this data, mortgage interest data and Taylor Larimore's "buy a Toyota Corolla and save" data can all be posted to...
by Lobster
Thu Apr 20, 2017 12:39 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

I was then wondering how much more you would need to save %wise to counter 1% in fees. Does this graphic mean that if you save 10% gross and have 0.1% fees, that would be equivalent to saving 13.3% with 1% fees and saving 20% with 2% fees? This shows what happens to the investment gains, regardless...
by Lobster
Thu Apr 20, 2017 12:36 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

MotoTrojan wrote:
This visualization is just your gains after 40 years, not your principal (or total account value). Over 40 years at 2% is splitting the gains between you and the advisor.


I like your explanation better :beer
by Lobster
Thu Apr 20, 2017 12:34 am
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Re: Visualizing the devastating impact of fees

I don't understand this. Suppose there is an average of 5% growth each year, over the long term. Even if I should lose 2% to fees each year, my account is still growing. This chart looks like it is shrinking. Maybe the chart needs some descriptions/labels on it??? I can see how the chart might look...
by Lobster
Wed Apr 19, 2017 11:15 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe says "Goodby."
Replies: 287
Views: 25072

Re: Larry Swedroe says "Goodby."

Thank you Larry for your contributions. I always enjoy reading your articles and appreciate your willingness to share your insights and perspective. :sharebeer
by Lobster
Wed Apr 19, 2017 11:03 pm
Forum: Investing - Theory, News & General
Topic: Visualizing the devastating impact of fees
Replies: 54
Views: 4564

Visualizing the devastating impact of fees

I have been experimenting with ways to better help visualize the real impact of costs over an investors lifetime. For example the chart in this frequently linked vanguard article has compelling data, but I believe the same information might be presented in an easier to understand way. Here is one at...
by Lobster
Wed Apr 19, 2017 10:15 pm
Forum: Investing - Help with Personal Investments
Topic: Help with investing
Replies: 22
Views: 1374

Re: Help with investing

I personally also have a 30k car loan at 1.25% interest with a 2 year term. My emergency fund is $110k. I have about $45k in retirement accounts. Your car loan represents 2/3 the amount of your current retirement savings. So I'm literally contributing 4% to 401k - company match is 4% of this. Your ...
by Lobster
Sun Apr 16, 2017 6:21 pm
Forum: Investing - Help with Personal Investments
Topic: My Story so far. Totally confused! Vanguard, Charles Schwab, Merrill Edge. Managing own portfolio... or NOT?
Replies: 86
Views: 5765

Re: My Story so far. Totally confused! Vanguard, Charles Schwab, Merrill Edge. Managing own portfolio... or NOT?

My biggest question is, does the portfolio above look ok? No. What would you change, if anything? These are OK: VOO Vanguard 500 Index Fund 27% VOE Vanguard Mid-Cap Value ETF 10% VBR Vanguard Small-Cap Value ETF 10% This might be OK depending on your tax bracket which I don't think we know. BND Van...
by Lobster
Sun Apr 16, 2017 6:10 pm
Forum: Investing - Theory, News & General
Topic: Investors backing off their equity AA primarily due to 8-year bull market?
Replies: 56
Views: 4417

Re: Investors backing off their equity AA primarily due to 8-year bull market?

Is there a growing trend of investors backing off their equity AA, stopping auto-investment in equity or even selling equity shares, primarily because of the 8-year bull market? Unless somebody has recently developed a time machine and sharing it with investors like us, I hope not! Market history s...
by Lobster
Sun Apr 16, 2017 4:04 pm
Forum: Investing - Help with Personal Investments
Topic: Too Much in Savings?
Replies: 5
Views: 1123

Re: Too Much in Savings?

$225k / $3.8k = 60 months of expenses. Even conservative individuals generally consider 12 months of expenses sufficient. Some individuals in retirement carry two years worth of expenses in cash. From 1974 - 1994 the spending power of $1 shrank to just 35 cents (Winning the Losers Game, location 240...
by Lobster
Thu Apr 13, 2017 10:14 am
Forum: Investing - Theory, News & General
Topic: Wealthfront: Why we avoid Blackrock ETFs
Replies: 24
Views: 3640

