Search found 1464 matches

by msk
Mon Feb 17, 2020 7:26 am
Forum: Investing - Theory, News & General
Topic: At what age did you begin adding bonds?
Replies: 138
Views: 11227

Re: At what age did you begin adding bonds?

Never bought a single bond. Now age 75. Dabbled in individual stocks, Options and rental RE but also fell into a good job that promised a COLA pension. Was lucky. Ended up with a nice :moneybag I sincerely believe that I could have ended up with :moneybag :moneybag :moneybag if I had taken even more risk but that's what my nerves and family obligations could stand. Individuals have different sensitivities.
by msk
Mon Feb 17, 2020 7:13 am
Forum: Personal Investments
Topic: Future inheritance asset allocation
Replies: 14
Views: 1679

Re: Future inheritance asset allocation

I am 75 and can live comfortably on my COLA pension, so in a similar situation to your Dad. I am not tax resident in the USA so I have nil tax complications. My entire portfolio is in VT (Vanguard World by free market weight) and equivalents for non US tax payers. I liquidate 3.5% every year and hand it to the kids as monthly gifts. A fortune teller 57 years ago told me that I will live to 95, but I remain skeptical. Three centuries of statistics in numerous countries (see Piketty: Capital in the Twenty-First Century) say that Trade-and-Industry returns 5 to 6% in real terms, on average. Shiller's reconstructed US stocks and CPI data for 1871 to 2018 says that they returned over 6.5% in real terms. I think I should be OK to age 95. So shoul...
by msk
Mon Feb 17, 2020 6:57 am
Forum: Personal Investments
Topic: Single stocks... would you?
Replies: 125
Views: 13101

Re: Single stocks... would you?

Almost everyone has dabbled in single stocks until they matured and went diversified. We almost always have to learn the hard way. Nevertheless, doubling an investment in AAPL or whatever is not worth much if all you had put into it was just a few percent of your Net Worth. Did you have the nerve to put in, say, 30% of your NW? You wish to dabble in individual picks? Learn to use Options. You can strictly limit your downside but actually impact your NW (if you have been right!). IMHO Options is the way to dabble in individual picks. I've since matured even beyond that and retired totally into 100% stocks worldwide by market weight. Took me 4 decades dabbling to get here... Now I plan to use Options when the market tanks >30%. Individual sto...
by msk
Fri Feb 14, 2020 7:30 am
Forum: United Arab Emirates
Topic: Tax on European domiciled ETF's
Replies: 5
Views: 8029

Re: Tax on European domiciled ETF's

Or you can buy VWRA (Vanguard World Accumulative, based in Ireland), and never worry about taxes at all. Vanguard sorts it all out to various countries, at maximum efficacy, and reinvests all dividends after tax and fees. And neither New Zealand nor the UAE tax you on income outside their borders. I am presuming that you are currently a tax resident of the UAE? Make sure you understand your exposure, if any, to New Zealand capital gains taxes before you repatriate your tax residence to New Zealand. It may be wise to cash out everything before moving back to NZ and thus avoid any quibble regarding capital appreciation of the VWRA during the years you were a tax resident of the UAE. I.e. restart in NZ with a neat load of cash.
by msk
Fri Feb 14, 2020 2:01 am
Forum: Investing - Theory, News & General
Topic: ETF to Hold for 50 Years
Replies: 118
Views: 13800

Re: ETF to Hold for 50 Years

+1 for VT
My several adult kids live in different countries, so they need different versions of VT, e.g. I told my kids in Canada to go for 5% VCN (Vanguard Canada) + 95% VXC (Vanguard world excluding Canada), my kids in countries where they do not pay income tax to go for VWRA (Vanguard World Accumulative, basically an Ireland based accumulative version of VT with dividends reinvested).
by msk
Fri Feb 14, 2020 1:49 am
Forum: Personal Finance (Not Investing)
Topic: $2-2.5M House?
Replies: 80
Views: 10529

Re: $2-2.5M House?

I think many BHs who have high incomes sooner or later wonder whether they are too stingy and are letting their lives drift at a lifestyle that is much lower than they can afford indefinitely into the future. My rules of thumb since my 20s, 50 years ago, and I have yet to see anything to point out that they are wrong: 1. Save and invest 30% of after tax income. Paying off equity in one's home mortgage may be treated as investing, not the interest part. 2. Never purchase a home worth more than 3x income (2.5x combined income) 3. Never acquire a car(s) worth more than 6 months' income(s). Does not matter whether paying cash or leasing. Of course one can have hobbies and wants that exceed the above "rules" and as long as these excess...
by msk
Fri Feb 14, 2020 1:21 am
Forum: Personal Investments
Topic: best use of 750k Cash
Replies: 12
Views: 2419

