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TheAncientOne

Moto, I think that's fine if we're talking about something like your year end bonus. But what if you get a once in a lifetime injection of cash, as might be the case with an inheritance or the sale of a business. Would you lump sum that money as well?

TheAncientOne

If you have strong political views about not investing in a given industry or company, then don't buy index funds. You can pretty much replicate what an index fund does by picking 15 stocks at random (minus those that offend your sensibilities).

TheAncientOne

With mortgage interest of only $3600 or so, you're probably going to be taking the standard deduction under the new tax law. Unless the two of you are really generous with charitable contributions, the 3.875% interest rate will be your after tax cost as well. You might as well pay that mortgage off ...

TheAncientOne

Can you get a transfer to a lower cost of living area? Even if they pay less there, you'll probably find that after adjusting for the difference in housing costs and state taxes that you'll do better somewhere else.

TheAncientOne

In your case, I'd cut back your 401K to the 10% for a year or two because a) you're in a low tax situation and b) your assets in your only taxable account (checking acct.) is too low. Your housing payments are high for your income but I'd have a hard time switching to a higher interest rate mortgage...

TheAncientOne

Assuming the bank is solid, this is as close to free money as you can get in the stock market. The current value of the bank prior to the IPO is owned by no one so those who buy shares in the IPO become owners of that previously unclaimed value. Buy as many shares as you can. If you have time prior ...

TheAncientOne

drzzzz, you're not required to distribute a certain percentage although the fund as a whole does and they do have the right to make account holders make donations in order to meet this. Since the minimum is 5% and the typical fund (Fidelity is what I'm familiar with) donates 15-20% per year, this wi...

TheAncientOne

First priority should be your 403b. You can do an IRA only if you max out the 403b first. And if you do an IRA, why would it be a Roth? You're looking at a combined 34% tax burden (assuming you won't be itemizing with the new standard deduction.)

TheAncientOne

Paying off the home equity loan will bring your emergency fund down to $45K, or four months' salary if I understand you correctly. Unless you have special circumstances, this would seem to be a more than adequate reserve, which you can now rebuild with the money that's no longer going toward the hom...

TheAncientOne

Given that you have specialized skills, it may take you longer than the average person to get a new job. At least you have a good explanation, from a hiring company's perspective, as to why you lost your job. First, I'd see if they will give you more COBRA than six months. Twelve or nine months? You...

TheAncientOne

The Supreme Court case currently pending involves the obligation of out of state sellers to collect the appropriate sales tax from their customers. All states with sales tax already require their residents to pay what's called use tax at an equal rate for goods brought into the state, whether purcha...

TheAncientOne

The desire of something for nothing will never go out of style.

TheAncientOne

So you have only $150K in investments after margin debt. Sell it all now. Margin debt is a foolish thing to have if you're well off. It's absolutely insane to have it in your situation. Your tax situation will probably be minor if you inherited it and received a stepped up basis upon the death of yo...

TheAncientOne

For starters, you'll now get 10K for SALT deductions. AMT remains but only for an elite group of income earners, which is as it was originally promoted and should be.

TheAncientOne

For those of us who saw the original Blade Runner when it came out, this year's version was a disappointment. By the way, I was talking with a good friend who's an expat in China (born there, came to US for grad school then became an American citizen), back home to visit HQ. He was surprised that BR...

TheAncientOne

Okie, I lived in NYC during the late 1970s when this was universal for all subway cars. When the city finally decided to get serious about the lack of civic order (it was common back then to see cars with the sign "No radio" on their dashboard to hopefully discourage car break ins), a key thing they...

TheAncientOne

Oops, upon reading this again, I'm confused. Did you contribute shares out of 401K or IRA account?

TheAncientOne

The cost basis is the fair market value on the day you donated the shares. You should be receiving Form 8283 from Vanguard that provides you with this information. At least that's what Fidelity did when we donated appreciated shares to our account.

TheAncientOne

Captain Kangaroo, short to intermediate treasuries (or more useful for most of us, a fund of them) would be the logical place to park your cash. I'm not willing to bet that long term treasuries can continue to remain at their current low yields. I'm willing to take term risk for two year notes in or...

TheAncientOne

The burden of public sector pensions and retirees health care costs is, if anything, greatly underrated. Those of you who would like to follow this subject more might want to check out the site pensiontsunami.com. Relying upon the rating agencies to tell you if there's risk is nonsense. Perhaps you ...

TheAncientOne

Your mom is pretty close to $4K/month already. If we use a 4% withdrawal rate on $315K, let's call that $12K, or $1K/month. Combine that with her SS and pension, she's just about there. If she's willing and able to work a couple more years as you suggest, she should reach that number.

TheAncientOne

Do you follow Mister Money Mustache's site? Your situation is similar to him and his followers. If I were in your shoes, I might want to first have an idea as to what my plans, initially, would be for my life rather than go all in with the Take This Job and Shove It path. Especially since you and yo...

TheAncientOne

I'm confused as to your question about "standard deduction." When you convert a 401K or a traditional IRA to a Roth IRA, the money converted counts as ordinary income in that year. Standard deduction will not be changed by this or any other income producing activity.

TheAncientOne

Wrong site to be asking this. I suspect most of us would say, "Way to go! Now sell it all and put it into index funds!"

TheAncientOne

The stock market does not know how much you "need" to make your goal. I'm a strong believer in heavy equity exposure when you're young as long as you can deal with the inevitable bear markets and have a job or career that will not be at risk when the next recession hits. If I were in your shoes, I'd...

TheAncientOne

Mutual fund shares are different from shares in a company. Every day after the market closes, the fund's accountants calculate the value of the fund's net assets and divide by the number of shares outstanding that day to report a net asset value per share. If you redeem shares today, the number of s...