Re: Wealthfront: Why we avoid Blackrock ETFs

Once you get down to expense ratios of 0.20% and under, it's starting to look like The Principle Of The Thing, awarding your business to Vanguard in order to show the industry that you appreciate Vanguard's governance or something. And yeah, I personally do stuff like that, but I know that it's an ...
by Lobster
Wed Apr 12, 2017 1:01 am
Forum: Investing - Theory, News & General
Topic: The $90 Billion Investor Who’s Out to Fire Wall Street
Replies: 4
Views: 1716

Re: The $90 Billion Investor Who’s Out to Fire Wall Street

If North Carolina had owned a vanilla stock-and-bond index portfolio instead of shifting into alternative assets, it would have earned an additional $20 billion over the seven years through June 2016, estimates Ron Elmer That portfolio would be 22% larger today with a low cost approach :oops: I'm s...
by Lobster
Wed Apr 12, 2017 12:51 am
Forum: Investing - Help with Personal Investments
Topic: Seeking feedback on portfolio
Replies: 7
Views: 622

Re: Seeking feedback on portfolio

Emergency funds : I don't maintain an emergency fund per se, so I think I know where the feedback will start :). Emergency funds are valuable because they avoid forcing difficult situations like selling appreciated assets and incurring cap gains (especially when already dealing with a stressful sce...
by Lobster
Wed Apr 12, 2017 12:31 am
Forum: Investing - Help with Personal Investments
Topic: 36yo looking for feedback
Replies: 25
Views: 3564

Re: 36yo looking for feedback

I'm afraid I don't understand how you can make that claim. Cast as a simple scenario, we can imagine a 401k with only total stock and an IRA with only Total Bond. When it comes time to rebalance across your entire portfolio, what do you do? Sell total bond and buy total stock in the IRA (assuming b...
by Lobster
Sat Apr 08, 2017 3:31 pm
Forum: Investing - Help with Personal Investments
Topic: New Boglehead Seeking Alternate Guidance on Portfolio
Replies: 20
Views: 1430

Re: New Boglehead Seeking Alternate Guidance on Portfolio

Questions: 1. Are there better alternatives for storage of emergency funds other than through a saving's account? 2. Should I pay off the car loan in full with available funds? Or should I instead use the cash I have to invest into Vanguard funds? 3. If the latter, I did some research and drafted a...
by Lobster
Sat Apr 08, 2017 3:08 pm
Forum: Investing - Help with Personal Investments
Topic: 36yo looking for feedback
Replies: 25
Views: 3564

Re: 36yo looking for feedback

Hello, Questions: 1. If I end up having the means and desire to retire early, can I count on using the 72t rule? Are there any surprises or common misunderstandings there? Should I be doing anything differently to maximize flexibility? Do I even need to worry about this? 2. Thoughts on my asset all...
by Lobster
Thu Mar 30, 2017 4:54 am
Forum: Personal Finance (Not Investing)
Topic: Budgeting vs Tracking Expenses?
Replies: 42
Views: 3275

Re: Budgeting vs Tracking Expenses?

Is there a psychological benefit to putting this in a formal budget? Do I just need better software? Your approach is the same we used, and I experienced the same frustrations with budgeting software. I wanted to have better visibility even though expense tracking worked okay. We settled on using m...
by Lobster
Thu Mar 30, 2017 4:18 am
Forum: Investing - Help with Personal Investments
Topic: Transfer from Edward Jones
Replies: 13
Views: 1183

Re: Transfer from Edward Jones

Go for it! Pick a brokerage with a good reputation and let them take care of the details. Vanguard PAS might be the right fit for a hands off approach.

:sharebeer
by Lobster
Thu Mar 30, 2017 4:14 am
Forum: Investing - Theory, News & General
Topic: Stay the course, always?
Replies: 55
Views: 4323

Re: Stay the course, always?

bob_m10 wrote:But, is there a time when you do need to adjust your AA based on what the market is doing?


As long as your AA is established as part of a solid plan and none of your personal situation has changed in a meaningful way, then stay the course!

:sharebeer
by Lobster
Sun Mar 19, 2017 7:18 pm
Forum: Investing - Theory, News & General
Topic: It's worth remembering that bull markets don't last forever
Replies: 95
Views: 6813

Re: It's worth remembering that bull markets don't last forever

An asset allocation should be set based on willingness and need to take risk. A retiree who hasn't met their savings goal is in a difficult spot because they have low ability, but high need, to take risk. This situation should be handled with care. [edit: Grt2bOutdoors rightly points out that abilit...
by Lobster
Sun Mar 19, 2017 11:21 am
Forum: Investing - Help with Personal Investments
Topic: Keep Financial Advisor or move to 3 Fund Portfolio?
Replies: 48
Views: 3846

Re: Keep Financial Advisor or move to 3 Fund Portfolio?

