Search found 218 matches

by RAchip
Thu Feb 22, 2018 5:17 pm
Forum: Investing - Theory, News & General
Topic: What if you only live off dividends?
Replies: 142
Views: 11130

Re: What if you only live off dividends?

If we are really talking about living off of dividends, we are talking about people with very large stock portfolios. If you have a $10+ million stock portfolio, those people don't sell their stock. Most of those people got very rich by following a simple rule: never sell your stock. My guess is tha...
by RAchip
Wed Feb 21, 2018 10:33 am
Forum: Investing - Theory, News & General
Topic: What if you only live off dividends?
Replies: 142
Views: 11130

Re: What if you only live off dividends?

Living off of dividends is exactly the same as selling off your stocks though. So you could rephrase your question as, "What if you only live off selling off your stocks?" I dont agree. Receiving dividends is not “exactly the same” as selling your stock. Nobody can say for sure what would happen to...
by RAchip
Mon Feb 12, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: SWR — Can You Include Real Estate as Part of Your Portfolio
Replies: 24
Views: 1409

SWR — Can You Include Real Estate as Part of Your Portfolio

I assume you dont include the value of your primary residence in your portfolio but what if you have a $1mm home and could easily downsize to a $500k home in the future if needed? Can you include the $500k difference in calculating SWR? How about vacation houses that could be sold or rented later in...
by RAchip
Mon Feb 12, 2018 2:20 pm
Forum: Investing - Theory, News & General
Topic: I think US interest rates could drop.
Replies: 62
Views: 6629

Re: I think US interest rates could drop.

I am in the camp of the OP. It makes no sense that the US 10yr could yield 3+% when the German 10yr yields .75%. If US bonds start yielding well above what the rest of the world’s “safe” bonds pay, the demand for US bonds will increase and driving the price up and yield down. It just makes no sense ...
by RAchip
Wed Jan 31, 2018 10:58 pm
Forum: Investing - Theory, News & General
Topic: Wow: Shiller PE is 34.52
Replies: 52
Views: 6330

Re: Wow: Shiller PE is 34.52

Its simpler to look at dividend yield. It seems unusually low to me. Which means stock prices are unusually high.
by RAchip
Wed Jan 31, 2018 10:41 pm
Forum: Investing - Theory, News & General
Topic: Are dividends really the same as capital gains?
Replies: 18
Views: 2565

Re: Are dividends really the same as capital gains?

The reality is that "the market" does not know how much cash is held by a company on a daily basis. That figure is disclosed quarterly. And nobody knows for sure how "the market" values cash held in a company at any particular time. So, in my view, you know exactly what a dollar dividended to you is...
by RAchip
Wed Jan 31, 2018 12:11 pm
Forum: Investing - Theory, News & General
Topic: Living on Dividends and Interest
Replies: 58
Views: 7456

Re: Living on Dividends and Interest

"If a given company had two classes of stock identical in all ways except for the fact that one paid a dividend and one did not, you'd end up with an equivalent amount pre-tax at the end of the day because the non-dividend stock should have more share appreciation equal to the amount of the dividend...
by RAchip
Wed Jan 31, 2018 11:04 am
Forum: Investing - Theory, News & General
Topic: Living on Dividends and Interest
Replies: 58
Views: 7456

Re: Living on Dividends and Interest

What would be correct or wrong about living on the dividends and interest of your portfolio if you were able to do so with a 30% surplus or more? For this exercise, consuming capital by selling shares/individual bonds/cd's would be prohibited. I'd be curious as to what this group thinks about it. T...
by RAchip
Mon Jan 29, 2018 3:13 pm
Forum: Investing - Theory, News & General
Topic: If you're really rich you're probably not an index-fundi Boglehead
Replies: 61
Views: 10929

Re: If you're really rich you're probably not an index-fundi Boglehead

"Why would they need more than 200 million dollars in liquid assets?" Because if you are a billionaire you own a plane (or planes) many residences and have lots of staff and all of that produces a crazy cash burn. I think you can put people with over $100mm in a different category. They have so much...
by RAchip
Mon Jan 29, 2018 11:16 am
Forum: Personal Finance (Not Investing)
Topic: $100k+ Credit Card Spend Per Year: What card offers the best return?
Replies: 44
Views: 4623

Re: $100k+ Credit Card Spend Per Year: What card offers the best return?

