Search found 528 matches

by msk
Fri Dec 08, 2017 11:17 pm
Forum: Personal Consumer Issues
Topic: I am buying a car: Most/Least Reliable Makes?
Replies: 64
Views: 3527

Re: I am buying a car: Most/Least Reliable Makes?

Only the makes I owned, over several decades, the actual samples I owned. Totally anecdotal. Most reliable to least: Lexus, Lexus, Toyota, Mercedes, Hyundai, BMW, Chevrolet, Ford, Porsche, Toyota, Ford, Peugeot, Jaguar As you can see, not all Toyotas (or whatever make other than Lexus) are created e...
by msk
Thu Dec 07, 2017 8:53 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage as percentage of take-home pay
Replies: 79
Views: 5602

Re: Mortgage as percentage of take-home pay

I see these questions are more relevant for youngsters rather than BHs nearing retirement. Money is normally in very short supply in your 20s and 30s. If it is still very tight when you are in your 40s then you have either been very unlucky or been careless with savings/investing. I'll now recount m...
by msk
Wed Dec 06, 2017 1:49 am
Forum: Investing - Help with Personal Investments
Topic: Non-US resident portfolio with an emerging market ETF
Replies: 9
Views: 787

Re: Non-US resident portfolio with an emerging market ETF

I have no clue whether the Chile stock market is large enough to be "efficient" or not. An easy check is to look at the market index history over the past decade or two, translate it into USD and make a personal judgement as to whether that history in USD reflects the history of the Chile economy as...
by msk
Wed Dec 06, 2017 1:07 am
Forum: Investing - Theory, News & General
Topic: Amount You Need To Save Annually Over Lifespan
Replies: 80
Views: 8705

Re: Amount You Need To Save Annually Over Lifespan

My first year gross salary was about $16K and my last year was about $180K. Interesting data. 38 years compounding at 6.6% p.a., or 2.6% above inflation. Somewhere between my terminology of good and very good :beer Perhaps I should have called 2% above inflation as very good and 4% above inflation ...
by msk
Tue Dec 05, 2017 2:48 am
Forum: Investing - Help with Personal Investments
Topic: Global nomad advice/newbie alert
Replies: 19
Views: 1625

Re: Global nomad advice/newbie alert

Stocks: you need to invest in an ETF or a Mutual Fund that is NOT run from the USA (to avoid dividend withholding tax and estate tax). UK or Ireland are fine. Simplest would be a worldwide ETF by free market weight, my choice after decades of investing. For myself I chose 90% in iShares IWDA + 10% i...
by msk
Mon Dec 04, 2017 2:11 am
Forum: Investing - Help with Personal Investments
Topic: cash out pension or no?
Replies: 9
Views: 1138

Re: cash out pension or no?

I used to be on the board of trustees of a company pension fund, low 10 figures, newish, not yet in the hundreds of billions. The pensions offered COL adjustment and all cash offers were reviewed with actuaries every few years. Gist of it: if you personally have a proven track record of both saving ...
by msk
Mon Dec 04, 2017 1:40 am
Forum: Personal Consumer Issues
Topic: Philanthropy and related issues
Replies: 50
Views: 3250

Re: Philanthropy and related issues

One can contribute a LOT by putting in effort and time instead of $. Many BHs are very knowledgeable and more financially astute than the average Joe. They also may have quite a number of wealthy friends. Myself and DW had a pre-nuptial agreement when we got married to separate our finances, more or...
by msk
Sun Dec 03, 2017 1:27 am
Forum: Personal Consumer Issues
Topic: Philanthropy and related issues
Replies: 50
Views: 3250

Re: Philanthropy and related issues

Best million $ I spent was to give to my alma mater's well established donor program. My money bought "units" like in a mutual fund. The total endowment (a few billion $) is invested and they take a 3-year average of the returns. They then deduct x% that will leave the rest to grow and keep up with ...
by msk
Sun Dec 03, 2017 12:13 am
Forum: Personal Finance (Not Investing)
Topic: Mutual Funds or alternates that don't force income
Replies: 10
Views: 1056