It looks like I have a lot more reading and research to do, specifically regarding optimizing tax efficiency. In 28% bracket now, soon to be 33% after my June wedding (165k salary plus wifes 105k salary). Here's the tax efficient placement cheat sheet: - Bonds in tax advantaged (401k/IRAs) up to yo...
by Lobster
Thu Mar 16, 2017 9:41 am
Forum: Investing - Help with Personal Investments
Topic: Switching to Vanguard
Replies: 7
Views: 620

Re: Switching to Vanguard

Do the calculations above make sense and would you recommend the VFIFX fund for a now stay at home mother's tIRA account? I recommend using a rate of return in line with the current long term projections. The market has historically done ~10%/year for the past 100 years, however many (including tru...
by Lobster
Fri Feb 17, 2017 10:24 pm
Forum: Investing - Help with Personal Investments
Topic: Is it reasonable to have 100% in the stock market?
Replies: 58
Views: 6071

Re: Is it reasonable to have 100% in the stock market?

I personally don't think that one should let potential capital gains taxes drive the AA bus. Your AA is what it is because you want to keep your risk in check, and failing to do this can have more drastic consequences than capital gains taxes. I agree that it's better to buy funds in order to get y...
by Lobster
Thu Feb 16, 2017 10:37 pm
Forum: Investing - Help with Personal Investments
Topic: Is it reasonable to have 100% in the stock market?
Replies: 58
Views: 6071

Re: Is it reasonable to have 100% in the stock market?

Thanks for all the comments and feedback. I think I will keep an aggressive AA but not 100% stocks, 80/20 probably. I definitely encourage you to take time (lets say 3-6 months) to do enough research to truly settle on your AA. There are cases to be made for 100/0 and for 80/20 and it's worth being...
by Lobster
Fri Jan 27, 2017 1:40 am
Forum: Local Chapters and Bogleheads Community
Topic: HAPPY 93RD BIRTHDAY, TAYLOR!
Replies: 199
Views: 8505

Re: HAPPY 93RD BIRTHDAY, TAYLOR!

Happy Birthday Taylor! Thank you for your substantial contribution in support of Mr. Bogle's crusade "To give ordinary investors a fair shake."
by Lobster
Sat Dec 31, 2016 5:39 pm
Forum: Investing - Theory, News & General
Topic: Does it matter "when" you buy bonds?
Replies: 11
Views: 1129

Re: Does it matter "when" you buy bonds?

Is there a good or bad time to buy into bond funds? Take the fund VICSX. Would you rather have bought on 09/29/2016 or 3 months later on 12/15/2016? The trick is to look at the December returns in September and pick the best time to buy. Livesoft charges 2 and 20 for use of his time machine though ...
by Lobster
Sun Dec 25, 2016 3:07 pm
Forum: Investing - Help with Personal Investments
Topic: Active Funds better than Index Funds for coming Bear Market?
Replies: 27
Views: 2367

Re: Active Funds better than Index Funds for coming Bear Market?

To compare performance between the indexes and the corresponding groups of actively-managed no-load funds, we selected several key periods in the market and broke those time periods into a series of rolling 12-month segments. Methodology does not account for fund fees, though the authors do emphasi...
by Lobster
Sat Dec 17, 2016 10:22 pm
Forum: Investing - Help with Personal Investments
Topic: When to rebalance?
Replies: 3
Views: 447

Re: When to rebalance?

If you are actively making contributions, you could also just direct new contributions to bonds and move there gradually. If all of your funds are in tax-advantaged accounts I concur that it is fine to do all at once, but I wouldn't recommend taking the tax hit if you are still accumulating.
by Lobster
Wed Sep 14, 2016 8:15 pm
Forum: Investing - Help with Personal Investments
Topic: I am going to stop tilting. Sanity check.
Replies: 66
Views: 6875

Re: I am going to stop tilting. Sanity check.

