Search found 42 matches

by Patrick584
Tue Aug 27, 2019 8:32 pm
Forum: Personal Investments
Topic: Mega 529s!!
Replies: 13
Views: 2041

Re: Mega 529s!!

If you are the beneficiary, you do not use any gift tax allowance. I understand that one can change beneficiary of an existing 529 account. If one can contribute more than gift tax allowance to own 529 and change the beneficiary few years after, does one have to pay gift tax at that later time or n...
by Patrick584
Fri Jun 14, 2019 8:33 pm
Forum: Personal Finance (Not Investing)
Topic: [Proposed changes to 401(k) and IRAs, SECURE Act]
Replies: 89
Views: 4958

Are existing stretch IRAs safe?

Details on the Secure act are a little scarce. It looks like the elimination of the stretch IRA will only apply to future dead people and existing stretch IRAs can continue indefinitely. Is this correct.
by Patrick584
Sat Apr 20, 2019 7:38 pm
Forum: Personal Investments
Topic: Absolute Beginner Question
Replies: 11
Views: 1304

Re: Absolute Beginner Question

Advisor fees/fees in general are terrible for a portfolio because they are a large fixed expense tied to assets with volatile returns. It’s not as simple as comparing the expected returns to the fees I.e. 5% real return vs 1+% fees because for a high fee portfolio, you should shift your AA to fixed ...
by Patrick584
Fri Apr 19, 2019 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: How to save for a down payment in ~5 years?
Replies: 6
Views: 1048

Re: How to save for a down payment in ~5 years?

I disagree with above advice. If a single house in the entire world will be for sale at a fixed price in 5 years, and you will be homeless if your down payment declines in value then maybe not equities. It sounds more like you have flexibility in future housing in which equities are a great way to e...
by Patrick584
Fri Apr 19, 2019 7:44 pm
Forum: Personal Investments
Topic: Asset Allocation - 34 year old worth $1.2M
Replies: 21
Views: 3388

Re: Asset Allocation - 34 year old worth $1.2M

It's also kinda tough to imagine a scenario like with Japan, where the market doesn't recover at all for many decades. The negative return for many decades is only true for people who bought in with a lump sum right at the very top. If people invested in the few years leading up to the peak, they s...
by Patrick584
Thu Apr 18, 2019 8:19 pm
Forum: Personal Investments
Topic: Asset Allocation - 34 year old worth $1.2M
Replies: 21
Views: 3388

Re: Asset Allocation - 34 year old worth $1.2M

Hedge your bets. Pay off the mortgage. Put half of the remainder in the market now. Put the rest in monthly for a year. I can’t figure out why so many Bogleheads support this detrimental strategy of dollar cost averaging. This strategy distances your portfolio from the efficient frontier because it...
by Patrick584
Thu Mar 07, 2019 9:04 pm
Forum: Personal Finance (Not Investing)
Topic: 529 non-qualified withdrawal question
Replies: 10
Views: 693

Re: 529 non-qualified withdrawal question

The 529 penalty is actually not that steep and there is some flexibility around changing beneficiaries. Since the is no tax drag, there is a time horizon where TSM in 529 with taxes and penalties will outperform TSM in taxable. Still preferable to use other tax shelters.
by Patrick584
Mon Mar 04, 2019 8:33 pm
Forum: Personal Investments
Topic: Which shares to sell first in taxable account?
Replies: 9
Views: 1454

Re: Which shares to sell first in taxable account?

The 0% capital gains rate is an incredible deal that you may not see again as long as you both work. It is a double win because you are saving by realizing gains a very low tax burden and you are getting out of a bad fund. I would do tIRAs instead of Roths if you can since this is such a deal. If yo...
by Patrick584
Sun Mar 03, 2019 8:33 pm
Forum: Personal Investments
Topic: When does the power of compounding interest really kick in?
Replies: 67
Views: 9392

Re: When does the power of compounding interest really kick in?

