Bogleheads.org

Seems like you should consult an attorney for sure. I do remember reading that Mark Zuckerberg got married 1 day after the Facebook IPO so I’m sure they’re an entire industry that specializes in these issues. Even if you need to pay $1000 / hour likely money well spent — not like index investing where lower costs are always better. I’ll also give some personal advice that mid to late 30s is a great time to have kids as the guy. Obviously you are successful in your career so don’t have any financial issues but hopefully you’ve had enough other experiences (travel, various hobby times) so you won’t feel like you’ve missing out when the time demands of kids happen. I had my kids at 35 and 37 (I’m now 47) and think that’s a better time than wai...

Also if there was a worldwide financial catastrophe such that a 2.5% withdrawal rate failed presumably things would get cheaper so even cutting back spending a little might not affect your lifestyle much. I remember reading that John F Kennedy didn’t even know about the Great Depression until he studied it in school as his families lifestyle was still very comfortable with servants etc. I would imagine something similar would happen with 10 million in assets unless you lost it with single stock speculation and crypto.

My standard answer would be the question can’t be answered without knowing what the $10 millionaire expenses are. :happy Say $200,000 plus taxes. Maybe $250,000 to $275,000 total. $300k is 3% withdrawal rate for 10 million, so any reasonable allocation for bogleheads should be good, unless perhaps you are under 60, but $250k is 2.5% withdrawal so maybe very conservative already. I’ve noticed you have multiple discussions on this topic (which are interesting to read) so seems like you’re quiet worried even though most would be very happy with 10 million. Questions: 1. Do you have any tax deferred space? If so could you buy 30 years worth of tips with that to give a safe income floor without the tax downsides. 2. Is $275k spending really abs...

If you are tired of the toy, sell. Otherwise in 20 years it won't make much difference either way. Make sure to have some fun budget when you are young and single. I'd also consider selling and buying a more impractical car like a Lotus Elise (since you already have a daily driver) -- you could probably find one for around $40k and have money leftover.

You could even extend it longer since you are 71 now potentially could go out to age 101. I’d consider doing it as long as it was less than 50% of my portfolio. Maybe have a few t bills and rest stocks. For the gap you could just buy more bonds maturing in 2034.

Personally I’d just buy the ladder now. I’m 47 so only peripherally looking at it but I bought some individual tips maturing when I’m 74-77 (I have a fixed pension starting at 60 so wanted something inflation protected besides stocks). It was a better deal to buy tips in October but even with the drop in rates it’s still the best time to buy in the last decade. Rates could be better in 6 months or a year or could be worse — if it’s good enough now for you I’d take it. You are giving up return as likely would do better off in stocks or even regular fixed income but the guarantee of a chunk of inflation protected income each year seems worthwhile. If you do decide to buy be aware the trades aren’t as quick as stock trades (sometimes you have ...

Seems like you had great success investing outside the bogleheads philosophy as if you put that money 20 years ago in, say, a total market fund you might have $50k instead of a million in Apple stock. Now the question is what to do, how long do you keep riding it. I’d suggest looking at a list of the biggest companies 20 years ago and see how their stock did 20 years later. It shows the star of the past isn’t always the star of the future. If you do decide to sell some apple maybe try to stay under the $250k income bracket where you have to pay the extra 4.7% Medicare + Obamacare surcharge. I’m not an expert as I’m not fortunate to have a single stock windfall and most of my investments are tax deferred. I’d check out The Overtaxed Investor...

From my reading on a tips ladder the other side is a risk portfolio that can be aggressively invested up to 100% stocks depending on your comfort level. I would use the tips ladder as part of the bond allocation so if you desire 45% bonds before the ladder take the ladder value from the bond section so perhaps you’ll only have 25% bonds left, however much the $333k in tips is.

Is the tips ladder to bridge until social security, presumable starting until age 70 which then takes the place of that $40k/year? You might need to post more info (age, withdrawal rate, yearly spending, etc) to get better advice from people.

