Search found 9027 matches

by aristotelian
Fri Apr 16, 2021 10:32 pm
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk Scenario
Replies: 35
Views: 2241

Re: Sequence of Returns Risk Scenario

But if not that, and if any downside is made up for by the better return of an equity heavy portfolio, what do you mean by "protect against downside risk"? Nothing deep. Retiring as quickly as possible at 100% of FI number isn't the only goal. You may want to keep X years in expenses in c...
by aristotelian
Fri Apr 16, 2021 10:42 am
Forum: Personal Investments
Topic: Insane Roth conversion Idea to qualify for max ACA subsidies
Replies: 10
Views: 1127

Re: Insane Roth conversion Idea to qualify for max ACA subsidies

That would be quite a tax bill. Have you done the math to see how long it would take to recoup the tax hit? If I understand correctly, it would save you $8k per year over 8 years but seems like the tax hit will be more than that. Even if you have zero other taxable income the hit would be over $80k....
by aristotelian
Fri Apr 16, 2021 10:16 am
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk Scenario
Replies: 35
Views: 2241

Re: Sequence of Returns Risk Scenario

Yes. There’s some subtlety though. You will get to 25x faster on average. But the distribution of answers for “how long until I get to 25x” is much more dispersed at 100/0. So the likelihood that you’ll get to 25x very much later than if you had a glide path is also much higher. You’re basically sw...
by aristotelian
Fri Apr 16, 2021 9:10 am
Forum: Investing - Theory, News & General
Topic: Going to receive around $1 million - what to do ?
Replies: 26
Views: 3831

Re: Going to receive around $1 million - what to do ?

OP, You should be doing backdoor Roth. Paying off car and HELOC would be no brainer. Paying off mortgage would also be a possibility if you have low risk tolerance but sounds like that is not the case. No comment on any of your investment ideas except that #2 works for me and most of the posters her...
by aristotelian
Thu Apr 15, 2021 6:06 pm
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk Scenario
Replies: 35
Views: 2241

Re: Sequence of Returns Risk Scenario

The problem is most people aren't robots programmed to retire as fast as possible. Once you get to a certain level of FI, you might want to start preserving your wealth and protecting your ability to retire on a minimal budget even if it takes a little longer to become fully FI. Or you might want to...
by aristotelian
Thu Apr 15, 2021 4:47 pm
Forum: Investing - Theory, News & General
Topic: The 4% Rule - Simplified?
Replies: 19
Views: 1510

Re: The 4% Rule - Simplified?

Since it is based on backtesting, rather than on theoretical arguments, it actually makes the (rather big) assumption that average return and volatility will not be much different in the future. Again, it doesn't say anything about average returns. The 4% withdrawal has been safe for many 30 year p...
by aristotelian
Thu Apr 15, 2021 4:09 pm
Forum: Investing - Theory, News & General
Topic: The 4% Rule - Simplified?
Replies: 19
Views: 1510

Re: The 4% Rule - Simplified?

The 4% rule is based on the maximum inflation adjusted withdrawal that has been safe with historical returns. It does not make any assumptions about average returns. If your goal is to spend the money there are methods for that. I think it is common sense that if you have a positive sequence of retu...
by aristotelian
Thu Apr 15, 2021 7:54 am
Forum: Personal Investments
Topic: Post Purchase Taxable Strategy
Replies: 5
Views: 460

Re: Post Purchase Taxable Strategy

Why taxable and not 529 for the kids? Keep in mind that with the ability to pay off your mortgage, your real allocation is something like -40% bonds, 140% stocks. I may allocate some into a 529, but don't like the restrictions around it. I don't really follow your logic around the allocation of -40...
by aristotelian
Wed Apr 14, 2021 12:29 pm
Forum: Personal Investments
Topic: Post Purchase Taxable Strategy
Replies: 5
Views: 460

Re: Post Purchase Taxable Strategy

Why taxable and not 529 for the kids? Keep in mind that with the ability to pay off your mortgage, your real allocation is something like -40% bonds, 140% stocks.
by aristotelian
Tue Apr 13, 2021 1:04 pm
Forum: Personal Investments
Topic: Alternative to Total Bond?
Replies: 46
Views: 4507

Re: Alternative to Total Bond?

The silver lining of bonds market value going down is that the yield is higher. Any money you have "lost" will be recouped by the higher yield as long as you keep holding it. Selling now would lock in the loss.
by aristotelian
Tue Apr 13, 2021 11:36 am
Forum: Investing - Theory, News & General
Topic: Is AGG considered a "safe" bond etf?
Replies: 42
Views: 3554

Re: Is AGG considered a "safe" bond etf?

