Search found 269 matches

by Ragnoth
Wed Feb 17, 2021 2:49 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin and the US Dollar
Replies: 122
Views: 10292

Re: Bitcoin and the US Dollar

I'm not sure how you would expect a single currency (or collectable, or commodity, or good) to destabilize the U.S. Dollar. The whole premise seems flawed. Currencies can collapse for a number of reasons (e.g., hyperinflation, unsustainable pegs, etc.) but it's unclear why an increased popularity in Bitcoin would trigger such an event for any country -- muchless the USA in particular.
by Ragnoth
Fri Feb 12, 2021 4:08 am
Forum: Personal Investments
Topic: 18 to 100 percent annual return fund
Replies: 223
Views: 41717

Re: 18 to 100 percent annual return fund

They have a brochure on the website. For lower level investors, they will have you open up an account at interactive brokers (or TDA) and actively buy/sell index funds on your behalf. The following are some of the most relevant/interesting tidbits: Our fees will range from 1.5% to 1.75% per year based on the total value of the portfolio. . . . The fees will be deducted by custodian (Interactive Brokers) on a quarterly basis and paid to Nanban Capital. Nanban Capital LLC came into existence in July-2020. Currently, we do not have any disciplinary information to disclose. We only buy or sell three exchange traded funds (ETFs)- SPY, QQQ, IWM. We believe there is no conflict to disclose here. We do not buy or sell individual stocks or mutual fu...
by Ragnoth
Fri Feb 12, 2021 3:35 am
Forum: Personal Consumer Issues
Topic: Help find an unbiased news source...
Replies: 90
Views: 6263

Re: Help find an unbiased news source...

I'm always surprised when people recommend the Economist in response to a question like this. I've tried it several times hoping for neutrality but on each occasion I've lasted for just a few months with it. The pieces seem to be all opinion pieces. Fine if you agree with them I guess. But if you don't and just want news.... I found it irritating. Just my own experience It tends to champion a relatively milquetoast centrist, neoliberal, view of the world (free markets, free trade, free mobility of labor and capital etc.) which comes off "neutral" to many people... at least in comparison to the alternatives. It also gets recommended simply because the articles are usually well written and decently thought out. It doesn't have anyt...
by Ragnoth
Fri Feb 12, 2021 3:14 am
Forum: Personal Consumer Issues
Topic: Help find an unbiased news source...
Replies: 90
Views: 6263

Re: Help find an unbiased news source...

Setting aside the metaphysics of whether or not something can be truly unbiased, sources like the AP and Reuters aim for a neutral perspective. Foreign papers are also to have a relatively neutral view of domestic politics (but you can find plenty of exceptions).

But honestly, you are probably better off reading a number of sources. As long as you are self-aware enough to notice bias and recognize the difference between journalism and opinion, you are doing better than most.
by Ragnoth
Sat Jan 09, 2021 2:17 am
Forum: Investing - Theory, News & General
Topic: Do you have FOMO (Bitcoin, TSLA, whatever?)
Replies: 201
Views: 17662

Re: Do you have FOMO (Bitcoin, TSLA, whatever?)

My current allocation let’s me sleep well. I own all the TSLA that I need through index funds, and hold a very small amount of bitcoin from an old experiment with mining (back when it was valued in the tens of dollars, instead of the tens of thousands). I’m extremely bearish on both of them, but I’m not going to sweat it if I continue to be wrong.
by Ragnoth
Wed Dec 30, 2020 3:54 pm
Forum: Investing - Theory, News & General
Topic: The Case Against 529's
Replies: 219
Views: 18626

Re: The Case Against 529's

For the ultra-wealthy 529s are sub-optimal from a gift/estate tax perspective. Direct tuition payments have their own gift tax exemption. If you have well in excess of $20 million and planning to maximize lifetime gifts, you are better using you annual gift exclusion to fund something other than a 529 (e.g., a crummy trust or direct cash payment) and just paying the tuition bill directly if/when the child gets to college.
by Ragnoth
Thu Dec 17, 2020 11:29 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin @ 23K, why am I anti-Bitcoin?
Replies: 404
Views: 26086

Re: Bitcoin @ 23K, why am I anti-Bitcoin?

I’ve held onto a small amount for years now, the remnants of an experiment with mining bitcoin back when it was feasible to do so effectively with a graphics card. But it’s enough to keep FOMO from setting in.