I did read the $250k threshold is inflation indexed so won’t be hitting the middle class after 20-30 years of inflation unless they change it.

If it affects you significantly. probably need to move. I’m moving to Washington from Oregon as I am a relatively high w2 income so not worried about this tax (and am happy to escape the income tax). Good thing is there are a lot of options in the US so easy to vote with your feet.

If you hope to get married in the future but don’t have a partner yet I’d personally wait to buy a house so your spouse can choose it with you. You don’t want to have to move to a 2nd house after getting married and pay another real estate commission.

I wouldn’t put down 100% on your house, maybe look at what monthly payments to make your budget not tight and go there. Sounds like this is your first time buying property? Perks to a landlord is they should take care of all maintenance and other issues even if you rent a house.

It used to be called just wanting to be rich — who wouldn’t want to be free from the worries of paying your bills. There’s some truth to it but it’s also like someone with dieting or fitness advice — not always as easy as it sounds. They are selling a dream but there’s still worthwhile info.

I think of fire being retired under 50.

nisiprius wrote: ↑Sat Mar 25, 2023 6:19 am
I don't want to come off as an excessive cheerleader for bonds, but a fundamental difference between bonds and stocks is that with a (normal kind of) bond (and assuming no default) you actually know the future for one particular date.

Unless it’s an inflation indexed bond, you don’t know what the future is in real terms at a particular date. Would be a big difference if there was 10 years of 5% inflation vs 2% inflation.

I agree with you that you know the maximum potential upside short of a deflation scenario. That’s the mistake people made (myself included) who bought long term treasuries with a yield of under 2%.

Bill, do you think ibonds are a good substitute for tbills for someone who plans ahead and can buy a meaningful amount before retirement? Or are t bills preferable?

I am getting to be more of a pessimist on inflation. I have a lot of TIPS now and I may do even more if I don't like what I see. How much longer TIPS yields stay positive is something I wonder about. They've already come down a lot in the last few weeks. Yes hard to know whether now (or a few months ago) was the best time to buy or the future will be a better time. I bought $100k worth of long term tips — getting something like 1.3% real. Not the best (although the money I used to buy them was selling nominal long term treasuries VGLT so I could have bought on a better day for tips but gotten less money for VGLT). I figure it’s okay to buy when it’s good enough and not try to pick the absolute best time to buy. It’s a relief to be out of l...

I’d suggest doing the transfer in partial amounts. I recently transferred my total market into brokeragelink at fidelity. I was expected I wouldn’t be out of the market much as the transfer processes when the market closes and the funds are available the next day. I was going from a vanguard total market institutional fund to VTI. However despite placing the order shortly after the market opened it was up something like 2% from market openings compared to my purchase price. Since I had transferred around $450k (a huge amount for me) that was a painful loss. It could have easily gone the other direction, of course, but stressful when dealing with a large amount of money as even a small fraction is a lot in absolute dollar terms.

Most people don’t lump sum in at the peak, they buy once or twice a month for 20-30 years so may not be as bad as you suggest — make sure to include dividends. I don’t know how to model on portfoliovisualizer, though. Lessons might be have some fixed income when you have stock market profits (the Japanese stock market was up 9x in the 15 years prior to the 1989 crash) and globally diversify. If both total international and us total market have 0 real returns over the next decade, you might be glad to have bought tips at 1-2% real return. However, commodities, gold, tips, treasuries likely will have lower returns than stocks over the next 1-2 decades so if you set yourself with a portfolio only with those things you’ll likely be poorer than ...

What does she think about the Washington state GET 529 program in my situation? I will be a new Washington state resident and am thinking about buying 4 years of tuition credits for each of my children now ages 10 and 12. One year of tuition costs $11,600 through this program and covers in state tuition at the time of college. If you don’t go to an instate school you can withdrawal the dollar equivalent of whatever rate tuition has gone up at in the meantime when kids are in college. I currently have $90k for one child and $50k for another child in 529s and am contributing $400 / month to each child’s account ($800 total). I expect to be full self pay and would like the option of out of state private but don’t know if I can afford it. Shoul...

