Search found 133 matches

by restingonmylaurels
Mon Jun 11, 2018 10:09 am
Forum: Investing - Theory, News & General
Topic: Early retirement pros and cons:
Replies: 78
Views: 10190

Re: Early retirement pros and cons:

One question that occurs to me in reading these threads (and I'm definitely the type who has mapped out scenarios for early retirement, particularly when I was in private legal practice), is: Has anyone here retired early a decade or more ago, so they can speak to us about the experience of what it...
by restingonmylaurels
Wed Jun 06, 2018 8:03 am
Forum: Investing - Theory, News & General
Topic: Do bond funds lose value while CDs do not?
Replies: 31
Views: 3445

Re: Do bond funds lose value while CDs do not?

Three, over the long run, most good bond funds have historically out-performed CD's. You are likely to make more money with the bond fund. If you look at a bond fund's return through the very narrow lens of the last few months, the returns look poor. When you back up and take the bigger picture, yo...
by restingonmylaurels
Tue Jun 05, 2018 2:58 pm
Forum: Investing - Theory, News & General
Topic: Do bond funds lose value while CDs do not?
Replies: 31
Views: 3445

Re: Do bond funds lose value while CDs do not?

Well to compare apples to apples you need to compare CD’s to an individual Bond/T-Bill. If held to maturity both will not lose value unless bond issuer goes bankrupt. Bond fund on the other hand keeps rotating bonds in order to allow for redemptions, invest new money or adhere to the fund guideline...
by restingonmylaurels
Tue Jun 05, 2018 4:16 am
Forum: Investing - Theory, News & General
Topic: Do bond funds lose value while CDs do not?
Replies: 31
Views: 3445

Re: Do bond funds lose value while CDs do not?

I think the replies received so far are focusing on changes to interest rates and past returns based upon both changes to interest rates and reinvestment of dividends. I have excluded both of those to try to understand why it is that bond funds seem to lose value as time goes on while CDs do not. As...
by restingonmylaurels
Mon Jun 04, 2018 6:08 am
Forum: Investing - Theory, News & General
Topic: Do bond funds lose value while CDs do not?
Replies: 31
Views: 3445

Do bond funds lose value while CDs do not?

I have a feeling the following is true in practice from several decades of investing but it does not seem like it should be true in theory, given arbitrage theory. Say I need the distributions from a fixed income investment to pay some expenses, so reinvestment does not need to be considered. I can ...
by restingonmylaurels
Mon Mar 12, 2018 5:15 pm
Forum: Investing - Theory, News & General
Topic: Investing spreadsheet or software?
Replies: 17
Views: 1700

Re: Investing spreadsheet or software?

It requires a login to the New Quicken server to download balance and entries but not if you are doing everything manually. I figured this out, maybe. I'm using Q2018 so it may be different. You need a password to open your data file . This may or may not be your Quicken password. Mine is not. Once...
by restingonmylaurels
Sun Mar 11, 2018 7:46 am
Forum: Investing - Theory, News & General
Topic: Investing spreadsheet or software?
Replies: 17
Views: 1700

Re: Investing spreadsheet or software?

I think you may be misinformed. The last few years that Intuit published Quicken the support deteriorated. The new organization took quite a while to get up to speed. Recently there has been major improvement. You don't "sign on" to Quicken to see or work with your data. They just added a password ...
by restingonmylaurels
Sun Mar 11, 2018 7:02 am
Forum: Investing - Theory, News & General
Topic: Investing spreadsheet or software?
Replies: 17
Views: 1700

Investing spreadsheet or software?

I have searched around the forum and did not find the answer, so let me ask people here. I am changing computers now and so leaving behind my decade-old copy of Quicken, which I used to track my investments for a long time. With all of the underwhelming reviews for the current version and especially...
by restingonmylaurels
Tue Mar 06, 2018 7:59 am
Forum: Personal Finance (Not Investing)
Topic: VNTC as successor trustee?
Replies: 12
Views: 814

Re: VNTC as successor trustee?

At a minimum, the trustee will have to file taxes for the trust each year, possibly coordinating with holders of assets elsewhere. Do you think they will do that for free? I think perhaps you did not read all of my post, where I fully accepted the administrative part of the trustee's role, such as ...
by restingonmylaurels
Tue Mar 06, 2018 12:40 am
Forum: Personal Finance (Not Investing)
Topic: VNTC as successor trustee?
Replies: 12
Views: 814

Re: VNTC as successor trustee?

