Bogleheads.org

Hi there - long time listener, first time caller. I've been having analysis paralysis about buying a new car, and am hoping to get some feedback and perspective from the wise folks here. 50k feels totally fine but 90k hurts, even when I like the car, and I'd very much appreciate a sanity check. I'm also unlearning a lifetime habit to spend as little money as possible. Some details: Engaged. no kids, plan for 1 in near future (~150k+ in IVF cost) P1 (34yo): 1m/year, 240k W2 + ~850k K1 from self-employment in highly risky industry P2 (42): 120k W2, stable private sector Current spend: ~180/year 1.4m mkt value house, 850k debt on house (2.88% today) Approx NW excluding house: 4.3m overall, 3.8m liquid, 500k illiquid 2.3M taxable 900k business...

stocknoob4111 wrote: ↑Thu Mar 23, 2023 7:29 am Just take a break, 6 months or a year and then come back to the work force. That is what I did when I was 36, worked out really well.

The sabbatical route sounds fun to me. I wonder if OP can actually do this while having 2 kids and a SAHM. If it's just a mindset thing, the OP can do anything and still shift his mindset. It's easier said than done though, especially if you're stuck.

ChinchillaWhiplash wrote: ↑Wed Mar 22, 2023 5:13 pm “Buy when others are fearful”. Does it make sense to back up the truck to sector funds such as financials? Seems like a good time to get a huge discount. You might have to sit on it until it rebounds but you would do that with any holding. What would having 10-15% of portfolio in this matter as far as the downside. Could go down more. If it does just DCA into it. Is this any worse or riskier than holding something such as a REIT fund at these percentages?

Why don't you do it and report back? Everyone thinks they are smarter than others in the market. You could face Warren Buffet himself on the other side of the trade. Do you like your chances?

There is a reason why bogleheads' investing strategy works for many individuals here.

CletusCaddy wrote: ↑Thu Mar 23, 2023 12:50 am I am looking for a way to lock in high long term interest rates.

iShares IBonds and Invesco Bulletshares only go out to 2032 right now.

But VCLT has a duration of 13 years and is paying 5.5%

How do I lock in this rate for 13 years? Do I hold VCLT with cash and just do a glide path (selling VCLT into cash) over 13 years?

The current yield is different than actual yield for the duration.

10 year treasury rate right now is 3.48%. I'm curious to see anyone is willing to pay 5.5% for 13 years. There is substantial risk with long duration on both sides of the trade.

InvestforSuccess wrote: ↑Wed Mar 22, 2023 7:35 pm What's the best tool out there now for tracking net worth and asset allocation? Historically we've used Vanguard's portfolio tracker and the ability to manually add outside accounts, but I am planning to move from Vanguard to Merrill Edge so this won't be an option going forward.

Microsoft Excel.

I hold shares in a private company that's been waiting for quite some time for stock market conditions to improve in order to IPO. Separately, I have a significant (to me) amount invested in S&P 500 index funds. Coincidentally the amount of anticipated IPO windfall is roughly equivalent to my index fund portfolio. I am thinking of exchanging some of my index funds for a money market fund, the cost basis is roughly the same as current market price so selling won't create much of a tax liability. The thinking is that if the stock market bounces back, my private company shares would become liquid. Alternately, if the stock market declines further, causing the aforementioned IPO to be put on hold indefinitely, I would at least avoid losses...

money is fungible. buckets are arbitrary. cash earning 4% is still losing against inflation. ibonds are paying 6.89%. But are Investments fungible? maybe not per the definition of the word, which is "replaceable with another *identical* item". but when pretty much any investment/possession can be traded for money, in practice it's fungible enough, no? even super illiquid assets like your home can be made liquid very easily with things like a HELOC. Can you get a HELOC if you are unemployed or underwater because the value of your home has declined, think 2008? While treasuries bought in 2019 could be made liquid in 2022 it was likely to be a very painful thing. This is the reason things like investment time horizon and duration ma...