That said, I have never heard a convincing argument for why it should have significant intrinsic value.
by Ragnoth
Sun Nov 08, 2020 3:45 am
Forum: Personal Finance (Not Investing)
Topic: What is the best 2% cash back credit card which is NOT the Citi Double Cash?
Replies: 84
Views: 12275

Re: What is the best 2% cash back credit card which is NOT the Citi Double Cash?

fujiters wrote: Sun Nov 08, 2020 3:28 am Highly recommend the BoA 2.62+% combo as described by Frugal Professor:

https://frugalprofessor.com/best-credit ... 9-edition/
This is what I use for general spending, and I would also highly recommend it. Only caveat is you need $100k worth of stock/ETFs that you can park at Merrill Edge.
by Ragnoth
Wed Oct 21, 2020 11:24 am
Forum: Personal Finance (Not Investing)
Topic: Letting neighbor use dock
Replies: 26
Views: 2827

Re: Letting neighbor use dock

The dock is old, it’s not in need of repair. I don’t go down there and sweep off the goose $&@! or pressure wash it ever year. It’s sturdy and the boards are firm. I’ll was hoping to find advice of a waiver, I guess I need to talk to a lawyer about that. Thanks Waivers of this type (anything dealing with contracts and/or tort liability) are all governed by state law. You aren’t going to get a real answer without a lawyer. The answer might also change if you were getting some financial benefit out of the arrangement (e.g., your level of care might need to be higher if he was paying you for the privilege of accessing the dock). But in many states, waivers of that type would need to be written, specific about the behavior covered, would o...
by Ragnoth
Wed Oct 07, 2020 8:39 pm
Forum: Personal Finance (Not Investing)
Topic: Tax exemption from home improvement expenses?
Replies: 8
Views: 871

Re: Tax exemption from home improvement expenses?

2. This forum is super sensitive IME to the possible implication of 'play fast and loose with the tax code'. Let's assume you mean 'clever, aggressive tax reduction measures within the law'. In which case you can't really do that. First as was just mentioned the owning entity has to depreciate the renovation over a period of years, generally 27.5 (some shorter lived items used in the renovation might qualify for shorter schedules). That's a pretty big difference from taking the renovation cost as a loss in year 1, in time value of money terms. Moreover, depreciation is not a permanent deduction, it lowers the tax basis of the house, generating a higher capital gain when you eventually sell it assuming the same price, unless you avail yours...
by Ragnoth
Wed Oct 07, 2020 3:13 pm
Forum: Personal Finance (Not Investing)
Topic: Tax exemption from home improvement expenses?
Replies: 8
Views: 871

Re: Tax exemption from home improvement expenses?

You should talk to an accountant, but the answer is probably: "no, you can't just write it off on your income taxes." It sounds like you want to treat this as an investment property. If you sell it right now, there will be no capital gains (your "cost basis" is the market value of the property at the time your father passed). The actual mechanics of it are a little complicated, but money you invest into the property will effectively get added to the cost basis, and will reduce the amount of capital gains you have when you eventually sell it. For example, if you "invest" $50k to increase the value by $200k, you will only get taxed on $150 worth of capital gains when you eventually sell. A clever accountant could...
by Ragnoth
Wed Oct 07, 2020 3:19 am
Forum: Investing - Theory, News & General
Topic: When a company pays a dividend, what is the literal reason for the stock price decrease?
Replies: 62
Views: 6143

Re: When a company pays a dividend, what is the literal reason for the stock price decrease?

The "value" of the shares include the value of the cash the company has floating around (which is reduced when they pay dividends). For example, Company XYZ might be worth 100 million, and have 1 million shares outstanding worth $100 each. Of that $100 million, lets say $5 million is cash in the bank, and the other $95 million is the value that the market puts on everything else (i.e., factories, land, machinery, intellectual property, good will, brand value, prospective future deals, etc.). That means that every share of stock represents $5 in cash, and $95 worth of "other stuff." If the company says "lets pay out $2 million in dividends" ($2 per share), they will only have $3 million in the bank, and $95 wort...
by Ragnoth
Sat Sep 05, 2020 1:03 pm
Forum: Investing - Theory, News & General
Topic: Is it really passive index if S&P actively excludes Tesla?
Replies: 160
Views: 14308

Re: Is it really passive index if S&P actively excludes Tesla?