Re: Mutual Funds or alternates that don't force income

+1 on BRK. Just do a screen on non dividend stocks. Choose 20 to 30 and invest as per their market capitalisation. While not as diversified as an index with 500 stocks, I expect that the behavior of 30 stocks will be very close to a larger index. Of course, you have to do some homework to avoid stoc...
by msk
Sun Dec 03, 2017 12:03 am
Forum: Investing - Theory, News & General
Topic: Amount You Need To Save Annually Over Lifespan
Replies: 80
Views: 8705

Re: Amount You Need To Save Annually Over Lifespan

Frankly I am surprised at the perceived difficulties in saving and investing, early and continuously, as expressed in the foregoing discussion. I recall distinctly yet another rule-of-thumb that was appropriate in my days of first-steady-job. It was never-pay-more-than-25%-of-income-for-accommodatio...
by msk
Fri Dec 01, 2017 11:06 pm
Forum: Investing - Theory, News & General
Topic: Amount You Need To Save Annually Over Lifespan
Replies: 80
Views: 8705

Re: Amount You Need To Save Annually Over Lifespan

My first year gross salary was about $16K and my last year was about $180K. Interesting data. 38 years compounding at 6.6% p.a., or 2.6% above inflation. Somewhere between my terminology of good and very good :beer Perhaps I should have called 2% above inflation as very good and 4% above inflation ...
by msk
Fri Dec 01, 2017 10:54 pm
Forum: Investing - Theory, News & General
Topic: Amount You Need To Save Annually Over Lifespan
Replies: 80
Views: 8705

Re: Amount You Need To Save Annually Over Lifespan

Just save 30% of after tax income as soon as you have a steady job and all will be fine. On the basis of the past 50 years historical data, I checked what one would achieve by investing 100% in stocks, starting with an income of $50k at age 25. NB SP500 grew by 6.63% p.a. and inflation has been 4% p...
by msk
Thu Nov 30, 2017 10:45 pm
Forum: Investing - Help with Personal Investments
Topic: retirement strategy
Replies: 24
Views: 2639

Re: retirement strategy

So you need only $40k annually for living expenses ($200k for 5 years)? I am at age 73 and have a 100% stocks portfolio. Using Monte Carlo simulations and also a 50 year history check, a 5% of portfolio withdrawal rate annually will survive >50 years, keep up with inflation and, on average, your wit...
by msk
Thu Nov 30, 2017 10:24 pm
Forum: Investing - Help with Personal Investments
Topic: Should I sell some of my Berkshire stock
Replies: 31
Views: 2749

Re: Should I sell some of my Berkshire stock

We recently sold a BRKB position we held in an IRA. I wish it would have been in a taxable account, your situation sounds ideal. We just used the proceeds to increase our Vanguard Total Market position.Warren has undoubtedly been good to you. Say goodbye to BRKB before we have to say goodbye to War...
by msk
Thu Nov 30, 2017 8:40 am
Forum: Personal Finance (Not Investing)
Topic: For a Friend: Keep beach home or sell? How to invest the rest.
Replies: 9
Views: 980

Re: For a Friend: Keep beach home or sell? How to invest the rest.

Secondary homes are like hobbies. You lose interest after a few years. I would be tempted to sell the one that they use less often (hotels or hotel-apartments are always cheaper since you pay only for the period of use at the non-permanent location), pay off the remaining mortgage and invest the res...
by msk
Thu Nov 30, 2017 8:22 am
Forum: Investing - Theory, News & General
Topic: Which crash have you seen it before it is coming?
Replies: 134
Views: 9438

Re: Which crash have you seen it before it is coming?

I did not foresee the Japan crash, the mid 1980s crash, the dot.com crash, the RE crash, etc. I did make good money out of the recoveries that followed. Bought Call Options on margin. Looking forward to the next one. In the meantime I am 100% in stocks worldwide and enjoying the ludicrous 20+% gain ...
by msk
Thu Nov 30, 2017 3:26 am
Forum: Investing - Theory, News & General
Topic: Hedge Market Risk By Short Selling Index ETF Or Selling Index Futures?
Replies: 25
Views: 1634

Re: Hedge Market Risk By Short Selling Index ETF Or Selling Index Futures?

