Bogleheads.org

I’m hoping this great community can help me find an answer to this vexing question! My wife has a small business; it’s a sole proprietorship – she is the only person. We set up a solo 401(k) with Vanguard. My understanding was that my wife can make two retirement account contributions each year – one as the “employee” and one as the “employer.” Accordingly, we made a 2022 employee-side contribution. What I am trying to do is find authority (an IRS bulletin?) that says that this was okay. The problem is that the IRS bulletins I’m aware of talk about employee-side contributions from “salary deferrals” and “wages.” But my wife doesn’t have any "wages" (e.g., she doesn’t get a W2) or a “salary” per se. She takes in her business’s rev...

Does a 22% effective tax rate for a home food making business set off any alarm bells? My wife has a sole proprietorship. For 2022, the effective tax rate (tax burden/gross income) is 22%. That's including social security, medicare, and income tax. 22% feels rather high. I suspect I might be missing business deductions, but on the other hand, the business just does not have a large number of costs and the profit margins are decent. We are married filing jointly. Federal tax bracket is 22%. I have a salary position with health insurance and a smallish pension, wife has sole proprietorship that adds about 8% to our overall gross income. Though of course the IRS does not tax the business separately, I do now track its expenses (including taxe...

whodidntante wrote: ↑Mon Mar 20, 2023 9:13 pm I like to keep my emergency fund in emerging markets value stocks.

Any fool knows it should be in Bitcoin. Preferably at FTX.

This article has an inflation adjusted FDIC history, and how the level of protection that backstopped the Great Depression bank failures was around half the $250k we have now (possibly unlimited, if the FDIC/Fed liked your bank). Comments also below on the moral hazard issues of insuring large depositors for the safety of the banking system. https://rationalwalk.substack.com/p/the-role-of-deposit-insurance The absence of any market discipline from depositors to police the activities of banks will require the government to step up regulatory oversight of all banks in order to limit exposure of the government to losses. In the absence of market discipline from depositors and sufficient regulatory oversight, only the shareholders of banks wil...

I tend to view it as liquidity. Maybe 9 months expenses in bank cash and another couple of years worth in ibonds. I don’t view it as irrational to have a fixed stack of cash or cash equivalents. Some will say “mental accounting”, but that presumes an individuals risk aversion curve will always dictate the same asset allocation whether one has $100,000 or $1 million. By setting a hard minimum, via a fixed emergency/liquidity fund when the value of your portfolio goes down, your stock allocation will decrease if looking at entire net worth. That isn’t optimal for long term growth but it does provide a safety cushion. It is very plausible for a 60 year old to have a risk aversion based optimal asset allocation of 0/100 at $100k, 50/50 at 1 mil...

The high dividend funds and the dividend appreciation/growth funds are two different beasts. High dividend funds to be value oriented funds. Dividend growth funds tend to have high quality stocks that have a consistent history or dividend growth, and the actual dividend yield as a percent is not particularly high. If your goal is to get dividend income for dividends sake, dividend growth/appreciation is not the way to do it. Again I like the growth appreciation funds in that they tend be be quality companies and somewhat lower volatility. One reason/narrative for dividend stocks, especially ones that are consistent or increase, is that if management has to commit to a dividend, they are less likely to reinvest it in higher risk bad investme...

As a final check on any investments I intend to make, I look and see how much money is invested in a fund to understand how other hopefully rational investors have decided. Any VG fund that has a significant amount invested ($50B?) passes this final test. Regarding one of the forum’s favorite topics, dividend irrelevance, after reading about every thread I could find here, I thought I would see how investors were voting with their feet. Just by reading the product summaries, there are at least seven (probably more) VG funds that have a dividend focus: High Dividend (VHYAX/VYM), Dividend Appreciation (VDADX/VIG), Dividend Growth (VDIGX), Equity Income (VEIRX), Wellesley Income (VWIAX), International High Dividend (VIHAX/VYMI), and Internati...

We’ve been with T-Mobile for a couple years and have been satisfied. Was with ATT many years before. T-Mobile is cheaper for family plan. Also has some nice streaming perks - free Apple TV, discounted Netflix and free paramount plus. I’d say coverage is marginally worse than ATT but not by much. We live in a major metro area, but coverage is still generally good when going through rural areas.

