Search found 205 matches

by ThrustVectoring
Sat Oct 21, 2017 11:33 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalance with large capital gain
Replies: 9
Views: 669

Re: Rebalance with large capital gain

Do you make or plan to make charitable donations? If so, you can replace them with donating appreciated stocks in-kind, skipping capital gains and getting the stocks full value as an income tax deduction. It's not worth doing if you weren't planning on charitable donation in the first place, but if ...
by ThrustVectoring
Fri Oct 20, 2017 2:53 pm
Forum: Investing - Help with Personal Investments
Topic: Looming Retirement & Market Jitters
Replies: 43
Views: 3140

Re: Looming Retirement & Market Jitters

You have far more than enough to retire. Your retirement assets need to cover $50k - $22k (pension) = $28k/yr. If you're at a 50/50 asset allocation, you have 25 times your annual expenses in bonds alone. If your equity assets dropped to zero you'd be fine. You can pick any asset allocation between ...
by ThrustVectoring
Fri Oct 20, 2017 2:23 pm
Forum: Investing - Help with Personal Investments
Topic: Emergency Fund Investment Strategy
Replies: 20
Views: 1420

Re: Emergency Fund Investment Strategy

First step is to find an online savings account with higher yield. 1.2% is out there at the very least. Next is to evaluate if you really need that much in cash. You probably don't. If you're employed, you probably need six months of expenses at most. If you have specific expenses coming up, that's ...
by ThrustVectoring
Fri Oct 20, 2017 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation with Farm Land
Replies: 19
Views: 1211

Re: Asset Allocation with Farm Land

This is probably more straightforward than people are making it out. Stocks and bonds are just junior and senior portions of the capitalization of a business. There's pricing for the senior portion of a business - the cost of taking on debt to finance the business. For real estate, this is mortgage ...
by ThrustVectoring
Thu Oct 19, 2017 2:47 pm
Forum: Investing - Theory, News & General
Topic: Do Index ETFs and Mutual Funds mute the diversification value of their diverse holdings?
Replies: 5
Views: 357

Re: Do Index ETFs and Mutual Funds mute the diversification value of their diverse holdings?

Not really. The diversification benefit is basically because sometimes companies will do well at the expense of other companies. If people stop shopping at Target and start shopping at Walmart instead, that will tend to push Target's stock price down and Walmart's stock price up. The overall value o...
by ThrustVectoring
Wed Oct 18, 2017 1:23 pm
Forum: Investing - Help with Personal Investments
Topic: If someone held a gun to your head, and force u to gamble whether the S&P 500 will rise or fall tomorrow, what do u say?
Replies: 45
Views: 2170

Re: If someone held a gun to your head, and force u to gamble whether the S&P 500 will rise or fall tomorrow, what do u

Thanks guys for not ripping me too hard. Yes I am trying to decide whether to lump sum or DCA a decent amount of $$ before 4 pm EST today. I realize that this is a completely ridiculous question. Go easy! Lump sum it. If it goes down, don't feel bad, because investing ASAP will do better on average...
by ThrustVectoring
Fri Oct 13, 2017 12:33 am
Forum: Investing - Help with Personal Investments
Topic: Need help investing $1M in today's market
Replies: 24
Views: 3771

Re: Need help investing $1M in today's market

On the other hand, few people are interested in "maximizing" their returns because otherwise they would be 100% invested in equities (or maybe 80/20 if that leads to a historically higher result after rebalancing). The margin for equities over bonds is too high compared to volatility for 80/20 to b...
by ThrustVectoring
Tue Oct 10, 2017 6:02 pm
Forum: Investing - Help with Personal Investments
Topic: What is a good Asset Allocation
Replies: 48
Views: 2608

Re: What is a good Asset Allocation

What's a Good Asset Allocation for a couple in their mid 30s with relatively high stable incomes in terms of Stock/Bond asset allocation? Their main goal is to be financially independent sooner rather than later. As a starting point I like to look at what asset allocation a target date fund uses fo...
by ThrustVectoring
Mon Oct 09, 2017 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Please define "cash"
Replies: 31
Views: 1990

Re: Please define "cash"

There can also be virtual cash contained in the ability of one to pay with credit. A lot of people have a larger credit card charge limit than they would ever hold in actual cash. I've got a very handy $10k line of credit attached to my checking account at my credit union. It basically means that f...
by ThrustVectoring
Sat Oct 07, 2017 7:32 pm
Forum: Investing - Help with Personal Investments
Topic: How to price backdoor roth availability?
Replies: 12
Views: 539

Re: How to price backdoor roth availability?

