Search found 649 matches

by learning_head
Sun Feb 12, 2017 12:38 am
Forum: Investing - Theory, News & General
Topic: 'Won the game', but what factors could potentially derail it?
Replies: 57
Views: 4273

Re: 'Won the game', but what factors could potentially derail it?

If the US implements a national sales tax or Value-Added Tax (VAT), you'd be taxed on your spending, not your income. The Roth IRA wouldn't protect you from that tax. If a potential VAT were applied to basic consumer goods, it would be regressive and opposed by policy makers. VAT exists in other na...
by learning_head
Sat Feb 11, 2017 11:55 pm
Forum: Investing - Theory, News & General
Topic: Agrument for ROTH 401K
Replies: 36
Views: 1886

Re: Agrument for ROTH 401K

Even assuming this is true, you still ended up paying more tax by going to Roth 401K at 28% marginal tax rate. Do you do your own tax? In USA tax system, we do not tax the first X dollar as the same as the last Y dollar, we do not have a flat tax system. We have tax brackets. ved, It does not matte...
by learning_head
Sat Feb 11, 2017 4:19 pm
Forum: Investing - Theory, News & General
Topic: 'Won the game', but what factors could potentially derail it?
Replies: 57
Views: 4273

Re: 'Won the game', but what factors could potentially derail it?

If the US implements a national sales tax or Value-Added Tax (VAT), you'd be taxed on your spending, not your income. The Roth IRA wouldn't protect you from that tax. If a potential VAT were applied to basic consumer goods, it would be regressive and opposed by policy makers. VAT exists in other na...
by learning_head
Sat Feb 11, 2017 4:02 pm
Forum: Investing - Theory, News & General
Topic: Agrument for ROTH 401K
Replies: 36
Views: 1886

Re: Agrument for ROTH 401K

You need to take into account that your take-home pay with a traditional 401k is higher than that compared to a Roth 401k. That needs to be considered to do a fair analysis comparing the two options. I did this. But the argument is the account has much more gains than contributions Please reread wh...
by learning_head
Thu Feb 09, 2017 9:05 am
Forum: Investing - Theory, News & General
Topic: tax treatment of shares gifted to child?
Replies: 8
Views: 896

Re: tax treatment of shares gifted to child?

... for legal tax avoidance ... Sorry for dumb but real question: If IRS is auditing you, do you tell them the child then gifted you back the resulting amount back? Do you have to coach your child to tell the same story? Or do you leave the funds in child's name and then potentially worry about the...
by learning_head
Thu Feb 09, 2017 8:56 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 61888

Re: Do you think Ric Edelman is correct, never pay down mortgage

2.25% pre-tax . After tax it's maybe 1.7 or 1.5% or so, I'd have to do the math. That's great. Please make sure to account for any fees related to taking out the mortgage. Overall, if it's 1.5-1.7%, I would also not pay it off and get before-tax 3% Andrews CD instead, assuming your overall interest...
by learning_head
Thu Feb 09, 2017 8:22 am
Forum: Investing - Theory, News & General
Topic: Is it wise to buy I bonds yielding lower than TIPS?
Replies: 18
Views: 1472

Re: Is it wise to buy I bonds yielding lower than TIPS?

Four years ago, 10-year TIPS has real yields of negative 0.57%, making 0% real yield series I savings bonds an obviously better choice. Since then, 10-year TIPS have surged to a real yield of positive 0.38%. The I bonds still have some built-in advantages, though -- not only do they defer taxes, bu...
by learning_head
Wed Feb 08, 2017 11:54 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 61888

Re: Do you think Ric Edelman is correct, never pay down mortgage

My rate is 2.25% for 15 years. If I can't beat that investing, then I shouldn't be investing. I ain't paying it down. Your mileage (and interest rate) may vary... Is 2.25% after-tax or pre-tax. If you have enough money, your real choice IMO is: - pay off mortgage to get guaranteed 2.25% return (gue...
by learning_head
Wed Feb 08, 2017 10:32 am
Forum: Investing - Theory, News & General
Topic: Vanguard's Wellesley Income fund is incredible
Replies: 112
Views: 18351