Re: best use of 750k Cash

3. Pay off the mortgage on my current home and invest rest in VTI/FSTVX. 4. Spend a 100K to finish a basement in our home and use the rest in VTI/FSTVX For peace of mind and adding more room as the kids grow, I would do these two. Many of us think of "forever home" as possible. Not sure whether such homes actually ever are forever and last through the entire kids' growing up. I would move only if the refurbishment/basement finishing of my existing home is no longer satisfactory or I expect it to be unsatisfactory for whatever reason. No matter whether I move or not, I hate having any debt on my home. Hence my priority is no mortgage on my home, existing or new. The rental property is a side business with concentrated risk, like t...
by msk
Wed Feb 12, 2020 10:30 pm
Forum: Investing - Theory, News & General
Topic: Indexing versus real estate for low income investors
Replies: 21
Views: 1957

Re: Indexing versus real estate for low income investors

For RE you have to be right on location, in space and time. Almost any location has had or will have its time. I am sure that investors are raking in millions right now in war torn areas, Kabul, Idlib, Tripoli, etc. You make a lot of money in the locations that people are loathe to invest in. Perhaps in your own city it's possible to make far higher returns as a slum landlord than in a posh area of town. Nobody can point out where, in time and space, you ought to invest today. Looking at "safe" locations, in space and time, leads to returns that are usually lower than diversified ETFs. Why? because everyone thinks it's easy to make money in RE and I am always amazed at how many people feel that investing in a stocks portfolio is t...
by msk
Wed Feb 12, 2020 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Where to leave money when we die
Replies: 68
Views: 6808

Re: Where to leave money when we die

There are so many worthy causes, but I recommend against a unique scholarship. A) A pain to administer--someone has to pick the worthy candidate. B) No one applies. A stunning lesson I learned as a professor, students don't bother applying for scholarships. My department had a full-year tuition scholarship and we had to beat the bushes to get students to apply, and I mean just put their name in. This is not an unusual problem, and I worked at a very blue-collar university. Lots of first generation students but clueless about opportunities for aid. If you are still a professor there, tell them that other schools use automatic applications. E.g. a school in which I am involved puts all grad students into auto mode (for "merit" scho...
by msk
Wed Feb 12, 2020 12:02 am
Forum: Investing - Theory, News & General
Topic: Equity allocation for young investors: am I missing something?
Replies: 47
Views: 3240

Re: Equity allocation for young investors: am I missing something?

Just wondering... Has anyone ever felt that "currently the stock market looks cheap"? I started dabbling in stocks in the early 1980s. The P/E for stocks looked ridiculously high compared to my local RE market. Then came the 1986(?) collapse. Since it wasn't clear to me as to why the market collapsed, the P/E still looked high. But the market kept going higher anyway. So I felt that Japanese stocks will also keep rising. All those Sony Walkmans, etc. So then I learned that P/Es can be too high. But then the dotcom bubble came. But these were the growth companies of the future! So I got caught in the NASDAQ collapse. Then came the second collapse in the 2000s. Yawn. I never really noted it. Perhaps I was finally learning. The marke...
by msk
Tue Feb 11, 2020 1:46 am
Forum: Personal Finance (Not Investing)
Topic: HS senior to-be is telling us he is thinking about majoring in Economics...
Replies: 75
Views: 7740

Re: HS senior to-be is telling us he is thinking about majoring in Economics...

He can study anything that turns him on but he ought to be aware that computer science is not the same as coding when it comes to making $ and that economics is not the same as a CPA. Fortunately he can learn coding while studying any subject, at any level, and become a CPA if salaries are not high enough for his life style as an economist. The world will be very different from now when he finishes his doctorate 8+ years hence. But he ought to learn skills that seem to be in demand as he progresses throughout his studies. Half of my physics Class of 1966 ended up practising primarily computing/coding with some petroleum engineering/geophysics thrown in. No way that in 1962/63 as freshmen we could have planned that. One of my high school cla...
by msk
Tue Feb 11, 2020 1:19 am
Forum: Investing - Theory, News & General
Topic: I have a wild [asset allocation] theory. Poke some holes in it.
Replies: 39
Views: 7219

Re: I have a wild theory. Poke some holes in it.