The author speculates that the coming fixed rate may not be as high as originally anticipated due to recent banking events. I bought a decent chunk of ibonds over the last couple of years between me, spouse, RLT and sole prop business and gift box. With variable rates and inflation trending down, and cash rates going up I probably won’t be adding to the positions, but what I may do is sell some of the zero percent fixed rates I’ve accumulated over the years and buy some at the higher fix rate. I’ll probably wait until later in the year to do that in case fixed rates rises, and also to cash out any purchases within 5 years to lose only 3 months at the new combined May lower rate. I assume you didn't hit the $10K limit this year from either ...

stoptothink wrote: ↑Tue Mar 14, 2023 6:33 am

judge1905 wrote: ↑Mon Mar 13, 2023 8:42 pm

Barkingsparrow wrote: ↑Sat Jan 28, 2023 1:14 pm Working through Counterpart on Prime. Starring the wondrous JK Simmons in dual roles in a convoluted and tense espionage drama with sci-fi overtones. Definitely not for the "wholesome" crowd. Really enjoying this series, it got a 100% rating on Rottentomatoes.com.

One of my favorite series, and definitely deserved more attention.

Really good series that almost nobody has heard about.

Great show too bad only 2 seasons.

The author speculates that the coming fixed rate may not be as high as originally anticipated due to recent banking events.

I bought a decent chunk of ibonds over the last couple of years between me, spouse, RLT and sole prop business and gift box. With variable rates and inflation trending down, and cash rates going up I probably won’t be adding to the positions, but what I may do is sell some of the zero percent fixed rates I’ve accumulated over the years and buy some at the higher fix rate. I’ll probably wait until later in the year to do that in case fixed rates rises, and also to cash out any purchases within 5 years to lose only 3 months at the new combined May lower rate.

The past several years I have done a few of these. Usually focusing on the larger bonuses, but never putting more than $20k in there. I’ve done chase personal and chase business and that is always fairly easy. I tend to do more credit card bonuses, I find the bank bonuses a bit more of a hassle due to tying up funds.

Recently I’ve done less, party due to tying up more liquidity in ibonds. They just don’t seem as attractive to me given your can earn 3-4% just sticking into a high yield account of treasuries.

I’ve always used Dr of Credit for both banks and cards.

I suspect odds are 5% would work, but the probability of failure is too high for my tastes. Even if it does work over many decades there will probably ups and downs and times where you are hoping and praying that markets recover to get you back on track. Assuming it does recover, as it usually does, mathematically that would be considered a success. But for me, I don’t want to live that way. I don’t don’t want to be white knuckling the downturns.

Also, it seems like you are locking in choices at a young age and assuming nothing materially bad happens along the way.

Having said that, I don’t have all the answers, and can’t predict the future. So hopefully it works out for you.

I recently found out that a relative who is almost 65 but still working for at least 1-2 more years has kept 100% of his retirement accounts in stock index funds. I don't know exact fund names, but they are at different brokerages/banks. He only started saving for retirement around age 40, knew enough to buy index funds, and keeps about 10% in cash. He has never held any bonds and casually told me that his retirement accounts are down 10-15%. I would guess his entire net worth is 1 to 1.2 million plus about 500k home equity. I'm afraid that I had an allergic reaction to the news of the 100% stocks at age 65, but my goal now is to help him. He and his wife live extremely frugally (<40k/year) so will not run out of money (I THINK). There is ...

This one does not use modern technology and has a simple, time tested design. The motor will last as long as you do. https://www.amazon.com/Columbus-Washboard-2072-Family-Silver/dp/B0000CBILJ/ref=sr_1_7?dchild=1&keywords=washboard&qid=1602467579&sr=8-7 :annoyed Actually, there are quite a few manual washing machines still on the market that do quite a good job (and are better than just a washboard.) They're usually marketed to long-term camping and off-grid situations. The manual part can be a handle or a foot pedal. I'm not providing links, because that's not what OP actually wants. I'd suggest looking to the basic models with fewer features. The less they tout features that say "automatic," the fewer chips are used....

