Search found 3351 matches

by AlphaLess
Sun Mar 10, 2024 7:20 pm
Forum: Investing - Theory, News & General
Topic: Can we expect TBM funds to outperform inflation?
Replies: 62
Views: 5108

Re: Can we expect TBM funds to outperform inflation?

Kevin M wrote: Sun Mar 10, 2024 9:55 am
nisiprius wrote: Sat Mar 09, 2024 3:26 pm From the average returns of stocks, bonds, and Treasury bills (i.e. "cash"), over the full time period 1900-2021, have all kept up with inflation. Source: Credit Suisse Global Investment Returns Yearbook, 2022 summary edition. As you see, bonds had a real return--i.e. beat inflation--by 2% per year.

Those are long-term bonds.
Right. This is why long-term TIPS are a good deal now: the real yield is about 2%, so why take the risk of unexpected inflation with nominal bonds when you can get the long-term average real yield with TIPS without that risk?
Bingo!

With the 30-year TIP at 2.0% real yield, that is heckuva deal.
by AlphaLess
Sun Mar 10, 2024 7:14 pm
Forum: Investing - Theory, News & General
Topic: Can we expect TBM funds to outperform inflation?
Replies: 62
Views: 5108

Re: Can we expect TBM funds to outperform inflation?

No. Not unless they are TIPS bonds, bought and held to maturity. Nominal bonds can and do lose to inflation. There is an implicit expectation built in with higher rates, although that is not guarantee if inflation spikes up more than expected during your holding period. Buy TIPS if you want guarantee. I'm currently using I Bonds, not TIPS, but the reason I am is because of my pessimistic assumption that Bonds will lose to inflation in the long term. I understand there's no guarantee, but if we lower the bar to "reasonable expectation" does it clear that? For example, have intermediate us bond returns outpaced inflation historically? And if so can we identify a reason for that or did it "just happen that way"? Generally,...
by AlphaLess
Sun Mar 03, 2024 5:03 pm
Forum: Personal Consumer Issues
Topic: When do electric cars stop making sense?
Replies: 210
Views: 16091

Re: When do electric cars stop making sense?

IMO, electric cars never make sense.

The only 3 things that make sense:
- walking,
- biking,
- public transit.
by AlphaLess
Thu Feb 22, 2024 10:53 pm
Forum: Personal Investments
Topic: 2001 Series I Savings Bonds - potential tax issue at maturity
Replies: 25
Views: 3729

Re: 2001 Series I Savings Bonds - potential tax issue at maturity

fuddbogle wrote: Wed Apr 21, 2021 1:15 pm Just an FYI, those should have a 3.0% fixed rate. I have a small amount of 10/31 I-Bonds. It would be hard for me to let them go prior to the 30 year mark.
Golden!
by AlphaLess
Fri Feb 02, 2024 10:09 pm
Forum: Investing - Theory, News & General
Topic: With interest rates this high are you increasing your equity return expectations?
Replies: 83
Views: 10719

Re: With interest rates this high are you increasing your equity return expectations?

I certainly am not. I plan for barely any real return, always have. Dot com, GFC, and whatever is going on now, has jaded me. We invest many thousands of dollars every month, equities and bonds, without worrying about things. We invest over $2M a year, and we worry a lot. Being paranoid is the best way to survive, as an investor. Yeah, if I was investing that much per year, I would also worry for those three years. After that I would be at 65/35 and be worrying only about needing to decide on 27 or 36 holes tomorrow. Good point. I don't play holes. The biggest worry, should I be in the position to play holes, is what steps to follow to have 50-70 years of productive, active, and interesting life. Certainly understand that. However, how muc...
by AlphaLess
Fri Feb 02, 2024 9:01 pm
Forum: Investing - Theory, News & General
Topic: With interest rates this high are you increasing your equity return expectations?
Replies: 83
Views: 10719

Re: With interest rates this high are you increasing your equity return expectations?

Silverado wrote: Mon Oct 30, 2023 7:43 pm
AlphaLess wrote: Sun Oct 29, 2023 10:38 pm
Silverado wrote: Sun Oct 29, 2023 6:52 pm I certainly am not. I plan for barely any real return, always have. Dot com, GFC, and whatever is going on now, has jaded me. We invest many thousands of dollars every month, equities and bonds, without worrying about things.
We invest over $2M a year, and we worry a lot.

Being paranoid is the best way to survive, as an investor.
Yeah, if I was investing that much per year, I would also worry for those three years. After that I would be at 65/35 and be worrying only about needing to decide on 27 or 36 holes tomorrow.
Good point. I don't play holes.
The biggest worry, should I be in the position to play holes, is what steps to follow to have 50-70 years of productive, active, and interesting life.
by AlphaLess
Fri Feb 02, 2024 9:00 pm
Forum: Investing - Theory, News & General
Topic: With interest rates this high are you increasing your equity return expectations?
Replies: 83
Views: 10719

Re: With interest rates this high are you increasing your equity return expectations?