The one regret I have in my investing life (5 decades so far) is that I was not more aggressive in my younger days. I would have learned what I have to date much earlier and gotten much richer by now. I took more risks than the BH philosophy, but in retrospect not enough. A 25 year-old can lose ALL his (puny) savings and do very well over the next several decades. Difference between those aiming for FIRE and wealth. BH philosophy is for those aiming for slightly-younger, slightly more comfortable retirement. Bogle would not have made his billions by following BH advice. Just an opinion.
by msk
Tue Feb 11, 2020 1:00 am
Forum: Investing - Theory, News & General
Topic: Non-US investor looking to invest in US
Replies: 8
Views: 641

Re: Non-US investor looking to invest in US

"There are 2 issues if the amount is many million$. India may need to be satisfied that the money is legit and already taxed. The US will need to know the purpose of the transfer. Usually saying "Investment" is enough. Experience (from elsewhere, not India) shows that it takes no more form filling than if the transfer was $10k (that seems to be the cutoff for banks to report forex to Central Banks these days, so no extra forms). You will have headaches as regards taxation of the future income, probably both in India and the USA. Some stuff to sort out: does India tax its residents on worldwide income and capital gains or only on income made in India and/or imported to India? The USA taxes all income made in the USA, even nonr...
by msk
Tue Feb 11, 2020 12:34 am
Forum: Investing - Theory, News & General
Topic: Equity allocation for young investors: am I missing something?
Replies: 47
Views: 3240

Re: Equity allocation for young investors: am I missing something?

Sigh. Most of these AA arguments are based on the imagining that anyone learns from others' wisdom and experience. Maybe true for the 50 year-olds who have already missed the get-rich boat; almost certainly not true for many of us when we were in our 20s and 30s. Any 25 year old "knows" that it is possible to accumulate great wealth in the stock market, that it is "possible" to time the market (all the TV talking heads say so many times a day), etc. What makes you insist that the kid is not the next Buffett? IMHO the best advice to give the 25 year old is to go 100% diversified stocks. He may listen, but I expect that he will still play individual stock picks...There WILL be a market correction. The kid WILL try to time ...
by msk
Sat Feb 08, 2020 3:00 am
Forum: Investing - Theory, News & General
Topic: How much to hold in cash during retirement?
Replies: 51
Views: 6674

Re: How much to hold in cash during retirement?

I feel that many BHs have an unjustifiable fear of having to sell stocks when the market is down. Firstly, unless you have "just" invested in stocks, you are not selling at a loss (long term gains, etc.). Secondly, you are selling a trivial amount annually anyway. The OP is, presumably, in good times, selling, say, 2% of his stocks portfolio. Let's say the market drops 50%, so, to maintain the same standard of living and acquisition of toys, he will have to sell 4% for that year. But he seems to have the option of cutting back on his "wants" anyway. Will the market then stay down for the next 10 or 20 years? So what? his legacy will still keep growing anyway (>5% real is the looooong term trajectory anyway). OK, for extr...
by msk
Sat Feb 08, 2020 2:17 am
Forum: Personal Consumer Issues
Topic: Parents' would like fabulous 80th birthday family trip
Replies: 33
Views: 4148

Re: Parents' would like fabulous 80th birthday family trip

Frankly most tourist areas around the world would do quite well. We have done such family trips with and without elderly couples. Our recipe is to book a house/apartment or rooms in a 4 star hotel/resort plus a vehicle that can accommodate the full tribe. Depending on the country we either book a driver with the vehicle/minibus or self drive. Museums, scenery, quaint towns and villages quickly bore children. On one trip to Italy even the elderlies refused to visit any museum or church in Florence! Been there, done that sort of thing. Beaches seem to keep everyone content. Just go to different beaches rather than stick to one. Suitable locations are available all over the world, e.g. Koh Samui or Phuket, Thailand to Barbados, Surfers Paradis...
by msk
Tue Feb 04, 2020 5:40 am
Forum: Personal Investments
Topic: Am I calculating Inflation correctly?
Replies: 6
Views: 826

Re: Am I calculating Inflation correctly?

5% real is a good, even a quite optimistic, view of returns over next 35 years. Almost exactly the return for global, USD, portfolios since 1900 (Dimson Marsh Staunton data). 1% real is a reasonable long term bet for bonds - unfortunately almost all government bonds are trading at lower real yields than this (nominal bonds should provide a higher return than RRBs/ TIPS, because they carry inflation risk. The long term returns of nominal bonds are about 1% real). Over 3 centuries, according to Piketty, "Trade and Industry" returned around 5 to 6% in real terms, in many countries. I concur with a reasonable assumption being 5% real scattered worldwide. The US has actually done a bit better than 5% real between 1871 till 2018 using ...
by msk
Sun Feb 02, 2020 9:43 am
Forum: Personal Finance (Not Investing)
Topic: Need help with valuation of small company
Replies: 12
Views: 1100

Re: Need help with valuation of small company

You could auction your share to the other four through secret bidding? Or semi-open bidding like on eBay? I.e. you put a time limit, say, one week, and inform all of the highest bid received each day.
by msk
Sun Feb 02, 2020 9:33 am
Forum: Personal Consumer Issues
Topic: Living in the UK for 3-6 months
Replies: 1
Views: 343