Turning a dollar from taxable into Roth is worth between 15 and 25 cents, depending on age. Older you are, the less time you have to take advantage of the tax protection on gains. I'm curious how you made this calculation. So, low end, the question is "how much money do I need to make an after-tax ...
by ThrustVectoring
Sat Oct 07, 2017 11:22 am
Forum: Investing - Theory, News & General
Topic: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals
Replies: 13
Views: 2083

Re: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals

It roughly matches my investment plan: buy equities until hitting 12x annual expenses, then let equities coast while buying bonds until I hit a 60/40 ratio. No dates are involved here because there's a pretty big variance in what I expect my future savings rate, earnings, and returns to be.
by ThrustVectoring
Sat Oct 07, 2017 11:08 am
Forum: Investing - Help with Personal Investments
Topic: Compare VSCSX and VBIRX in "reach for yield"
Replies: 4
Views: 183

Re: Compare VSCSX and VBIRX in "reach for yield"

Why are you trying to time the market? If you aren't comfortable with the risk level of your portfolio with your chosen asset allocation, the right thing to do is to have more invested in bonds. It isn't to pull out of the stock market altogether.
by ThrustVectoring
Sat Oct 07, 2017 11:01 am
Forum: Investing - Help with Personal Investments
Topic: How to price backdoor roth availability?
Replies: 12
Views: 539

Re: How to price backdoor roth availability?

Turning a dollar from taxable into Roth is worth between 15 and 25 cents, depending on age. Older you are, the less time you have to take advantage of the tax protection on gains.
by ThrustVectoring
Fri Oct 06, 2017 4:59 pm
Forum: Investing - Help with Personal Investments
Topic: Did Backdoor Roth, but there's 35 cents left in TIRA
Replies: 8
Views: 769

Re: Did Backdoor Roth, but there's 35 cents left in TIRA

It's 35 cents. Why do you care? Leave it in the money market fund, wait until next year, and instead of opening a new TIRA do a backdoor Roth through contributing to this one.
by ThrustVectoring
Fri Oct 06, 2017 3:58 pm
Forum: Investing - Help with Personal Investments
Topic: Where should I put my money?
Replies: 15
Views: 1500

Re: Where should I put my money?

Paying down the mortgage is not really an option. My partner is not a similar financial position and cannot contribute more. House is definitely not a forever house and possibly partner is not either. What split would you recommend between VTSAX & VGTSX? Paying down the mortgage early is an option,...
by ThrustVectoring
Fri Oct 06, 2017 1:24 am
Forum: Investing - Help with Personal Investments
Topic: Sell individual stocks now after transfer to Vanguard?
Replies: 14
Views: 1008

Re: Sell individual stocks now after transfer to Vanguard?

Are you planning on making any charitable donations? If so, look into in-kind donations (or Vanguard's Donor Advised Fund). You get to claim the full value of the stocks as a tax deduction without paying capital gains, so it's pretty much a free win if you were going to donate anyways.
by ThrustVectoring
Fri Oct 06, 2017 1:14 am
Forum: Investing - Help with Personal Investments
Topic: Where should I put my money?
Replies: 15
Views: 1500

Re: Where should I put my money?