I don’t own individual TSLA stock, and I use the total stock market for most of my US equity allocation. But as somebody that does not hold an S&P fund, I think the notion that that investing in an S&P 500 index fund is “active” because they are dragging their feet on a single company is pretty ridiculous on its face. I feel that this is mostly coming from people feeling “burned” by some TSLA trade that didn’t pan out the way they planned. There are many reasons for buying an individual stock, but speculating that the price will pop due to inclusion on some index is a pretty poor one. More generally, I assume Tesla will be around a long time and I wish them the best. I wouldn’t have a lot of conviction in the present valuations (i.e...
by Ragnoth
Sat Aug 29, 2020 1:31 pm
Forum: Investing - Theory, News & General
Topic: Winklevoss: The Case for $500,000 Bitcoin
Replies: 349
Views: 28952

Re: Winklevoss: The Case for $500,000 Bitcoin

To summarize the article:

1) Hyperinflation is coming in the USA.
2) Oil isn't a store of value because total supply is unknown, it is expensive to hold, and total demand will fluctuate.
3) Gold isn't a store of value because the supply is unlimited once you start space mining (described as a "long-term inevitability").
4) Bitcoin is the only solution, and it will beat out every other crypto because of network effects.
5) Therefore, Bitcoin should have the same market cap that gold currently has, which would price it at $500,000.

If you find that a compelling bull case for Bitcoin, god bless your little heart.
by Ragnoth
Sun Aug 23, 2020 4:17 am
Forum: Personal Finance (Not Investing)
Topic: Cousin died He did not leave a will
Replies: 85
Views: 12858

Re: Cousin died He did not leave a will

When did you last see your disabled cousin? Had you visited him regularly? Pre-Covid 19 I drove up to visit him a couple of times. He was in a assisted living facility. I went to see him when he was first admitted. When Covid-19 turned into an epidemic, visitors were not allowed. He died at the facility. To recap, your relative died intestate (without a will). The California laws on this are here , but the short version is that if he doesn't have parents, siblings, nephews, or aunts living, it will get split among his cousins equally. You should have a California lawyer walk you through it, but anybody with an interest in the estate should be able to start the probate process and ask to be named executor. If nobody has done this already, I...
by Ragnoth
Fri Aug 21, 2020 3:13 pm
Forum: Investing - Theory, News & General
Topic: Advice to a Millennial about nest egg "Critical Mass"
Replies: 150
Views: 21153

Re: Advice to a Millennial about nest egg "Critical Mass"

Living below your means and investing early is still the best advice you can get. That works regardless if you are dealing with a pension plan or a 401k, and if your career is with a single company or 10 companies. Your standard of living will always depends on the relative cost of education, housing, healthcare etc. But that doesn't preclude people from building good habits and doing their best to save over time.
by Ragnoth
Wed Aug 19, 2020 4:27 am
Forum: Personal Investments
Topic: Assets going from 600K->15M, should I change my asset allocation?
Replies: 176
Views: 22020

Re: Assets going from 600K->15M, should I change my asset allocation?

The actual asset allocation doesn’t change. You can have a thousand, a million, or tens of millions. The Bogleheads philosophy works fine, and you are unlikely to find a financial advisor who can do much better than a well balanced low-cost portfolio. However, the real limiting factor is that aggressive tax/estate planning starts when people have over $25M, and really kicks in around $50M (basically, any time you have capital gains and/or taxable estate in the millions). Your allocation would be the same, but that’s the point where outside professionals can really work some magic with trusts to save you and your heirs millions (e.g., using GRATs to move money out of your estate, or CRUTs to dodge capital gains under the guise of “charity”).
by Ragnoth
Sun Aug 16, 2020 3:23 am
Forum: Investing - Theory, News & General
Topic: Impact of negative interest rates on bonds and CDs?
Replies: 16
Views: 1755

Re: Impact of negative interest rates on bonds and CDs?

It's very hard to drive nominal bond yields into deep negative territory. You can issue debt with small negative yields (maybe somewhere around 50-100 basis points) because banks and institutional investors are willing to pay up a bit for safety/liquidity, and it's very difficult to hold physical assets in sufficient quantity. But at a certain point banks will be motivated to come up with some other "creative" solutions and avoid bonds all-together. For individual investors, you always have the alternative of holding cash or physical assets, and there's no reason to ever buy a negative bond. I think the real danger to watch out for is when real bond yields turn negative. This is a much more common occurrence, and will make most bo...
by Ragnoth
Fri Aug 14, 2020 4:40 am
Forum: Personal Investments
Topic: Merrill Lynch Preferred Deposit
Replies: 47
Views: 34580

Re: Merrill Lynch Preferred Deposit

How do Vanguard, Fidelity, Schwab, etc. make money with no annual fees and how do big brokerage firms stay in business with $125 annual fees? https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy I agree with the premise of value low cost investing in the link, but how does Vanguard make money at $0 a year for an account and how to big brokerages stay in business with a $125 annual fee? Fees aren’t the only way of making money off an account. Off the top of my head, they can make interest off the money sitting in sweep accounts, can loan out shares short term (e.g., to traders, short sellers, or other brokerages), try to lure you into additional services or margin accounts, or engage in order routing to collect fees from t...
by Ragnoth
Fri Aug 14, 2020 12:01 am
Forum: Personal Investments
Topic: Merrill Lynch Preferred Deposit
Replies: 47
Views: 34580