A related question to HeavyChevy: What income cutoff are you virtually guaranteed to be full pay? Greater than $200k, > $250k? I understand the federal government no longer discounts for multiple children in college simultaneously; do some private schools still discount in this situation?

When the long term TIPS real rate hits 3% Mic drop!! 8-) The 20 yr TIPS point on the Treasury Dept 'Daily Yield Curve', then the longest in that source, exceeded 3% a dozen or so days in Oct/Nov 2008 and shorter points were above 3 by more for longer. But I guess if you look back to posts on this forum then (started in 2007?) they wouldn't have all said 'let's get out of stocks', and not doing so was the right call in retrospect. I get the general point of that post that a high enough riskless return, even one below historical stock returns, even one below the current expected return of stocks (which I'd ballpark as 4% real pre tax), could change your asset allocation away from risk. But a low valuation/high expected return of TIPS is high...

Seems clear that a $90k car is affordable on a million / year income. Just extend your career by another 2 months if you need to or sell some of the $120k in cryptocurrency. At least you have the car if cryptocurrency crashes (that’s my bias though as I think crypto is a Ponzi scheme, you may feel differently) Since your older car is from 2009 which suggests you tend to keep cars for a long time so the per year cost won’t be that much. Main issue as others said is finances going forward as a couple and overall spending. A $90k car once / decade isn’t a big deal. A new $50k-90k car every 2 years would be. Getting married, having P2 stay home and then get divorced 5 years later would be a huge hit. Seems like at $120k / year there should be o...

I am at the stage of life where I am becoming more concerned about decumulation than accumulation; my portfolio should be adequate to handle basic needs without too much concern but I am short of the amount that will support all of my desires for future travel. Probably might be easier to give advice if you say your age, how many more years you have to work, and what percentage expenses you have saved. From reading the above it sounds like you might be short of your goals and looking at some way using mathematical techniques to try to get better returns with less risk. Might work but might blow up. There might be other less risky ways to achieve your goals. If travel expenses are a concern make sure you are looking at travel hacking with m...

I am at the stage of life where I am becoming more concerned about decumulation than accumulation; my portfolio should be adequate to handle basic needs without too much concern but I am short of the amount that will support all of my desires for future travel. Probably might be easier to give advice if you say your age, how many more years you have to work, and what percentage expenses you have saved. From reading the above it sounds like you might be short of your goals and looking at some way using mathematical techniques to try to get better returns with less risk. Might work but might blow up. There might be other less risky ways to achieve your goals. If travel expenses are a concern make sure you are looking at travel hacking with m...

No one knows for sure. I have reits (VNQ) + a small cap value tilt (VBR) 10% each REITs seemed more highly recommended 10-15 years ago, but Burton Malkiel in his 2023 random walk down Wall Street still recommends them (10% in REITs for his model portfolio mid 20s). I’ve read in here many don’t favor REITs anymore and they say some academic research shows it’s not a separate asset class. I haven’t independently evaluated that work. Small cap value often has higher reit percentage than the total market unless you pick a fund that excludes it. Whatever you pick make sure you can stick with it 20+ years. I’d say that you’ll be more questioning yourself with a REIT tilt rather than small cap value, particularly if you spend a lot of time on this...

Great quotes. I heard many of them used without attribution and now I know where they come from. Timeless!

Reacting to each of these things after the fact is one of the worst investment strategies. People were sure rates would go up and held onto cash after which rates went down. Then they moved into long term treasuries for extra yield and rates went up. Now they are surely flocking into TIPS. If inflation is less than expected they will lose out again. The better strategy is to evaluate a portfolio, balance risk vs reward to form a strategy, and live with the outcome of the strategy. I’m not sure if buying tips now is buying high. Tips have already crashed (LPTZ long term tips etf is down 27% the past year), so buying tips now is more like buying REITs after 2008. I read a lot elsewhere saying tips failed when high inflation showed up with th...