So: Any thoughts on this? Wrestled with same questions this year. I decided that I will sleep better with a simple portfolio. Probably a good idea to stop if you're already doubting the strategy. Or you can do what I've seen some on this forum do, which is "tilt" your portfolio by such an...
by Lobster
Fri Sep 02, 2016 10:54 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard PAS
Replies: 21
Views: 1805

Re: Vanguard PAS

The biggest plus to Vanguard's PAS is not that they will make you higher returns in good times, but rather they may keep you from doing something stupid in bad times. plannerman Yes this is the value of PAS in my opinion. As long as OP has the fortitude to stay the course then it isn't needed. Howe...
by Lobster
Wed Aug 31, 2016 8:45 pm
Forum: Investing - Theory, News & General
Topic: How to give unsolicited advice
Replies: 54
Views: 4039

Re: How to give unsolicited advice

Back to the actual topic, I sometimes comment that I was blown away when I learned how simple an effective investment strategy can be. Sometimes people comment that they wish they had a better grasp on investing. In those cases I send them a kindle copy of the Bogleheads Guide to Investing.
by Lobster
Wed Aug 31, 2016 7:56 pm
Forum: Investing - Theory, News & General
Topic: How to give unsolicited advice
Replies: 54
Views: 4039

Re: How to give unsolicited advice

I'm wondering if the other couple are posting right now to another message forum: We are spending the weekend with a couple 20 years older than us. How can we convince them to buy into our MLM scheme? Can you direct me to that forum? I've been looking for some resources to help me improve my pitch....
by Lobster
Sat Aug 27, 2016 1:06 pm
Forum: Investing - Help with Personal Investments
Topic: Feedback on Portfolio AA
Replies: 10
Views: 681

Re: Feedback on Portfolio AA

sener212 wrote:Any thoughts on the following equity AA of my portfolio


Looks great. Stick with it and don't adjust your allocation based on recent performance.
by Lobster
Sat Aug 27, 2016 1:04 pm
Forum: Investing - Help with Personal Investments
Topic: $2.2M Windfall
Replies: 37
Views: 5393

Re: $2.2M Windfall

I have been doing a lot of reading, but I feel like the amount of information to digest is rather overwhelming. Take your time to establish a plan. 70% of individuals who win the lottery end up broke within 5 years, so proceed with caution. Be very careful about who you work with; Vanguard will hel...
by Lobster
Sat Aug 27, 2016 11:52 am
Forum: Investing - Help with Personal Investments
Topic: Do you count your emergency fund?
Replies: 45
Views: 3664

Re: Do you count your emergency fund?

ARB57 wrote:Do you count your emergency fund as part of your investable assets when figuring your asset allocation?


Nope, I don't count the emergency fund as part of my AA.
by Lobster
Thu Aug 25, 2016 9:57 am
Forum: Investing - Help with Personal Investments
Topic: Decisionmaker asking if we're in correct investment lineup
Replies: 12
Views: 1171

Re: Decisionmaker asking if we're in correct investment lineup

Any thoughts on how to handle this? Howdy overwatch01, Glad to hear your CEO sounds open to exploring the options. Regarding how to be effective sharing your case, here are a couple thoughts: ⋅  Good job taking a collaborative approach to this by being conscientious of the fact that they'...
by Lobster
Fri Aug 19, 2016 11:38 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review ?
Replies: 23
Views: 2366

Re: Portfolio Review ?

Taylor Larimore wrote:Bogleheads:
I have a friend who asked me to review his 4-fund portfolio:


I imagine it will do just fine. Of course your friend could simplify further with the Three Fund Portfolio which will achiever greater diversity at lower cost, but I trust you are already aware of this :wink:
by Lobster
Fri Aug 19, 2016 10:56 am
Forum: Investing - Help with Personal Investments
Topic: Debt Free - Now What
Replies: 37
Views: 3888

Re: Debt Free - Now What

Hi Sempsis101, First, thank you for your service :happy. Second, I will only repeat what's already been said, and provide a couple books you might find valuable. ⋅  Meet Bob, the world's worst market timer ⋅  Establishing an investment policy statement is a very helpful way to cl...
by Lobster
Tue Aug 16, 2016 8:25 pm
Forum: Personal Consumer Issues
Topic: Editing shortcut emacs-like keys. Do u use them?
Replies: 34
Views: 2431

Re: Editing shortcut emacs-like keys. Do u use them?

livesoft I'm glad to hear you use shortcuts for the one true editor :wink: I coded exclusively in emacs through university. I still edit files on remote servers in emacs, though I've been forced to learn enough vi commands given its available more often. The emacs shortcuts don't appear to work on W...

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