Search found 571 matches

by Ron Scott
Mon Jun 18, 2018 8:42 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 51
Views: 2742

Re: A different theoretical view of SWR

Whatever helps you sleep at night is fine, but your formula appears to be a recipe for working longer than needed and ending up with a pile of money that is not spent.. Without making the assumption that past market returns can predict future market returns over the period of an individual‘s retire...
by Ron Scott
Sun Jun 17, 2018 2:47 pm
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 51
Views: 2742

Re: A different theoretical view of SWR

Anything except the most conservative portfolio should be able to do more than just keep up with inflation. If you look at the Trinity study, most of the portfolios with at least 50% equities have very substantial terminal values. But you are using historical market return data to justify your conc...
by Ron Scott
Sun Jun 17, 2018 6:53 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 51
Views: 2742

Re: A different theoretical view of SWR

One benefit of the “keep up with inflation” theory is that it is NOT based on historical data. It is another attempt to address the same problem, by other means. That it yields a SWR somewhat close to what the historical-data theorists find should be reassuring. I also find it interesting that there...
by Ron Scott
Sat Jun 16, 2018 12:25 pm
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 51
Views: 2742

Re: A different theoretical view of SWR

Well - 3.33% is less than 4% so already very conservative. Do you adjust the withdrawal to account for inflation - or does it stay fixed? Do you recalculate every year? Do I get to take 5% 10 years into my 30 year retirement? Whoa... 1. This is not well-formed theory. This is just the beginning, ba...
by Ron Scott
Sat Jun 16, 2018 11:21 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 51
Views: 2742

A different theoretical view of SWR

If you're like me and believe that churning calculations of historical market returns is not a useful exercise for predicting future returns, you're still left with everyone's problem: how to determine a SWR. From a theoretical perspective I've come to believe that over the long term reasonable inve...
by Ron Scott
Mon Jun 11, 2018 9:02 pm
Forum: Personal Finance (Not Investing)
Topic: Balancing the Burden and the Benefit of Wealth
Replies: 11
Views: 1468

Re: Balancing the Burden and the Benefit of Wealth

Yes, "freedom" is key, perhaps a sufficient target in and of itself. But wealth also connotes things like a good financial cushion, lifestyle and legacy to me. I'd say wealth is having the freedom to live the lifestyle I want for myself and my loved ones, without worrying about swings in the economi...
by Ron Scott
Mon Jun 11, 2018 8:26 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3373

Re: Larry Swedroe: What Makes Factors Endure

I think "what makes factors endure" is the amount of money they earn for those who use them to market their services.

If it looks and smells like an actively managed pile, don't step in it.
by Ron Scott
Mon Jun 11, 2018 7:38 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy for a prolonged bear market
Replies: 62
Views: 4971

Re: Strategy for a prolonged bear market

I didn't see it mentioned above so I'll throw out the obvious Plan B for a particular class of investor. This is for those who are a) retired, b) not really employable, c) depend on a relatively high WR and d) who have maintained an overly aggressive equity position in their AA. These retirees are l...
by Ron Scott
Mon Jun 11, 2018 9:40 am
Forum: Investing - Help with Personal Investments
Topic: What to do with individuals stocks?
Replies: 15
Views: 899

Re: What to do with individuals stocks?

I am in a worse position than you. I hold 20% of my net worth in a single stock in a taxable account, my former employer. It is a perennial grower, up more than 35% in the past year alone, and has a realistic growth strategy for the next 5 years that should result in double-digit EPS and sales incre...
by Ron Scott
Mon Jun 11, 2018 8:56 am
Forum: Investing - Help with Personal Investments
Topic: rolling 10yr period returns for different stock/bond mixes
Replies: 5
Views: 512

Re: rolling 10yr period returns for different stock/bond mixes

For your purposes, I would refer to the Vanguard economic and market forecast here: https://personal.vanguard.com/pdf/ISGVEMO.pdf . Page 27 gives their estimate for the 60/40 portfolio (including international) at4.5% nominal. They also show returns at two confidence intervals and some other portfo...
by Ron Scott
Mon Jun 04, 2018 8:04 am
Forum: Investing - Help with Personal Investments
Topic: NYT Story on Importance of Working Just a Little Longer
Replies: 27
Views: 4688

Re: NYT Story on Importance of Working Just a Little Longer

Let’s rephrase:

A. If you can work longer it will almost always lead to a better financial outcome for you.
B. Choosing to retire earlier than you need to will almost never lead to a better financial outcome.
by Ron Scott
Mon Jun 04, 2018 7:55 am
Forum: Investing - Help with Personal Investments
Topic: Is it fine to have 100% of portfolio in VTSAX
Replies: 33
Views: 3104

Re: Is it fine to have 100% of portfolio in VTSAX

Not the best strategy.