1 month tbills. You can usually set up auto roll to automatically reinvest them at most brokerages if you want.

KidneyMD wrote: ↑Sun Mar 19, 2023 10:42 am On the topic of financial history and what we can learn from it, I thought I recalled there was a website and newsletter by a financial historian with new posts/emails on Sundays. I thought this was Chancellor’s work but couldn’t find anything on Google. Anyone know what I’m talking about?

investoramnesia.com

I wouldn’t do scenario #1 if you are worried about tight cash flow in the future as the $120k lump sum could make a lot of mortgage payments if times get tough, much better than your wife unexpectedly having to go back to work.

Also make sure to factor property tax into your new payment, as could be closer to $4000/month.

I’d make sure you aren’t buying too much house with the plan to go down to 1 income and upgrade your house at the same time.

Probably the main difference is loss in bond value -- otherwise it's not a surprise that stocks go down (sometimes a lot) from time to time. Also the drop isn't too bad if you look at it over a 3 or 5 year period. VTI 2/14/20 171.70, 195.19 3/17/23, that's still up 13.6% over ~ 3 years. If you look at it from the covid low 3/20/20 115.90 up 68%. If you have bought every 2 weekly or every monthly like most savers do over the past 5 years, you're doing well.

I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is. Edit: This would be a permanent tilt if I were to do it. So I'm not market timing but just want to make sure I get a reasonably decent entry point. I cannot predict whether there is further down to go. I think one can have a base position in SCV, but that one needs to buy more on RBDs and sell those newly bought shares within days or weeks. Rinse and repeat. For example, if this coming week there is an RBD, then I'm buying. If no RBD happens, then ...

States with no income tax need to get revenue somehow, if those affect you the savings may not be as much as you think. Property, sales, gasoline taxes are common. If you’re renting and not commuting maybe it doesn’t impact you much. We live in Washington state. I'm in the camp that each state will get the money it wants in some way. Our Gas tax quite high, sales tax if you make a big purchase (we bought a different boat last year which included 23k sales tax), liquor tax is highest in country and the estate tax limit has not been raised from the 2.13million in quite a few years. Other states may have other issues. Earthquake or hurricane insurance, drought, utilities etc. Family and friends should be a significant issue. I pay over $25k /...

Tips definitely push out the cost to the government until later. Take, say a 30 year tips compared to a nominal. Much of the return with a tips comes from the 30 year inflation adjusted return of principal where a nominal 30 year return of principal is much lower. So perhaps with tips pushing out the cost to later so is attractive to the government. Same rational like why allow Roth IRAs — they get more money in tax now even though less later.

Think of the government like a bank trying to draw in customers. They either have to pay a higher interest rate on your savings, or give away toasters. If the government wants to borrow more money to continue (what appears to be a long held tradition of) deficit spending, they need to be able to borrow from as many people as possible. So, by offering TIPS and I bonds, they draw in new customers who weren't previously lending their money to the government. Regards, My understanding is TIPS is a very small portion of the overall US debt so I don't think that's the reason. I am curious myself. For i bonds I think they do it as a service to the small investor but with TIPS there's no dollar limit so that isn't the explanation for why they issu...

Finding a rental on your own should be easy — look at what’s listed on Redfin.com. As someone who’s going through the process myself I easily found a rental there. We hired a real estate agent to help sell our house (5% commission in our area) and I think she will be worthwhile as she had some connections for people to hire to do repairs / upgrades before listing for sale. We’ll see what results we get on the market, though. I found someone who sold the property behind us last year and had many sold properties so would be picky on who you hire. As to buying a house, the same agent might refer you to someone else (ours will when we plan on buying, said she does selling only). For buying I’m not as sure the value as much since seems easy to s...

skierincolorado wrote: ↑Thu Mar 16, 2023 2:29 pm
Gambling is bad. Need a strategy that's better than gambling.