Are you a W-2 employee or a 1099 contractor? If you're a contractor, you are your employer, so you can set up your own retirement plan and contribute up to the legal limits of the plan you choose. If it means draining savings to do so, well, the money is better off tax-protected. Otherwise, it's a l...
by ThrustVectoring
Thu Oct 05, 2017 2:02 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking Input for Financial Plan
Replies: 12
Views: 902

Re: Seeking Input for Financial Plan

You're living well below your means, you're young, and you've got a healthy emergency fund. I wouldn't futz with your long-term asset allocation, just with how much you put into long-term investing versus short-term savings. Work backwards from expected expenses: if you've got a wedding next year an...
by ThrustVectoring
Thu Oct 05, 2017 1:40 am
Forum: Investing - Theory, News & General
Topic: So... What bond fund or bond-like instrument do you use?
Replies: 47
Views: 4117

Re: So... What bond fund or bond-like instrument do you use?

I'm personally in high-yield savings for money I think I'll probably touch in the short-term and 100% equities outside of that. I'll re-evaluate when I've hit half of my retirement "number" or so.
by ThrustVectoring
Wed Oct 04, 2017 5:27 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement contributions - account options after Roth & Employer Plan?
Replies: 12
Views: 531

Re: Retirement contributions - account options after Roth & Employer Plan?

If you become really well off and don't ever need the money, you can pass the appreciated assets to heirs and they get a stepped up cost basis, so nobody has to pay the cap gain tax. Similarly, if you plan on making charitable contributions, you can donate the appreciated stock without paying capit...
by ThrustVectoring
Wed Oct 04, 2017 5:20 pm
Forum: Investing - Help with Personal Investments
Topic: Only bond fund in 401K is Pimco Total Return. Buy?
Replies: 15
Views: 653

Re: Only bond fund in 401K is Pimco Total Return. Buy?

How old are you? How much money is in the new 401k? If you're under 40 and the total amount is under $100k, you're likely fine having a temporarily-more-aggressive asset allocation until you change jobs and can roll it into an IRA at your ideal asset allocation. Like, yeah, the risks and returns are...
by ThrustVectoring
Wed Oct 04, 2017 3:39 pm
Forum: Investing - Help with Personal Investments
Topic: Pay off mortgage instead of bond investment
Replies: 28
Views: 2163

Re: Pay off mortgage instead of bond investment

I just gave this same advise to a younger person. It makes no sense to lose money to interest and make less money off investing in bonds. Who in their right mind would pay 3% per year to borrow money so that they can earn 2% interest. You're losing 1% per year, sure, but you have significantly more...
by ThrustVectoring
Wed Oct 04, 2017 2:14 pm
Forum: Investing - Theory, News & General
Topic: Peter L. Bernstein: Cash BETTER than Bonds
Replies: 64
Views: 7386

Re: Peter L. Bernstein: Cash BETTER than Bonds

+++ copernicus, bernstein, taleb. When I want to trade, I want the cash to do so and not wait the 2 days to clear brokerage. YMoMV Run a margin account, buy immediately, and cover the margin loan two days later when it clears to your brokerage account. Paying 3% APR for two days is, like, whatever.
by ThrustVectoring
Wed Oct 04, 2017 2:11 pm
Forum: Investing - Theory, News & General
Topic: Annuities-when and why?
Replies: 94
Views: 12961

Re: Annuities-when and why?

Single-premium immediate annuities have been mentioned before, and they're basically the only sort you want to buy. Their primary purpose is to cover a shortfall in retirement saving by exchanging your inheritance assets for mortality credits. Other people buying an annuity die early and give up the...
by ThrustVectoring
Wed Oct 04, 2017 1:26 pm
Forum: Investing - Help with Personal Investments
Topic: How much should an 18 year old keep in bonds?
Replies: 28
Views: 1398

Re: How much should an 18 year old keep in bonds?

For your Roth IRA and at your age, it really doesn't matter. The target date fund is plenty fine. What's important is to start getting into the habit of living below your means early and figure out how to make your independent adult life work well for you. If you don't expect to need the money until...
by ThrustVectoring
Tue Oct 03, 2017 11:00 am
Forum: Investing - Theory, News & General
Topic: Buy on Really Bad Days, Sell on Really Good Days?
Replies: 169
Views: 9229

Re: Buy on Really Bad Days, Sell on Really Good Days?