Nahtanoj wrote: ↑Wed Mar 22, 2023 4:52 pm One emergency to consider is the death of a spouse. The survivor will need cash, and the deceased’s earned income will stop. And there may be a time lag before the survivor can access retirement accounts and any remaining life insurance. Cash in a jointly-titled bank or brokerage account could be available to the survivor right away. Thinking about this myself recently, in the context of estate planning.

It sounds like everything is fair game under the death of a spouse. Not just cash in checking account. It includes all of financial assets.

It's all about an emergency response plan, not just cash sitting around.

Questions: 1. What should I do with my 401k and $1.4M in cash after selling the stock if I decide to pull the trigger? What funds? 2. Does it look like we have enough? 3. Should I start roll overs ASAP? or try to wait until next year when I should have lower income. I don't have enough for 5 years of expenses in my after tax. 4. I will probably speak to my employer to get a layoff to be able to use the severance to repay the debt around $30k I assume. I can also sell one of the cars that should wipe out $60k of the debt. I made a bad decision and bought an expensive car when the market was at AH and my portfolio was worth a lot more. Thanks 1. A mix of Total U.S. stock / Total International stock / Short-term treasuries 2. It depends if yo...

JDave wrote: ↑Tue Mar 21, 2023 5:30 pm Emergency fund = cash you can access within 24 hours that you KNOW will be there, no matter what.

You would be SOL during weekends then, unless you keep your cash under mattress. But then you want to carry a bag of cash with you on vacation too.

I think there is definitely a Need, Willingness and Ability aspect to the responses. The amount of available financial resources will certainly drive an individual's choices, as will their personal comfort with volatility risk, inflation risk, etc. It takes more money to defer defined benefits, for example. HCOL vs LCOL locations certainly matter. The degree and quality of any retirement benefits from an employer or union would matter. I doubt that there's one true answer to question -- but understanding the responses can help you make your own choices. The responses are now very far a field from the OP which was along the lines of examining your investments to see if you were actually maintaining an EF even though you don't call it that w...

miyaraj354 wrote: ↑Mon Mar 20, 2023 11:07 pm Hi all,

My DW overheard a conversation between two people discussing a certain high-yield savings acct that gives back @ 13%!! But also, there is a investment cap of $10k. Anyone knows what that is?

Yes, I also have a bridge I can sell to you.

If I need $50k of emergency expenses today, I can look at my taxable lots and sell the lots that I bought prior to March 2020 with > 45% unrealized gain. And that's with all the market downturn in 2022 and 2023. If I were to leave the same fund in HYSA since 2020, it would have earned less than 5%. You'd really want to sell the lots with a loss. A share is a share. If you paid $100 for one and $75 for the other and the current price is $80, you wind up in a better position selling the one you paid $100 for. With either share, you wind up with $80 is your hand. With the $75 share, you have to give 15%-40% of your $5 to the government. With the $100 share, you can use that $25 to offset other gains or ordinary income. It's a good point. When...

an emergency fund must meet at least two criteria: 1. It must be liquid and accessible 2. It must be principal-protected To me, this strongly suggests an emergency fund consists of assets like cash in a savings account, iBonds held >1 year, short-term Tbills, etc. Correct. If you have to "sell low" or at a loss to raise emergency cash, it's not an emergency fund. It's a mistake. You can twist yourself into a pretzel trying to justify a stock portfolio as constituting an emergency fund. All I can say to that is, "good luck." You'll need it. This year I've been hit with ~$50K+ of emergency expenses. Without my emergency fund, I would have had to sell stock holdings at a loss. Not good. That's the pitfall with emergency fu...