VNTC charges two types of fees. A trust administration fee of 0.25% seems reasonable enough, as they deal with tax returns, etc, although they used to charge that as a flat fee. An investment management fee of 0.30% would seem fine if you needed ongoing investment management. On an estate of $1m inv...
by restingonmylaurels
Mon Mar 05, 2018 8:12 am
Forum: Personal Finance (Not Investing)
Topic: VNTC as successor trustee?
Replies: 12
Views: 814

VNTC as successor trustee?

I am curious if anyone else uses VG National Trust Company as their successor trustee? If you do, what do you think about them charging an investment management fee which you cannot avoid, even if you will leave your heirs a perfectly acceptable AA that does not require any additional tinkering by V...
by restingonmylaurels
Fri Feb 23, 2018 4:41 am
Forum: Investing - Theory, News & General
Topic: Bond Fund Interest as QDI?
Replies: 12
Views: 958

Re: Bond Fund Interest as QDI?

Let me use an example to illustrate. For simplicity, let us assume stock and bond fund prices are completely stable. This is for a couple filing jointly with a standard deduction of $24k, and using the distributions to pay living expenses. They have $2m to invest in either a bond fund or a stock div...
by restingonmylaurels
Thu Feb 22, 2018 1:05 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Interest as QDI?
Replies: 12
Views: 958

Re: Bond Fund Interest as QDI?

OK then, definitions of fixed income aside, I guess I am targeting those who live off of their portfolio's distributions. What I was wondering if anyone can refer to me an analysis of whether it is better, risk-adjusted and AFTER tax, to take your monthly/quarterly distributions from a stock dividen...
by restingonmylaurels
Thu Feb 22, 2018 9:59 am
Forum: Investing - Theory, News & General
Topic: Bond Fund Interest as QDI?
Replies: 12
Views: 958

Re: Bond Fund Interest as QDI?

I think my query was not well understood. I am asking about any fixed income funds. Besides bond funds, I would include dividend focused funds. So what I am trying to think out loud about is whether it is actually better, all things being equal, to own a stock dividend oriented fund whose dividends ...
by restingonmylaurels
Tue Feb 20, 2018 7:28 am
Forum: Investing - Theory, News & General
Topic: Bond Fund Interest as QDI?
Replies: 12
Views: 958

Bond Fund Interest as QDI?

In looking at 2018 federal tax rates, a married couple whose sole income was $101,200 of qualified dividend income (QDI) would pay $0 in federal income taxes! That is because QDI is taxed at 0% up to $77,200 and there is a $24,000 standard deduction for joint filers. This is not true if the income c...
by restingonmylaurels
Fri Feb 16, 2018 10:09 am
Forum: Investing - Theory, News & General
Topic: Increasing SS PIA by working again
Replies: 27
Views: 1813

Re: Increasing SS PIA by working again

The flip side is doing a lot of things like travel or being real active will be harder or perhaps impossible as you age. I figured that up to about the age of 75 or so would likely be the best years of my retirement because even if my health remains relatively good I will still slow down a lot by t...
by restingonmylaurels
Thu Feb 15, 2018 4:13 am
Forum: Investing - Theory, News & General
Topic: Increasing SS PIA by working again
Replies: 27
Views: 1813

Re: Increasing SS PIA by working again

Thanks for all the calculation confirmations. In summary, if one were to work an additional five years at $50,000 annually and then live 20 years in retirement after full retirement age, they would add $21,420 in total to their SS retirement benefits received. Everyone has their own way but to me, t...
by restingonmylaurels
Wed Feb 14, 2018 2:49 pm
Forum: Investing - Theory, News & General
Topic: Increasing SS PIA by working again
Replies: 27
Views: 1813

Re: Increasing SS PIA by working again

I'm no expert on PIA calculations but i know it's not quite that simple. Benefit amounts don't increase on a straight line. Lower income people get a larger benefit with respect to their lifetime earnings. As an example, here is the description from the SS site: For an individual who first becomes ...
by restingonmylaurels
Wed Feb 14, 2018 2:07 pm
Forum: Investing - Theory, News & General
Topic: Increasing SS PIA by working again
Replies: 27
Views: 1813