It means consistently having money you can invest sit on the sidelines. This is a false statement. It means no such thing as discussed many times before. I'm not sure what you mean. If you buy stocks today because the market went down, what money are you using to buy said stocks? And couldn't you h...
by ThrustVectoring
Tue Oct 03, 2017 10:54 am
Forum: Investing - Theory, News & General
Topic: Glide up or glide down before retirement?
Replies: 7
Views: 1326

Re: Glide up or glide down before retirement?

Equities have better long-term returns, so generally speaking "gliding down" is the best path. That said, you've got three years to retirement, so personal details matter a lot here. What's your estimated withdrawal rate? If you had to keep working, could you? If you wanted to cut your expenses, how...
by ThrustVectoring
Tue Oct 03, 2017 10:46 am
Forum: Investing - Theory, News & General
Topic: Buy on Really Bad Days, Sell on Really Good Days?
Replies: 169
Views: 9229

Re: Buy on Really Bad Days, Sell on Really Good Days?

It's not worth it, IMO. It means consistently having money you can invest sit on the sidelines. The stock market is volatile, sure, but it's not volatile enough compared to the edge of having your money invested. The math is pretty straightforward with the Kelley criteria. Having a better edge on yo...
by ThrustVectoring
Tue Oct 03, 2017 10:32 am
Forum: Investing - Theory, News & General
Topic: $10 million+ - Still Working and LBYM
Replies: 162
Views: 16286

Re: $10 million+ - Still Working and LBYM

Ah, but don't begrudge people who spend their money because: They are just giving it to other people for goods and services. That's called The Economy, so it's a good thing. Now if folks just took cash out of the bank and burned in their fireplace, that would be disturbing. I don't see that's the c...
by ThrustVectoring
Fri Sep 29, 2017 1:47 pm
Forum: Investing - Help with Personal Investments
Topic: How should I should allocate my inheritance
Replies: 17
Views: 1756

Re: How should I should allocate my inheritance

High yield savings and possibly increase your Roth IRA and 401k contributions. And honestly, a lot of what you should be doing is investing in your future career. Your long-term success is probably best served by attending the best college you can, and using your savings to avoid needing to work whi...
by ThrustVectoring
Fri Sep 29, 2017 1:38 pm
Forum: Investing - Help with Personal Investments
Topic: Why don't three goals - sabbatical, early retirement, and retirement - mean 3 different asset allocations?
Replies: 19
Views: 1064

Re: Why don't three goals - sabbatical, early retirement, and retirement - mean 3 different asset allocations?

Yeah, we're not much different, except we don't have the sabbatical component. But I do have an "early retirement" set of investments and allocation that is different from "retirement". The early retirement bucket is more conservatively allocated and all held in taxable. It's essentially the bridge...
by ThrustVectoring
Thu Sep 28, 2017 6:04 pm
Forum: Investing - Help with Personal Investments
Topic: Can I Safely Retire?
Replies: 60
Views: 8021

Re: Can I Safely Retire?

Since the original post, I've learned that I'll be getting an additional $15,000 to $30,000 a year in inherited royalties and residuals. Would you just hold on to this bonus cash or invest it? By the way, since the original post I've indeed fled the increasingly dystopian hell of California. Never ...
by ThrustVectoring
Thu Sep 28, 2017 1:52 pm
Forum: Investing - Theory, News & General
Topic: Which bogleheads have a "high need to take risk"?
Replies: 51
Views: 4498

Re: Which bogleheads have a "high need to take risk"?

I'm curious: Whom of you feels like they need to go e.g. 90%+ stocks to meet some financial goal? I'm talking about bogleheads who have a limited investment horizon and think another allocation would be safer, but have decided to take on more risky assets. If the risk doesn't pay off, what will you...
by ThrustVectoring
Thu Sep 28, 2017 12:48 pm
Forum: Investing - Theory, News & General
Topic: Guy proves that Buy The Dip strategy works (via backtests) any rebuttals?
Replies: 65
Views: 6453

Re: Guy proves that Buy The Dip strategy works (via backtests) any rebuttals?