You do not have a good idea about the scope of work your car needs. Take your car to a couple of independent mechanics for estimates (not dealers). Ask your neighbors/friends/co-workers about their mechanics. Or look at cartalk web site https://www.cartalk.com/mechanics-files Without understanding what your car needs to pass inspection, there is not much to discuss. Unless of course you just want an another vehicle. The OP can try that but the OP should assume that each one will cost at least $100 for an opinion. So the OP does have to have some kind of stop-loss strategy. Since the root of the issue wasn't performance but a code, if the engine light reappears the OP could buy a code reader for relatively low cost. Or borrow one for free a...

an emergency fund must meet at least two criteria: 1. It must be liquid and accessible 2. It must be principal-protected To me, this strongly suggests an emergency fund consists of assets like cash in a savings account, iBonds held >1 year, short-term Tbills, etc. Correct. If you have to "sell low" or at a loss to raise emergency cash, it's not an emergency fund. It's a mistake. You can twist yourself into a pretzel trying to justify a stock portfolio as constituting an emergency fund. All I can say to that is, "good luck." You'll need it. This year I've been hit with ~$50K+ of emergency expenses. Without my emergency fund, I would have had to sell stock holdings at a loss. Not good. That's the pitfall with emergency fu...

I often hear having an Emergency Fund discussed here and I maintained one my entire working career but now that I am "retired" I didn't think I had one anymore. Then I started thinking about some of the assets I was holding and it seems like a distinction without a difference. So is an emergency fund just an acceptable mental accounting device to allow you to group or allocate short term accessible liquid assets or is it something else? So please tell me what counts as an emergency fund and is a rose by any other name just as sweet? When an emergency occurs, everything is fair game. Everything. Nothing is untouchable. So it's everything I own, everything I can borrow, everything I can acquire. This thread has been very informativ...

TheTimeLord wrote: ↑Mon Mar 20, 2023 9:57 am I often hear having an Emergency Fund discussed here and I maintained one my entire working career but now that I am "retired" I didn't think I had one anymore. Then I started thinking about some of the assets I was holding and it seems like a distinction without a difference. So is an emergency fund just an acceptable mental accounting device to allow you to group or allocate short term accessible liquid assets or is it something else? So please tell me what counts as an emergency fund and is a rose by any other name just as sweet?

When an emergency occurs, everything is fair game. Everything. Nothing is untouchable. So it's everything I own, everything I can borrow, everything I can acquire.

Merionman wrote: ↑Mon Mar 20, 2023 9:31 am It’s important to learn lessons from current events in the financial world.

Just wondering where we as Vanguard investors are at risk in the current state of financial affairs of the banks.

The bond holders got wiped out in the UBS Credit Suisse deal for example.

Are investors in Vanguard high yield/junk bond funds on the hook for a significant loss on the deal?
Was Vanguard invested in those bonds? Will Vanguard come clean and tell shareholders?

Where else might we be at risk and not know it?

As a man once said: "get greedy when others are fearful." I'm ready to buy when it all crashes down.

Just keep the current car.

The metric that I’m using: “the IDGAF metric”. When I go to the store, I don’t give a d*** how much stuff cost. When I want something, I buy it. When I give something away, I don’t give a d*** how it would cost me. When the market goes up or down, I don’t give a d*** what it does to my portfolio.

That’s the only way that I am free from money.

Yesterdaysnews wrote: ↑Sun Mar 19, 2023 2:10 pm The government has basically guaranteed all bank deposits.

oh yeah? and when the US defaults on itself around June, who gonna guaranteed whom?

Fremdon Ferndock wrote: ↑Sun Mar 19, 2023 11:31 am This is concerning, especially Citi.



https://awealthofcommonsense.com/

Ask yourself: "What is percentage of domestic deposits that were uninsured?".

It's the amount of deposits exceeding $250k FDIC threshold. What else can you get out of this chart?

I recently looked at my unrealized capital gains / losses tab, and noticed it looked off. I swapped the majority of my funds from VTWAX to VTSAX in August 2022. So, average acquisition price should be around $104-105, and there should be an unrealized short-term capital loss of about $10 per share, given the current price around $94. However, the unrealized capital gains / losses tab shows an average acquisition price of around $94 per share, and a mix of long-term + short-term gain. It's the same acquisition price for all tax lots on different dates, including dividend reinvestments. Also, some of the tax lots show acquisition dates in 2018, 2019, etc. well-before I acquired the VTSAX shares. I called customer support, and they were mostl...