Re: Merrill Lynch Preferred Deposit

Preferred Deposit interest rate is now only 0.05% Is $125 a year to have an account at a big brokerage firm expensive? Extremely, since most of us pay $0 a year to.have accounts at Vanguard, Fidelity, Schwab, etc. How do Vanguard, Fidelity, Schwab, etc. make money with no annual fees and how do big brokerage firms stay in business with $125 annual fees? https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy I agree with the premise of value low cost investing in the link, but how does Vanguard make money at $0 a year for an account and how to big brokerages stay in business with a $125 annual fee? Fees aren’t the only way of making money off an account. Off the top of my head, they can make interest off the money sitting in...
by Ragnoth
Wed Aug 05, 2020 10:38 pm
Forum: Personal Investments
Topic: Holding Vanguard ETFs in Merril Edge
Replies: 19
Views: 4009

Re: Holding Vanguard ETFs in Merril Edge

I hold over $100k in Merrill Edge accounts, and buy and sell VTI all the time (with no fees). It used to be that you had to have a certain account balance for no-fee ETF/stock trades, but I think they did away with those fees for all accounts a year or two ago. So you should be fine just moving over $100k and buying VTI directly through Merrill Edge (and pocketing the bonus). I don’t know if you have any interest in it, but holding $100k+ in combined BofA/Merrill Edge accounts also gives you access to very generous credit card offers as a “platinum honors” client (or whatever they call it nowadays). You can look it up, but the cash reward card can then give 5.25% on all online purchases including Amazon/Seamless/Etc., and the preferred rewa...
by Ragnoth
Mon Aug 03, 2020 9:30 am
Forum: Personal Finance (Not Investing)
Topic: Any Chase Sapphire Reserve cardholders planning on cancelling? [annual fee increasing]
Replies: 238
Views: 32571

Re: Any Chase Sapphire Reserve cardholders planning on cancelling?

I ditched a while ago for the BofA cards (and an Amex for groceries). If you have 100k sitting with Merrill/BofA the premium card works out to 2.625% on all purchases. Also, the everyday cash back with the “online” category selected works out to 5.25% back for things like Amazon, Seamless/Grubhub, etc.

We worked out the math at one point, but there was just no way we would spend enough on travel/going out to make it worth it to keep the Chase. It may have worked out differently if we had unused travel benefits and a stockpile of points.
by Ragnoth
Mon Aug 03, 2020 4:05 am
Forum: Personal Finance (Not Investing)
Topic: Crummey trust as eventual recipient of inherited Roth IRA?
Replies: 13
Views: 1508

Re: Crummy trust as eventual recipient of inherited Roth IRA?

This is really a question for an estate lawyer, but I don’t think there are any problems with the idea. You are basically just suggesting a trust that is funded with annual exclusion gifts during your life by giving crummy powers to the beneficiary, that you also designate as the beneficiary on your IRA, and that you have a single set of restriction/provisions for investing and distributing the assets. Trusts can be pretty bespoke, and there should be no problem putting crummy powers on inter-vivos gifts, while simply adding other property to the corpus without some interim right of withdrawal. That said, I have no idea if this would actually achieve your goal of lowering administrative costs. And depending on what your end-goal is, the che...
by Ragnoth
Wed Jul 29, 2020 10:27 pm
Forum: Personal Consumer Issues
Topic: Need to destroy old external Hard Drives
Replies: 103
Views: 6968

Re: Need to destroy old external Hard Drives

Drill a hole or two and throw it away. Even if it turns up in the dump, nobody but the Feds is going to be able/willing to do anything with it at that point.
by Ragnoth
Wed Jul 29, 2020 4:54 pm
Forum: Investing - Theory, News & General
Topic: I'm not getting why all the love for gold. here's why.
Replies: 87
Views: 8895

Re: I'm not getting why all the love for gold. here's why.

It’s an (almost) uncorrelated asset class. Even if you don’t believe it should produce long term returns, it can reduce the volatility in your portfolio. I’m that sense, I think it serves the same purpose in a portfolio as art and collectibles.