For a one year horizon I would go about removing risk a bit more simplistically. Let us take an example of a stake in SPY. SPY is trading at $262.6. Buy one-year Puts on SPY at a Strike of $262, Cost $14.75 Sell one-year Calls on SPY at a Strike of $270, Collect $10.40 Total cost = $4.35, but you wi...
by msk
Thu Nov 30, 2017 2:24 am
Forum: Investing - Theory, News & General
Topic: Is there any reason to invest in real estate?
Replies: 98
Views: 7224

Re: Is there any reason to invest in real estate?

According to Piketty, Capital in the 21st Century, productive RE (land for farming and buildings to let) returned an average of 4% p.a. real terms over the past 300 years. Trade and Industry returned 1 to 2% more p.a., real terms. Of course one can play RE both as a trader or as a long term owner. U...
by msk
Mon Nov 27, 2017 10:42 pm
Forum: Investing - Help with Personal Investments
Topic: Inheriting a large sum, slightly intimidated.
Replies: 51
Views: 5117

Re: Inheriting a large sum, slightly intimidated.

50:50 stock:bonds is far too conservative at age 28, IMHO. My youngest kids are in their early 20s and I plan to pass onto each a couple million $ when they settle down (i.e. steady job/marriage). Currently about to start grad studies. My instructions/advice to each will be simple: Put the whole lot...
by msk
Mon Nov 27, 2017 9:10 am
Forum: Personal Finance (Not Investing)
Topic: Yet another can I afford this house post- please weigh in
Replies: 27
Views: 2655

Re: Yet another can I afford this house post- please weigh in

I find many responses here far too conservative for somebody who loves the idea of owning her own home. A paid off home in a HCOL area can be a very good investment (or not... just like stocks but somewhat more robust than stocks). She has roughly $2mil. If it were me, I'd just buy the house with ca...
by msk
Sun Nov 26, 2017 3:20 am
Forum: Personal Consumer Issues
Topic: What are average incomes for luxury vehicle purchases? Will help me decide
Replies: 57
Views: 3632

Re: What are average incomes for luxury vehicle purchases? Will help me decide

Worked for me for more than 4 decades: All car purchases in our family should amount to less than 6 months income. For a $100k Mercedes or Lexus you need a $200k income. For one of each you need $400k income. Starting out young with a $50k income stick to a couple of Corollas or one Camry, or go to ...
by msk
Sat Nov 25, 2017 11:38 pm
Forum: Personal Finance (Not Investing)
Topic: Too much house, right?
Replies: 88
Views: 8055

Re: Too much house, right?

My decades old rule of thumb has been that a home should not cost more than 3x single income (or 2.5x dual incomes). So if you can keep things down to $750k total, great! If not, you can still 'justify' it as follows: the building lot, since it's rare can be considered as an 'investment'. You will b...
by msk
Sat Nov 25, 2017 11:09 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation In Retirement
Replies: 9
Views: 845

Re: Bond Allocation In Retirement

I retired 18 years ago and am 100% stocks. Frankly, what matters is your tolerance for volatility in the accumulation phase (i.e. primarily psychological) and in retirement is your ability to weather through reductions in withdrawals after stock market falls. A 5%-of-portfolio WR annually will last ...
by msk
Sat Nov 25, 2017 3:14 am
Forum: Investing - Help with Personal Investments
Topic: Finding a direction - What next?
Replies: 15
Views: 1621

Re: Finding a direction - What next?