Re: Living in the UK for 3-6 months

Like much of Britain, the Lake District is superb in fine weather but gets tiresome quite quickly in lousy weather. Unfortunately all that nice greenery in the Lake District demands a lot of rain and fog. 3+ months might end up seeming excessively long for somebody not used to that kind of inclement weather. Perhaps you might prefer 3 months in the Lake District and 3 months somewhere on the south coast favored by retirees? Say, around Torquay? Back in the 1980s there used to be a requirement that you need a UK driving licence if you are resident in the UK for longer than 3 months. Perhaps people knowledgeable with current regulations might chime in. Not sure how "residing in the UK" is defined.
by msk
Sun Feb 02, 2020 7:46 am
Forum: Non-US Investing
Topic: 40 y.o. European expat, UAE resident, high 7 figures
Replies: 4
Views: 1020

Re: 40 y.o. European expat, UAE resident, high 7 figures

After 40 years investing I have decided on 100% stocks worldwide by market weight. No bonds because my portfolio is large enough to weather, say, a 50% drop for several years. After many plays with long term data and Excel, I have come to the conclusion that I can safely withdraw 5% of portfolio balance annually, forever, and, if history is any guide (from 1871 to 2018) then the portfolio balance should keep up with inflation forever. There will, of course be volatility, but as long as I never exceed cashing out more than 5% in any year then my cash withdrawals ought to, on average, also keep pace with inflation forever. Hence, if you trust yourself not to panic following severe market collapses, and you have in excess of, say, $5 million t...
by msk
Wed Jan 29, 2020 2:20 am
Forum: Personal Consumer Issues
Topic: Buying a new-construction home
Replies: 28
Views: 4258

Re: Buying a new-construction home

I built around 10 houses/buildings using various contractors over the decades. Any contractor knows far more about what matters than you do. If you have a good rapport with him from Day 1 it will pay huge dividends. If you have a major quibble from the start you will be penalised and pay through the nose. The house will cost you at least 10% to 20% more than what you are quoted or expect. Ditto for time till you can move in. Be prepared. No need to bother with discounts from asking price. Ask for freebees, like cost-free upgrades and/or substitutes of materials/fixtures, etc. at net dealer cost to you. Quite often contractors automatically add their buying "commission"/service charge (10% to 25%?) to whatever you change from the s...
by msk
Sun Jan 26, 2020 1:34 am
Forum: Personal Consumer Issues
Topic: Most inexpensive places to buy new cabinets and countertops
Replies: 21
Views: 4739

Re: Most inexpensive places to buy new cabinets and countertops

I have experience with probably 50+ kitchen installs/replacements over the decades, rental and own occupancy. Hands down, if there is an Ikea near you, then Ikea is the best option. Fairly priced and a 25 year warranty. Pay them to do the installation. When you visit them go with a detailed plan of your kitchen, walls, windows, etc. Down to the quarter inch! So one visit should suffice. Just replaced a large kitchen after a fire, $30k worth, with one visit lasting several hours. They do offer a LOT of choices!
by msk
Sat Jan 25, 2020 1:12 am
Forum: Personal Consumer Issues
Topic: Mechanics of maintaining two homes
Replies: 37
Views: 4422

Re: Mechanics of maintaining two homes

If you want this lifestyle for many years duplicate everything, including cars once the long drive gets boooooring. A suitcase per person back and forth is tolerable. DW packs her favorite teas/herbs/etc. into her suitcase for use fresh the first few days. I have friends with 3 homes. They triplicate everything, including cars. Another couple did not wish to look after a second home at the secondary location, so they bought a 5-star hotel and reserve one suite for themselves year round. Extra friends and family members just book more rooms. If you do not wish to duplicate, it's simply not worth the bother IMHO.
by msk
Sat Jan 25, 2020 12:50 am
Forum: Personal Finance (Not Investing)
Topic: Prepping for retirement 3 yrs out - what to do?
Replies: 39
Views: 4413

Re: Prepping for retirement 3 yrs out - what to do?

If you have the option to continue working, I would until I can afford my "minimal" living standard with 2.5% of my portfolio. Why? Because the markets may drop 50% the day I retire and stay down for a decade. So define the gap between your current standard of living (3.7%) and "minimal". If the gap can stretch to 1.2% after 3 more years of saving and investing, you are good to go. "Minimal" can encompass stuff like keeping a car for 15+ years, etc. Not starving but severely tightening the belt. We all can when forced by circumstances. It's just a theoretical construct but worth verifying before pulling the plug.
by msk
Sat Jan 25, 2020 12:33 am
Forum: Personal Investments
Topic: Our first investment property - any advice?
Replies: 13
Views: 1209

Re: Our first investment property - any advice?