The general approach, Bogle/Graham, is to maintain 25-75% in American equities, with a more aggressive posture in your early years. That’s the best advice be heard.
by Ron Scott
Mon May 28, 2018 7:48 am
Forum: Investing - Help with Personal Investments
Topic: Critique Opportunistic Rebalancing
Replies: 6
Views: 526

Re: Critique Opportunistic Rebalancing

Rebalancing is always just a mind game, and an odd one at that. (Do spouses with divergent tolerances for risk set allocations that neither is happy with? Is tolerance for risk everlasting and immutable?) But it has a meaning. It speaks to buying and selling assets based on what's happening inside y...
by Ron Scott
Mon May 28, 2018 7:23 am
Forum: Investing - Help with Personal Investments
Topic: Starting out
Replies: 19
Views: 2737

Re: Starting out

You're doing well and, yes, you should reduce risk. The general guidelines in this forum will serve you well and there is no need to pay a financial advisor, robo-advisor or whatever, for advice on investing you can get here for free. Investing is one of those oddities in life in which its not rocke...
by Ron Scott
Mon May 28, 2018 7:08 am
Forum: Investing - Help with Personal Investments
Topic: Creative Planning vs Vanguard PAS
Replies: 78
Views: 4322

Re: Creative Planning vs Robo-advisor

I'm totally confused.

What advice exactly are you looking for and willing to pay so much for? What questions do you have? What do you feel you need help with?
by Ron Scott
Sun May 27, 2018 5:05 pm
Forum: Investing - Theory, News & General
Topic: Is inflation the greatest risk to retirement portfolios?
Replies: 100
Views: 8209

Re: Is inflation the greatest risk to retirement portfolios?

All the comments above notwithstanding, inflation IS a disaster for retirement funds... We rightly complain about FAs and high-cost investment vehicles which can cost us a percent of our earnings. They're intolerable to most of us. But inflation takes double that amount. You cannot plan for unforese...
by Ron Scott
Sun May 27, 2018 4:45 pm
Forum: Investing - Help with Personal Investments
Topic: New doctor looking for your seasoned advice on initial investments
Replies: 13
Views: 1574

Re: New doctor looking for your seasoned advice on initial investments

I plan to invest 20% of my income. Someone told me i should invest half of that 20% toward retirement and half in some more high risk type of funds. But wanted to know generally what i should do with my budgeted 20% investment strategy? Starting with an asset allocation having somewhere between 25%...
by Ron Scott
Sun May 27, 2018 3:37 pm
Forum: Investing - Help with Personal Investments
Topic: Two Fund Vanguard vs. Managed Portfolio
Replies: 13
Views: 1642

Re: Two Fund Vanguard vs. Managed Portfolio

Smoke and mirrors, including mismatching asset allocations to show a better return.

Your 2-fund is sound. Forget international equities. Stay the course.
by Ron Scott
Thu May 24, 2018 6:59 pm
Forum: Personal Finance (Not Investing)
Topic: NY Insurance Costs on the Rise
Replies: 12
Views: 1095

Re: NY Insurance Costs on the Rise

To the extent that the cost of that which is being insured for rises, the cost of insurance will rise too. Because insurers books of business vary, the cost to them of taking on new business could vary too; pricing varies naturally among insurers. So yes, it pays to shop. Annually. Americans tend to...
by Ron Scott
Thu May 24, 2018 1:59 pm
Forum: Investing - Help with Personal Investments
Topic: How big a portfolio should I have before retiring?
Replies: 60
Views: 9626

Re: How big a portfolio should I have before retiring?

50 x annual spending is very conservative. If 50 x annual spending is what it takes to make you feel comfortable, so be it. I understand that you're probably speaking to Ron Scott and/or Sandtrap, but I agree that a 2% (50x annual spending) withdrawal rate is extremely conservative. Probably me, as...
by Ron Scott
Thu May 24, 2018 8:39 am
Forum: Investing - Help with Personal Investments
Topic: Non-qualified Stock Options; when to sell?
Replies: 8
Views: 550

Re: Non-qualified Stock Options; when to sell?

The correct answer, for whomever is asked, is to diversify. But you know your company and we do not. I exercised and held options, paying the tax out of cash for many many years and even took out loans to do so. In the end It paid off like the lottery. But that's me. Did the "exercise and hold" do ...
by Ron Scott
Thu May 24, 2018 8:37 am
Forum: Investing - Help with Personal Investments
Topic: How big a portfolio should I have before retiring?
Replies: 60
Views: 9626

Re: How big a portfolio should I have before retiring?