Re: Vanguard's Wellesley Income fund is incredible

I like the steady "active-light" approach for a tiny 15 bp. I'm not an index purist, so Wellesley's solid long-term management for me is a selling point. Another plus: internal rebalancing. I don't always have the guts to rebalance myself, so I leave it to the managers. And balanced funds...
by learning_head
Tue Feb 07, 2017 9:42 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Wellesley Income fund is incredible
Replies: 112
Views: 18351

Re: Vanguard's Wellesley Income fund is incredible

There is no reason to pick this fund for any new money over a LifeStrategy fund IMO. If you don't like international allocation of LifeStrategy funds, pick your own with individual index funds. If you think it's superior, I did not get why. OP mentioned its superior returns but did not compare it to...
by learning_head
Tue Feb 07, 2017 9:08 am
Forum: Investing - Theory, News & General
Topic: Any good alternative to TIPS in taxable account?
Replies: 15
Views: 833

Re: Any good alternative to TIPS in taxable account?

I am very interested in knowing the answer as well. I think the answer depends on what you are trying to achieve. If it's covering basic expenses for the rest of your life, the only semi-alternative I know are CPI-adjusted annuities which have been disappearing lately. Principal still sells them via...
by learning_head
Mon Feb 06, 2017 8:46 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

I don't get why anyone likes TIPS. They guarantee you a 0% real return. That's only slightly better than a savings account. Granted, it's a guarantee, but it's a guarantee to never get ahead. For those of us who lived through the late '70s as an adult, inflation means something more than to those w...
by learning_head
Mon Feb 06, 2017 8:40 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

I've not heard anyone outside of the insurance industry recommend that anyone considering a SPIA go all in with them. Vanguard says that most of their clients who are buying them are only putting around 20% of their portfolios in them. When you think about the kind of people who are going to be att...
by learning_head
Sun Feb 05, 2017 7:55 am
Forum: Investing - Theory, News & General
Topic: Good Backdoor Roth Vid. The end is nigh?
Replies: 5
Views: 1342

Re: Good Backdoor Roth Vid. The end is nigh?

Was hoping he would comment on how to preserve any basis in the TIRA if the invested contribution dropped in value before the 12 month conversion. Answer: Leave a few bucks in the TIRA when you convert. Alan, could you elaborate on this? I thought even if you have $0 in your TIRA, you could still h...
by learning_head
Sun Feb 05, 2017 6:56 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

Insurance companies can try to support their obligations whichever way they want. Yes, that may mean taking on more risk. Point is that I am not the one shouldering that risk, but they are, which is the whole point of my purchasing the product. They have more resources to support such risks than me...
by learning_head
Sat Feb 04, 2017 6:04 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

I would rather have to deal with finding a new US treasury investment for my maturing TIPS than worry about the havoc that large negative yields are reaping within an unstable insurance industry in this type of future. What would you consider a "large" negative yield? There is no "fi...
by learning_head
Sat Feb 04, 2017 5:55 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

Did any retirement expert say if you were planning to buy one you better get it before they run out? There was no announcement by anyone that a deadline was coming up. Nope, just suddenly one day the quote comes up as "No Quote". Well, I am no retirement expert but I've tried to give a wa...
by learning_head
Sat Feb 04, 2017 5:51 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

I would rather have to deal with finding a new US treasury investment for my maturing TIPS than worry about the havoc that large negative yields are reaping within an unstable insurance industry in this type of future. What would you consider a "large" negative yield? There is no "fi...
by learning_head
Sat Feb 04, 2017 11:32 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5249

Re: No Inflation-Adjusted SPIAs at Vanguard

Nothing really replaces CPI-adjusted annuity (incl. social security btw)for assuring guaranteed life-long income stream of stable purchasing power to match your minimal spending needs. TIPS based approaches do not protect from government stopping issuing these securities over time for reinvestment o...
by learning_head
Sun Jan 01, 2017 9:28 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3490

Re: Good time to buy inflation-adjusted SPIA?

BTW I've heard from some who should know that Vanguard takes a very handsome cut on life annuities purchased from Income Solutions compared with most other avenues for purchasing life annuities from Income Solutions. What are other avenues? Quote I have says Vanguard takes 2%. I tried to get quote ...
by learning_head
Sun Jan 01, 2017 12:32 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3490

Re: Good time to buy inflation-adjusted SPIA?