I’ve had a Roth with contrafund and low price stock for decades and that account has appreciated more than any of my other accounts. I do realize much of that outperformance was probably earlier years. I’m always looking at potentially divesting them but haven’t been compelled to do so yet.

This fidelity page should confirm your questions. For a CMA type account: In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. At a minimum, there are generally five banks available to accept customer deposits, making customers eligible for nearly $1,250,000 of FDIC insurance. Anything in excess is put into money markets: The Money Market Mutual Fund Overflow component ("Money Market Overflow") of the FDIC Insured Deposit Sweep program, was added to ...

Does anybody use Fidelity Cash Management for business? Are you able to increase FDIC over $250k via their sweeping program to multiple banks?

What other solutions are available for small business, other than having multiple accounts and constantly moving money in and out to keep them all within $250k?

There is absolutely zero reason to work in an abusive environment. The environment and the offending people are not going to change and it isn’t going to get better.

I’d get the heck out ASAP. Afterwards a conversation with an employment attorney wouldn’t hurt. At a minimum you may very well be able to get unemployment comp even though you quit, as you could argue you were being forced out and working in an unethical and abusive work environment.

Wife and I are submitting an offer that is likely to be accepted based on conversations with sellers. We max our 401ks already. Would I be better off paying cash or taking a mortgage given the rate is a little under 7% and likely to go down in the future (not interested in opposing perspectives of that assumption)? Cash is currently in my taxable account. Just sold all stock at $18k loss, which I can buy back in should we decide the mortgage option. Offer Price: $500k Downpayment: 20% Rate: 6.9% Annual Real Estate Related Tax: $7,500 Fed Top Marginal: 24% We take the standard deduction and would likely continue to do so Again, we max our 401ks already and that would not change regardless of either option. I am genuinely confused in reading...

Hi all. DW is in a very difficult situation we're trying to navigate. She's mid-career, and part of the senior leadership team of her department (not a department head, or C-level). She's been at her company for a little over 2.5 years. It's been a long, hard journey that in hindsight, was not as advertised and this company was not a good fit. Live and learn, that part is ok. We make wrong turns in our career, and she's been looking for a new job since the end of last year. However, the combination of new executive leadership about 6 months ago (including her department head) and a series of situations over the past few months events have made it debilitating (and I don't use that word lightly) for her to go to work each day. Without getti...

Bought and put in use a small car for business in 2019. Initial cost $44,500. Here are the numbers in past. If they are wrong, I don't plan to amend but just want to calculate correct numbers for next few years. I assume that the vehicle will be fully depreciated on Dec 31, 2024. I am working on 2022 return. Turbo tax says that depreciation for 2022 AND 2023 is $0. Not sure why. Can you please guide me as to what numbers should be in the blanks below? I am using 200DB HY Year Business Use Depreciation deduction on 1120s 2019 69.56 18,100 12,590 (special depreciation) 2020 61.40 3,206 8,743 2021 65.10 8,448 2,087 2022 62.00 ?? ?? 2023 assume 65% ?? ?? 2024 assume 65% ?? ?? why is your 2020 deprecation 3206 and deduction 8743? I would have e...

It has its charms but it can get touristy and loud and partly tacky. You really kind of have to know what you want specifically to see and do. Don’t go there thinking you will go to a beach. Whatever beach they have there is pretty underwhelming.

A bus ride from Key West to Hollywood might take much of the day.

Article on 10 banks that could face trouble. Includes Boglehead favorite Ally bank

https://www.marketwatch.com/story/the-1 ... =home-page

I’m kind of slowly transitioning to electronic. I don’t keep new paper statements, I turn them off so they aren’t sent and occasionally I go online and download them just to have them. I still have a couple of file cabinets with old tax returns and some old statements. I culled out most of the detail and mainly kept the main forms. I still hold on to them for some unknown reason. Maybe eventually I’ll scan them. Too lazy to at this point. I also have some very old statements. Probably don’t need them but I hold on to them. Pretty much everything else I either toss/shred, or when I get it and I want to hold it for a spell I put it in a large drawer with a bunch of papers. Every year I go through that drawer and toss/shred 95% of what is in it.