Question How big of a portfolio would you require to feel comfortable retiring? I would require a portfolio of at least 50x (50 times annual income/expenses needed) to begin to feel comfortable in retirement. And even more than that would add to that comfort level. :D I too like the 50x approach as...
by Ron Scott
Fri May 18, 2018 12:09 pm
Forum: Investing - Help with Personal Investments
Topic: Non-qualified Stock Options; when to sell?
Replies: 8
Views: 550

Re: Non-qualified Stock Options; when to sell?

The correct answer, for whomever is asked, is to diversify.

But you know your company and we do not.

I exercised and held options, paying the tax out of cash for many many years and even took out loans to do so. In the end It paid off like the lottery. But that's me.
by Ron Scott
Fri May 18, 2018 10:02 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Risks Of Short Selling
Replies: 8
Views: 1166

Re: Larry Swedroe: Risks Of Short Selling

Relative to the overall market, this board is pretty optimistic. The overall global stock/bond mix is about 40/60, but around here 60/40 is looked at as fairly conservative and everyone is implored to "stay the course" when they are thinking about dumping their stocks because the market dropped, be...
by Ron Scott
Thu May 17, 2018 3:13 pm
Forum: Personal Finance (Not Investing)
Topic: Rental Property as a supplemental income strategy in retirement?
Replies: 7
Views: 852

Rental Property as a supplemental income strategy in retirement?

We have owned 2 rental properties for some time now. Both in desirable locations and both well maintained. We've been making about 5-6% of the resale values before taxes. With the first one the tenant balked at a 3% increase. That problem was quickly solved by moving my mother in there at cost. The ...
by Ron Scott
Thu May 17, 2018 12:50 pm
Forum: Personal Finance (Not Investing)
Topic: Having trouble figuring out expected expenses in retirement
Replies: 37
Views: 2645

Re: Having trouble figuring out expected expenses in retirement

If you don't already, I would start doing a monthly budget. Once you start doing that for a few months, I think you will see what expenses might be eliminated or reduced (i.e. Retirement Savings, Mortgage, gas) and what might increase (medical, travel, etc...) in retirement. No one can predict your...
by Ron Scott
Wed May 16, 2018 9:03 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium Lives!
Replies: 39
Views: 3064

Re: Larry Swedroe: Value Premium Lives!

While buying what is cheap may outperform buying what is expensive in the long term, it begs the question why not buy what's both cheap and good, which sends us down a familiar rabbit hole. But the ultimate question for investors is can active strategies outperform Bogle. Larry has some more work to...
by Ron Scott
Wed May 16, 2018 8:47 am
Forum: Investing - Help with Personal Investments
Topic: Can I afford to retire now?
Replies: 45
Views: 6609

Re: Can I afford to retire now?

I would not retire given the circumstances you describe, especially your consideration of making a major life change by moving to a different state and the fact that you are obviously concerned you're in a borderline situation financially. You have the means to live modestly/well in CA and quite wel...
by Ron Scott
Mon May 14, 2018 5:30 pm
Forum: Investing - Help with Personal Investments
Topic: Grant date of ISOs reset when company acquired?
Replies: 9
Views: 759

Re: Grant date of ISOs reset when company acquired?

You know your exercise date and should not use etrade to determine it. They're using something to determine it...maybe correctly, maybe not. Since you led the options for a decade before you exercised you already paid tax at that time to accomplish the exercise. When you eventually sell the residual...
by Ron Scott
Mon May 14, 2018 7:05 am
Forum: Investing - Help with Personal Investments
Topic: Early Retirement - aka - plan B.
Replies: 7
Views: 1922

Re: Early Retirement - aka - plan B.

I was pretty much in your financial position at your age, except I didn't spend as much and had 2 fewer kids. FWIW, I do not like your plan B because its too rich. You can look at your position a few ways: 1. Using a constant 5% real return net of taxes for 35+ years simply increases the risk factor...
by Ron Scott
Sun May 13, 2018 4:47 pm
Forum: Investing - Theory, News & General
Topic: New Digital Advisor for $20/month - Worth it ?
Replies: 11
Views: 1461

Re: New Digital Advisor for $20/month - Worth it ?

rgs92 wrote:
Sat May 12, 2018 10:39 am
With a nice 3-fund portfolio, you do not need any type of adviser. I would let this forum be your adviser. Good luck.
Wow. Clear and succinct.