Compounding interest starts right away. Certainly the impact is more noticeable over time. An example to visualize compounding interest is time to double value. At 10% interest, how long does it take for a asset with reinvesting interest to double? Not 10 years, but 7 years. I would call that a big ...
by Patrick584
Sun Mar 03, 2019 5:30 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401k unqualified principal withdrawals
Replies: 8
Views: 573

Re: Roth 401k unqualified principal withdrawals

Thanks again Alan. A good point that the financially savvy recognize that Roth accounts offer incredible flexibility throughout life and dollars are better left in these accounts. It also would be a good idea to add this to my HSA tracking files. Regarding form 8606, it’s hard to understand what ins...
by Patrick584
Sun Mar 03, 2019 2:29 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401k unqualified principal withdrawals
Replies: 8
Views: 573

Re: Roth 401k unqualified principal withdrawals

Thanks Alan for the thorough response. It sounds like these accounts are favorable for early principal withdrawals, but good bookkeeping is essential. I am working with the major custodians, Vanguard, Schwab and Fidelity. Is it practical to think that they have the accounting so if I need non qualif...
by Patrick584
Sun Mar 03, 2019 6:58 am
Forum: Personal Finance (Not Investing)
Topic: Roth 401k unqualified principal withdrawals
Replies: 8
Views: 573

Re: Roth 401k unqualified principal withdrawals

In general, there is no “cost basis” inside a 401K. There are two separate accounts, one for pre-tax assets and one for after-tax assets. Rollovers move the contents of a pre-tax account into a traditional IRA or the contents of an after-tax account into a Roth IRA. Be aware that withdrawals from 4...
by Patrick584
Sat Mar 02, 2019 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401k unqualified principal withdrawals
Replies: 8
Views: 573

Roth 401k unqualified principal withdrawals

I’m designing my finances to be flexible and am struggling with the details of withdrawals for Roth and Roth 401k accounts. Particularly, whether only principle can be withdrawn and how principle is determined. I recently learned that unqualified withdrawals from 529 plans don’t allow principle only...
by Patrick584
Tue Feb 19, 2019 9:07 pm
Forum: Personal Consumer Issues
Topic: Trailer towing capacity questions
Replies: 50
Views: 2510

Re: Trailer towing capacity questions

This reminds me of a funny story. I dug up a garden and posted the landscaping rock on Craigslist. A guy showed up with a Saturn pulling a utility trailer~ 5x10 with two foot sides. He filled it to the brim with the rock. The trailer was easily twice the car weight. I suggested such, but he happily ...
by Patrick584
Mon Feb 18, 2019 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: Car purchase, income ratio
Replies: 22
Views: 1918

Re: Car purchase, income ratio

Even though he didn’t follow it, I like Financial Samari’s number. Car cost < 1/10th annual income. Cars are a great way to reduce wealth. Think of the opportunity costs of that 46k. You could accomplish the same thing for much less.
by Patrick584
Thu Feb 14, 2019 9:44 pm
Forum: Personal Investments
Topic: Repay 401k loan or mega back door roth?
Replies: 18
Views: 896

Re: Repay 401k loan or mega back door roth?

If you are reliable and a big saver, the mega back door. If you are financially flaky, the loan. The back door gives more access to shelters, but an outstanding loan is a liability. If you lost your job, could you avoid penalties?
by Patrick584
Tue Feb 12, 2019 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Can I file jointly with my girlfriend
Replies: 32
Views: 4274

Re: Can I file jointly with my girlfriend

Yes, if you get married within the tax year. Great tax shelter.
by Patrick584
Mon Feb 11, 2019 9:03 pm
Forum: Personal Consumer Issues
Topic: How many hours do you work and what do you outsource
Replies: 88
Views: 8134

Re: How many hours do you work and what do you outsource

One more thing: Socks. I have only black gold-toe socks. They all match, so I never have to match up socks. I can pull any two clean black socks off the rug of the dining room and put them on. Yes, I have become a huge fan of the black gold toe socks. 1/4 high? I use to do white socks and they woul...
by Patrick584
Sun Feb 10, 2019 8:51 pm
Forum: Personal Investments
Topic: Portfolio Checkup + MegaBackdoor Roth?
Replies: 5
Views: 656

Re: Portfolio Checkup + MegaBackdoor Roth?