We already have one — that’s VTI or VT. Leverage will always be a gamble (unless special situations like you have a fixed rate mortgage below the current treasury rate).

Everyone, please pull out your crystal balls and humor me 1) What do your foresee happening with the economy/interest rates 2) How does the above affect this strategy 3) What would have to happen to convince you that this strategy is essentially dead I think the strategy will continue to succeed in the future, it's just whether those who bought in 2021 or earlier (like myself) will survive enough to see any of the future returns. I think buying long term bonds now is way better than in 2020 or 2021. I'm already at a 50-60% drawdown, at some point the drawdown will be so great hard to recover. I don't think the strategy can last 30 years, though, so maybe have an exit point once you've made a certain amount (or at least take some profits ou...

KlangFool wrote: ↑Wed Mar 15, 2023 8:14 pm OP,

https://www.irs.gov/individuals/interna ... -exclusion

Why aim so low? Why can't you live outside of the USA for 330 days and qualify for foreign earned income exclusion?

In summary, saving 20+K per year of taxes is nothing compared to your income and annual savings. If you really want to save a lot of taxes, live outside of the USA.

KlangFool

He consider also look at Puerto Rico, still in the us but super favorable tax treatment.

I would consider it but not for taxes as the only reason, there should be another pull factor for you. For Washington the outdoors and access to the mountains you don’t have in Ohio, for Florida the beach, etc. Otherwise with $465k / year you should be able to live in a high tax state if you want to.

I'm surprised by all these comments about "skin in the game." If your child fails or barely passes their first year, then you can re-evaluate paying for an expensive school and have them transfer somewhere else. Otherwise if you can afford to pay for their school why wouldn't you? Only reason not to is if you can't comfortable afford it, which I suspect in the case for many on here as a full pay private school could be $300k / child for self pay. Even if you've reasonably successfully with 1-2 million net worth for someone who has 2-3 kids it might be hard to afford spending ~ 40% of your net worth on school. For those who are fortunate enough to have 1-2 million but not rich enough they can comfortably afford it (I'd say someone ...

I’d at least look into renting a house so you will be happy with your living situation. I decided to sell our house too and move into an apartment but am actually looking forward to apartment life for at least 6-9 months. The complex is brand new and has a pool so I want to enjoy it with my kids over the summer. As to timing the real estate market, it seems likely (but not guaranteed) that prices could be flat or down next year. However, interest rates could be even higher, so if you are borrowing money your payment could be higher. It’s also possible the fed could cut rates in a few months if there is economic troubles (look at the recent bank news), leading to lower mortgage rates and higher house prices. From reading about various market...

This isn’t the best board for that request although you will find some successful entrepreneurs on here. You’ll never get rich quick with index funds but will slowly (over 20-30 years investing $10k - $50k/year).

I think looking for more business opportunities is a great idea as income / career track is most important at age 19. Personally though I’d invest $10k in an index fund (either total world or vti us total market) to learn about them and still have most of your money to invest in business ventures. Perhaps in 10 years you will have several million from successful business ventures that you can then deploy in index funds.

If it doesn’t work in 20 years you’ll be 56 or so and still able to get some sort of job (drive for Uber, etc). For someone who is 65 withdrawing 5% and 20 years later is 85 they’ll unlikely to have those sorts of work options available. That gives you a margin of safety, not financial but human capital.

