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aristotelian

Bonds aren't really supposed to generate income. Only in declining rate scenario would bonds have positive real return. Historically that has not been true. Closer to the complex and unpredictable truth would be that interest-earning cashlike investments--Treasury bills, money market mutual funds, ...

aristotelian

We would stop a lot of the dismay over interest rates and confusion over dividends if this point were better understood. That and the confusion over real vs nominal. People seem not to want to buy bonds all of a sudden, but you shouldn't really expect high real return from the bond side even when n...

aristotelian

Bonds aren't really supposed to generate income. Only in declining rate scenario would bonds have positive real return. When yields are higher, inflation is higher. AGG and BND are investment grade and excellent choices but more for wealth preservation and reducing volatility than to generate income.

aristotelian

If you were sure of imminent inflation, you would borrow massive long term debt at low interest rates in today's dollars such as a cash out refi on your house. Invest the proceeds in inflation protected bonds, stocks, and commodities, then pay back the loan in future dollars. Personally my approach ...

aristotelian

Money_Badger wrote: ↑Mon Apr 12, 2021 9:09 am
aristotelian wrote: ↑Mon Apr 12, 2021 6:36 am Why not buy five $300k properties and diversify a little?
Sounds like 5 times the work ...

I'm guessing OP is going to use a management company since he is not in Texas. So maybe not aside from the initial paperwork.

aristotelian

The retirement accounts are an easy fix. You can easily sell everything within those accounts and start over from scratch. Decide the overall bond allocation you want and then buy a total bund ETF such as BND or AGG up to that amount in the Solo 401k. Then buy US and International stock ETF's with ...

aristotelian

To paraphrase Sammy Sosa, passive investing has been very, very good to me.

aristotelian

We can certainly discuss whether the new SWR is 2.8%, or another number. What instead is undeniable is that in the present scenario 4% is a lot less safe than before and it doesn't take a professor to understand this simple fact, although it seems to escape more than a few over here. If you accept ...

aristotelian

The retirement accounts are an easy fix. You can easily sell everything within those accounts and start over from scratch. Decide the overall bond allocation you want and then buy a total bund ETF such as BND or AGG up to that amount in the Solo 401k. Then buy US and International stock ETF's with t...

aristotelian

I don't have a WSJ subscription. I'm less interested in the WSJ article than the actual report it is summarizing. Does anyone have a link to Pfau's research? I am not seeing the report calculating 2.8%. Is this just back of the napkin math? I see in April 2020 he "calculated" 2.4% and urge...

aristotelian

Why not buy five $300k properties and diversify a little?

aristotelian

Do you actually have earned income from self employment?

aristotelian

Might want to check out this thread. If you are looking to set up a permanent charitable fund, one poster suggested $3M as a number where private foundation could make sense. https://www.bogleheads.org/forum/viewtopic.php?t=330877 Another option would be making direct gifts rather than going through...

aristotelian

Some kids actually earn income. The most common example is child model or actor for the very young ones. Maybe lawnmowing, babysitting, or dog walking for the older ones. I doubt that mowing the family yard or babysitting the younger sibling or walking the family dog will do. I think some people ma...

aristotelian

Need a bit more info. How much do you plan to spend annually? Do you have any liquid cash or taxable brokerage account? What is the size of your 401k/pretax accounts? What I am getting at is it may be advantageous to convert the pretax assets to Roth - possibly even more than you spend annually - so...

aristotelian

5. Corollary: pay off credit card debt before all other priorities, period (I have seen professional financial "coaches" advocate saving an emergency fund before paying down CC debt).

aristotelian

this is interesting... a 5.67% distribution is massive and considering this is a passive fund it's even more insane. What exactly caused this? I am thinking Vanguard Funds avoid this sort of thing. VSMAX shows something similar . I would think it's partly because of Tesla joining the S&P500, th...

aristotelian

Could the big distribution have something to do with TSLA entering the S&P500?

aristotelian

Morningstar has it up 0.15%. I am trying to pull up the fund page on Fidelity's site and it's not loading. Could be a glitch?

aristotelian

Looks like most of the losses have also occurred when the market is open. I don't see much upside but you never know. If the market was dramatically net negative during the day then this would be something to consider.

aristotelian

There is no actual distinction between employer contribution and employee contribution except that your employer takes your contribution out of your paycheck. That alone proves CPA does not know what he's talking about. Seems like somewhere he entered your wife as having single coverage with you bei...

aristotelian

Consider this other scenario You put a sell trade for your Roth stocks with a very ask price. You tell your broker to select that particular lot for your your taxable account, even if there are more lots with a lower ask price. One month later, you sell them. Or is not possible to do this off-marke...

aristotelian

Yes, myself

aristotelian

So if market makers are going to get in the way of using option strategies... is there anyway to use 3x leveraged short and long etfs in a similar reverse correlation way? Its my understanding that they decay fast so maybe you could loose big if there was 0 movement. In that case you'd be taking a ...

aristotelian

FSA is usually slightly better but has the risk of not being used. Since the credit is almost as good, I would do the FSA only for funds you absolutely 100% know are going to be spent.

aristotelian

The losing money in one account, to gain in another, starts to sound an awful lot like a wash sale, especially when you own both sides of the trade. Regards, The wash sale rule only prevents you from claiming the loss. It does not make the transaction itself prohibited. That's not to say that what ...