I do not know how much exactly you would net if you sell, but let us assume $80k. Invested in 100% stocks that's good for 5% to 6% real terms, forever. $o at 5% real, net, $80k is good for $333 per month. Real terms, forever, nil effort. Fluctuates; so what? Over 30 to 50 years it should average that much. It did, from 1871 to today... Food for thought. For the younger me, I would have viewed it dispassionately. One rental unit is a nuisance not worth having. OK if you are starting off to build serious RE investing, with many rental units. I ended up with 30. Are you? Again, for the younger me, I would have taken the $80k and used it for equity in my primary home. Best tenant you'll ever have is yourself, etc. Best sense of security you'll ...
by msk
Fri Jan 24, 2020 4:07 am
Forum: Personal Consumer Issues
Topic: When to Change Car Battery?
Replies: 120
Views: 10675

Re: When to Change Car Battery?

- Very hot climate: change after 3 summers, regardless. Very computerised car: you'll be very sorry when you suddenly get tens of urgent, inexplicable, incomprehensible, error messages and your dealer attempts to resolve them because "the battery tests OK". You pay for the work time (BMW 6 series). Fancy modern luxe car that does not start at your home: key fob useless for opening the door but instruction manual locked up inside (yes, access WWW...), auto parking brake does not release for you to push car to where you can jump start it or charge the battery. Did you not know that you have to access the parking brake using the long thing for the jack and inserting it into a hole inside the luggage trunk (Lexus LS 460)? I found that...
by msk
Thu Jan 23, 2020 1:22 am
Forum: Personal Consumer Issues
Topic: Spain in July with kids
Replies: 49
Views: 4436

Re: Spain in July with kids

With young kids I would say opt for beach with only a bit of "culture". I did this kind of trip many times to many countries with young kids. For Spain I had opted once for an extensive drive tour; Madrid/Barcelona/Costa Brava etc. Not a good idea.Too much packing/unpacking. Next variation was to fly to Malaga and stay in one apartment on the Costa del Sol (NB gets hot in mid summer). Rental car enabled day tours to Gibraltar/Granada/Seville/Cordoba/Malaga. Make sure your car has air conditioning. When the kids grumble you just spend the day at the beach.
by msk
Sun Jan 19, 2020 4:51 am
Forum: United Arab Emirates
Topic: New UAE-based Investor seeking advice!
Replies: 7
Views: 9739

Re: New UAE-based Investor seeking advice!

Since US-Stocks and Bonds are subject to withholding tax (whether in different percentages between the US/Ireland domiciles), Are non-US stocks (international markets) traded vis US broker (IB) also liable to withholding tax? This query is more complicated than appears at first sight and, to be properly answered, you really need feedback from somebody who has actually held the stocks through a dividend cycle. E.g. there are 2 stocks for Royal Dutch Shell, RDS.A and RDS.B. As an experiment, I owned each version via TDAmeritrade (a US broker). RDS.A dividends got clobbered by the 30% US withholding tax. RDS.B was not, but I believe there was some withholding in some other country (Netherlands/UK?). Bummer! I had held RDS.A for eons :annoyed ...
by msk
Sun Jan 19, 2020 12:03 am
Forum: Personal Finance (Not Investing)
Topic: $400,000 Cash: Pay Off Rental v. New Home Down Payment
Replies: 18
Views: 1955

Re: $400,000 Cash: Pay Off Rental v. New Home Down Payment

Brianmcg321 wrote: Thu Jan 16, 2020 8:39 am I would put it all on primary residence.
+1. I find it baffling that a BH at your age and income is still carrying a mortgage on his home. As for the beach property it's either an investment or a toy. Nothing wrong with either approach in my view. Decide which and act accordingly. If investment then do you even use Airbnb? If toy, recognize it as such and simply enjoy the (expensive in terms of opportunity cost) 365 day availability.
by msk
Sat Jan 18, 2020 11:51 pm
Forum: United Arab Emirates
Topic: New UAE-based Investor seeking advice!
Replies: 7
Views: 9739

Re: New UAE-based Investor seeking advice!

Worldwide by market weight is roughly 55% N.America 45% rest of the world. IMHO one ETF is better than splitting and then wondering about the ratios every year. Let the world's markets and MSCI or FTSE calculate. E.g. China is almost as large an economy as the USA yet China's weighting for stocks is currently well under 5%, US 10x larger. Sooner or later China will organize its stock markets enough so that it can benefit from foreign money to better reflect the size of its economy, i.e. to get more or less on par with the US weighting. Could happen in 10 years, 20, never... Do you really want to keep tracking this? Let the ETF do that automatically. My latest choice is VWRA, Vanguard World Accumulative. Has been created just recently but to...
by msk
Sat Jan 18, 2020 6:12 am
Forum: Personal Finance (Not Investing)
Topic: Life advice for recent graduate
Replies: 67
Views: 6960