I'd challenge this one, even though it's a common refrain. It's quicker for me (and probably most everyone) to change the oil myself vs taking it in. If you start the clock at walking out to the car and stop it at walking back into the house, it's less than 30 mins for sure to change your oil and filter. It helps that I installed a Fumoto oil drain valve/plug (you just slide a lever over to start the oil drain). Maybe if my neighboring property was a JiffyLube they can beat that but assuming 5-10 mins to drive each way you'd be hard-pressed to get an oil change done in less than 30 including travel. Don’t you need to count the time to acquire oil and oil filter? Time to drive to and from store to buy them. And then time to drive to and bac...

RANkiDEr wrote: ↑Thu Mar 16, 2023 9:27 am How soon will you have access to your money?
What's the process?
Do you have access right away? Or does it take time?
Will this force a sale of the bank?

Thank you again in advance.

1) In case of SVB, the next business day. For any other banks that are not in trouble, you still have to wait for the next business day.
2) Same as usual. Go to website and make ACH transfer. Go to the bank website and they will have the details for you. Just read. https://www.svb.com/
3) See #1 above
4) Why do you care anything beyond your deposits?

JiggsJazzCar wrote: ↑Wed Mar 15, 2023 1:45 pm

stocknoob4111 wrote: ↑Wed Mar 15, 2023 10:43 am International is crashing hard today due to possible contagion from Credit Suisse

Is there any actual reason this bank's issues would cause international to go down other than people fear selling? I need some reassurance here. lol

I'm actually buying today. So, I'll buy some of what you're selling...

Just kinda curious as what some of your decision making processes are when it comes to repairing things yourself vs. hiring someone else. For example, I'll usually do my own plumbing but won't touch electrical. I'll seal my deck but won't do my own roof. I have a few things I need to address that aren't so clear cut. I'll normally hire someone out to cut down a tree, but if a tree is already down, I'll cut it myself. I have a downed tree but it is covered by vines which makes the job more difficult so I've thought about just hiring that job out. I can do basic lawnmower/tractor repair but if I'm not careful, I might be spending days or even weeks if I can't figure it out, which can be frustrating. I have a current lawn tractor issue that I...

saver1 wrote: ↑Wed Mar 15, 2023 3:21 pm Does anyone know what would happen if you have a 401k at a previous employer that ends up going bankrupt?

If their 401k is closed as well, they distribute the check to you. Then you will rollover into your IRA.

So I know predicting the stock market is extremely challenging but I am having a hard time staying calm and continuing to invest free cash flow month after month into an 80/20 portfolio (equity/bond) given the market results of 2022 and now presumably a potential recession of some magnitude in 2023 due to rising rates and a regional bank crisis. This is especially hard as our portfolio is sizable ($1.7M invested) so the volatility can be pretty material. Looking at history it is fairly uncommon to have 2 consecutive down years in the S&P but clearly this has occurred most recently during the dot com bubble of the early 2000s and also during the 1970s. How do other Bogleheads view the current market outlook? Are you doing anything diffe...

The Tipswatch page has been updated since yesterday with this disclaimer: "Note, March 13: It has been 5 days since I wrote this article, and while I think it presents a reasonable theoretical way to look at the I Bond’s fixed rate, these predictions are totally shot, at least for now. The 10-year real yield is currently trading around 1.22%, down about 44 basis points in the last 5 days. So … in this troubling environment of bank bailouts, the Fed and markets are likely to change course. Yields leading up to the May 1 decision are likely to be very volatile. (But I think this all still makes a strong case for investing in inflation protection.) Read this article knowing that it is almost impossible to predict what the I Bond’s fixed ...