Yes, you should do a mega back door roth up to the limit. Despite similar names I’m pretty sure they are independent. This is a great tax shelter for big savers that will give huge tax savings for many years. If your 401k plan is good, there are modest benifits to keeping in 401k. I’ve heard that se...
by Patrick584
Wed Feb 06, 2019 8:51 pm
Forum: Personal Finance (Not Investing)
Topic: Crazy lady backs into my car...don't think she will pay me out of pocket
Replies: 103
Views: 10420

Re: Crazy lady backs into my car...dont think she will pay me out of pocket

I don’t think it’s fair that someone is liable for multiple days pay because they put a scratch in your fragile car. ..... It costs you nothing to shrug it off and you would bring great relief to this woman. I don’t think it’s particularly fair that you think people ought to be able to damage other...
by Patrick584
Tue Feb 05, 2019 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Crazy lady backs into my car...don't think she will pay me out of pocket
Replies: 103
Views: 10420

Re: Crazy lady backs into my car...dont think she will pay me out of pocket

You are entitled to your own priorities, but I think people care way too much about the cosmetics of their car finish. Cars are outside and they get hit by things. I don’t think it’s fair that someone is liable for multiple days pay because they put a scratch in your fragile car. It’s like the class...
by Patrick584
Sat Feb 02, 2019 8:55 pm
Forum: Personal Finance (Not Investing)
Topic: Thoughts? What to do? [When can I buy a house?]
Replies: 9
Views: 961

Re: Thoughts? What to do? [When can I buy a house?]

You probably shouldn’t buy a house. Houses cost a lot more than people think. An analogous purchase is a new truck. You will get utility out of it, but it will cost a lot of money that otherwise could go towards savings. Houses depreciate and have numerous expenses. Plan on spending 2% of list value...
by Patrick584
Tue Jan 29, 2019 8:09 pm
Forum: Personal Consumer Issues
Topic: No Heat! (Live in Michigan)
Replies: 47
Views: 4971

Re: No Heat! (Live in Michigan)

Your house will get cold, but not that cold. A hotel would be more comfortable, but enough coats and blankets will keep you warm. Your house will be 10-20 degrees warmer than outside and a couple of safely placed eclectic heaters will get you even warmer. Make sure to not overload circuits. People c...
by Patrick584
Mon Jan 21, 2019 8:41 pm
Forum: Personal Investments
Topic: Multiple 401K accounts
Replies: 3
Views: 312

Re: Multiple 401K accounts

I have a plan with an old employer as well as my current employer. There are pros and cons. Rollovers to IRAs or other plans are a one way street. If one of your plans makes bad changes, you have flexibility. Also, the 401k has some benifits over IRAs - loans and certain legal protections. Cons incl...
by Patrick584
Mon Jan 21, 2019 8:30 pm
Forum: Personal Investments
Topic: Tax Gain Harvest vs Roth Conversions?
Replies: 8
Views: 569

Re: Tax Gain Harvest vs Roth Conversions?