In addition to all the other comments, you must spend $50k on "Merchandise Purchases." I would bet this does not include paying your contractor.
by RAchip
Sat Jan 27, 2018 6:41 pm
Forum: Investing - Theory, News & General
Topic: Starting to feel like the late 1990s?
Replies: 145
Views: 12651

Re: Starting to feel like the late 1990s?

The charts are very misleading. Going from 5 to 10 is exactly the same as going from 20 to 40.
by RAchip
Sat Jan 27, 2018 3:18 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Rising Rates Increase Worries
Replies: 86
Views: 12993

Re: Larry Swedroe: Rising Rates Increase Worries

"30 year Treasuries currently offer a yield of 2.85%"

I would be worried. The Vanguard prime MMF is yielding about 1.45% and rising rapidly. Who would tie up money for 30 years now at 2.85% when interest paid for fully liquid ultra short term is 1.45% and is not locked in? It makes no sense to me.
by RAchip
Thu Jan 25, 2018 1:52 pm
Forum: Personal Finance (Not Investing)
Topic: High Yield Savings Account Recommendations?
Replies: 45
Views: 2796

Re: High Yield Savings Account Recommendations?

If you have a meaningful amount of money I would just put it in the vanguard prime mmf. Why? :confused Because I think the best place to hold a large amount of cash and get a decent return is one of the top mmf's in the world, particularly if you have cash that significantly exceeds the FDIC insura...
by RAchip
Tue Jan 23, 2018 3:39 pm
Forum: Investing - Theory, News & General
Topic: Vanguard CEO - "4-4.5% Market Returns Over The Next Decade"
Replies: 35
Views: 5230

Re: Vanguard CEO - "4-4.5% Market Returns Over The Next Decade"

This just proves that even the "experts" have no clue. The gains they said would take 5 year happened in 9 months.
by RAchip
Tue Jan 23, 2018 3:28 pm
Forum: Investing - Theory, News & General
Topic: Bond Portfolio for High Net Worth Individuals - Different Rules?
Replies: 56
Views: 5700

Re: Bond Portfolio for High Net Worth Individuals - Different Rules?

Where is the line that makes you an HNWI?

I am coming around to the view that bonds are mostly a scam at this point. MMF are getting close to 1.5% and rising. Keep some needed cash in a mmf and longer term money in an s&p 500 fund. very simple. But I am no expert.
by RAchip
Tue Jan 23, 2018 2:15 pm
Forum: Personal Finance (Not Investing)
Topic: High Yield Savings Account Recommendations?
Replies: 45
Views: 2796

Re: High Yield Savings Account Recommendations?

If you have a meaningful amount of money I would just put it in the vanguard prime mmf.
by RAchip
Sun Jan 21, 2018 4:24 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 8319

Re: Fear of dying with too much money?

"There is an underlying assumption here, faulty in my opinion, that NOT spending at least 4% is foolishly depriving yourself of additional happiness." I actually made that quote, not RAchip) I think it depends on how much money you have and how old you are. If you have $25mm+ and are 50+, it seems ...
by RAchip
Sun Jan 21, 2018 2:17 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 8319

Re: Fear of dying with too much money?

"There is an underlying assumption here, faulty in my opinion, that NOT spending at least 4% is foolishly depriving yourself of additional happiness." I actually made that quote, not RAchip) I think it depends on how much money you have and how old you are. If you have $25mm+ and are 50+, it seems ...
by RAchip
Sun Jan 21, 2018 12:07 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 8319

Re: Fear of dying with too much money?

"There is an underlying assumption here, faulty in my opinion, that NOT spending at least 4% is foolishly depriving yourself of additional happiness." I think it depends on how much money you have and how old you are. If you have $25mm+ and are 50+, it seems to me that you can be more aggressive in ...
by RAchip
Sun Jan 21, 2018 12:00 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 8319

Re: Fear of dying with too much money?

