Bogleheads.org

TheAncientOne

I agree that a low cost index fund, 100%, makes the most sense for someone this young. If you can convince him to fund a Roth IRA with half his savings, that would be great. Alternatively if your parents are in a position to fund it for him (which is what we did with our kids), he can get off to a g...

TheAncientOne

Notwithstanding MMM's idiosyncracies, there's a powerful message there that should resonate with BHers. Spending much less than you make is possible and does not necessarily mean diminishing the quality of your life. Saving 30% of your after tax income (MMM advocates for 50% or more) will have a far...

TheAncientOne

Ben Graham wrote The Intelligent Investor in 1949 when the very idea of investing in stocks had been discredited. The Dow peaked in September 1929 at 380. Twenty years later, the Dow was at 180. His goal in writing the book was to argue that buying stocks might actually make sense. In the book's fir...

TheAncientOne

You're doing fine. If I were in your shoes, I keep your money market and taxable Vanguard fund where they already are, and continue to pay down that loan with the monthly surplus you generate. It shouldn't take very long for that to happen given the rate at which you've paid off loans the last coupl...

TheAncientOne

How much will your income be? 94K is a high amount for student loan debt. Is this just for undergraduate? The key thing is to live a spartan lifestyle and get this debt paid down ASAP. I'd limit 401K contribution to whatever your employer matches. If you don't have a job that pays well, you need to ...

TheAncientOne

Regarding one issue raised, CA requires that upon sale of a property that the water heater must be strapped. Even if you've been in your house for a long time, the guys who replace your water heater, which happens after 10-15 years, will automatically strap it for you when they install the new one. ...

TheAncientOne

Totally crazy to pull money out of tax sheltered accounts to pay off your student loans. Refinance your loans if they're above market. Also if you have more than enough in taxable accounts to serve as your emergency fund, you could partially pay those loans down.

TheAncientOne

I've owned a home in the Bay Area for 35 years and have never purchased earthquake insurance. As you point out, there is a huge deductible. Let's say the value of your home, excluding land is 400K. How likely will you have damage in excess of 100K? The coverage for temporary housing and for contents...

TheAncientOne

Given that your daughter is way ahead of her peers when it comes to saving for retirement, I'm a little reluctant to say you should push for an even higher percentage into the 401K but that's the right thing to do. Assuming her starting salary is $80K?, she's only putting in $8K out of a maximum of ...

TheAncientOne

I'd do traditional, but then take the $7K or so you save in taxes each year and put it in a taxable account.

TheAncientOne

How much cash are you talking about? FDIC is not an insurance company, it's the government. If it goes bankrupt, as the FSLIC (savings and loan fund) did in 1990 or as the FDIC did in 2009, Congress will just put more money into the fund and gradually collect that advance back as the banking system ...

TheAncientOne

It's very hard to make the numbers work for buying in the Bay Area. Where do you live and where do you work? Are you likely to be working in the same general area indefinitely? Even if you can make the numbers work, the last thing you want to do is to buy a place that's inconvenient to a large part ...

TheAncientOne

Snowball gives you a much better idea of who he is personally. Kind of a weird person actually but that doesn't change his brilliance or his impact on other investors. After giving Alice Schroeder full access to himself and to his friends, I understand he was very unhappy about the book (especially ...

TheAncientOne

Being the trustee simply means you're responsible for disposing of the assets in accordance with the wishes expressed in your mother's will. You do have a fiduciary responsibility to the trust's beneficiaries but since the assets are simple (cash and marketable securities) and I'm assuming you're on...

TheAncientOne

Messner, given that your father's portfolio is heavily (or exclusively?) weighted toward dividend paying stocks, you can think of his situation as not unlike someone who's 80% in the S&P 500 index fund, with its significant weighting in Amazon, Google, Facebook and other non-dividend paying stocks, ...

TheAncientOne

Why are you paying 12%? Can't you refinance this loan? If I were stuck with a 12% loan (and you must not be since you're saying you have the option of paying it down), I wouldn't be putting any additional money into retirement accounts other than the 18K for your 401K.

TheAncientOne

Where do you get 5% on cash? Even the 3% sounds way higher than the market. Wherever you have it, I doubt that it's really "cash."

TheAncientOne

Nisprius, that gaming firm has to be way off. Buffett is 45 percentage points ahead with less than four months to go. I can't believe that this gives Protege that much chance of catching up relative to an S&P 500 index fund. Protege is a fund of funds so not only do you have to pay the funds their u...

TheAncientOne

Sounds to me like you've put together a thoughtful plan for them. Since the withdrawals will only be providing $15K/yr, do either of your parents have an interest in working at least part time in a low stress job? It shouldn't be hard to make an amount that would be a significant boost to their SS p...

TheAncientOne

Stormbringer, premiums will go up for all forms of insurance because the supply-demand balance will tighten up. It will not have a significant effect on your premiums, but it will sure push up rates for hurricane susceptible coastal areas. What should irritate residents of the Midwest are the massiv...

TheAncientOne

Who will do the building? Are you and any other investors taking on the risk that construction might come over budget?

TheAncientOne

Where do you currently live? South Florida (Miami up to Palm Beach) traditionally attracts people from the Northeast (coming down I-95) while the Gulf Coast is more for Midwesterners (coming down I=75).

TheAncientOne

If you already have a Fidelity account, just open up a taxable account with them and pick a single index fund for now. The key thing is to keep money going in during good times and bad. The difference between S&P 500 or TSM is trivial compared to committing to regular contributions to said account. ...