Re: Life advice for recent graduate

I lived by these rules and retired 20 years ago at 55: -save and invest 30% of after tax income. Paying the principal on your home mortgage counts as investing, not the interest part and not paying for consumer items like cars. To save 30% simply continue living like a student for another year or two. Thereafter it'll be plain sailing. Use the remaining 70% to enjoy life. The expensive toys will all become affordable quite quickly as your investment income builds up. -never acquire a car(s) worth more than 6 months income. Paying cash, leasing, etc. does not make much difference -never buy a home worth more than 3x income (2.5x income combined with partner) Understand the tax regime you live under and use it to your max advantage. Since you...
by msk
Thu Jan 16, 2020 12:04 am
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 1177
Views: 204345

Re: Year 2000 retirees using the '4% rule' - Where are they now?

deltaneutral83 wrote: Wed Jan 15, 2020 8:45 am
msk wrote: Wed Jan 15, 2020 12:15 am CPI for 1999 to 2019 went from 100 to 154. Cheers for stocks!
Am I reading this correctly in that $40k in 2000 is $61,600 today (I.e. what was withdrawn on 12/31/2019) and a million then is $1,540,000 today?
Yes. US inflation from 1776 to 2020 is instantly available on your smartphone using the free App "Inflation Calculator". Download it. Highly recommended. It does terrify all of us when thinking of the long term.
by msk
Wed Jan 15, 2020 2:04 am
Forum: Personal Investments
Topic: advice on retirement portfolio for a $20m windfall
Replies: 63
Views: 16034

Re: advice on retirement portfolio for a $20m windfall

I have a portfolio larger than $10m, all in stocks worldwide, all in ETFs similar to VT. I am not tax resident in the US so I bought, e.g. VWRD, VWRA, IWDA+EIMI+WSML (no need to look them up, each lot mirrors 4000 stocks out of the 8000 in VT). I give away 3.5% of my portfolio annually, as monthly stipends to all my heirs, but my own research on Shiller's data from 1871 till present indicates that I can withdraw 5% of balance annually (that's $500k from $10 million) and the 100% stocks portfolio should last forever, in real terms. Since I am 75 years old I do not spend much of the withdrawals on myself. A COLA pension meets my modest needs. I see nil reason why you would want to complicate your investments. $10 million on VT and the dividen...
by msk
Wed Jan 15, 2020 12:15 am
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 1177
Views: 204345

Re: Year 2000 retirees using the '4% rule' - Where are they now?

I am bemused by the whole idea that a BH would be so stupid as to keep increasing his cash withdrawals to keep pace with inflation even after a major market collapse. Does not happen. I actually did retire on 1.1.2000, with a "satisfactory" COLA pension. Here is my history since then: - started retirement with about 30% invested in RE, rest in stocks. Very shortly post retirement sold off all RE and shifted to 100% stocks. - COLA pension paid for life's necessities (view it as a BH bond allocation), luxuries paid for after stock market shot up. Sensible behavior. - NW today is 8x nominal what I started with at 1.1.2000. CPI for 1999 to 2019 went from 100 to 154. Cheers for stocks! I started with my stocks 50% worldwide and 50% in ...
by msk
Sun Jan 12, 2020 2:19 am
Forum: Personal Investments
Topic: 70 Years Old, $50000 to invest
Replies: 14
Views: 2584

Re: 70 Years Old, $50000 to invest

My grandmother is very risk averse, though in my view she really doesn't have to be -- but then again, I'm not 70 years old (I'm 18). So I understand that living through multiple recessions can scare you into thinking that your timing could be bad and you could lose your savings. She's had some friends who have those horrible stories of losing it all in the market, that's where I think this comes from. :greedy I doubt if this will make any difference to her risk averseness, but I am 75 and ALL my investments (8 figures) are 100% stocks worldwide, like in Vanguard's VT. I simply do not see that 8000 companies worldwide can go to zero any time soon. Like her, I have a satisfactory income (COLA pension), so all the investments are for my heir...
by msk
Sun Jan 12, 2020 2:00 am
Forum: Personal Investments
Topic: Networth- in diversified assets vs mainly in investment portfolio
Replies: 18
Views: 1454

Re: Networth- in diversified assets vs mainly in investment portfolio

Great advice. I feel like selling my 2 rentals that I'm never managed, let alone even seen because I'm tired of them. But I balk at the capital gains and depreciation recapture. How did you deal with the taxes on your properties when you sold? As a wise man once said, to be taxed means that you have made an income. Overall, that's good. Don't let the tax tail wag your investment decisions unduly. I never did claim any depreciation because of the impending recapture headaches. This is quite unusual, and adding depreciation would have had the undesirable effect (to me anyway) of having to take larger mortgages for interest to balance out net income. As they say, you have eaten the cake already by claiming depreciation, while in fact your pro...
by msk
Sat Jan 11, 2020 7:04 am
Forum: Personal Investments
Topic: Networth- in diversified assets vs mainly in investment portfolio
Replies: 18
Views: 1454