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, ...
by aristotelian
Tue Apr 13, 2021 9:58 am
Forum: Investing - Theory, News & General
Topic: Is AGG considered a "safe" bond etf?
Replies: 42
Views: 3554

Re: Is AGG considered a "safe" bond etf?

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...
by aristotelian
Tue Apr 13, 2021 7:51 am
Forum: Investing - Theory, News & General
Topic: Is AGG considered a "safe" bond etf?
Replies: 42
Views: 3554

Re: Is AGG considered a "safe" bond etf?

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.
by aristotelian
Tue Apr 13, 2021 7:10 am
Forum: Personal Investments
Topic: Protect savings from imminent inflation?
Replies: 29
Views: 2978

Re: Protect savings from imminent inflation?

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 ...
by aristotelian
Mon Apr 12, 2021 9:26 am
Forum: Personal Investments
Topic: Buying a 1.5M house in Austin. Should I pull it?
Replies: 51
Views: 5338

Re: Buying a 1.5M house in Austin. Should I pull it?

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.
by aristotelian
Mon Apr 12, 2021 9:25 am
Forum: Personal Investments
Topic: How do I self-manage and completely change my portfolio?
Replies: 27
Views: 1861

Re: How do I self-manage and completely change my portfolio?

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 ...
by aristotelian
Mon Apr 12, 2021 9:04 am
Forum: Investing - Theory, News & General
Topic: Is this the single worst time to be a passive investor
Replies: 73
Views: 9294

Re: Is this the single worst time to be a passive investor

To paraphrase Sammy Sosa, passive investing has been very, very good to me.
by aristotelian
Mon Apr 12, 2021 8:02 am
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13847

Re: Another 2.8% SWR Article Quoting Wade Pfau

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 ...
by aristotelian
Mon Apr 12, 2021 7:45 am
Forum: Personal Investments
Topic: How do I self-manage and completely change my portfolio?
Replies: 27
Views: 1861

Re: How do I self-manage and completely change my portfolio?

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...
by aristotelian
Mon Apr 12, 2021 7:10 am
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13847

Re: Another 2.8% SWR Article Quoting Wade Pfau

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...
by aristotelian
Mon Apr 12, 2021 6:36 am
Forum: Personal Investments
Topic: Buying a 1.5M house in Austin. Should I pull it?
Replies: 51
Views: 5338

Re: Buying a 1.5M house in Austin. Should I pull it?

Why not buy five $300k properties and diversify a little?
by aristotelian
Sun Apr 11, 2021 3:56 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA and Pro-rata Rule
Replies: 13
Views: 671

Re: Backdoor Roth IRA and Pro-rata Rule

Do you actually have earned income from self employment?
by aristotelian
Sun Apr 11, 2021 12:21 pm
Forum: Personal Finance (Not Investing)
Topic: DAF - At What $ Level Do Other Options Make Sense?
Replies: 10
Views: 1127

Re: DAF - At What $ Level Do Other Options Make Sense?

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...
by aristotelian
Sun Apr 11, 2021 8:28 am
Forum: Personal Investments
Topic: Is it possible to open and fund a Roth IRA for my kid
Replies: 17
Views: 1226

Re: Is it possible to open and fund a Roth IRA for my kid

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...
by aristotelian
Sat Apr 10, 2021 2:43 pm
Forum: Investing - Theory, News & General
Topic: Using savings draw down instead of Roth conversion
Replies: 9
Views: 505

Re: Using savings draw down instead of Roth conversion

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...
by aristotelian
Sat Apr 10, 2021 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Theory: The Only Four Situations Justifying Debt
Replies: 103
Views: 7025

Re: Theory: The Only Four Situations Justifying Debt

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).
by aristotelian
Fri Apr 09, 2021 8:03 pm
Forum: Investing - Theory, News & General
Topic: FSMAX Shows 6% Loss Today?
Replies: 39
Views: 2501

Re: FSMAX Shows 6% Loss Today?

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...
by aristotelian
Fri Apr 09, 2021 6:00 pm
Forum: Investing - Theory, News & General
Topic: FSMAX Shows 6% Loss Today?
Replies: 39
Views: 2501

Re: FSMAX Shows 6% Loss Today?

Could the big distribution have something to do with TSLA entering the S&P500?
by aristotelian
Fri Apr 09, 2021 5:33 pm
Forum: Investing - Theory, News & General
Topic: FSMAX Shows 6% Loss Today?
Replies: 39
Views: 2501

Re: FSMAX Shows 6% Loss Today?