Increasing SS PIA by working again

I am looking at what it would take to increase one's Social Security Primary Insurance Amount (PIA), the benefit paid in retirement, by going back to work in the years before full retirement. It seems that your PIA is calculated based upon your earnings up to the SS max in the highest-earning 35 yea...
by restingonmylaurels
Sun Feb 11, 2018 10:19 am
Forum: Investing - Theory, News & General
Topic: Effective tax rate from investing
Replies: 3
Views: 531

Re: Effective tax rate from investing

Livesoft, very interesting ALI poll results from two years ago. I have not read through all of the responses but you got very different tax rates for people on similar incomes. Did you determine what it was that differentiated people on similar incomes to get different effective tax rates? Also, per...
by restingonmylaurels
Sun Feb 11, 2018 4:49 am
Forum: Investing - Theory, News & General
Topic: Effective tax rate from investing
Replies: 3
Views: 531

Effective tax rate from investing

I just calculated my 2017 tax liability, being somewhat apprehensive as capital gains and interest income have both increased quite a bit, so was relieved to find my effective tax rate from investing was around 6%. This is for taxable investment income in six figures. In examining why, I think the b...
by restingonmylaurels
Fri Feb 09, 2018 11:36 am
Forum: Investing - Theory, News & General
Topic: Active v. passive during corrections
Replies: 21
Views: 2226

Re: Active v. passive during corrections

No. Here are the cold hard facts: http://us.spindices.com/spiva/#/reports Sure, if one looks at the whole slew of fund companies. But if we narrow down the focus to VG funds only, it is different. For example 10-year annualized return of active VGHAX is 11.79% and passive VFIAX is 9.77%, despite th...
by restingonmylaurels
Fri Feb 09, 2018 11:17 am
Forum: Investing - Theory, News & General
Topic: Active v. passive during corrections
Replies: 21
Views: 2226

Re: Active v. passive during corrections

I have certainly looked at the much longer term and am happy there with what VG active management has done. Not trying to judge, just observing that a VG active funds did twice as well as the passive funds in the face of a significant sell off. While i am sure BHs are not doing anything except buyin...
by restingonmylaurels
Fri Feb 09, 2018 10:56 am
Forum: Investing - Theory, News & General
Topic: Active v. passive during corrections
Replies: 21
Views: 2226

Active v. passive during corrections

I know this is a very small sample size (1 day), but ...

Yesterday the U.S. indices dropped around 4%. My actively managed pure U.S. large cap stock VG fund dropped around 2%.

Does this demonstrate that there can indeed be a real benefit to active management during the darker days of investing?
by restingonmylaurels
Fri Jan 12, 2018 12:58 pm
Forum: Investing - Theory, News & General
Topic: When the Fed stops what do you do?
Replies: 17
Views: 2559

Re: When the Fed stops what do you do?

I will jump in with a quick update on the replies to far: Inflation seems to be the predominant concern but I am allowing for a moderate increase in inflation by having a necessary SWR lower than the interest rate of the 30-year Treasuries. I would buy these bonds when the rate hike cycle ends, not ...
by restingonmylaurels
Fri Jan 12, 2018 11:46 am
Forum: Investing - Theory, News & General
Topic: When the Fed stops what do you do?
Replies: 17
Views: 2559

When the Fed stops what do you do?

Have watched the Fed closely for years, I believe they will continue on their program of Fed funds rate rises until they hit 3.0% in 2020. Thinking ahead while also looking back at the last decade’s low interest rate environment, I am considering the following investment strategy change to enjoy an ...
by restingonmylaurels
Mon Nov 13, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Re: Right Bond Allocation - Government v. Credit?

For any particular investor CDs are certainly a viable option, but here are some reasons to prefer bonds: 1. A bond fund is more convenient than managing a passle of CDs. This includes purchasing, redeeming, and rebalancing. 2. Most 401k plans do not offer CDs as an option. 3. In an IRA you might h...
by restingonmylaurels
Mon Nov 13, 2017 3:08 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Re: Right Bond Allocation - Government v. Credit?

I see the point, but there is another way to look at it. Just like costs in mutual funds matter, annual returns matter. If one could really get an additional 1% annual return with a certain bond type, over 16 years the 1% could compound to 17%. Some of the many schools that are out there: 1. Treasu...
by restingonmylaurels
Sat Nov 11, 2017 6:50 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Re: Right Bond Allocation - Government v. Credit?

dbr wrote:
Thu Nov 09, 2017 5:19 pm
Yield from investments should not be equated to a withdrawal in support of personal cash flow. It is not as if dividends paid by a bond fund are free money.
dbr, can you explain further what you mean that yield should not be equated to a withdrawal?
by restingonmylaurels
Thu Nov 09, 2017 12:25 pm
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Re: Right Bond Allocation - Government v. Credit?