... PF is never going to have us at their mercy because substitutes like TIPS and social security are available. One way to increase your consumption of social security in later retirement, when you need it most arguably, is to defer taking it till age 70. Unfortunately, I don't think this substitu...
by learning_head
Fri Dec 30, 2016 12:32 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3490

Re: Good time to buy inflation-adjusted SPIA?

Here is a potential issue that makes me want to buy one now, even as I am still relatively quite young for any sort of mortality credits (though planning to retire in 5 years or so). TIPS approach assumes there will be ability to buy inflation adjusted SPIA in say 20-30 years. However, that is not a...
by learning_head
Thu Dec 22, 2016 9:54 am
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 2952

Re: TIP: record inflows but price is going down?

@saltycaper: I would think in your explanation of apple analogy, there reason price of apples drops is because there is a greater interest on the seller side the sell than combined interest from all buyer to buy. In other words, seller has some additional knowledge that apples will go bad or any oth...
by learning_head
Wed Dec 21, 2016 8:42 am
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 2952

Re: TIP: record inflows but price is going down?

I understand that for every dollar bought there is a dollar sold. That does not tell us anything about the price movement. However, I think the reason price moves at all is because there is different interest in underlying asset coming from buying side vs selling side. If you are a reluctant seller ...
by learning_head
Tue Dec 20, 2016 11:30 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 2952

Re: TIP: record inflows but price is going down?

PJW, so you are saying that outside of TIP-related ETFs, there is even more selling of underlying TIP related securities? So, in reality and contrary to what most articles claim, on balance, more investors (or rather investor dollars) have been trying to get out of inflation protection since the ele...
by learning_head
Tue Dec 20, 2016 11:26 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 2952

Re: TIP: record inflows but price is going down?

Future inflation expectations (and fear) have increased, and real (TIPS) rates have increased (30 yr from 0.71 to 1.14) since the election, so existing bonds (ETFs/funds) have dropped in value, but people are buying (inflows) to protect against future, increased expectations and fears. And good Bog...
by learning_head
Tue Dec 20, 2016 8:26 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 2952

Re: TIP: record inflows but price is going down?

@alec: Articles talk about "net" inflows, which I assume means (inflows - outflows) and accounts for people existing these.
by learning_head
Tue Dec 20, 2016 7:25 pm
Forum: Investing - Theory, News & General
Topic: TIP: record inflows but price is going down?
Replies: 32
Views: 2952

TIP: record inflows but price is going down?

Since the election, with increased inflation expectations, investors are more interested in TIPS. Many articles indicate that there has been record amount of inflows into TIP and other such funds as a result. However, TIP price has been going down ever since November 9. What am I missing? I thought ...
by learning_head
Tue Dec 20, 2016 4:53 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3490

Good time to buy inflation-adjusted SPIA?

Hi folks, I am considering purchasing an inflation-adjusted SPIA (tied to CPI-index) within the next few years and trying to decide if now is a good time to buy vs waiting. (I am young enough that mortality credits won't make much difference.) In interest-rate rising environment, nominal annuities (...
by learning_head
Wed Nov 09, 2016 10:10 am
Forum: Investing - Theory, News & General
Topic: Just don't panic
Replies: 61
Views: 9034

Re: Just don't panic

Today's market open is pretty amazing and I think should be memorable. It's funny to see all the websites filled with headlines about market being down huge, next to little tickers showing barely any movement. A very good lesson for how hard it is to predict market behavior, even within hours and mi...
by learning_head
Sun Nov 06, 2016 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Help-need to select new upcoming employer health insurance option
Replies: 4
Views: 430

Re: Help-need to select new upcoming employer health insurance option

Our premiums would be significantly lower with the high deductible plan ...but doesn't that also mean our pre-tax savings from premiums are lower? Yes, your premium savings of 3k (=7k-4k) are pre-tax, so your after-tax savings for these should be 3k * ( 1- marginal (fed and state) tax rate). If I g...
by learning_head
Sun Nov 06, 2016 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice - 41yo couple
Replies: 23
Views: 2622