Volatility isn't high enough compared to long-term returns for "Buy The Dip" to outperform buy-and-hold. Last time I saw the numbers getting run, the "right" asset allocation is something like 130% stock / -30% cash. You lose out because you have to sell the dip to maintain the right asset allocatio...
by ThrustVectoring
Thu Sep 28, 2017 12:41 pm
Forum: Investing - Theory, News & General
Topic: Why do you LBYM? Why do you save and invest?
Replies: 197
Views: 13644

Re: Why do you LBYM? Why do you save and invest?

I have very modest needs and I'm compensated generously. I don't really control my spending and have a roughly 33% savings rate. Might as well make my long-term plans work out well for me.
by ThrustVectoring
Tue Sep 26, 2017 5:27 pm
Forum: Investing - Help with Personal Investments
Topic: Can I afford to slow down at 34yo? Feeling burn out.
Replies: 17
Views: 3568

Re: Can I afford to slow down at 34yo? Feeling burn out.

When was the last time you took a vacation? It sounds like you should figure out how to put your business stuff on hold and take anywhere from two weeks to two months off, and then come back and figure things out.
by ThrustVectoring
Tue Sep 26, 2017 11:47 am
Forum: Investing - Help with Personal Investments
Topic: How safe is cash in today's economy?
Replies: 37
Views: 3867

Re: How safe is cash in today's economy?

I don't plan for national situations that are bleak enough that an FDIC-insured savings account doesn't help me. It's a small enough risk, and things are going to be really bad anyhow, that my efforts are better spent elsewhere. Like, seriously, at that point in low-likelihood situations that you've...
by ThrustVectoring
Mon Sep 25, 2017 5:18 pm
Forum: Investing - Theory, News & General
Topic: Which Taxable Lots to Sell during Retirememt?
Replies: 10
Views: 1727

Re: Which Taxable Lots to Sell during Retirememt?

Generally speaking, you want to maximize your unrealized capital gains. There are situations where you can get a free step-up in basis, effectively eliminating the capital gains altogether. First: when you die and leave behind appreciated shares, the cost basis for your heirs is the current market v...
by ThrustVectoring
Mon Sep 25, 2017 2:55 pm
Forum: Investing - Help with Personal Investments
Topic: Are all investments compound interest?
Replies: 50
Views: 3010

Re: Are all investments compound interest?

Most investments expect exponential growth of some sort. The exceptions are those that have difficulty reinvesting gains and puts profits into your pockets. Real estate is a good example - if you get a profit of $1000 from rent checks, it's difficult to turn that into more rental properties to prof...
by ThrustVectoring
Mon Sep 25, 2017 12:34 pm
Forum: Investing - Help with Personal Investments
Topic: Are all investments compound interest?
Replies: 50
Views: 3010

Re: Are all investments compound interest?

Compound interest is one example out of a general trend of exponential growth. People generally stay invested today because they expect their investment to be worth slightly more tomorrow. And that "slightly more" is a small percentage of the current value today. So if you expect a 4% annual growth ...
by ThrustVectoring
Mon Sep 25, 2017 2:04 am
Forum: Investing - Help with Personal Investments
Topic: Pay student loans versus invest
Replies: 14
Views: 954

Re: Pay student loans versus invest

Student loans probably is the best bet. Do you know off hand whether early payments reduce your monthly minimum payment or your number of remaining payments? If it's the former, that's better for paying things down early. Don't do individual stocks. At best you should do a passive diversified index ...
by ThrustVectoring
Fri Sep 22, 2017 2:11 pm
Forum: Investing - Help with Personal Investments
Topic: Investing for my 20 year old son
Replies: 8
Views: 574

Re: Investing for my 20 year old son

For the emergency fund, he probably wants a high-yield savings account. Ally has good rates IIRC. There's a limit of 6 withdrawals or transfers out per month (regulation D), but if it's an emergency fund that shouldn't be an issue. It'll mean getting an extra 1%/yr or so of interest, which is about ...
by ThrustVectoring
Thu Sep 21, 2017 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: I won the Lottery. Need sound advice.
Replies: 220
Views: 24167

Re: I won the Lottery. Need sound advice.