TheAncientOne

In that situation, I'd max out the 401K but then focus on bringing down that student loan debt next. I'm assuming you're young so you'll have lots of years to pile up those retirement contributions and benefit from long term increase in value in your retirement account. Yes you can put more into tax...

TheAncientOne

I found the article completely unconvincing. Passive investors do not use their holdings to pressure the companies in their portfolios to spend less on R&D or capital spending or anything else. The fact that all of the major airlines are more circumspect when it comes to expansion and price wars has...

TheAncientOne

Oltex, the ability to stop paying PMI sooner is not enough to change the decision. Also, our recommendation to use the money to pay off student loan debt does not mean you should not make any more payments on it for several years. The idea of continuing to pay for college well after you're middle ag...

TheAncientOne

I believe your understanding of tax deductibility on home equity loans are correct. Question is what is your current interest rate on the student loan and what would you be paying on the home equity loan? Can you refinance student loan debt at a rate below the home equity loan? I worry when people t...

TheAncientOne

Marlowe and his wife have managed to save $149K in retirement accounts plus they own a rental property while still in their twenties or early thirties. Their student loans are substantial but at very low interest rates. The First Republic loan is already being paid down at a rapid rate. The one shor...

TheAncientOne

Yeah, this is a personal finance site and not one for romantic advice but what the hell. If you know your girlfriend is the right one for you, why sit around for the next two to five years? At some point you need to take the leap of faith.

TheAncientOne

Your thinking on financial planning is solid. Some thoughts... 1. Sounds like you're both doctors and the previous poster who suggested you visit whitecoatinvestor.com is absolutely correct. 2. Max out your 401Ks every year. 3. Refinance those high cost student loans ASAP. There's a specific article...

TheAncientOne

We bought our first home in Cupertino 35 years ago so we haven't had to deal with this insanity. All three of our children live in the Bay Area so we have no reason to consider moving. At the risk of highjacking dacalo's thread, why isn't there more consideration by you all of relocating elsewhere? ...

TheAncientOne

Margin debt makes sense for almost no one. As Warren Buffett said, "if you're a good investor, you don't need leverage to be successful If you're not, your crazy to be using borrowed money." In your case, you don't know what you're doing at all. The desire to borrow money just so you won't be out of...

TheAncientOne

I no longer have my copy of The Intelligent Investor so these numbers will be slightly off. The Dow Jones peaked in September 1929 at around 380. Twenty years later the Dow when Ben Graham wrote the book, the Dow was at 180. Graham pointed out that an equal monthly investment into the Dow stocks (wh...

TheAncientOne

You don't need to spend six months plus a day in FL in order to be a FL resident for tax purposes. What you do need to do is to make sure that you don't spend six months plus a day in NJ. High tax states in the Northeast and Midwest are on the lookout for wealthy taxpayers that have relocated to Flo...

TheAncientOne

First of all, pay the damn bills. The money was owed and it's not hard to see why Illinois is heading toward bankruptcy with the mindset of this attorney. Before you hire this giant of the legal profession to handle the title transfer of a $2,000 car, call up the DMV and ask them how to handle it. A...

TheAncientOne

Your numbers are exactly correct. I do my daughter's taxes as well as ours and last year, she had 65K in taxable income (after standard deduction, one personal exemption and 401K contribution). At that august level of income, she had marginal taxes of 25% federal and 9.3% state plus the usual FICA/M...

TheAncientOne

I missed the part about $20 MM in equity in a start up. Wise of you not to count your chickens on this but if you can cash out even one-tenth of that, come on out here!

TheAncientOne

Where in the Bay Area are you looking to live? Where would your jobs be? Where are the relatives? Sounds like you need to be close to them regardless of the job location.

TheAncientOne

You're overthinking this. First you need to make sure that they are not earning more than the maximum allowed for an IRA, assuming they have a 401K or pension. Then you just write a check for the amount you want to fund, made out to the brokerage firm. Do you want to fund the full $5500, as a way to...

TheAncientOne

Your stepson sounds like he has given this some thought, which puts him well ahead of most of his peers. Not a matter of "I'm thinking art history because I hear that's where the hot babes are." Given that he must have strong math and science skills to have such strong scores, I'd encourage him to c...

TheAncientOne

Once you've lived in the Bay Area, going somewhere else can be difficult if you've gotten used to the climate. I know two people who moved to Seattle who came back within a couple of years due to those gray, rainy and endless winters. You're fortunate that you can pick whichever area you think you'd...

TheAncientOne

Is this stock grant in the form of a Restricted Stock Unit? If so, a taxable event occurs when a given portion of your grant vests and not when you sell the stock. Under those circumstances, it would be folly to not sell the stock immediately. If you are feeling lucky, as one well known Silicon Vall...

TheAncientOne

First, let me respond to your initial question. RSUs are like owning the stock except that they come to you each month or year (depending on the company) that you work there. You also can't trade them for a low cost index fund. You have stock market risk, sector risk (you mean tech stocks can't outp...

TheAncientOne

At your age and your ability to invest 1K/month (which is incredible), just keep putting that 1K into a low cost index fund. I'm happy with the S&P 500 because all the larger domestic funds are 85% S&P 500 anyways so why screw around? And say your prayers that we have a bear market soon. You're in t...

TheAncientOne

These are tiny loans. Are you really worried that you'll go bankrupt before the student loan is paid off? Just pay off that student loan in the next year by committing to pay an extra $400/month then finish off that car payment in the following 6 or 8 months.

TheAncientOne

If you have no liquid savings (I'm assuming your checking account has just the usual transactional balance), I'd build up an emergency savings first and postpone prepayments on the mortgage. I'd also be concerned about having your company stock as your emergency fund because bad times at your employ...

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