I don’t put much faith in back-testing, and I don’t know if I would ever want to hold a “golden butterfly” portfolio, but a modest allocation to fold has done wonders for investors (even over a multi-decade time scale).
by Ragnoth
Mon Jul 27, 2020 3:12 am
Forum: Personal Investments
Topic: Best way to sell physical gold bars?
Replies: 3
Views: 997

Re: Best way to sell physical gold bars?

I lived in a big metropolis and used to do this at local jewelry/pawn shops. Not sure how viable that is for you. The standard rate offered was about 5% below spot, give or take. There was a bunch of stores in the area, so I would always ask around a bit first. My buddy tried to liquidate some gold recently and he used some online service (I think it was jmbullion or one of the other big online gold sellers). If it seems a bit shady to use an online seller, you can always do it in small chunks over time (e.g., start with a single bar for 2k, see how it goes, then do $10k chunks until you’re done). I honestly don’t know if I would feel safe walking around with $50k+ worth of gold, so I would probably do it in batches even if I was conducting...
by Ragnoth
Tue Jul 21, 2020 2:55 am
Forum: Personal Finance (Not Investing)
Topic: Estate tax for marital and QTIP trusts
Replies: 19
Views: 1332

Re: Leaving inheritance to children/grandchildren

Almost. It's the ability to appoint in favor of at least one of yourself, your estate, your creditors or the creditors of your estate that results in the trust being included in your estate, not whether you exercise your power in that way. If you have that power, it's included, even if you don't exercise it. But if you may appoint to anyone except the above, then it's not included. The short answer is "yes," you can appoint to your spouse. If you owe money to your spouse the answer is a little less clear, but the IRS has zero desire to start parsing out inter-family dynamics and the chance of them getting after you for this is approximately 0 (not to mention that you can pass an unlimited amount to your spouse free from estate ta...
by Ragnoth
Mon Jul 20, 2020 3:25 pm
Forum: Personal Finance (Not Investing)
Topic: Leaving inheritance to children/grandchildren
Replies: 37
Views: 5294

Re: Leaving inheritance to children/grandchildren

What affect would being able to decide who gets the balance at their death have on including the trust assets in their estates for tax purposes, especially inclusion of the assets for estate tax purposes and for step up on death? Would it affect a creditor's ability to get at the trust assets? As long as the class of permissible appointees exclude the beneficiary, his/her estate, his/her creditors and the creditors of his/her estate, the trust won’t be included in the beneficiary’s estate and won’t be subject to the beneficiary’s creditors. Alternatively, if the beneficiary may appoint in favor of any of the above, the trust will be included in the beneficiary’s estate. In some states it will be subject to the beneficiary’s creditors. In o...
by Ragnoth
Sun Jul 19, 2020 10:03 pm
Forum: Personal Consumer Issues
Topic: Are 55+ Communities a Baby Boomer Thing Only? If so, who will buy when Boomers want to sell?
Replies: 237
Views: 30299

Re: Are 55+ Communities a Baby Boomer Thing Only? If so, who will buy when Boomers want to sell?

I'm a millennial, and my in-laws live in a 55+ community. The houses are nice, well maintained, and they have a pretty active social life with people around their age that have similar interests (book clubs, televised sports, a wine tasting group, etc.). The HOA fees are high, but they also enjoy low taxes since it was set up in an area without a big school system. I could easily imagine myself enjoying a similar living situation once the kids are out of the house and I'm fully retired, and I imagine that there are plenty of other Millennial (or Gen Z) folks who might think the same once they start pushing retirement age. These communities have existed for a long time. There have always been people aging out, and another crop of retirees ag...
by Ragnoth
Sun Jul 19, 2020 7:37 pm
Forum: Personal Finance (Not Investing)
Topic: Leaving inheritance to children/grandchildren
Replies: 37
Views: 5294

Re: Leaving inheritance to children/grandchildren

I am troubled about how to distribute our estate (3 million). We have 2 kids ages 35 and 36. The 36 year old is single, a horrible saver and not very ambitious. The 36 year old works for the 35 year old. My younger son has his own framing company. He’s a hard worker, but also spends every dollar he earns The younger son has 3 children. Ages 0, 6 and 8. Any suggestions? Basically, this boils down to how you want to handle annual gifts, other lifetime gifts, and the distribution in your will. Each of these can be given directly, or put into a trust. I'm a big advocate of avoiding drama by treating you children equally (e.g., don't put extra strings on the money going to one kid and not the other), and making sure everybody knows what to expe...
by Ragnoth
Tue Jul 07, 2020 4:06 am
Forum: Personal Finance (Not Investing)
Topic: taxes from selling rentals
Replies: 2
Views: 403