I have never heard it said as well...
by Ron Scott
Sun May 13, 2018 4:33 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Two Fund or A Managed Portfolio?
Replies: 13
Views: 965

Re: Vanguard Two Fund or A Managed Portfolio?

Hiring a financial advisor is usually a waste of money and especially so in your case because you already get it. You already know how to earn what the market is paying and financial advisors rarely beat the market BEFORE considering their fees. I have no idea what that sample portfolio is supposed ...
by Ron Scott
Thu Mar 29, 2018 3:16 pm
Forum: Investing - Theory, News & General
Topic: Spending in Retirement: An interesting study
Replies: 5
Views: 1448

Re: Spending in Retirement: An interesting study

I don't wish to guess at what GAAP wants. But, if you're normal retirement age (65) and planning on a 30 yr retirement to figure a SWR, you might leave money on the table compared to using a projection based on probable life span. Not the worse outcome possible. Me neither, and no, trying to time y...
by Ron Scott
Thu Mar 29, 2018 9:59 am
Forum: Investing - Theory, News & General
Topic: Spending in Retirement: An interesting study
Replies: 5
Views: 1448

Spending in Retirement: An interesting study

All studies are flawed, some interesting, some useful... Based on my earlier posts on spending principal and spending income in retirement, I took to Googling and found an interesting study on the subjects. I've become skeptical about how theoretical SWRs are implemented in the real world. My gut (a...
by Ron Scott
Thu Mar 29, 2018 9:29 am
Forum: Investing - Help with Personal Investments
Topic: Rebalancing AA options
Replies: 2
Views: 263

Re: Rebalancing AA options

I don't think the majority of rebalancers rebalance assets within asset classes but I could be wrong. I do not. To limit the tax effect you could look at your overall stock portfolio as a single class to rebalance and, when it's time, sell from either US or intl, depending which is out of wack per p...
by Ron Scott
Wed Mar 28, 2018 6:53 pm
Forum: Personal Finance (Not Investing)
Topic: Overcontribution to 401K
Replies: 2
Views: 605

Overcontribution to 401K

You retire in Q217, transfer your 401K to an IRA with a different brokerage, and get a letter a couple months later from the brokerage house that held your 401K that you "overcontributed" in 2016, and that a 1099 along with a recommendation to withdraw an amount certain is coming in time for the 201...
by Ron Scott
Wed Mar 28, 2018 6:39 pm
Forum: Investing - Theory, News & General
Topic: Pfau: Why Bond Funds Don't Belong in Retirement Portfolios
Replies: 143
Views: 23684

Re: Pfau: Why Bond Funds Don't Belong in Retirement Portfolios

tludwig23 wrote:
Tue Aug 04, 2015 10:24 pm
I don't trust the conclusions of any paper, white or otherwise, where the author is paid by someone with a vested interest in the paper's conclusion.
That's a bingo.

If it looks like it, feels like it, smells like it and tastes like it, then don't step in it.
by Ron Scott
Wed Mar 28, 2018 4:20 pm
Forum: Investing - Theory, News & General
Topic: Retirees: Do you spend all your "income"?
Replies: 46
Views: 4436

Re: Retirees: Do you spend all your "income"?

RMDs are nothing more than a forced taxation on tax-deferred accounts, which happens to be scaled by some measure of remaining life expectancy. This isn't exactly right. RMDs are also a cash-flow issue and show up as "income" on Form 1040 the same way that dividends and interest (and capital gains)...
by Ron Scott
Wed Mar 28, 2018 2:35 pm
Forum: Investing - Theory, News & General
Topic: New CD Rates
Replies: 6
Views: 1848

Re: New CD Rates

My mother, who is one of those with a big chunk of the portfolio in treasuries paying 7.5%, had too much cash in checking and sweep accounts. We just did a CD at Wells, 13 months for 2.15%. Maybe I should have gone longer, hard to say.

Rates are getting there...
by Ron Scott
Wed Mar 28, 2018 7:45 am
Forum: Investing - Theory, News & General
Topic: What would you do if you were in charge of a State Pension Fund?
Replies: 36
Views: 2183

Re: What would you do if you were in charge of a State Pension Fund?

Would you believe that I just got selected to head the CalSTRS, with $225 billion in assets? Well, not really, but if you were in charge, would you fire all the investment advisors and just use a three-fund portfolio? Clearly you've never been in charge of anything. In the real world, the person in...
by Ron Scott
Wed Mar 28, 2018 7:18 am
Forum: Investing - Theory, News & General
Topic: Retirees: Do you spend all your "income"?
Replies: 46
Views: 4436

Re: Retirees: Do you spend all your "income"?