The choice depends on the resulting property of your whole portfolio. Anything you can affect by choosing one bond allocation over another can be more largely and directly affected by choosing your stock/bond allocation. That only changes if your portfolio is almost entirely bonds. Is your portfoli...
by restingonmylaurels
Wed Nov 08, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Re: Right Bond Allocation - Government v. Credit?

Todd, your chart is very illuminating. Would you be able to add Wellesley Income as a fourth fund on the chart over that same time period?
by restingonmylaurels
Mon Nov 06, 2017 9:16 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Re: Right Bond Allocation - Government v. Credit?

Assuming you are comfortable with your stock/bond split (a first order decision), the choice of bond allocation is much less consequential (definitely a second order decision). It all comes down to what you value most from your bond allocation: • Do you want the highest expected return, and are not...
by restingonmylaurels
Sun Nov 05, 2017 11:38 am
Forum: Investing - Theory, News & General
Topic: Right Bond Allocation - Government v. Credit?
Replies: 22
Views: 2639

Right Bond Allocation - Government v. Credit?

In looking at my next lump-sum investment, I analyzed my bond holdings and found out that I am 2/3 credit (corporates domestic and global) and 1/3 government (Treasuries, GNMAs, foreign). This is probably due to the higher yields when I can decide but also the tilts of the funds when I do not decide...
by restingonmylaurels
Sun Sep 03, 2017 4:35 am
Forum: Local Chapters and Bogleheads Community
Topic: There are many roads to ... Baile Átha Cliath? [Dublin...]
Replies: 3
Views: 814

There are many roads to ... Baile Átha Cliath? [Dublin...]

For my 100th post, I thought I would examine a BH sacred cow, albeit with the appropriate sense of trepidation. :( That concerns the oft-used saying that “there are many roads to Dublin.” :confused Now, I actually live in Dublin (the original one, the black pool, Baile Átha Cliath in modern Irish). ...
by restingonmylaurels
Fri Sep 01, 2017 9:11 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio analysis tool
Replies: 4
Views: 432

Portfolio analysis tool

I am wondering what tool do BHs use to analyze their portfolios. Portfolio Watch would be great, given its ready access to all of one's VG funds, but it seems to make a number of errors, including its allocations between stocks, bonds, and short-term reserves and between domestic and international, ...
by restingonmylaurels
Thu Aug 31, 2017 1:41 pm
Forum: Investing - Help with Personal Investments
Topic: A Guide to Moving Abroad
Replies: 10
Views: 2115

Re: A Guide to Moving Abroad

As someone who has lived around the world, both while working full-time and part-time, I would advise trying to continue to fund retirement plans and Social Security in the U.S. and continuing to invest in the U.S., wherever you are in the world. The reasons are manifold but for example, if you join...
by restingonmylaurels
Thu Aug 31, 2017 8:17 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2946

Re: Riskier Bonds vis a vis AA

High-yield bonds should probably be treated as half bonds and half stocks in determining your risk level; consider what happened to them when the stock market crashed in 2008. The 50% ratio does depend on the specific fund; Vanguard High-Yield Corporate, for example, holds higher-quality junk. This...
by restingonmylaurels
Thu Aug 31, 2017 8:08 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund - buying the interest?
Replies: 7
Views: 1013

Re: Bond Fund - buying the interest?

Many are familiar with the concept of "not buying the dividend" when purchasing equity funds. When you're dealing with bond funds, there is a difference from equity funds. Many (not all) of Vanguard funds accrue dividends daily. This means that if you buy $10,000 on September 15, the dividend that ...
by restingonmylaurels
Wed Aug 30, 2017 2:53 am
Forum: Investing - Theory, News & General
Topic: Rob Arnott: Dump US stocks buy EM
Replies: 65
Views: 7165

Re: Rob Arnott: Dump US stocks buy EM

Personally, our portfolio has a considerable tilt toward emerging markets. But I wouldn’t be selling U.S. stocks to load up on emerging markets, based on Arnott’s 'reversion to the mean’ forecasts. U.S. stocks can easily stay expensive for years and still provide healthy returns. Living outside the...
by restingonmylaurels
Wed Aug 30, 2017 2:02 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2946