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?
by aristotelian
Fri Apr 09, 2021 9:00 am
Forum: Investing - Theory, News & General
Topic: Beat the market by only holding after hours
Replies: 56
Views: 3333

Re: Beat the market by only holding after hours

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.
by aristotelian
Fri Apr 09, 2021 7:46 am
Forum: Personal Finance (Not Investing)
Topic: CPA Saying I Have Excess HSA Contribution
Replies: 32
Views: 2094

Re: CPA Saying I Have Excess HSA Contribution

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...
by aristotelian
Thu Apr 08, 2021 7:37 pm
Forum: Personal Investments
Topic: Sidedoor Roth
Replies: 36
Views: 2406

Re: Sidedoor Roth

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...
by aristotelian
Thu Apr 08, 2021 3:50 pm
Forum: Personal Investments
Topic: Sidedoor Roth
Replies: 36
Views: 2406

Re: Sidedoor Roth

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 ...
by aristotelian
Thu Apr 08, 2021 3:16 pm
Forum: Personal Finance (Not Investing)
Topic: New child, dependent care FSA or Child and Dependent Care Credit?
Replies: 6
Views: 528

Re: New child, dependent care FSA or Child and Dependent Care Credit?

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.
by aristotelian
Thu Apr 08, 2021 2:01 pm
Forum: Personal Investments
Topic: Sidedoor Roth
Replies: 36
Views: 2406

Re: Sidedoor Roth

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 ...
by aristotelian
Thu Apr 08, 2021 12:55 pm
Forum: Personal Investments
Topic: Sidedoor Roth
Replies: 36
Views: 2406

Re: Sidedoor Roth

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 ...
by aristotelian
Thu Apr 08, 2021 7:16 am
Forum: Investing - Theory, News & General
Topic: The Atlantic: The Autopilot Economy -- Economists ... are Worried That Index Funds are Hurting Markets
Replies: 28
Views: 3434

Re: Recent Atlantic article: What do you think the macro economic positive and negatives are of index investing

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...
by aristotelian
Wed Apr 07, 2021 3:09 pm
Forum: Personal Investments
Topic: Family with 4 little humans: chances of retiring/financial independence
Replies: 70
Views: 7076

Re: Family with 4 little humans: chances of retiring/financial independence

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.
by aristotelian
Wed Apr 07, 2021 12:26 pm
Forum: Investing - Theory, News & General
Topic: What is your contrarian/alternative play?
Replies: 101
Views: 8599

Re: What is your contrarian/alternative play?

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?...
by aristotelian
Wed Apr 07, 2021 8:48 am
Forum: Investing - Theory, News & General
Topic: What is your contrarian/alternative play?
Replies: 101
Views: 8599

Re: What is your contrarian/alternative play?

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.
by aristotelian
Wed Apr 07, 2021 8:22 am
Forum: Investing - Theory, News & General
Topic: De-risking, inflation and forward risk tolerance
Replies: 21
Views: 1512

Re: De-risking, inflation and forward risk tolerance

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 ...
by aristotelian
Tue Apr 06, 2021 9:18 am
Forum: Investing - Theory, News & General
Topic: Vanguard 529 plan change
Replies: 21
Views: 2268

Re: Vanguard 529 plan change

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...
by aristotelian
Tue Apr 06, 2021 6:37 am
Forum: Personal Investments
Topic: Should my parents invest an inheritance? (No current retirement savings)
Replies: 19
Views: 2044

Re: Should my parents invest an inheritance? (No current retirement savings)

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.
by aristotelian
Mon Apr 05, 2021 4:01 pm
Forum: Investing - Theory, News & General
Topic: Ibond really a good vehicle against inflation
Replies: 56
Views: 4761

Re: Ibond really a good vehicle against inflation

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...
by aristotelian
Sun Apr 04, 2021 6:27 pm
Forum: Investing - Theory, News & General
Topic: Parent contribute to child IRA
Replies: 10
Views: 1374

Re: Parent contribute to child IRA

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.
by aristotelian
Sat Apr 03, 2021 11:18 am
Forum: Personal Finance (Not Investing)
Topic: HSABank does not have 1099-SA for transfer to Fidelity. Reflect in tax return?
Replies: 7
Views: 283

Re: HSABank does not have 1099-SA for transfer to Fidelity. Reflect in tax return?

+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.
by aristotelian
Fri Apr 02, 2021 7:00 pm
Forum: Personal Investments
Topic: Sell stock in taxable account to fund tax-advantage saving accounts?
Replies: 12
Views: 1050

Re: Sell stock in taxable account to fund tax-advantage saving accounts?

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.
by aristotelian
Fri Apr 02, 2021 9:58 am
Forum: Investing - Theory, News & General
Topic: In what condition, will international significantly overperform US?
Replies: 170
Views: 12527

Re: In what condition, will international significantly overperform US?

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.
by aristotelian
Fri Apr 02, 2021 8:54 am
Forum: Personal Finance (Not Investing)
Topic: Why do I owe so much in Taxes?
Replies: 55
Views: 6758

Re: Why do I owe so much in Taxes?

You have 200k salary and no investment income?