Too much paralysis by analysis. Just open a brokerage account (Interactive Brokers is my current favorite), fill out all your tax advantaged opportunities, use your surplus savings to purchase VT (Vanguard Total World) and then spend more time analysing and contemplating what next, how to fine tune,...
by msk
Fri Nov 24, 2017 2:13 am
Forum: Personal Consumer Issues
Topic: CAR: Buy new, buy used (2016), lease new
Replies: 56
Views: 2831

Re: CAR: Buy new, buy used (2016), lease new

Rule-of-thumb: all your family's new car acquisitions should have a value not exceeding 6 months family income. How you pay for them makes little difference overall, but beware that a $100k Mercedes that you pay $20k used will still cost you the maintenance for a $100k car (say, $3k p.a.). So, don't...
by msk
Fri Nov 24, 2017 1:59 am
Forum: Personal Finance (Not Investing)
Topic: recent fire in parent's house - what to do?
Replies: 9
Views: 1194

Re: recent fire in parent's house - what to do?

Normally when an estate agent says a house is worth $250k it includes the value of the land lot it is sitting on. A house sitting on, e.g. a beach with a huge frontage, would be insured for a lot less than the estate agent value, since the lot is still there after any fire and may be worth even more...
by msk
Fri Nov 24, 2017 1:48 am
Forum: Personal Finance (Not Investing)
Topic: Is it possible to negotiate a layoff?
Replies: 22
Views: 2252

Re: Is it possible to negotiate a layoff?

I was going to retire at 55 anyway, regardless of any early retirement package, but being a company director in a Fortune 10 company I knew the ropes very well. Secret was to align company strategy with your layoff. Either phase out your own position by reorganising or enable the company to execute ...
by msk
Fri Nov 24, 2017 1:27 am
Forum: Investing - Help with Personal Investments
Topic: Bonds v. Mortgage Payoff
Replies: 21
Views: 2057

Re: Bonds v. Mortgage Payoff

J295 wrote:
Thu Nov 23, 2017 9:45 pm
I think it largely comes down to your personal situation and risk tolerance
Especially age.
by msk
Thu Nov 23, 2017 2:28 am
Forum: Personal Consumer Issues
Topic: Making collegebound Kid Financially Savvy Questions..
Replies: 49
Views: 2983

Re: Making collegebound Kid Financially Savvy Questions..

Two daughters were in a boarding school, later followed by college. I gave them fixed allowances monthly. Allowances included car insurance, gas, maintenance, etc. at college. Even textbooks. Worked fine, and they never asked for extras (they knew that extras will not be entertained). Another daught...
by msk
Thu Nov 23, 2017 2:01 am
Forum: Investing - Help with Personal Investments
Topic: Bonds v. Mortgage Payoff
Replies: 21
Views: 2057

Re: Bonds v. Mortgage Payoff

Never understood why anyone would borrow at 3.75% and simultaneously lend some stranger at 1.x% (bonds). I assume you have sorted out all your taxation side. Your paid off home is a solid investment. With reasonable luck it'll keep up with inflation plus a bit. With a HELOC it is also ready cash. I ...
by msk
Wed Nov 22, 2017 3:08 am
Forum: Investing - Help with Personal Investments
Topic: Advice to become wealthy
Replies: 58
Views: 5267

Re: Advice to become wealthy

Why do you consider the 401k and Roth as not 'saving and investing' ? Perhaps you are already fulfilling the 30% rule. In which case just stick to it and things will work out fine :beer
by msk
Wed Nov 22, 2017 1:48 am
Forum: Investing - Help with Personal Investments
Topic: Advice to become wealthy
Replies: 58
Views: 5267

Re: Advice to become wealthy

1. Save and invest 30% of after tax income. Payment of principal on a home mortgage counts, but not interest. 2. Never buy a house worth more than 3x annual income, or 2.5x joint income. You may afford the monthly payments but expensive homes carry expensive maintenance commitments, be it landscapin...
by msk
Tue Nov 21, 2017 10:15 am
Forum: Investing - Help with Personal Investments
Topic: First time investor looking to jump in market but apprehensive with record highs
Replies: 23
Views: 2990

Re: First time investor looking to jump in market but apprehensive with record highs

I lived by these rules-of-thumb since my student days, retired early at 55, now at 73. Your life trajectory will be different, but these rules did well by me, currently at 8 figures NW: 1. Save and invest 30% of after tax income. Payment of principal on a home mortgage counts, but not interest. 2. N...
by msk
Mon Nov 20, 2017 12:37 am
Forum: Personal Consumer Issues
Topic: Are expensive tires worth it?
Replies: 42
Views: 2612

Re: Are expensive tires worth it?