If there's anything I know from this site, it's that everyone will agree you should try to time the market based on your personal knowledge of the Fed's upcoming actions. I detect a note of sarcasm. Not really helpful.. I know 'timing' is a curse word around here. However it seems just plain dumb to ignore the environment into which youre investing. Some things are unknowable, however there are facts and conditions which can influence how you invest. Its not always necessary or even advisable to adhere to an ironclad view of the economy, devoid of real market influencers. Can you predict without failure future stock movements or interest rates? Of course not.. That doesnt mean you shouldnt use certain known recent environmental facts to yo...

Outer Marker wrote: ↑Mon Mar 13, 2023 12:49 pm Yes. Wish I'd avoided that expense. It was a small down payment on a very expensive divorce.

We didn't get any money our parents. We didn't want to buy expensive dinners to people who aren't our immediate families. We did pay photographers to take pictures at our favorite local park, and we did enjoy our time off and several honeymoon trips. It's not about the money, it's about spending it on things that we value most.

I know this is highly variable, but I am wondering whether there is any data that shows the average net worth at retirement age for people of different income levels throughout their working lives. I am basically curious about the average (because I know it is extremely variable) net worth at 65 for someone who makes an average of $100k annually throughout their working career, $200k, $300k, etc. Can a couple with a household income of $250k, for example, theoretically have save/invest enough to have a net worth of $4 million at 65? (That was just an example of the type of data I'm looking at, I don't necessarily care about that specific example). You should look at median and not average. The wealth at the 1% group is massive and it would...

goodenyou wrote: ↑Mon Mar 13, 2023 10:32 am

quantAndHold wrote: ↑Mon Mar 13, 2023 9:24 am

goodenyou wrote: ↑Mon Mar 13, 2023 8:57 am

jebmke wrote: ↑Mon Mar 13, 2023 8:56 am

goodenyou wrote: ↑Mon Mar 13, 2023 8:54 am It just means that customer service at Vanguard will get worse. If that is even possible.

Why would this incident have any impact?

If they lost money, they will need to cut expenses.

Vanguard’s funds lost the money. Customers who owned the funds are the losers, not Vanguard. Vanguard’s operations are paid for by ER’s on the funds, fees, etc. Not by a stock Vanguard buys on behalf of its customers.

Got it. If the funds go down, and the ERs stay the same, does the revenue go down?

Vanguard operates at cost. The ER will change, not stay the same. Whatever it costs to run the funds, divided by total AUM, will get you the ER.

It's just SVB is a mere rounding error to their AUM.

teelainen wrote: ↑Sat Mar 11, 2023 11:47 pm

22twain wrote: ↑Sat Mar 11, 2023 11:36 pm How long? 2-3 hours for a drive to the beach or wherever, or all day on a road trip?

In the summer, it will be inside the car for 4-5 hours with the car engine turned off. So it will be very hot in the car for 4-5 hours.

Are you working in the office setting? Or a contractor type of work? If it's an office setting, I'd use the fridge.

Heat dissipates. It's just physics. You can put ice in a cooler and keep your drinks there. But after 4-5 hours under Texas heat, you'll be back with a cooler full of lukewarm water.

muffins14 wrote: ↑Sat Mar 11, 2023 9:31 pm Fdic limit is 250k since 2008? Should we lobby/advocate for that to be indexed to inflation?

Considering the average Joe doesn't have $500 saving, I'd say it's pretty low on the lobbying list. Now if you mention $1,200 stimulus check or cancel student loan, more people will listen to you.

cash is its own asset class Always has been. My point was that for at least 15 years many have dismissed cash as useless. Until real risk showed up and it wasn't. Cash always has been the worst asset class in the long run. What is real risk? Is there fake risk? Food for thought. Thank you. There was a time in the very recent past where I held no cash. Hated cash. I'm just glad I didn't have to buy a car and have to sell stocks and bonds when they were both significantly down (that's what I meant by "real risk"). Now, with new contributions to taxable, some dividends, and a small windfall, I'm holding about 7% in cash. It feels right for me and based on backtesting isn't a terrible drag. I'll use it for lumpy expenses and slowly r...