White Coat Investor wrote: Tue Oct 31, 2023 12:37 am
AlphaLess wrote: Sun Oct 29, 2023 10:38 pm
Silverado wrote: Sun Oct 29, 2023 6:52 pm I certainly am not. I plan for barely any real return, always have. Dot com, GFC, and whatever is going on now, has jaded me. We invest many thousands of dollars every month, equities and bonds, without worrying about things.
We invest over $2M a year, and we worry a lot.

Being paranoid is the best way to survive, as an investor.
Mo money mo problems I guess. Still seems sad. What do you worry about specifically?
Worry is mostly around tail risk management.
by AlphaLess
Fri Feb 02, 2024 8:58 pm
Forum: Personal Investments
Topic: I gained 21% this year so far in my IRA. What should I do?
Replies: 49
Views: 6168

Re: I gained 21% this year so far in my IRA. What should I do?

Try Vegas. Roulette. Bet on number 13. If it comes up, you will 35x your money.
by AlphaLess
Sun Oct 29, 2023 10:47 pm
Forum: Personal Finance (Not Investing)
Topic: What net worth are you targeting at age 90?
Replies: 126
Views: 16972

Re: What net worth are you targeting at age 90?

Beensabu wrote: Sun Oct 29, 2023 9:53 pm
nonnie wrote: Sun Oct 29, 2023 9:02 pm
Beensabu wrote: Sun Oct 29, 2023 7:58 pm I fully expect to either be dead by then or wish I were.

I don't imagine anything past 2070 to be remotely acceptable vs. current living standards.
I can't imagine being alive in 2070-- I can barely imagine 2030 (I'm 81).
Honestly, I have a hard time seeing past 2050.

It's not about tech. I think we're just going to run out of everything, and so it's going to suck for all but a very few.
This is true. We could see a mass extinction event as half or more of humanity perishes.

The choices are:
- die before then, OR
- accumulate enough to be part of the very few.
by AlphaLess
Sun Oct 29, 2023 10:45 pm
Forum: Personal Finance (Not Investing)
Topic: What net worth are you targeting at age 90?
Replies: 126
Views: 16972

Re: What net worth are you targeting at age 90?

Many retirement calculators ask for a terminal age for their simulations, and the assets you'd like to have then. I generally use 90 as my terminal age. Personally, I'm a 50 year old single male in average health (healthy lifestyle, but some chronic health conditions). The actuarial tables say my expected lifespan is 80, and that's about when I plan on kicking the bucket. The odds of making it to 90 are low, but easily 10% or so. What I'm struggling with are a) How much money I'd like to wind up with at 90, and b) If I should include home equity in any way. What assets do you plan to have "at the end of the simulation", and does home equity play a role in lowering your desired financial assets then? Expected lifespan at 80 => 50%...
by AlphaLess
Sun Oct 29, 2023 10:38 pm
Forum: Investing - Theory, News & General
Topic: With interest rates this high are you increasing your equity return expectations?
Replies: 83
Views: 10719

Re: With interest rates this high are you increasing your equity return expectations?

Silverado wrote: Sun Oct 29, 2023 6:52 pm I certainly am not. I plan for barely any real return, always have. Dot com, GFC, and whatever is going on now, has jaded me. We invest many thousands of dollars every month, equities and bonds, without worrying about things.
We invest over $2M a year, and we worry a lot.

Being paranoid is the best way to survive, as an investor.
by AlphaLess
Sun Oct 29, 2023 10:36 pm
Forum: Investing - Theory, News & General
Topic: With interest rates this high are you increasing your equity return expectations?
Replies: 83
Views: 10719

Re: With interest rates this high are you increasing your equity return expectations?

Since I started modeling my portfolio returns I’ve kept my equity returns expectations at 7% nominal. But when I started doing this, bonds were returning basically nothing. Now I can buy a 20 year treasury paying 5.2% nominal with no risk when held to maturity. Should I keep my equity expectation at 7%? Or should I bump it up? If so, by how much? If not, why not? This is imminently actionable, as it may lead me to change my AA to hold (a lot) more bonds. This is an excellent question. IMO, there are two ways to look at this. The first is the Case-Shiller PE, which stands at 28x as of Oct 2023. That translates to real yield of 3.57%. Add in inflation expectation of 2.85%, and you get something like 6.4% of expected equity returns (before in...
by AlphaLess
Sat Oct 21, 2023 10:24 pm
Forum: Investing - Theory, News & General
Topic: Investing 100% into TQQQ
Replies: 231
Views: 36282