All tires have a rating code on them. Learn how to read the code and make an intelligent choice. E.g. A very hard, long-wearing tread will obviously compromise on grip. A tire made for cold climates will very likely be rather soft when used in an Arizona summer, etc. Great on grip but rather acceler...
by msk
Mon Nov 20, 2017 12:23 am
Forum: Personal Consumer Issues
Topic: How much do you budget for vacation?
Replies: 94
Views: 5768

Re: How much do you budget for vacation?

My vacation budget has not changed since my college student days to now 18 years in retirement. Daily expenses not to exceed my daily earnings/pension, fares extra coming from savings. Hence we have tended to take very long vacations, since there is no real financial pain. Travelled Economy till rec...
by msk
Fri Nov 17, 2017 2:08 am
Forum: Personal Consumer Issues
Topic: Flying first class, business, versus economy.
Replies: 184
Views: 16801

Re: Flying first class, business, versus economy.

Whoever gets excessively exhausted by flying, please have a full medical. Dehydration because of the dry, low pressure air in the plane is a well known cause, but... DW can hardly stay awake after sunset at an altitude of 7000ft last time we drove there. Takes only a couple of hours from our house b...
by msk
Thu Nov 16, 2017 1:56 am
Forum: Personal Consumer Issues
Topic: New TV for Father
Replies: 22
Views: 1663

Re: New TV for Father

Assuming his (corrected) vision is 20/20 then an optimal size = half the viewing distance. Less than perfect vision (all retired BHs?) => larger TV. Ditto if he has access to 4k streaming. Basically, a too-large TV gives a stretched-balloon effect, but if his vision is so-so, over-large just looks i...
by msk
Tue Nov 14, 2017 8:19 am
Forum: Investing - Help with Personal Investments
Topic: Is it worth starting investing if 7-8 years from retirement?
Replies: 22
Views: 2555

Re: Is it worth starting investing if 7-8 years from retirement?

If not 20 years ago then today is next best. +1 I retired 18 years ago. Despite all the withdrawals I have made since then, my NW has gone up a factor 7.18x :greedy A bit of RE carried over from before retirement but soon thereafter 100% stocks. Retirement affords you time to manage your investments...
by msk
Tue Nov 14, 2017 2:52 am
Forum: Investing - Help with Personal Investments
Topic: Does Magic Formula works or ever worked for you?
Replies: 39
Views: 10076

Re: Does Magic Formula works or ever worked for you?

I spent the last 3 decades of my stock investment life split roughly 50:50 on developed markets and a very tiny market (highly inefficient) in a country I happened to live in. Conclusions: Stock picking does not work in large markets. I enjoyed SPY and BRK for decades and hardly kept up with stock p...
by msk
Tue Nov 14, 2017 2:32 am
Forum: Personal Finance (Not Investing)
Topic: Borrowing from parents - what interest rate?
Replies: 52
Views: 3688

Re: Borrowing from parents - what interest rate?

From a parent's point of view: Just look up 5 year corporate bonds and pay that rate. As a parent I would be at greater pain if my son fell into hard times so bad that he can no longer meet his payments to me than some loss on the loan I made him. You could also look up 5-year government bonds to sh...
by msk
Tue Nov 14, 2017 2:09 am
Forum: Personal Finance (Not Investing)
Topic: Actually might have "enough", thinking of suspending retirement savings in favor of saving for down payment
Replies: 36
Views: 3178

Re: Actually might have "enough", thinking of suspending retirement savings in favor of saving for down payment

OK, these threads keep coming up and my response is invariably to share the rules-of-thumb I picked up during my student days back in the 1960s (so plenty of financial disruptions since): 1. Save and invest 30% of after-tax income. You can include paying off principal (not interest!) on a home mortg...
by msk
Sun Nov 12, 2017 4:10 am
Forum: Personal Finance (Not Investing)
Topic: Another "Can We Afford This House" ?
Replies: 28
Views: 2630

Re: Another "Can We Afford This House" ?