Re: Riskier Bonds vis a vis AA

Would it be appropriate to consider these riskier bond funds to be say half stock and half bond or some other breakdown like that? Yes. From a somewhat fuzzy memory short term corporate were calculated as .1 equity, IT was .2 and HY was .3. If my stock/bond asset allocation is 50-50, but VG HYC/EM ...
by restingonmylaurels
Tue Aug 29, 2017 11:10 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2946

Re: Riskier Bonds vis a vis AA

Risk is not usually rewarded as well with bonds as with equities. This is why experts like Larry Swedroe say "Take your risks on the equity side." Bonds are for safety , and stocks are for growth. "A fitting conclusion is this advice from David Swensen, the highly regarded chief investment officer ...
by restingonmylaurels
Mon Aug 28, 2017 10:57 am
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 2946

Riskier Bonds vis a vis AA

Being a bit conservative investing-wise, I have long been a proponent of taking some risk in bond holdings, such a higher quality junk and EM bond funds. I think the recent 5 and 10-year returns support this concept well and allow for more sleep insurance than allocating the same amounts to stocks. ...
by restingonmylaurels
Tue Aug 22, 2017 11:25 am
Forum: Investing - Help with Personal Investments
Topic: How to Become a Spender?
Replies: 16
Views: 1908

How to Become a Spender?

I am having a financial problem that may be familiar (or not?) to many BHs. Having spent my lifetime saving and investing, now that I can, I find I am having trouble switching my mindset to become a spender. While great for the longevity of my investments and heirs, as my withdrawal rate is pretty m...
by restingonmylaurels
Sat Aug 12, 2017 6:02 am
Forum: Investing - Help with Personal Investments
Topic: Has anyone converted their interest income to QDI?
Replies: 4
Views: 481

Has anyone converted their interest income to QDI?

Interest income earned from CDs and bond funds is taxed at progressive federal rates while dividend income from stocks is not taxed or is taxed at a (mostly) flat rate if qualified dividend income (QDI). All things being equal, it would be preferable to receive one’s income distributions from stocks...
by restingonmylaurels
Thu Aug 10, 2017 3:13 pm
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1680

Re: Does VG Compound Interest?

You will see if you look at fund reports that the bond funds have investments in institutional money market funds (for liquidity and other purposes), so whatever interest arrives and is part of the daily declaration of dividends is invested in at least a money market fund and thus is earning a form...
by restingonmylaurels
Thu Aug 10, 2017 8:44 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1680

Re: Does VG Compound Interest?

There is no cash to reinvest until the coupon is actually paid. The accrued interest on a bond is not compounded by the bond issuer either. Sure, but these coupons are not all paid the day before fund distribution date. They may be paid at various days all during the month. What happens to that cas...
by restingonmylaurels
Thu Aug 10, 2017 8:21 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1680

Re: Does VG Compound Interest?

There is no cash flow to invest with an accrual. An accrual is an accounting method to account for that part of the interest that you have already earned but that won't get paid until the coupon date or when/if the bond is sold before maturity. Agree that cash flow and accrual are different as this...
by restingonmylaurels
Thu Aug 10, 2017 7:48 am
Forum: Investing - Theory, News & General
Topic: Does VG Compound Interest?
Replies: 12
Views: 1680

Does VG Compound Interest?

From the Management fees and fund distributions wiki, I noted that most VG bond funds accrue/declare interest daily and pay it to fund holders monthly. I am wondering if these interest income accruals, which do not show up as part of the fund’s NAV, are they themselves subject to compounding and if ...
by restingonmylaurels
Thu Aug 10, 2017 3:01 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 5857

Re: Should TBM Be Your Only Bond Fund?

It seems that you could get more yield for less interest rate risk by allocating the fixed income part of your portfolio equally to Prime MMR and HYC. TBM has a yield of 2.37% and duration of 6.1 years. Prime MMR has a yield of 1.10% and duration of 0.3 years; HYC has a yield of 4.58% and a duratio...
by restingonmylaurels
Wed Aug 09, 2017 11:57 am
Forum: Investing - Help with Personal Investments
Topic: Bond Fund Piñata
Replies: 27
Views: 3701

Re: Bond Fund Piñata

No, because you can always realize capital gains whenever you want to, by selling shares for a capital gain and buying them back. This is most commonly done when you are temporarily in the 15% bracket and pay no tax on your capital gains. The difficulty is that I do not see that I can ever be in th...