You said retired. Therefore I think that business earnings and wages should not be part of the income mix. If you have wages or business earnings, you are not really retired. Especially so, wages. I would disagree with you on business earnings as a retiree could earn rental income on real property ...
by Ron Scott
Wed Mar 28, 2018 7:09 am
Forum: Investing - Theory, News & General
Topic: Retirees: Do you spend all your "income"?
Replies: 46
Views: 4436

Re: Retirees: Do you spend all your "income"?

HIinvestor wrote:
Wed Mar 28, 2018 4:22 am
What about rental income? Is this part of income? What are RMDs from 403 and IRAs?
Rental income would be included in the definition in the original post as "business earnings". RMDs are forced distributions, not income.
by Ron Scott
Tue Mar 27, 2018 7:38 pm
Forum: Investing - Theory, News & General
Topic: Retirees: Do you spend all your "income"?
Replies: 46
Views: 4436

Re: Retirees: Do you spend all your "income"?

You didn't give your percent. You are correct! I believe I'm in the 80% range. No SS and the pensionette hasn't kicked in yet. I doubt if my situation is anywhere close to yours, so I'm at a loss to figure out why this info is important. My guess is most retirees, regardless of their situation, DO ...
by Ron Scott
Tue Mar 27, 2018 4:14 pm
Forum: Investing - Theory, News & General
Topic: Retirees: Do you spend all your "income"?
Replies: 46
Views: 4436

Retirees: Do you spend all your "income"?

Following up on the "principal" thread--and leaving principal aside--I wonder what % of your income you spend annually--on average. I'll try a definition of "income" here and others may want to comment on it. Income = interest and dividends on investments including stocks, bonds, CDs, etc. + SS + pe...
by Ron Scott
Tue Mar 27, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: How old were you when you started spending your “principal”?
Replies: 90
Views: 8481

Re: How old were you when you started spending your “principal”?

I just realized you have withdrawal close to 3% for 19 years and your portfolio is up not 30% but 130% real, which means close to triple your portfolio in nominal dollars, just like FireCalc projected for some cases. This is an excellent illustration of why, absent an extremely unlikely black swan ...
by Ron Scott
Mon Mar 26, 2018 3:25 pm
Forum: Investing - Theory, News & General
Topic: More bad news for Wealthfront
Replies: 30
Views: 7294

Re: More bad news for Wealthfront

So the whole Rick Ferri post--from 2013--is as follows, with the key point highlighted: Venture capitalists (VCs) have committed over $27 million to Wealthfront by my count. That might seem absurd given the fact that they have very little in assets ($170 million) and charge a 0.25% fee. A RIA of sim...
by Ron Scott
Mon Mar 26, 2018 8:44 am
Forum: Investing - Theory, News & General
Topic: More bad news for Wealthfront
Replies: 30
Views: 7294

Re: More bad news for Wealthfront

I have a hard time understanding how ANY organization that holds other people's money as their primary corporate mission is not under pressure to take as much of that money for themselves as possible, by "adding value." In the late '70s I worked for a "mutual" savings bank (non-profit, owned by depo...
by Ron Scott
Sun Mar 25, 2018 7:10 pm
Forum: Investing - Theory, News & General
Topic: How old were you when you started spending your “principal”?
Replies: 90
Views: 8481

Re: How old were you when you started spending your “principal”?

I think what’s happening is that by the time the million-dollar retirement kitty reaches its mid-life, when growth is theoretically over and the decline is supposed to kick in, a) you realize you’re really NOT going to continue spending like you did before, and b) that million is only worth about $3...
by Ron Scott
Sun Mar 25, 2018 3:10 pm
Forum: Investing - Theory, News & General
Topic: How old were you when you started spending your “principal”?
Replies: 90
Views: 8481

How old were you when you started spending your “principal”?

So you retire with $X and that amount continues to grow for some years as the plan sets itself up for the big inflation affect to catch up to you. Then, at some point, the accounts are less than the original $X.

How old were you when your accounts dropped below $X?
by Ron Scott
Sat Mar 24, 2018 11:29 pm
Forum: Investing - Theory, News & General
Topic: Seasoned bogleheads repressing the thought of lower expected returns
Replies: 178
Views: 12504

Re: Seasoned bogleheads repressing the thought of lower expected returns

premiumbananas wrote:
Sat Mar 24, 2018 2:08 pm
Are seasoned bogleheads on this forum repressing the prospect of hardly positive real returns for the next decade, because its painful to acknowledge?
Some are and some get annoyed at posts that explore this.