People do detailed financial calculations. So detailed that they miss out on the big picture. Ever since my youth I lived by the following very simple rules. Retired early at 55, now at 73, in order of priority: 1. Save and invest 30% of after tax income. Payment of principal on a home mortgage coun...
by msk
Sat Nov 11, 2017 3:46 am
Forum: Personal Finance (Not Investing)
Topic: Personal letters to the sellers of your house can work!!!
Replies: 72
Views: 7456

Re: Personal letters to the sellers of your house can work!!!

IMHO always ask for a written report. In most locations they are then legally liable. Oral????
by msk
Sat Nov 11, 2017 1:52 am
Forum: Personal Consumer Issues
Topic: Interesting Career Advice
Replies: 6
Views: 1239

Re: Interesting Career Advice

Reality is that there is ALWAYS a shortage of talent. All normal companies have all their executive positions filled all the time, even if by somewhat incompetent people. If the organisation is so small that movements, retirements in the executive ranks are unlikely for a long time, then it's best t...
by msk
Sat Nov 11, 2017 1:44 am
Forum: Personal Finance (Not Investing)
Topic: Personal letters to the sellers of your house can work!!!
Replies: 72
Views: 7456

Re: Personal letters to the sellers of your house can work!!!

I find it bizarre that esate agents still live on, with those ridiculously high commissions. And then the lawyer fees. You can plonk a million $ in an ETF in a couple of minutes... Last house I bought was directly from the owner. My daughter lived in the area and noticed the classified ad. Asking pr...
by msk
Fri Nov 10, 2017 1:58 am
Forum: Personal Finance (Not Investing)
Topic: 35 yr-old doc needs some wisdom
Replies: 49
Views: 10985

Re: 35 yr-old doc needs some wisdom

OK, I would assume that your after-tax net income is circa $300k. My rules-of-thumb at any income level (worked well for me, retired at 55, now in my 70s, not an MD): 1. Save and invest 30% of after-tax income, i.e. $100k. You can include paying off principal (not interest!) on a home mortgage. 2. N...
by msk
Thu Nov 09, 2017 1:22 am
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2260

Re: Will “Dividend Yield” Become Globally Obsolete?

Share buybacks should only occur when COMPETENT boards/management deem their shares are trading below well below "intrinsic value", as per Warren Buffett (and every sane person on the planet!). From all the posts I see here, the vast majority of BHs seem to have the view that shares are currently ov...
by msk
Thu Nov 09, 2017 1:05 am
Forum: Personal Finance (Not Investing)
Topic: Lending Money to Business Acquaintance
Replies: 17
Views: 1285

Re: Lending Money to Business Acquaintance

My neighbor approached me last year for an emergency loan of $4000, for a "few" days but his haulage business was under circumstances similar to what you described. I refused giving him a loan but gifted him $1500. Things were so urgent that he could not accept a bank check since his bank would have...
by msk
Thu Nov 09, 2017 12:35 am
Forum: Personal Consumer Issues
Topic: Pricing a home addition
Replies: 7
Views: 742

Re: Pricing a home addition

Choice of finishes and materials make a HUGE difference in any build, all the way from $130/sq ft to 300+. What the contractor included in his "allowances" is almost never good enough for the owner. E.g. a bedroom ceiling light fixture can vary all the way from a $30 disc to a $3000+ chandelier. OK,...
by msk
Thu Nov 09, 2017 12:17 am
Forum: Investing - Help with Personal Investments
Topic: Children's money?
Replies: 26
Views: 2803

Re: Children's money?

I had two pairs of kids, in my 20s and the second pair in my 50s. I put $100k in 100% stocks (SPY+BRK) for the first pair as their education fund for about a decade, paid for their college education and handed each half the balance when they got married. Turned out each got around $100k, nice packe...