Re: Portfolio advice - 41yo couple

I have quite a lot of stock still to vest, as does my wife, so you'll see from the discussion in posts after the first one that I realized I need to sell now. That will also allow me to loss harvest too. My plan is to annually rebalance in about late February each year, which will allow us to sell ...
by learning_head
Sun Nov 06, 2016 5:39 pm
Forum: Investing - Help with Personal Investments
Topic: Should I signup for HDHP and an HSA?
Replies: 8
Views: 1826

Re: Should I signup for HDHP and an HSA?

simplesimon wrote:no employer contribution and, more significantly, only $138 difference in annual premiums. If it's your employer's goal to save money by offering the HSA, they're doing it wrong.


+1.. may want to double check those two numbers
by learning_head
Sun Nov 06, 2016 5:17 pm
Forum: Investing - Help with Personal Investments
Topic: First time 401K investor Need Help with Choices
Replies: 12
Views: 1118

Re: First time 401K investor Need Help with Choices

1. I should put most of my money in my traditional 401k rather than my roth 401k – I am having trouble understanding what the benefit of one versus the other would be. Would it be beneficial to put some in Roth and some in Traditional as I expect my tax bracket to be higher when I retire? Higher th...
by learning_head
Sun Nov 06, 2016 4:52 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice - 41yo couple
Replies: 23
Views: 2622

Re: Portfolio advice - 41yo couple

Few more answers (IMHO) 4. Is there anything about current market conditions that should make me wary about this allocation? No, try not to look at "current market conditions". That's anti-boglehead way for the most part. 5. What is likely to be our best option(s) for lower votality? I hav...
by learning_head
Sun Nov 06, 2016 4:42 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice - 41yo couple
Replies: 23
Views: 2622

Re: Portfolio advice - 41yo couple

8. I realize that holding onto the employer stock is definitely not Boglehead-approved, but selling at current oil prices seems like a bad decision. One idea may be to aim to sell a fifth of it once a year for five years? Any thoughts? I struggle with similar questions regarding wanting to get as m...
by learning_head
Sun Nov 06, 2016 4:31 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice - 41yo couple
Replies: 23
Views: 2622

Re: Portfolio advice - 41yo couple

Ethelred wrote:Annual contributions
<snip>
$6500 his Roth IRA (backdoor)


At 41 years of age, I think max you can contribute to your Trad / backdoor Roth is $5500. Am I missing something?
by learning_head
Sun Nov 06, 2016 3:55 pm
Forum: Investing - Help with Personal Investments
Topic: Can Bank Change CD Terms Mid-Stream?
Replies: 40
Views: 3365

Re: Can Bank Change CD Terms Mid-Stream?

No reason why they should not be able to change your APY either.
by learning_head
Thu Nov 03, 2016 4:12 pm
Forum: Investing - Theory, News & General
Topic: pre vs. post tax in calculating overall asset allocation (not fund placement)
Replies: 12
Views: 1098

Re: pre vs. post tax in calculating overall asset allocation (not fund placement)

@OP: yes

(& for taxable accont, you'd have to estimate how much you have in gains to approximate how much those would be taxed)
by learning_head
Wed Nov 02, 2016 10:24 am
Forum: Investing - Theory, News & General
Topic: Remind me again why we put VXUS/total intl in our lazy 3 fund portfolio?
Replies: 26
Views: 3608

Re: Remind me again why we put VXUS/total intl in our lazy 3 fund portfolio?

pkcrafter wrote:If at least one of your assets isn't underperforming, you aren't diversified.


+1
by learning_head
Wed Nov 02, 2016 10:17 am
Forum: Investing - Theory, News & General
Topic: Help me understand dividends
Replies: 93
Views: 4865

Re: Help me understand dividends

I don't think this is too complicated... Scenario 1: You are an active investor & owner of a specific private company and get to make decisions: company makes $X in profit. You get to decide whether to take part of $X back (i.e. take the dividend), or leave it all on the company books and reinve...
by learning_head
Tue Nov 01, 2016 10:23 pm
Forum: Investing - Theory, News & General
Topic: Why can't stocks be deterministically/objectively/mechanically priced?
Replies: 75
Views: 4390

Re: Why can't stocks be deterministically/objectively/mechanically priced?