aristotelian

The losing money in one account, to gain in another, starts to sound an awful lot like a wash sale, especially when you own both sides of the trade. Regards, The wash sale rule only prevents you from claiming the loss. It does not make the transaction itself prohibited. That's not to say that what ...

aristotelian

The assumption is that passive investing is killing active investing. I see zero evidence that is the case. Theoretically, you could have 1% of the market capitalization in active and still have enough trading to enable pricing. I look at the tickers in my watch list and I see stocks going up and do...

aristotelian

What is your spending? With $250K and $30k contributions, Portfoliovisualizer projects anywhere from $1m real to $5m real. If you assume slightly below the median, that might give about $2M for a budget around $80k.

aristotelian

international is contrarian to US, etc. Since US stocks and international (EM + DM) are highly correlated these days, I'm not sure how can contrarian that is. Frontier markets are less correlated (0.60 - 0.67) and are arguably more contrarian. https://www.portfoliovisualizer.com/asset-correlations?...

aristotelian

Contrarian to what? A diversified portfolio should have built in hedging to a variety of risks. By bond portfolio is contrarian to stocks, international is contrarian to US, etc.

aristotelian

You could reduce the duration of your bond allocation. Should inflation rise in response to inflation, you will not want to be locked into long term bonds at low rates. The risk of short term bonds going down is much lower. Of course, the long term expected return is lower as is potential for going ...

aristotelian

Morningstar has a writeup of the Vanguard/Nevada 529 plan mistakes . I think it's fair to call it a fiasco. The Nevada 529 plan sponsor, their investment consultants, and Vanguard all share in the blame. As it happens, the unintentional higher stock exposure worked out for investors but their mista...

aristotelian

The fact that they recently ran up five digits of debt tells me they need a solid emergency fund in something safe and liquid. I would keep $30-40k in a high yield savings account.

aristotelian

One huge problem with iBonds when they are paying a zero of tiny fixed rate in addition to inflation is that when you eventually redeem them you pay taxes on the inflation component so you are virtually guaranteed to lose purchasing power. This example was given in a prior post; So a pair of sneake...

aristotelian

Just have the child deposit the money. As far as the IRS is concerned, they are contributing to their own account. As long as they have earned income and otherwise qualify, what would be the problem? You can gift up to $15,000 annually without having to report anything to the IRS.

aristotelian

+1, if you did a direct custodian to custodian transfer there should be no 1099R and nothing to report. If you did a manual rollover, you would get a 1099R for the distribution which you would report as a rollover.

aristotelian

Personally I would pull from the emergency fund and invest in cash or a safe bond fund in the Roth until you have replenished the emergency fund. If an emergency occurs you can withdraw the contribution tax free. To me that is preferable to taking a tax hit.

aristotelian

If the US outperforms for a while and becomes overvalued, you could at some point see a reversal. For a moment it looked like that might have been happening with tech valuations. We will see if it continues.

aristotelian

You have 200k salary and no investment income?

aristotelian

Take a look at ESGV (ER .12%). Warning: you are probably going to get tons of flak for reducing diversification and paying that extra 8 basis points. That said, the best choice depends on what exactly you mean by green and what you are trying to achieve. Green could mean anything, from making a conc...

aristotelian

I think it is fair to say that TIPS protect you from inflation (hence the name) but that does not mean they guarantee positive real return. Yes, TIPS will go up if inflation goes up, but with current rates you will still be locking in negative real return.

aristotelian

Just depends on your risk tolerance. With $40k expenses and $5M net work, you are going to be fine no matter what you do with it. Personally I would keep $700k in cash and invest the rest according to your allocation.

aristotelian

Thank you for the feedback. So you're thinking that paying an extra 2% on this money (if I elect to take it up the 24% bracket) wouldn't be worth it? And yes, being a fed, I have to consider the taxable hit of having a pension later in life, although I am hoping to be retired before then, which I w...

aristotelian

Sure, especially if your allocation is below target. My LTT position is still just giving back gains from 2020 and it is behaving as I would expect during a recovery.

aristotelian

We have been contributing since 2004. Wife's IRA is $280k, mine is $180k. She picked some good active funds early on.

I made some poor stock picks.

aristotelian

Going 90/10 versus 100/0 is not going to make any difference with or without the mortgage. If you feel like you need the liquidity and are willing to pay a negative arbitrage, go for it. Once you have the liquidity you need, I would draw a line in the sand and at that point putting all new dollars i...

aristotelian

And, yes, I agree with both of those. But my objections to these objections are: - no one is clairvoyant about what taxes will be in the future. You pay now or later. - I do not necessarily believe that companies can re-invest their capital better than, say, the market. Or me, according to my desir...

aristotelian

This makes no sense. Apples to apples, the only difference would be tax paid on the dividend. In a taxable account, one is paying tax on the dividend whether the dividend is reinvested or received in cash. Tony Right. And the tax will be the only difference between the two companies in total return...

aristotelian

Who sells off all the stocks that create market crashes? I have read that institutions hold around 78% of all stocks in the US market. I find it hard to believe that these professionals would panic sell enough to create an actual market crash. Yet, it seems unlikely that the remaining 22% of shares...

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