TheAncientOne

My only dealing with a FA was when I took control of my mother's account at Fidelity when she was in her mid 80s. As i recall they charged something like 1% and would also on a regular basis move money from one Fidelity mutual fund to another. Between paying the AUM fee, paying for active management...

TheAncientOne

You sound like a physician. If you haven't already, spend time at whitecoatinvestor.com. They specialize in situations like yours. Main thing you need to do is to come out of the box saving lots of money before your lifestyle creeps up to your new income. Second, refinance that student loan debt to ...

TheAncientOne

Going from 90/10 to 80/20 is fine if it makes you feel better but it won't change things much. I'd argue that if you feel that the market is frothy (and most all of us do) then take it upon yourself to go to 50/50 for the next two years. See where you are then and possibly readjust. Lots of us thoug...

TheAncientOne

I don't have hard data for you but I was active in the late 1990s market. The thing about it was that outside of stocks in the dot com bubble along with related tech and "concept" stocks, the market then was very cheap. If you look at the Berkshire Hathaway annual report for 1999, which came out in ...

TheAncientOne

Lrt, I only wish I had been on the ball as much as you are at your age. I'd guess you're at the 95th percentile plus in terms of money management for a couple still in their twenties. It's been my perception that too many people here get so carried away with minimizing taxes that they lose track of ...

TheAncientOne

Pay back the 401K loan. I'm not a believer in loans from that account at all but I can understand why people do that in order to buy a home. If you must do that, pay it back ASAP which in your case means adding to the HELOC. However, once you do that you need to be very aggressive in paying that off...

TheAncientOne

The Intelligent Investor was written in 1949 when the Dow Jones was at 180. Twenty years earlier, the Dow peaked at 380 in September 1929. Graham wrote at a time when the idea of being in stocks at all was widely considered to be incredibly risky. His idea of a good stock was one that had $20 in cas...

TheAncientOne

Just to make clear on Diogenes' question, the exemption on gift limits applies only to education and medical costs paid directly to the school or health care provider. Paying a lender or credit card company doesn't count.

TheAncientOne

Nage, I don't know what the new law is but under the old one, you were limited on refinances to an additional 100K of cash out for income tax deduction purposes, regardless of what your mortgage balance was. Given that the general theme of the new law has been to reduce deductions while lowering tax...

TheAncientOne

having done my taxes for my daughter last year here in CA, I was shocked to find that her marginal state tax rate for a taxable income of $65K (she's a physical therapist) was 9.3% Assuming your husband makes around the same as you, I'd bet that you're paying a similar marginal rate, even though you...

TheAncientOne

I can see going either way on this. It sounds like he's off to a good start with his job and career so whatI think I'd do is give him $30K (the maximum you can in one year without using up part of your exemption) and let him take care of the remaining 20K himself. Sit him down and talk about the val...

TheAncientOne

I agree with you regarding moving fixed income investments into governments. The purpose of fixed income positions is to hedge against declines in equities and to have funds available to invest when the market is down. Corporate bonds are likely to decline as well if the market decline is connected ...

TheAncientOne

Eight year payback. If you plan on keeping this mortgage for 30 years, not moving, not prepaying, not refinancing, then it is a no brainer. Life has a way of surprising you though.

TheAncientOne

I agree with the posters who suggest paying off the HELOC with the emergency cash, then building that back up ASAP this year. If there absolutely, positively is no way to do that quickly without making this year's 401K contribution less than the max, then trim that a bit. A non-deductible 7%+ debt s...

TheAncientOne

You can refinance the loans at much lower rates if you don't want to use up that much cash on loan repayment. This will take away any opportunity for loan forgiveness as you will no longer have government loans.

TheAncientOne

More info needed. Being able to sell stocks at zero capital gains rate is also valuable. Which one is better (or do you even need to choose) requires data.

TheAncientOne

One easily forgotten benefit of Fidelity or Schwab is that most of us have an office nearby that we can go to when a problem arises. That's been useful for me, especially when managing my mother's account in her last couple of years and after her death. Even for my account, I've had a couple issues ...

TheAncientOne

A fabulous and inspiring story. It reminds me that we need to not just preach to the converted here but to encourage friends, family, and coworkers to spend less than they make and to invest those savings intelligently and consistently over the long term.

TheAncientOne

Daniel, you've got it right. The term condominium refers to a form of ownership. I've seen single family detached home projects in Florida for the elderly that have a condominium ownership, as the HOA does all landscape and exterior structure maintenance. The term apartment simply means a multiunit ...

TheAncientOne

Two additional points that I don't believe have been covered here. First, the growing congestion combined with the geography of jobs can put you at a severe disadvantage if you want/need to look for a new position. The last thing you want to do is to buy a home convenient to your job in Cupertino on...

TheAncientOne

The key to long term success is to keep investing in good markets and bad. Nothing can be quite so disheartening as finally investing in equities just before the bear market begins. Notwithstanding all the talk on this site about the importance of low management fees, studies have shown that the ave...

TheAncientOne

1. You won't be able to buy anything in or near (within one hour's commute) of West LA with that income. 2. Use your next couple months of free rent to find a rental that works for the two of you. 3. Start cranking up those retirement savings. If you want compound interest to be your friend, the mor...

TheAncientOne

I'd sell first thing tomorrow morning. Forget about tax planning, you tripled your investment in something which you (and everyone else who's bought them) know nothing about.

TheAncientOne

I have a friend who went to work for a hedge fund in 2003 or 04. His first day there, the general partner had a meeting to discuss how the fund could best play what the partner saw as a bubble in housing prices. Not only was he way early, they misplayed how to invest on that theory and the fund went...

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