If you have significantly more than the estate tax exemption, this is a concern. I am disappointed that Trump didn't follow through with his promise to eliminate the estate tax. The things the lawyers want you to do to avoid estate taxes are not really that attractive. They involve giving up control...
by RAchip
Fri Jan 12, 2018 7:16 pm
Forum: Investing - Theory, News & General
Topic: 4% Withdrawal vs Yield as Income
Replies: 41
Views: 2285

Re: 4% Withdrawal vs Yield as Income

"Look, the 4% withdrawals include dividends. If I was 100% Total Stock Market Index in retirement (I wouldn't be), I'll get the 2% dividends from it, and then sell another 2% each year." Understood and agreed. But you could build your own portfolio of individual stocks (no REITS or MLP's) that pays ...
by RAchip
Fri Jan 12, 2018 5:21 pm
Forum: Investing - Theory, News & General
Topic: 4% Withdrawal vs Yield as Income
Replies: 41
Views: 2285

Re: 4% Withdrawal vs Yield as Income

"RAChip what does your portfolio look like right now in-terms of indexes etc" The majority of my stock portfolio is individual blue chip dividend stocks. Some is in the vanguard s&p 500 index fund, but I bought most of my individual holdings when stock prices were lower and yields were higher. I ack...
by RAchip
Fri Jan 12, 2018 3:20 pm
Forum: Investing - Theory, News & General
Topic: 4% Withdrawal vs Yield as Income
Replies: 41
Views: 2285

Re: 4% Withdrawal vs Yield as Income

As a long term investor who prefers to live off of dividends, I am not concerned what the market value of my portfolio is now or in a year or two. I care what it will be in 10 or 20 years when I might want to sell and spend. For now, my concern is whether the actual dollar amount of my dividend cash...
by RAchip
Fri Jan 12, 2018 1:56 pm
Forum: Investing - Theory, News & General
Topic: 4% Withdrawal vs Yield as Income
Replies: 41
Views: 2285

Re: 4% Withdrawal vs Yield as Income

"It's simple math." No its not. You are assuming that instead of paying dividends, a company just lets the excess cash accumulate in an account in perpetuity AND that the market values that excess cash dollar-for-dollar. Neither assumption is valid companies inevitably end up wasting excess cash -- ...
by RAchip
Fri Jan 12, 2018 1:47 pm
Forum: Investing - Theory, News & General
Topic: 4% Withdrawal vs Yield as Income
Replies: 41
Views: 2285

Re: 4% Withdrawal vs Yield as Income

"If they didn't pay them to you, your shares would be worth more." This cannot be proven. Nobody knows what JNJ's market value would be today if it had never paid any dividends. The stock price the day before and day after an ex-dividend date mean nothing to me. The issue is what the price would be ...
by RAchip
Mon Jan 08, 2018 4:09 pm
Forum: Personal Finance (Not Investing)
Topic: Can you ever win the game?
Replies: 50
Views: 5274

Re: Can you ever win the game?

"The financial system could completely collapse and money could become worthless." Yes, but if you own stock in companies that provide needed products and services your stock won't become worthless even if the dollar does. For me, its hard to quit the game because of lifestyle creep. Its hard to sto...
by RAchip
Sat Jan 06, 2018 12:53 pm
Forum: Investing - Help with Personal Investments
Topic: Why not Muni Money Market?
Replies: 41
Views: 3506

Re: Why not Muni Money Market?

Obviously something unusual is going on. The muni mmf should not be yielding more than the prime taxable mmf. This has to be temporary.
by RAchip
Thu Jan 04, 2018 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: 1m in Stocks looking to Simplify to Indexes
Replies: 11
Views: 1499

Re: 1m in Stocks looking to Simplify to Indexes

What are the 7 stocks (besides Berkshire)? What was the gain on your portfolio compared to the s&p 500?
by RAchip
Thu Jan 04, 2018 8:39 pm
Forum: Investing - Theory, News & General
Topic: Muni Money Market funds starting to look good!
Replies: 75
Views: 11739

Re: Muni Money Market funds starting to look good!