Re: taxes from selling rentals

The short version is that your cost basis gets smaller every time you deduct that depreciation. For example, if you bought the property for $100k and took deductions for ~20k of depreciation, you effective cost basis has become $80k. When you eventually sell it for $300k, that means you will be paying capital gains on $220k instead of $200k. When people talk about “recapturing depreciation”, they are talking about the fact that you have to pay the capital gain on that extra ~20k that you depreciated early on. But the real thing to conceptualize is that all those deductions have been eating away your cost basis, and will result in higher capital gains when you sell. There is a trick to dodge capital gains entirely if you trade the property f...
by Ragnoth
Fri Jun 26, 2020 5:16 am
Forum: Personal Investments
Topic: GERM ETF
Replies: 9
Views: 1300

Re: GERM ETF

Eastcoaster212 wrote: Thu Jun 25, 2020 4:35 pm I mean i only bought it for a quick pop in return, and so far its up by a lot. Wasn't a long term investment, all of my things are in VTSAX. It was just purchased for a quick buy and sell. We'll see what happens with it
This seems merely reckless and speculative. The one thing it has going for it is that it isn’t outright fraud, penny stocks, or some elaborate pump and dump scam.
by Ragnoth
Fri Jun 26, 2020 4:55 am
Forum: Personal Investments
Topic: TLH Again: The "Sell All" Exception to Wash Sale, Stacked Indefinitely?!
Replies: 7
Views: 1148

Re: TLH Again: The "Sell All" Exception to Wash Sale, Stacked Indefinitely?!

There is no “sell all” exception. They have described something correctly (i.e., there is no “wash sale” if I buy 100 shares on Monday, then decide to sell everything Tuesday and never buy another stock again), but it’s being described using some poorly chosen language. Wash sales are triggered in two situations. First, if you sell something and then repurchase substantially “identical” shares within 30 days. Second, if you do something that looks sufficiently similar to that in terms of the outcome, the IRS will treat it like a wash sale. For example, it will be treated like a wash sale if you buy 100 shares in year one; then you buy an EXTRA 100 shares in year 2 a few minutes BEFORE you sell the original 100 shares. This would be a “cleve...
by Ragnoth
Wed Jun 24, 2020 4:25 am
Forum: Personal Finance (Not Investing)
Topic: new BoA Premium Card benefit
Replies: 101
Views: 14320

Re: new BoA Premium Card benefit

I got the same offer. I rarely use the card, but I keep it around for the 2.625% on general purchases. I primarily use a BoA cash back card for online purchases, or an Amex card for groceries.

I actually ignored the email and wrote it off as spam (until I saw this thread). But if it’s legit, I guess there’s no harm in switching to my BoA premium card the next time I go grocery shopping and pocketing the $50.
by Ragnoth
Tue Jun 23, 2020 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: Is a forgiven loan a gift?
Replies: 13
Views: 1270

Re: Is a forgiven loan a gift?

Forgiving the loan is a “gift.” Also, to the extent that you are not charging any interest, that is also considered a “gift.” For example, if the market rate is 2% and you have an interest free loan for 50k, the IRS would treat the loan like a gift of 1k per year. If you want to avoid filing anything, the way to do it would be “forgiving” half the loan + the interest on the other half in 2020 (total gift ~$25.5k), and then forgiving the second half of the loan in 2021 (total gift ~$25k). It’s basically just mental accounting, but that is the way to keep it above board and avoid filing anything. The IRS has zero interest in probing into small intra-family loans, and the only purpose of writing anything down (e.g., a letter to your daughter c...
by Ragnoth
Tue Jun 23, 2020 4:12 am
Forum: Personal Investments
Topic: Why Morgan Stanley Says the 60/40 Portfolio Is Doomed
Replies: 107
Views: 13483

Re: Why Morgan Stanley Says the 60/40 Portfolio Is Doomed

The article claims that returns over the next 10 years are unlikely to be as good as returns over the preceding 10 years as a result of (1) high valuations for the S&P coupled with (2) low bond yields. The claims might be correct (and similar articles are a dime a dozen), but there isn’t much you can do about it. It’s similar to the argument that the withdrawal rates on a balanced portfolio should be 3% instead of the traditional 4%. For example, if a portfolio of 600k can comfortably spit out $2k per month under normal conditions, maybe you should only expect it to only give $1.5k under current market conditions. At best, this article (and other similar articles) suggest that you should adjust your expectations on how large the long-te...
by Ragnoth
Sun Jun 21, 2020 4:01 am
Forum: Personal Investments
Topic: High net worth portfolio advice
Replies: 159
Views: 41028