SVB bank fail is causing massive panic. Just imagine when the U.S. defaults and the Treasury cannot pay its bill.

Charles Joseph wrote: ↑Sat Mar 11, 2023 6:50 am

watchnerd wrote: ↑Fri Mar 10, 2023 10:26 pm

Charles Joseph wrote: ↑Fri Mar 10, 2023 9:07 pm cash is its own asset class

Always has been.

My point was that for at least 15 years many have dismissed cash as useless.

Until real risk showed up and it wasn't.

Cash always has been the worst asset class in the long run.

What is real risk? Is there fake risk?

In light of this recent banking news, I am quickly looking into trying to transfer my money out of a bank. However then the problem becomes what to do with it. My current plan is probably to buy treasuries with it. But to do this, I believe I would first need to allow the money to sit in my Vanguard settlement fund for some amount of time while the transaction goes through. I am not sure exactly how long this is, but I am thinking it could possibly be about a week. So with this in mind, I think I might need to have the cash sitting in my Vanguard settlement fund for about a week. But then does this defeat the entire purpose of doing this in the first place, which is for safety with regards to possible bank issues given the recent news? The...

My wife is in fintech and a significant number of her clients/accounts had accounts with Silicon Valley Bank. She's been on the phone non-stop since early this morning and her employer has asked everybody to be on call through the weekend; absolute pandemonium. I saw a post this morning on the r/personalfinance sub-Reddit from someone who said they are typically paid by their employer through an SVB account; they did not get a paycheck today and the company itself could be in some peril if this is not resolved quickly. So these types of events do impact “regular” folks. Wife get a text from her best friend, her employer does this and they aren't sure anybody will get paid next Wednesday. She's a single mom who lives paycheck-to-paycheck an...

This is just a start.

Imagine what will happen when there is a failure to raise debt ceiling.

hey guys. Is the bear market over yet?

Thanks for sharing!

If you subscribe to Disney+ and pay for it with Amex Blue, Amex Blue reimburses $7/month off the Disney charge, effectively making the amex Blue annual fee $11. Amex Blue also has special deals from time to time, for example Marriott $50 off and Kroger $10 off per cardholder on a purchase of $50+. Point being, to me their annual fee is essentially $0. US Bank has a no annual fee card that will get you 5% utilities and one other category like internet or cell phone. We use it for water, electricity/gas, and our internet to get 5%. ^ this. The Hulu/Disney+ credit is $84 a year. If you take advantage of AMEX deals for items that you would have spend anyways, you'll come out ahead even before accounting for 6% cash back on the $6,000 groceries...

I used PayPal Bill Pay with Chase ink card to pay property taxes. No fees. It took 7 days for the county to post my payments. Easy $900 tax free money. I also used Chase Pay Yourself Back to get additional 10% bonus on internet and phone bills. NM I see where it is now :) So interestingly, I searched for the entity and it shows up (Orange County, CA Tax Collector) and asks for the "Account Number" - I'm wondering if that's the parcel number in this case? I'm in Texas. The account number is printed on the property tax statement. I made $10 "test" payment, waited 5-7 days for it to get posted. It worked, so I paid the full balance. There's a long thread about Paypal Billpay. Some has troubles with it so proceed with cauti...

I used PayPal Bill Pay with Chase ink card to pay property taxes. No fees. It took 7 days for the county to post my payments. Easy $900 tax free money. I also used Chase Pay Yourself Back to get additional 10% bonus on internet and phone bills.

Normchad wrote: ↑Mon Mar 06, 2023 3:59 pm Given that he won’t profit from this, it’s probably real.

You can hear exhaust leaks.

He probably did you a favor by not starting the inspection. Once you start and fail an inspection, the “you must fix it” clock starts. You won’t always get a dashboard for an exhaust leak, depending on where it is.

Then again, maybe he just hates VW and doesn’t want to be bothered with it.

^ this.