It doesn't make a lot of sense to me. The muni MMF yields are getting fairly close to the VG Prime MMF yield. I don't see how that can continue for very long.
by RAchip
Tue Jan 02, 2018 2:11 pm
Forum: Investing - Help with Personal Investments
Topic: How to Get Money Out of One's Investments for a Early Retiree
Replies: 24
Views: 2077

Re: How to Get Money Out of One's Investments for a Early Retiree

"Either way, you have $50,000 that you can use for spending, but which of these is best depends on your other income." Yes, but then you have less dividend income going forward and since those shares are gone, you don't get any future capital appreciation on them. The reason every company in the DJI...
by RAchip
Tue Jan 02, 2018 11:40 am
Forum: Investing - Help with Personal Investments
Topic: How to Get Money Out of One's Investments for a Early Retiree
Replies: 24
Views: 2077

Re: How to Get Money Out of One's Investments for a Early Retiree

"pending the dividends and interest IS effectively selling that part of your return that appears in the form of interest and dividends. A withdrawal is a withdrawal is a withdrawal" I've read this over and over here, but I just cant force myself to agree. If I were the OP I would reconsider how the ...
by RAchip
Sun Dec 24, 2017 8:46 pm
Forum: Investing - Theory, News & General
Topic: Implications of tax bill on residential real estate (house prices)
Replies: 62
Views: 5810

Re: Implications of tax bill on residential real estate (house prices)

If you own a $3mm home and pay $30k in real estate taxes, even assuming you could deduct none of that (and used to deduct all of it) you would owe 37% of that or $11,100. So the value of my $3mm home would drop by about $11,000 at most. That will probably be offset by stock portfolio appreciation.
by RAchip
Sat Dec 16, 2017 4:30 pm
Forum: Investing - Help with Personal Investments
Topic: What to do after losing $117k in stock market?
Replies: 156
Views: 17154

Re: What to do after losing $117k in stock market?

Was it a realized loss or a paper loss? My view is that just because the market price of some stocks in your portfolio went down, thats no reason to quit. It depends what stocks you own. I bought a lot of BP in the low-mid 40's. When it fell to the upper $20's I "lost" (on paper) several hundred tho...
by RAchip
Fri Dec 08, 2017 6:28 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 13534

Re: One answer to the Dividend stocks puzzle from behavioral finance

"selling shares led to an equivalent outcome." If you have an $8mm portfolio if 23 individual stocks, deciding what to sell every 3 months would be extremely difficult. Plus, as you sell down your portfolio the dividend income decreases. The reality for me is that selling shares is not an equivalent...
by RAchip
Fri Dec 08, 2017 5:43 pm
Forum: Investing - Theory, News & General
Topic: "Financial Shock" wealth
Replies: 33
Views: 6352

Re: "Financial Shock" wealth

"for others it might be $10K. $100K, $250K, $500K, $1M or maybe more" At a certain level of wealth, there is no "financial shock" you cant absorb. There is virtually no financial debt you can be hit with for $1mm other than a catastrophic liability you aren't insured for. If you are really rich, the...
by RAchip
Mon Dec 04, 2017 9:30 pm
Forum: Investing - Theory, News & General
Topic: Bonds Are Riskier Than People Think
Replies: 142
Views: 14099

Re: Bonds Are Riskier Than People Think

Why in the world would anyone buy a 20 year bond yieldind about 3%? If you dont need your principal back for 20 years you can buy an s&p index fund, get a dividend of 2% (with a better tax rate than bond interest) and be virtually guaranteed that your original investment amount will have appreciated...
by RAchip
Mon Dec 04, 2017 3:35 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 13534

Re: One answer to the Dividend stocks puzzle from behavioral finance

"Berkshire investors disagree" This and your other arguments are speculation. I think that is Berkshire started paying a dividend there would be even more demand for its stock and the price would rise, not fall. The market price of stock is determined by supply and demand. The market price is not an...
by RAchip
Mon Dec 04, 2017 3:16 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 13534

Re: One answer to the Dividend stocks puzzle from behavioral finance

To echo and perhaps even amplify triceratop's voice: We are not against dividends. We are only against misconceptions about dividends. PJW I think it is you who misunderstand dividends. A finance professor performing an academic valuation would say that keeping the cash in the company increases the...
by RAchip
Mon Dec 04, 2017 11:43 am
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 13534

Re: One answer to the Dividend stocks puzzle from behavioral finance

"There are still people posting here from time to time who seem to have the misunderstanding that dividends are free money." Dividends are not "free" money, THEY ARE GUARANTEED MONEY. If the cash stays in the company you may or may not realize that money when you sell your stock at some point in the...
by RAchip
Sun Dec 03, 2017 10:51 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 13534