I would like to be financially independent in the next 10 years - is that reasonable? I figured it would take 2.5M in the bank and zero debt. How much it takes to be financially independent depends on how much you need to have "enough" to live off of. $500k would be enough for some folks, and $5M w...
by ThrustVectoring
Thu Sep 21, 2017 12:53 pm
Forum: Investing - Help with Personal Investments
Topic: Should I be worried about my AA?
Replies: 31
Views: 1513

Re: Should I be worried about my AA?

My rule (I made it up) is that under $100k, it doesn't matter. Just go all equity and be done with it until you're over $100k. My desired retirement portfolio is 60/40, and it's better to be aggressively invested earlier rather than later, so I'm doing 100% equity until reaching 30% of my desired r...
by ThrustVectoring
Wed Sep 20, 2017 11:33 am
Forum: Investing - Help with Personal Investments
Topic: 401(k) & working for only a year before returning to school
Replies: 12
Views: 1034

Re: 401(k) & working for only a year before returning to school

You definitely should do traditional. When you're in school, you've got a low income, which means you can convert it to Roth then and minimize your total tax bill.
by ThrustVectoring
Tue Sep 19, 2017 2:08 pm
Forum: Investing - Help with Personal Investments
Topic: Financial Review ($800K Nest Egg)
Replies: 7
Views: 2591

Re: Financial Review ($800K Nest Egg)

Backdoor Roth IRA is probably the next thing to hit, since you're already maxing 401k contributions. After that you might want to look into what tax-deferred accounts are eligible to convert to Roth, and possibly making Roth 401k contributions instead of traditional. That probably edges out paying o...
by ThrustVectoring
Mon Sep 18, 2017 1:58 am
Forum: Investing - Help with Personal Investments
Topic: Military: Investing a Windfall in Expensive Market?
Replies: 16
Views: 2034

Re: Military: Investing a Windfall in Expensive Market?

23 years to go, 0.75% interest rate, secure military job. Trying to time the market generally doesn't work. The risk of hitting a correction is generally less than the risk of having money on the sidelines while the market gets the returns you need to achieve the goals you have. Plus you sound like ...
by ThrustVectoring
Sat Sep 16, 2017 11:12 am
Forum: Investing - Help with Personal Investments
Topic: Bipolar Investor Wants to Roll The Dice
Replies: 12
Views: 1661

Re: Bipolar Investor Wants to Roll The Dice

Take risks elsewhere in your life, IMO. The best investing strategies involve making a good decision and then not changing your mind. Like, I would pretend that the only fund Vanguard has is the target retirement fund that matches your retirement date.

Don't YOLO with your retirement accounts.
by ThrustVectoring
Fri Sep 15, 2017 2:19 pm
Forum: Investing - Help with Personal Investments
Topic: REIT vs. Rental Property vs. Pay off the mtg
Replies: 43
Views: 2907

Re: REIT vs. Rental Property vs. Pay off the mtg

And then you are turning passive income into earned income, which comes with self employment tax and higher income tax for whatever isn't deferred. Doing the math, in their tax bracket, this is almost certainly a bad idea. It depends on the difference in tax rate between earned and unearned income ...
by ThrustVectoring
Fri Sep 15, 2017 10:59 am
Forum: Investing - Help with Personal Investments
Topic: REIT vs. Rental Property vs. Pay off the mtg
Replies: 43
Views: 2907

Re: REIT vs. Rental Property vs. Pay off the mtg

Either invest in a taxable brokerage account, or purchase a rental and set it up as self-employment. If you have self-employment income, you can set things up for tax advantages - essentially, some of the limits on retirement plans are per-employer, and "buy a rental property and rent it out" makes...