Re: High net worth portfolio advice

This may sound like heresy, but people with high net worth (i.e., seven-figures and above) can get a lot of benefit by working with financial advisors/estate planners. They will charge you exorbitant fees, but there are a handful of strategies for extremely wealthy individuals that are rarely discussed and are difficult to implement without professional help. For example, nobody is going to try setting up their own charitable remainder unitrust to liquidate appreciated stock and defer tax liability. But it would have spread the tax bill over the next couple decades, and would have saved the OP millions (or at least high six-figures) in taxes long-term. It's too late to do much about it now, but it's a heck of a lost opportunity. At this poi...
by Ragnoth
Thu Jun 18, 2020 8:11 pm
Forum: Personal Investments
Topic: Susie Orman Says You are Crazy to be Investing in Bonds
Replies: 176
Views: 23618

Re: Susie Orman Says You are Crazy to be Investing in Bonds

The short and simple version is that bond are just loans made to companies/governments. Each one has an interest rate (i.e., a percent of the principal that is paid out each year), and at the end of some fixed period of time the principal is returned to you. If the interest rate goes up, the value of preexisting bonds goes down, with "longer-term" bonds going down more than "short-term" bonds. Short-term bonds are fine, and many people consider them "cash equivalents." Long-term bonds are more problematic. Many commentators are scared of rising interest rates. The argument is that you have limited upside (i.e., yields are low and there isn't much room for them to fall further), and there is a lot of potential d...
by Ragnoth
Thu Jun 18, 2020 6:56 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up and Managing a Private Foundation
Replies: 42
Views: 2037

Re: Setting up and Managing a Private Foundation

Private foundations have some pretty strict filing and reporting requirements, along with obligations to distribute a fixed portion of the endowment each year (my vague recollection is that it is 5%). It’s not the kind of thing anybody should be trying to do on their own.

Depending on why you want the foundation, you may get similar bang-for-your-buck out of a donor advised fund. Notably, you can still control how the money is invested, you can direct how the money is disbursed to charity, and you can get your deduction up front.

There is minimal reason to mess with a private foundation unless you are planning to give out grants to individuals, hire your buddies onto the board, and/or invest in individual stocks and esoterica.
by Ragnoth
Tue Jun 16, 2020 4:24 am
Forum: Personal Consumer Issues
Topic: Undergrad college list parameters.
Replies: 100
Views: 5420

Re: Undergrad college list parameters.

I would be very careful about planning too far ahead when it comes to college majors and grad school. Most of the people I went to school with flirted with different majors (at least to some degree). After a semester or two, that interest in psychology could easily turn into a passion for sociology, or neuroscience, or behavioral economics, etc. It may sounds trite, but I suggest simply going to the best school in your budget (and with the right geography etc.) that offers a broad range of liberal art majors. That is probably just the nearby State school, but it could also be a private school with the right aid package (notably, most of the “top” schools don’t do academic/athletic scholarships, but they give out need-based aid like candy).
by Ragnoth
Fri Jun 05, 2020 2:40 pm
Forum: Investing - Theory, News & General
Topic: Anyone wish they would have invested more during recent downturn?
Replies: 124
Views: 13083

Re: Anyone wish they would have invested more during recent downturn?

I rebalanced on 3/23 because my equity allocation drifted ~5% or so from my target allocation. I inadvertently called the bottom (or was pretty darn close to it), but it was all dumb luck.
by Ragnoth
Wed Jun 03, 2020 3:50 am
Forum: Personal Finance (Not Investing)
Topic: Any 529 abusers here ?
Replies: 38
Views: 6242

Re: Any 529 abusers here ?

Just to round off discussion, how about estate benefits? If one is thinking networth that might exceed estate exemption...... If you have enough wealth to be seriously worried about gift/estate taxes (think 50+ million) there are often better approaches than 529 accounts. For example, there is no gift tax on direct payments to universities to cover tuition. Many people would actually “maximize” gift-tax exemptions by just skipping the 529, paying the tuition bills as they come in, and using your annual exclusion amounts to fund a cash gift / Crummy trust instead. Another alternative might be a full-blown HEET trust for descendants, if you really wanted to encourage future generations to prioritize college/grad school. Similarly, if you are...
by Ragnoth
Fri May 15, 2020 1:58 am
Forum: US Chapters
Topic: How Is Your Job Being Impacted By The Current Crisis?
Replies: 505
Views: 68886

Re: How Is Your Job Being Impacted By The Current Crisis?