I grew up behind a lawnmower, but as I approach 50 I'm beginning to reassess whether I shouldn't just pay somebody to take care of the mowing/edging/trimming etc. We live in a subdivision in Houston on a 8000sf lot with lots of beds. I do enjoy some lawn care, just not the 3-4 hours per week. I travel with my job (3-4 days gone per week) and always feel like I don't have enough time on the days off. I would just like more time to do the things I want to do, especially now that the kids are almost gone. Our income level/hourly wage more than dwarfs the cost of lawn care. I recently hired a pool company to take care of the pool, so maybe its just a trend..... My question is has any other Bogleheads reached this conclusion and do you have any...

Just a different perspective. Take it for what it’s worth. Evaluate if bankruptcy is an option. It may or may not be depending on the state. I’m going to assume her keeping a strong credit rating isn’t a priority. As to credit cards I have a young adult relative who spent a bunch of money there was no way she was able to pay off. Bankruptcy may or may not be in her future. But in a little less than two years they have gone to collections and are now sending settlement offers substantially below the debt face value. You may be able to sit on them and see what happens, or call them and tell them the situation. Often these credit card companies are pretty quick to negotiate and work out very low interest payment plans. Can you declare bankrup...

Many moons ago, I had to file Form 8606 for several years in arrears because the form was new and I did not know that I had to file such a form. Just for entertainment, here is a link to the very first form 8606. It was then a one page very simple and straightforward form. They have since added many sections to that form but did not bother to change the form title. https://www.irs.gov/pub/irs-prior/f8606--1987.pdf Several decades ago I contributed a very small non deductible IRA and failed to do an 8606. Later I figured out I should have, so I sent in an 8606 form with an explanation and apology for the omission. I never heard anything after that. For the first time in many years I did a Roth conversion this year and am trying to figure ou...

Just a different perspective. Take it for what it’s worth.

Evaluate if bankruptcy is an option. It may or may not be depending on the state. I’m going to assume her keeping a strong credit rating isn’t a priority.

As to credit cards I have a young adult relative who spent a bunch of money there was no way she was able to pay off. Bankruptcy may or may not be in her future. But in a little less than two years they have gone to collections and are now sending settlement offers substantially below the debt face value. You may be able to sit on them and see what happens, or call them and tell them the situation. Often these credit card companies are pretty quick to negotiate and work out very low interest payment plans.

jabberwockOG wrote: ↑Sun Feb 26, 2023 6:05 pm Suggest you set your iphone option to require passcode or faceID immediately. Also set Erase Data option - this will erase all data on your phone if passcode guessing attempts exceed 10 incorrect attempts. These options are under FaceID and Passcode setting section.

Not a good idea to have banking and investment apps on your phone.

There is a code and Face ID is set up. But as mentioned if Face ID doesn’t work the code will override it.

It seems like most here don’t think others getting the code is an issue. To me it doesn’t seem that difficult for parties that are truly determined to do it.

Not having banking apps would be a big inconvenience. In my case I see no need for brokerage company apps on phone.

[Thread merged into here --admin LadyGeek]

https://www.businessinsider.com/apple-n ... 2023-2?amp

https://www.wsj.com/articles/stolen-iph ... a-2c4a3be7

It seems if a thief can get your phone and your pass code they pretty much have keys to the kingdom. Typically you have passwords for apps saved in the phone, maybe some banks and other apps. Emails on phone. 2Fa usually comes to he phone or an app on the phone.

What can you do to reduce this risk? I don’t put brokerage accounts on phone but do banks.

What are you asking? They have fees. The fees are higher than you would pay at your brokerage, but they are not exorbitant. Put your money in a target date fund or the S&P 500 and roll it over when you leave. Whatever. What are you proposing to do instead? Invest in your taxable brokerage? I was looking for thoughts like this. Thanks. I would consider instead putting it in my taxable brokerage. I would not consider your taxable brokerage over your 401(k) unless fees were well over 1%, I was planning on staying at the company for twenty years, and I saw no hope of influencing the company to choose a lower cost plan or cover the fees. Note that the average fees for 401(k)s around the country are about 1%, they are just frequently paid by...