I thought more about it, and here's how I think I envision it: Imagine a private company that wants to go public. They look at their assets A and liabilities L. Then compute equity E = A - L and IPO. Share price = E / shares. So far, so good. Now instead of having a highly speculative market as it ...
by learning_head
Tue Nov 01, 2016 9:51 pm
Forum: Investing - Theory, News & General
Topic: Help me understand dividends
Replies: 93
Views: 4865

Re: Help me understand dividends

I'm taking the investor's perspective. Why should I, an investor, care about receiving dividends, when they do not increase my wealth but do increase my tax burden? Am I missing something? I would guess most folks on this board would agree with you and do not care about dividends from a fund aside ...
by learning_head
Tue Nov 01, 2016 9:35 pm
Forum: Investing - Theory, News & General
Topic: Paid off home. View as bond or cash in AA if you plan to sell in retirement?
Replies: 32
Views: 2701

Re: Paid off home. View as bond or cash in AA if you plan to sell in retirement?

Include it as what it is - it is undiversified residential real estate. Definitely isn't a bond nor is it anything resembling cash. +1 I think this nails it. Same thing as if I went out tomorrow and bought your house from you. How would you tell me to consider it in my portfolio? Exactly what it sa...
by learning_head
Tue Nov 01, 2016 9:27 pm
Forum: Investing - Theory, News & General
Topic: Employer Equity Program vs 401k - close results?
Replies: 10
Views: 863

Re: Employer Equity Program vs 401k - close results?

You get an immediate and free 40% gain on your share purchase. If you have the discipline to sell after a year, this is a no-brainer. Go for the share program. +1 If you model out the cash flows, you will notice that - if you choose to buy the shares - you are only skipping one year's worth of full...
by learning_head
Sun Oct 30, 2016 8:42 pm
Forum: Investing - Theory, News & General
Topic: How much international?
Replies: 80
Views: 7546

Re: How much international?

I used to have international allocation closer to 50%, but have been trying to limit it closer to 30%, once I realized (thanks to Rick Ferri's book) that a lot of the return of that international allocation is driven purely based on dollar index (i.e. relationship of dollar to other currencies). So ...
by learning_head
Sun Oct 30, 2016 8:36 pm
Forum: Investing - Theory, News & General
Topic: too much passive indexes => bad governance?
Replies: 15
Views: 1453

too much passive indexes => bad governance?

(Apologies is this was discussed) I thought this article mentions a couple of interesting points: (1) Aside from well-known rise of index funds in and out of Vanguard, there are a ton of "closet indexers" (active funds basically charging high fees to deliver index performance with minor de...
by learning_head
Fri Oct 28, 2016 2:48 pm
Forum: Investing - Theory, News & General
Topic: The riskiness of home ownership
Replies: 239
Views: 16435

Re: The riskiness of home ownership

In that situation I agree, but most people are not in that situation. (money to pay off mortgage sitting in investments). You don't have to have a terrible FICO score to pay interest on a mortgage, every mortgage has interest and it should be included in $Y as it is an expense to own. Thanks BW1985...
by learning_head
Fri Oct 28, 2016 2:22 pm
Forum: Investing - Theory, News & General
Topic: The riskiness of home ownership
Replies: 239
Views: 16435

Re: The riskiness of home ownership

Are you including the interest on the mortgage as an expense? If not, shouldn't it be? With rent you do not have this expense. You missed the most important part - you don't get back interest payments either. When you finance a house using a mortgage, you pay rent to the bank (basically, you're ren...
by learning_head
Fri Oct 28, 2016 2:08 pm
Forum: Investing - Theory, News & General
Topic: Roth 401k vs Roth IRA for after-tax 401k money?
Replies: 5
Views: 528

Re: Roth 401k vs Roth IRA for after-tax 401k money?

Thanks for the replies! Do you know then of any disadvantages of contributing after-tax money to Roth 401(k) until I quit and after I leave my employer rolling everything over from Roth 401(k) to Roth IRA? (I already have Roth IRA started many years ago so 5-yr-rule should not be an issue) (Gryphon ...

Go to advanced search