The situation for many people is that their retirement assets warrant staying at the top of the 12% bracket throughout retirement. The difference between these two choices at low vs high income is 15% tax rate reduction for cap gains vs 10% reduction for conversion. I would say if your income will b...
by Patrick584
Sat Jan 12, 2019 7:57 pm
Forum: Personal Investments
Topic: Biggest Investment Mistake
Replies: 219
Views: 20378

Re: Biggest Investment Mistake

When I was 11 a stock brocker came to our class and told us that he owned Intel and it had gone up 10 fold in the few years he held it. My parents helped me open an Etrade account and invest the 3000$ that I had saved (with parental match). I put it all in Intel and a month later Intel had the bigge...
by Patrick584
Wed Jan 09, 2019 8:45 pm
Forum: Personal Finance (Not Investing)
Topic: Paid off Mortgage...what to do next
Replies: 32
Views: 2858

Re: Paid off Mortgage...what to do next

A point which has not been made is that you can max out your 401k without making even contributions throughout the year. Many take do front loading, but you could do backloading while you handle the higher priorities. An emergency fund should be based on the risk and severity of accessing alternate ...
by Patrick584
Wed Nov 07, 2018 9:36 pm
Forum: Investing - Theory, News & General
Topic: 426% return if there is a recession in 2019?
Replies: 23
Views: 4552

Re: 426% return if there is a recession in 2019?

Bogleheads encourage fiscal discipline, and fun money is poor discipline. Endearment of this behavior is contrary to Boglehead’s philosophy and doesn’t have a place on this forum. Please don’t promote such fiscal recklessness.
by Patrick584
Wed Nov 07, 2018 9:26 pm
Forum: Personal Investments
Topic: Payoff Mortgage
Replies: 12
Views: 1626

Re: Payoff Mortgage

500k in MM? Why wouldn’t you pay it all from this fund and keep money in Roth. You can hold MM in Roth and it is just as liquid and you don’t have to pay taxes on the earnings. Tax shelters should be utilized as much as you can.
by Patrick584
Sat Oct 27, 2018 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: Separate HSA for spouse
Replies: 6
Views: 842

Re: Separate HSA for spouse

I have a related question. HSA owners can’t change, but can I have the contributions deducted from my pay sent to my Wife’s HSA bank account? It’s clear that contributions outside of payroll could go to either spouse, but this payroll question would be useful for minimizing number of accounts.
by Patrick584
Tue Oct 16, 2018 8:19 pm
Forum: Personal Investments
Topic: "MegaMillions and Powerball jackpots combined are now $1B" - Good investment?
Replies: 55
Views: 3295

Re: "MegaMillions and Powerball jackpots combined are now $1B" - Good investment?

https://dqydj.com/mega-millions-expected-value-calculator/ You have a 1 in 24 chance of winning something. Minimum return on a win is 100% (lowest payout on a $1 ticket is $2). Of course expected return is >0 but must be <1 otherwise the state would be losing money. If expected return was 0 no one ...
by Patrick584
Sat Oct 06, 2018 11:14 am
Forum: Personal Finance (Not Investing)
Topic: Complicated inherited IRA situation
Replies: 8
Views: 1158

Re: Complicated inherited IRA situation

Thanks for the input. The response of taking the entire account as a distribution is probably the simplist thing to do. I was considering combining it with the inherited IRA I have at Vanguard. It’s unfortunate to take money out of tax shelters after working so hard to put money in. I’m fairly young...
by Patrick584
Thu Oct 04, 2018 8:41 pm
Forum: Personal Finance (Not Investing)
Topic: Complicated inherited IRA situation
Replies: 8
Views: 1158

Complicated inherited IRA situation

I recently learned of an inherited IRA account that I inherited in 2005. It only has a few thousand dollars. I think it was the profit sharing portion for a company my father worked at for a few years. I believe the issue with the account disappearing was my social security number was off by one dig...
by Patrick584
Wed Aug 29, 2018 8:15 am
Forum: Investing - Theory, News & General
Topic: Most commonly misused/misunderstood investing terms and concepts (on BH forum)
Replies: 220
Views: 13071

Re: Most commonly misused/misunderstood investing terms and concepts (on BH forum)