Wife and I have white-collar professional jobs (legal and banking). We are both working from home. Everything is stable for right now, but rumor is that the company is about to start buyouts for some of the lower-paid support staff (e.g., tech guys, secretaries, cleaners, cafe workers, mailroom, etc.). Not a great sign TBH.
by Ragnoth
Fri May 15, 2020 1:30 am
Forum: Personal Finance (Not Investing)
Topic: Estate Tax Question
Replies: 6
Views: 766

Re: Estate Tax Question

My in-laws live in Minnesota and are struggling to set up a will because my FIL has been wanting to give it more thought for about the last 8 years, in addition to being quite frugal and not wanting to pay a lawyer/accountant. A proper estate plan might cost ~$5k-10k, but it is worth every penny. A professional can walk you through it and avoid unnecessary pitfalls (e.g., What if the wife dies first? What if they die simultaneously? How will you ensure that everything is titled properly ahead of time? Are you planning to go through probate? If not, what is your plan to get assets moved from one party to the other? Is your Will flexible enough to accommodate "mistakes" elsewhere in the estate plan and still avoid taxes? etc.). Tha...
by Ragnoth
Thu May 14, 2020 4:22 am
Forum: Personal Finance (Not Investing)
Topic: Rethinking chase sapphire during pandemic
Replies: 8
Views: 1345

Re: Rethinking chase sapphire during pandemic

I did the math and wound up downgrading my Chase to a card without an annual fee. I had already used up my $300 credit, and the remaining benefits weren’t really worth the $450 renewal fee. Since I wasn’t going to be redeeming points for travel any time soon, it didn’t really make sense.

Right now I’m using an Amex with 6% back in groceries (up to some quarterly limit), and a couple of BoA cards. If you have $100k+ to park at Merril Edge (or other BoA accounts), the reward bonus is pretty generous. I’ve looked around, but I don’t think you can find a better deal than the BoA honors program in terms of just raw cash back.
by Ragnoth
Sun May 03, 2020 3:03 am
Forum: Personal Finance (Not Investing)
Topic: BofA PPP loan - amount less than requested
Replies: 17
Views: 2067

Re: BofA PPP loan - amount less than requested

Somebody in my wife’s family got his loan (some local bank), and it was somewhere around 2-2.5 months of payroll. I’m not sure what he asked for, but that might just be the ballpark number they are handing out.
by Ragnoth
Fri May 01, 2020 11:57 pm
Forum: Personal Finance (Not Investing)
Topic: Who owns the IP - School or Me?
Replies: 23
Views: 2983

Re: Who owns the IP - School or Me?

In January I quit my good paying job to pursue a Masters degree and pursue some business opportunities through my LLC. Of course, due to the very nature of my business and research, I am trying to do double duty - get my MS, and develop products. The things I'm learning at the school are helping me develop my product, and some of the projects I'm working during my classes are tangentially related to the products I'm developing for my business. So much so that I have felt obligated to place a copyright on my submittals to my professors. I recently got some feedback from a professor saying that he is not aware of an NDA and that he doesn't need to abide by my copyright. And he actually did disclose some of my IP to at least one other third p...
by Ragnoth
Wed Mar 11, 2020 5:27 pm
Forum: Investing - Theory, News & General
Topic: Why shouldn´t I buy oil futures now?
Replies: 92
Views: 8587

Re: Why shouldn´t I buy oil futures now?

To make this work, you would need to figure out when oil will go up, and what the rest of the market is going to do in the interim (and to figure it out better/faster than everybody else).

There is a world of difference between being an average guy who "knows" oil will go back up eventually, and being one of the select few who "knows" the price will double in the next 6 months as the rest of the market remains flat.

My crystal ball is broken, but if you really want to place a specific bet I'm sure somebody would lay out the best set of options/futures/ETFs to make it happen for you.
by Ragnoth
Wed Mar 11, 2020 2:25 pm
Forum: Non-US Investing
Topic: In the future will Bitcoin end up replacing Gold?
Replies: 64
Views: 3452

Re: In the future will Bitcoin end up replacing Gold?

It sounds like the argument is that Bitcoin is more useful than Gold as an alternative currency and a store of value when (1) faith in local fiat currency has eroded; (2) you have sufficient infrastructure to have internet access; and (3) the government tolerates its use—or is unable or unwilling to crack down on it. This argument for Bitcoin as a “replacement” ignores all “non-currency” uses of gold, and ignores the competition from other crypto-currencies. This also ignores the fact that sufficiently advanced countries like the USA or China could crack down on wide-spread use of crypto via banking regulations or control over over the Internet. Overall, I’m not buying the idea that it is a replacement. Government's cant crack down on it e...