You might find a few cases where you have to pay 2.5% but get 2.6% or something like that, and the fee would be deductible. My guess is that deducting the fee as a business expense would mean you'd have to declare the cash back as income, but someone with more knowledge will tell us if that's the case. Cash back is not generally considered income for ordinary non-deductible expenditures. I have never heard of a requirement to report a credit card reward as income. I expect that would change the credit card industry. The the banks would probably be required to send out 1099 forms. Please let me know if you have seen a ruling on that. I don't know which is why I'd like someone who knows to comment. Obviously credit card cash back isn't norma...

It is all mental game playing. Lets say I drive 30 mins to go hiking. That 4 bucks in gas is clearly discretionary spending. Go to the grocery store and buy 20 meat instead o f8? That is also discretionary spending. Buying 200 dollar glasses instead of 40? You guessed it... What you call your spending doesn't matter. It is all about what you spend. Well I am frugal with respect to grocery shopping and eyewear. I buy prescription eyeglasses for $14 per pair online. I shop at 4 different stores once or twice per month (in a circular combined trip) and buy in bulk, freezing meats when they are on sale etc. (We shop at various stores because we keep a price book and buy everything for as little as possible.) We rarely eat $20/lb meat let alone...

Doesn't sound like an enjoyable year to me unless you have no choice. What's the point of just saving money for the sake of having more? Life's too short. I started too late. I used to live paycheck to paycheck, until 5 years ago. I really want to get this home paid off and have around $500k in retirement over the next 15 years. We'll draw on it later at no more than 4% and travel a couple times per year etc.. when he's no longer working. My net worth is only like $86k right now. I should have this home paid off within a couple years. I want at least a $50k emergency fund after that.. then we might travel once per year after we accomplish that. So maybe in about 5 or 6 years. Good for you. You’ve found something that works for you and take...

This is a huge wake up call for solo K owners. The Secure Act was partially paid for by a humongous 10 X increase in 5500 filing penalties. And apparently, the IRS intends to enforce these fines from the start. I can only guess how many taxpayers may be at risk. SEC. 403. INCREASED PENALTIES FOR FAILURE TO FILE RETIREMENT PLAN RETURNS. (a) In General.—Subsection (e) of section 6652 of the Internal Revenue Code of 1986 is amended— (1) by striking “$25” and inserting “$250”; and (2) by striking “$15,000” and inserting “$150,000”. (b) Annual Registration Statement And Notification Of Changes.—Subsection (d) of section 6652 of the Internal Revenue Code of 1986 is amended— (1) by striking “$1” both places it appears in paragraphs (1) and (2) an...

Any government services that I have seen that allow payments by credit card also charge a service fee that is higher than the 2% cash back that you might get. The only way to avoid being underwater on fees is to use it to qualify for sign-on bonus that requires a large amount to qualify. In some cases, the sign-on bonus can be in the range of 20-30% for things like Chase Reserve, Amex Platinum, etc. I have seen some people do this because they don't have enough organic spending to meet the qualification terms. Just note that it will likely cost you something and, of course, you need to qualify for those high rewards cards. You might find a few cases where you have to pay 2.5% but get 2.6% or something like that, and the fee would be deduct...

I have a small business that regularly pays fees to an agency in the Federal government (not the IRS). The fees can add up to a substantial amount over time. I am looking for a credit card that will maximize the benefits for government expenses. I would probably prefer a cash back card rather than travel rewards (I have not had much luck with travel rewards). I know the Fidelity card pays 2% on everything. Are there any better cards for this? Are there any cards that have a higher rate for government fees. I sometimes see the government fees categorized as "services". Are there any other strategies for paying government fees? It requires a little more effort but to really maximize you can sign up for the highest bonus business an...

Dup….

I have a small business that regularly pays fees to an agency in the Federal government (not the IRS). The fees can add up to a substantial amount over time. I am looking for a credit card that will maximize the benefits for government expenses. I would probably prefer a cash back card rather than travel rewards (I have not had much luck with travel rewards). I know the Fidelity card pays 2% on everything. Are there any better cards for this? Are there any cards that have a higher rate for government fees. I sometimes see the government fees categorized as "services". Are there any other strategies for paying government fees? It requires a little more effort but to really maximize you can sign up for the highest bonus business an...