Re: Networth- in diversified assets vs mainly in investment portfolio

You will get as many opinions on this as there are bogleheads. My personal one is that, through personal experience of owning non-tradeable assets, I have come to strongly value the liquidity in stocks and bonds. My concern with investments is , it feels great when they are doing well but when there is a market crash , things can get ugly pretty quickly My asset allocation went from 100% RE at age 30 to 100% stocks at age 60. Owned 30 units before I started selling off. You already know how good is your nose for RE. Sooner or later you get fed up with managing RE. For you it could be at age 80... For me it was when I retired from my day job at age 55. We always wish to offload RE when the RE market gets tough. LoL. If you are wondering abo...
by msk
Sat Jan 11, 2020 6:45 am
Forum: Personal Investments
Topic: 70 Years Old, $50000 to invest
Replies: 14
Views: 2584

Re: 70 Years Old, $50000 to invest

Enjoy the feeling of gifting while your alive, it'll most likely be more enjoyable for the both of you. +1. I give all my kids monthly stipends. Fortuitously, because of our varied and assorted tax residences scattered all over the globe, there are no tax implications for any. All of them can retire today if they so wish. One added bonus: I never have to worry about birthday gifts ever again :D I would just put the whole $50k in the stock market. Pay out 5% of balance annually. So $2500 this year. Next year the balance could be $40k or even up to $60k. Pay out 5% of that next year. If history is any guide, since 1871 your original $50k will still be worth in REAL terms $50k, even 50 years from now. Only nuisance is that your annual gifting...
by msk
Thu Jan 09, 2020 8:47 am
Forum: Personal Finance (Not Investing)
Topic: Donating $1M
Replies: 81
Views: 14752

Re: Donating $1M

Just food for thought for those donating very large amounts. A friend of mine is the grand nephew of the largest charitable foundation in Europe, something akin to the Ford Foundation. He was the last direct blood link to the founder and he was ousted from the Board of Directors for reasons I am not familiar with, but he told me, I paraphrase, "If you ever set up a foundation, specify that a member of your family is always on the Board, otherwise decades from now the bunch of strangers who then run the Foundation will no longer feel obligated to follow your dying wishes." At the time I just smiled, since I was a mere salaryman engineer and foundations seemed like in a galaxy far, far away.
by msk
Tue Jan 07, 2020 11:56 pm
Forum: Personal Finance (Not Investing)
Topic: Donating $1M
Replies: 81
Views: 14752

Re: Donating $1M

$2 million is very easy to waste, hence, personally, I would give it in small chunks. Invested in ETFs it's good for between $70k and $90k per annum. Forever! See my earlier post regarding my endowment. Unfortunately anyone of us can die tomorrow so you need an ongoing, trustworthy trust to hand it to for your beyond-the-grave handouts. As for "people I know" I simply give them monthly checks. If I die today, too bad, no more checks.
by msk
Thu Jan 02, 2020 1:08 pm
Forum: Personal Investments
Topic: Average portfolio withdrawal rate...
Replies: 11
Views: 1526

Re: Average portfolio withdrawal rate...

I would just pay attention to historical inflation and compare the portfolio 20 years ago to today, in real terms. The CPI from 1999 to 2019 has gone from 100 to 154. A heavily-into-stocks portfolio with 5% of balance withdrawn at the end of each year should easily have grown to over 1.54x what it was in 1999. That style of withdrawal, 5% of portfolio balance each year, would have retained the real value of the portfolio all the way from 1871 to today, according to Shiller's stocks, dividends and CPI data. No more than 5% of portfolio BALANCE of a 100% stocks portfolio annually and the portfolio ought to retain its real value indefinitely. Years with offtake significantly higher than 5% (e.g. the mentioned 7%) must be balanced by subsequent...
by msk
Thu Jan 02, 2020 7:35 am
Forum: Non-US Investing
Topic: Favorite country to live in after FIRE?
Replies: 191
Views: 22866

Re: Favorite country to live in after FIRE?

cap396 wrote: Wed Jan 01, 2020 6:36 pm
Wannaretireearly wrote: Wed Jan 01, 2020 11:17 am
Love to hear more. Got a blog? ;)
Yes we do: snailtravelers.com
:sharebeer
by msk
Wed Jan 01, 2020 12:58 am
Forum: Personal Investments
Topic: 10 Years of CDs or SP500 ???
Replies: 9
Views: 1433

Re: 10 Years of CDs or SP500 ???