Re: One answer to the Dividend stocks puzzle from behavioral finance

So many here dont like dividends. You are the VAST minority. Every single company in the DJIA and 80+% of of companies in the s&p 500 pay dividends. Why? The VAST majority of investors want them. They create value for investors.
by RAchip
Sun Dec 03, 2017 5:49 pm
Forum: Personal Consumer Issues
Topic: Growing Number of Electric Vehicles
Replies: 112
Views: 9036

Re: Growing Number of Electric Vehicles

Eventually, there will be battery exchanges like propane tank exchanges have evolved into. I wouldn't worry about this.
by RAchip
Sun Nov 19, 2017 9:00 am
Forum: Personal Consumer Issues
Topic: Thoughts about wearing a "uniform"/same thing everyday?
Replies: 138
Views: 10305

Re: Thoughts about wearing a "uniform"/same thing everyday?

I am a lawyer and we need to wear a "uniform" also. A three suit rotation is fine -- navy, navy pinstrip and grey. 5 white button down collar shirts all identical. 5-10 ties. One pair of black cap toe dress shoes. Black belt. 5 pairs of navy dress socks.
by RAchip
Sat Nov 11, 2017 3:25 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Slaughtering The High Dividend Sacred Cow
Replies: 192
Views: 14268

Re: Larry Swedroe: Slaughtering The High Dividend Sacred Cow

"Dividends are part of total return, but are less tax efficient than selling stock in a taxable account as all of the dividend is taxed yearly and when selling stocks only the capital gains part is taxed." Yes, you will pay less in taxes on a "homemade" dividend than on a qualified dividend for the ...
by RAchip
Sat Nov 11, 2017 12:29 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Slaughtering The High Dividend Sacred Cow
Replies: 192
Views: 14268

Re: Larry Swedroe: Slaughtering The High Dividend Sacred Cow

"Dividends make cash appear in their accounts without having to sell shares and that makes them happy is the argument I'm hearing for that. But perhaps I'm unfairly characterizing their position?" You are correct, I think. But I think it makes a big difference if you own a portfolio of 20+ dividend ...
by RAchip
Fri Nov 10, 2017 12:29 pm
Forum: Investing - Help with Personal Investments
Topic: Do telecom stocks have a future?
Replies: 64
Views: 3847

Re: Do telecom stocks have a future?

Pretty much every single person in the world has or wants a smart phone and other devices connected to the big carriers networks so I think they will be ok.
by RAchip
Wed Nov 08, 2017 4:18 pm
Forum: Personal Finance (Not Investing)
Topic: Why make more money?
Replies: 134
Views: 13871

Re: Why make more money?

I am 52. If it weren't for health insurance concerns, I would retire today. For me, working and having the governments (state, federal local) take over half of my earnings has caused me to be very close to saying I'm done. I don't feel like continuing to grind to make millions for the government.
by RAchip
Wed Nov 08, 2017 11:14 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Slaughtering The High Dividend Sacred Cow
Replies: 192
Views: 14268

Re: Larry Swedroe: Slaughtering The High Dividend Sacred Cow

What would the market value of JNJ be today if it had never paid dividends? Trillions?
by RAchip
Wed Nov 08, 2017 10:20 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Slaughtering The High Dividend Sacred Cow
Replies: 192
Views: 14268

Re: Larry Swedroe: Slaughtering The High Dividend Sacred Cow

I don't know if it does or doesn't but to me what's important isn't the price on one day. If a company holds excess cash you don't know what will happen to that cash over time. It could be spent on a stupid acquisition. It could be paid out as silly bonuses to management. It could be wasted on point...
by RAchip
Wed Nov 08, 2017 9:35 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Slaughtering The High Dividend Sacred Cow
Replies: 192
Views: 14268

Re: Larry Swedroe: Slaughtering The High Dividend Sacred Cow

"the price of your shares falls by the amount of the dividends" This is what I don't agree with. Over the long term (5-10 years or more) if cash is held in a company rather than being paid out as a dividend, nobody knows for sure what would happen to the market price of the stock. That money could e...
by RAchip
Tue Nov 07, 2017 1:13 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Slaughtering The High Dividend Sacred Cow
Replies: 192
Views: 14268

Re: Larry Swedroe: Slaughtering The High Dividend Sacred Cow

One problem with the "dividends are pointless" argument is that there is no way to actually prove it. There is no way to know what JNJ or MO's stock price would be today if it had never paid dividends. The value of a cash payment to you by a company you own is known or calculable. The market value o...