Duplicate.

$1,000,000 with a 4% annual withdrawal rate. That’s $40k per year.

$1,000,000 with 4%~1% =3% is $30,000 per year.

You are giving up 25% of your annual safe withdrawal rate for the privilege of being with RJ.

Over 25 years that is $250,000 of inflation adjusted cash flow sacrificed.

Share that basic math with your wife. Chances are she is under the illusion that places like RJ sprinkle their magic and give superior returns. You should be able to see what is in the portfolio and chances are it isn’t anything special.

You could take the money and put it all in a vanguard life strategy fund.

Another way to look at it, RJ’s annual withdrawals before expenses would have to be 33% higher than if you just put it in a basic index fund.

billfromct wrote: ↑Wed Feb 22, 2023 6:08 pm

JBTX wrote: ↑Wed Feb 22, 2023 5:39 pm I prefer your current retirement account holdings in Target dates vs having it all in US large cap.

It would be helpful if you could explain why you prefer the current account holdings in “Target dates” vs having it all in US large cap.

•••••

I believe the Vanguard Total Stock Market Index is about 30% mid/small cap stocks.

bill

I think low cost target date funds are good choices for most people in tax advantaged accounts. They have an appropriate market weight diversified allocation and automatically rebalance towards age appropriate allocations.

OP’s proposed alternative scenario in those account was primarily a domestic large cap index fund. Even if it was a US only stock total market index fund I’d say the same thing.

I prefer your current retirement account holdings in Target dates vs having it all in US large cap.

I read the article and the rebuttal. I’m not sure what the big deal is. The article in question touts a factor- ish type portfolio for 50 years, which would have started in the early 70s. During the 70s with inflation a portfolio with some real estate, small cap, gold commodities and international would have done well compared to large cap U.S. stocks and bonds which did fairly poorly, depending on your start and end points. If you started in the early 80s you probably would have gotten a different story where stocks and bonds rode a 40 year tail wind of declining inflation and declining interest rates. So which portfolio is a superior portfolio for the future? I dont know. I dont find the portfolio particularly crazy. It somewhat resembles...

Well of course the absolute values are greater, but as a percentage of total wealth they are much smaller. And the latter matters more from a behavioral and emotional standpoint. Which is more painful - if I only have $5 and I am forced to give you $1, or when I have $10 and I am forced to give you $1? Btw, the global equities fund I am talking about is VT. Doesn't get lower expense than that. well then you might want to edit your post because VT doesn't cost 0.70% as you originally wrote). It costs 0.07%, not 0.70%. That's a big difference. Regardless of absolute or relative wealth I'd much rather have had $1.7 mil in my example above as oppposed to $1.4 mil. And finally, you have 17% less in the period of HIGH returns (net of fees in my ...

Here is a video where Bogle talks about it

https://youtu.be/oNdfOerxwok

Here is a site that tried to recreate the chart using different parameters.

https://seekingalpha.com/article/375236 ... t-on-table

Here is a reference on the BH wiki

https://www.bogleheads.org/wiki/Mutual_funds_and_fees

Just finished 1883 on paramount +. Excellent show. It is the back story of how the Dutton Family from Yellowstone arrived where they ended up. Sam Elliot is fantastic in his role. Overall much better than Yellowstone series which started good but has devolved into nonsense. Also Started and caught up with 1923. Also good, but not quite on the level of 1883 IMO. I enjoyed it too, but with these caveats: The characters adhered to modern values and sensibilities. Also everyone's hair was freshly shampooed and their teeth were perfect. Not likely in real life. And this plot hole: The transcontinental railroad was completed in 1869 . This was 1883 , fully fourteen years later. The characters could've avoided all the death and mayhem by booking ...

Just finished 1883 on paramount +. Excellent show. It is the back story of how the Dutton Family from Yellowstone arrived where they ended up. Sam Elliot is fantastic in his role. Overall much better than Yellowstone series which started good but has devolved into nonsense.

Also Started and caught up with 1923. Also good, but not quite on the level of 1883 IMO.

My kid lost his iPhone. I’m looking at IPhone XR refurbished replacements at Best Buy or Amazon between $220 and $300.