What really matters is what will you have in REAL terms, after inflation. I find the Monte Carlo simulator at

Code: Select all

https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults
useful. I pay attention only to the 25 percentile, median, 75 percentile. These are the results of investing $15k each year for 10 years, i.e. 11 instalments:
US stocks Total Market: 154, 198, 250
US Intermediate Term Bonds: 145, 161, 179
Cash: 136, 143, 150

Note that Cash guarantees that you will be losing out to inflation. Your input is 11*$15k = $ 165k
by msk
Tue Dec 31, 2019 1:24 pm
Forum: Personal Consumer Issues
Topic: Bidding with airline carrier to upgrade seats
Replies: 22
Views: 1834

Re: Bidding with airline carrier to upgrade seats

This past summer I flew return across the Atlantic. I was reasonably content to sit in Premium Economy for the daytime leg, so I bid low. For the return, overnight leg, I bid higher. I won both legs and still saved around $2500+ from the Business Class return fare. Oh, and there were still one or two empty seats. I could have bid lower :annoyed Not being seated next to DW is really not a big deal. Sleeper seats are designed for a lot of privacy anyway and surely somebody will be willing to swap seats...? Then of course there a number of narrow-body long-distance jets with a bunch of single-row seating anyway. Bid just above the minimum and enjoy! Or not.
by msk
Tue Dec 31, 2019 1:09 pm
Forum: Personal Finance (Not Investing)
Topic: Help me get my young-adult daughter to save.
Replies: 30
Views: 2765

Re: Help me get my young-adult daughter to save.

Two routes:
1. Explain to her why saving and investing 30% of after tax income should be a lifetime strategy. It can be painless since I expect that 70% of her after-tax income once she gets a job will probably be more comfortable than how she lived as a student. So, it could be a seamless transition.
2. If she is the only child, does she actually have to save anything? How high is the probability that what she inherits from you is enough to FIRE the instant she gets the inheritance? If that is the case then you have to introduce her gradually to shepherding an inheritance, perhaps by gifting her some amount regularly into some brokerage account under her control.
by msk
Tue Dec 31, 2019 12:52 pm
Forum: Personal Consumer Issues
Topic: New Zealand Train trip
Replies: 77
Views: 5039

Re: New Zealand Train trip

NZ cities are like many Canadian and Australian cities, but the landscapes are right up there with the world's best. One alternative: fly to major scenic centers, e.g. Queenstown, and take guided excursions from there, i.e. conducted bus tours. Tripadvisor can fill in all the blanks.
by msk
Tue Dec 31, 2019 4:49 am
Forum: Personal Consumer Issues
Topic: New Zealand Train trip
Replies: 77
Views: 5039

Re: New Zealand Train trip

We rented a campervan and drove all around the South Island. Great vacation some 25 years ago.
by msk
Tue Dec 31, 2019 2:04 am
Forum: Personal Consumer Issues
Topic: Question about computers with two hard drives (SSD and regular hard drive)
Replies: 36
Views: 3109

Re: Question about computers with two hard drives (SSD and regular hard drive)

I've had my current desktop for a few years already and I have an annual subscription to Windows. That comes with One Drive allocations. What's wrong with depending on One Drive for everything other than program files (on a C Drive) and restore files (on D Drive)? My One Drive is at 300+ GB while the others are rather trivial by comparison. It also makes my switching between the desktop and laptop quite seamless. I have never experienced any corruption on my One Drive. Presumably Microsoft is more competent at back-ups etc. than I can ever hope to be. Looks to me that a minimal SSD would suffice, say 500GB?

Every time I had to change/repair a desktop the nuisance has been having to reinstall program files. Is there a way to make this simple?
by msk
Tue Dec 31, 2019 1:26 am
Forum: Personal Finance (Not Investing)
Topic: How much were you able to spend this year?
Replies: 53
Views: 3473

Re: How much were you able to spend this year?

Spent $100k on myself and DW. Includes ample domestic help and one holiday trip to the other side of the world. Gave away $300k to potential heirs and charity. At age 75 I think I get enjoyment of my life-long hard earned savings in a ratio reflecting that expenditure ratio. Only the second year I maintained that high a spending pattern. Markets go up, I'll give away more; market falls, give away less :beer
You kids in your 40s and 50s: utility of your $ drops drastically as you age. Save and invest 30% of your after tax income, blow the rest on the frivolities in life that sound great today but will become too bleh as you age :twisted:
by msk
Sat Dec 28, 2019 2:14 am
Forum: Personal Finance (Not Investing)
Topic: Donating $1M
Replies: 81
Views: 14752

Re: Donating $1M

I gave an endowment a few years ago to my alma mater, to aid students in dire straits similar to what I was in my youth, from a 3rd world country. I did not have any tax deductions to chase, so I simply advised the college what my target student population was and they drew up a 2-page legal document for me to sign. I did not want any ongoing involvement from myself, e.g. in the student selection process. What I liked: -each major endowment is assigned a number of Units in their endowment fund (currently in the billions). Withdrawals (3.5% to 4.5% depending on market performance over the previous 3 years) are designed to be on the basis that the balance will maintain its value in real terms, forever. -trivially easy to add to "your&quo...