You have way too many funds. For example, you have 18 funds in your Roth alone. I have just one fund in my Roth - Vanguard total stock market. Our entire portfolio is the three fund portfolio, plus a muni fund and treasuries (due to the rapid rise in interest rates) I would recommend greatly reduce the number of funds that you hold. I sure agree with you Wiggums. Some of the EFTs were started when I couldn't meet the min. investment for a mutual fund. But now it's a lot to track. Should I take the long and patient approach and just sell off a holding when it's up? You could sell all now if you wanted to and convert to broad base index funds, waiting until losses recover before selling doesn’t make a lot of sense. I think it’s called loss a...

Retirement calculators tell me that if we invest $1600 a month with modest assumptions on returns, inflation, etc, never increasing this amount, we could expect to retire at 65 with $1.7 million, live to nearly 100 while withdrawing 100k, with money left over when we die. These calculations don’t include my wife’s pension of $2400 a month. So on one hand I see all over BH I should be saving 15-20% of our income, even 50% in some cases like yours (incredibly admirable!), but this is telling me we’re ok on 10%, despite our “late” start. How can this be? What am I missing? Turnerb, "Current ages 31/35" "we could expect to retire at 65 with $1.7 million," Are you that lucky? Counting on luck is not a good strategy. There is...

If he has 1.2 million, is 65, will get social security that pays at least $20k/ year, 100% stocks isn’t unreasonable for a $40k/ year spend. That would require $20k / year spend from his portfolio with is less than a 2% withdrawal rate.

Alternatively, he could consider putting $200k in short term bonds to be spent over the next 5 years and postponing social security to age 70. That would probably be the safer strategy.

Personally, outside of an emergency fund I’d stay close to 100% stocks until you are closer to 50-55 if you don’t plan on retiring for 30 years. If you do bonds don’t go to bond heavy maybe 10% like the target date funds.

No replies so no one may have been interested in this topic, but just in case someone is thinking the same thing I did go ahead and made the exchange today. Not the best day to buy TIPS, but VGLT was up (sold in am) and I didn't want to keep my money in cash trying to market time too much the TIPS market. It was my first time buying secondary market individual tips (using fidelity) and while the trade eventually went through it wasn't as quick as buying an ETF. Seems the bonds are sold in blocks and many times have a minimum of 75 bonds to purchase (1 bond = $1000 par value, actual cost for most was less) and I was looking at buying 20-30. After a few requests I was able to buy what I wanted but it isn't exactly clear why some orders were r...

When are you planning on retiring and how much have you saved? Vanguard 2055 retirement fund has around 10% bonds so you don't have to go bond heavy yet unless you already have enough. My impression is many people on here are bond heavy either due to loss aversion or being rich enough they don't have to worry about the potential loss in return. Likely stocks will still return more in a 20-30 period, though, even though now is a better time to buy bonds than in the past decade since you can lock in a good return. It doesn't seem as big a deal in the accumulation phase but is for people already or soon to retire. Here's some ideas: 1. The relatively standard suggestion for vanguard's total bond fund/etf for whatever you want as your bond allo...

Maybe. Or maybe not. I like TIPS. A lot. I am retired. I have enough assets to fund my retirement comfortably so have no logical reason to accept unnecessary risk...market risk or inflation risk. In the best of all possible worlds I would be nearly 100% invested in TIPS and sleep soundly through any crisis (regardless of whether equities overperform or underperform). That said, with nearly half my financial assets in equities, and enough in safe investments like TIPS to probably fund my retirement comfortably (barring huge unexpected expenses), does it make financial sense to sell my equities (all in taxable with 100-200+% unrealized gains) and put the proceeds into TIPS, thus taking a huge tax hit up front that would otherwise be invested...

Is the $30K going to be $30k in 2023 dollars or the inflation adjusted $30k? If nominal and you need exactly $30k in 2033 you could buy a 10 year nominal treasury for somewhat less than $30k as a zero coupon bond -- I've never done so can't give you advice how to buy. If you need an inflation adjusted $30k, you could buy a secondary market TIPS maturing in 2033. That assumes the item will inflate at the same rate as the CPI -- for some things like college tuition the rate of inflation might be higher.