Another one might be “horrible” 401k plans. People often write about their horrible 401k plan expenses, but then it turns out to be 0.5 or so. It ain’t no admiral share er, but it ain’t horrible either. Interesting post. I happened to post a couple of days ago saying that a 0.46 ER on an S and P 50...
by Patrick584
Tue Aug 28, 2018 8:28 pm
Forum: Personal Finance (Not Investing)
Topic: 28/F - First time home buyer needs advice on saving more
Replies: 39
Views: 4148

Re: 28/F - First time home buyer needs advice on saving more

Not the OP, but curious if you'd be willing to share more about what has happened/why you seem to regret your decision? Nothing has happened that is out of the ordinary. Buying a house is simply lifestyle creep in disguise. The conventional wisdom (which consists of popular sayings with no basis in...
by Patrick584
Mon Aug 27, 2018 8:20 pm
Forum: Personal Finance (Not Investing)
Topic: 28/F - First time home buyer needs advice on saving more
Replies: 39
Views: 4148

Re: 28/F - First time home buyer needs advice on saving more

Not the OP, but curious if you'd be willing to share more about what has happened/why you seem to regret your decision? Nothing has happened that is out of the ordinary. Buying a house is simply lifestyle creep in disguise. The conventional wisdom (which consists of popular sayings with no basis in...
by Patrick584
Mon Aug 27, 2018 7:32 pm
Forum: Personal Finance (Not Investing)
Topic: Getting out of vacation club contract
Replies: 10
Views: 1948

Re: Getting out of vacation club contract

My impression is that these “timeshares” are terrible and are sold by the sleaziest sales people. These are the ones that call you offering a cheap night at a resort and the make you sit through 2 hours of high pressure sales pitch for a very expensive vacation plan. They have no interest in you get...
by Patrick584
Fri Aug 24, 2018 8:45 pm
Forum: Investing - Theory, News & General
Topic: Best way to sell long held mutual fund
Replies: 13
Views: 1573

Re: Best way to sell long held mutual fund

I think not selling is probably your best bet. Hypothetically if unrealized gains are 30% and the mariginal cost (marginal tax + loss of govt programs) is 25% then selling reduces the value of this asset by 7.5%. Unless the fund had a really high ER, you would never make up for this haircut. Deferri...
by Patrick584
Tue Jun 19, 2018 8:48 pm
Forum: Investing - Theory, News & General
Topic: Why are expected returns so much lower than historical returns?
Replies: 158
Views: 14508

Re: Why are expected returns so much lower than historical returns?

Reversion to the mean. It’s just that simple. If history shows 9-10% returns and recent returns are 2x -3x times that, you have to have a period of below average returns to get back to average. False. The concept of reversion to the mean is that by taking a larger sample size it will likely look mo...
by Patrick584
Sat Apr 14, 2018 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off (2nd home) debt or invest more?
Replies: 8
Views: 851

Re: Pay off (2nd home) debt or invest more?

With the mortgage interest basically going away, the choice is obvious. You are choosing between paying a 4 % mortgage and taxable investing. If you treat the mortgage as a 4% guaranteed tax free return on investment it is a much better investment than 4-5% bond returns that are subject to taxes. Yo...
by Patrick584
Sat Apr 14, 2018 10:45 am
Forum: Investing - Theory, News & General
Topic: Why are expected returns so much lower than historical returns?
Replies: 158
Views: 14508

Re: Why are expected returns so much lower than historical returns?

Reversion to the mean. It’s just that simple. If history shows 9-10% returns and recent returns are 2x -3x times that, you have to have a period of below average returns to get back to average. False. The concept of reversion to the mean is that by taking a larger sample size it will likely look mo...
by Patrick584
Fri Apr 13, 2018 8:02 pm
Forum: Personal Investments
Topic: Crazy to start 529 without kids??
Replies: 49
Views: 7220

Re: Crazy to start 529 without kids??

I started a 529 plan before having a kid and I’m glad I did. In addition to the flexible ways to spend it on education the penalty for withdrawal is not that bad and if far enough out it could be less than the impact of ongoing dividends & capital gains taxes. If it is money earmarked for education ...