Re: Investing 100% into TQQQ

Hi, since last October I’ve been DCA into TQQQ. I think I’ll put a large amount into TMF or TLT leaps soon as well (very short term, long term still all TQQQ). My hypotheses are the underlying trend that we are in a deflationary environment hasn’t changed, and that the recent supply shock + government spending is the primary driver for current inflation. Inflation and rates will eventually come down and tech dominance will persist. Regardless of those assumptions is this a bad idea? I’ve been playing around with 100 QQQ -200 cashx and investing 3x QQQ with 5-8% interest rates (corresponding to 3.5-6.5% LIBOR rates) on PV and this strategy seems to rarely do that much worse than just SPY. There are large drawdowns but usually eventual recov...
by AlphaLess
Sat Oct 21, 2023 10:19 pm
Forum: Personal Investments
Topic: How would you define ‘cash’ ?
Replies: 60
Views: 7272

Re: How would you define ‘cash’ ?

I personally prefer Benjamins, but denominations of other Presidents are also acceptable.

I don't consider Russian rubles cash. It's more like trash.
by AlphaLess
Tue Sep 12, 2023 9:26 pm
Forum: Investing - Theory, News & General
Topic: Does Anyone Actually Run Down Funds in Retirement?
Replies: 361
Views: 49543

Re: Does Anyone Actually Run Down Funds in Retirement?

Of all the retirees I know who follow a reasonable SWR (<4%), no one's financial assets are getting depleted. I get that a retiree doesn't necessarily want to watch their accounts dwindle to zero net worth. However, everyone I know has stable or increasing net worth - even into advanced years. On one hand, good news not to deplete assets. On the other hand, are retirees leaving too much on the table - meaning they could fly business instead of economy, take that special vacation, play a round of golf at Pebble Beach, drive a better car, etc? Judging by spending, liquidity, and other preferences of bogleaheads, as well as their conservatism, I am guessing that bogleheads end up with more money than needed. I can think of the boglehead life ...
by AlphaLess
Tue Sep 12, 2023 8:00 pm
Forum: Personal Investments
Topic: How do you determine your "X"?
Replies: 52
Views: 5998

Re: How do you determine your "X"?

I get the 25x, 30x, 50x, etc. on expenses saved for a "safe" retirement. However, how do you determine your "X" if your spending can be very flexible year to year during retirement? For example, if you could easily live on $60k a year, but some years you may spend $100k due to vacations or other potential expenses, what value do you use for your "X"? Well, you compute minimum comfortable retirement spend amount: MS. This includes, for example, once-every 8 year car purchase, and once every 15 year remodel of the kitchen. You may buy the car outright cash, or on payments, or whatever, but even if buying outright, you can amortize the expense over 8 years. For the kitchen remodel, you should amortize over 15 yea...
by AlphaLess
Sat Sep 09, 2023 9:14 pm
Forum: Personal Investments
Topic: Fidelity wealth management
Replies: 22
Views: 3300

Re: Fidelity wealth management

livesoft wrote: Sat Sep 09, 2023 3:29 pm I would have one or both of our children involved. Do you have competent children? If so, they are going to be involved when their parents' health declines anyways, right?
GOLDEN!
by AlphaLess
Sat Sep 09, 2023 9:12 pm
Forum: Personal Investments
Topic: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?
Replies: 209
Views: 81010

Re: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?

rkhusky wrote: Sun Aug 13, 2023 5:43 pm
EnjoyIt wrote: Sun Aug 13, 2023 1:19 pm Bonds are technically my cash like equivalent and I have 30% of my wealth in bonds. That comes out to 7.5 years of current living expenses and ~15 years of fixed/mandatory expenses. This is what keeps my emotions in check.
Bonds are not cash or cash-like, unless one is speaking of very short term bonds, like less than a year duration, and more like 3-month or 6-month.
Indeed. The cash-like bonds are under 1-year.
Also, I-bonds are cash-like. Despite their 30-year duration, you can cash them out at face value + interest.

Thus, I-bonds are a SPECIAL type of bond.
by AlphaLess
Sat Sep 09, 2023 9:09 pm
Forum: Investing - Theory, News & General
Topic: What do you think of this "Updated Trinity Study"?
Replies: 24
Views: 4854

Re: What do you think of this "Updated Trinity Study"?

Any SWR is just a way to decide to get serious about figuring out if you have enough. What will your spending in retirement be? It won't be what it is when working. Taxes are different, health care expenses are different, things you spend on are in some cases different. Make a retirement spending list and you can still use that with your SWR number because that's the spending you want to document. Next, say you have a number of 33 times spending. Well, great. But say you and your spouse are just 35. You have 3 kids to put through college and you really want them to go to the college you love and graduated from where you met your spouse who also graduated from there. By the time the kids get to college age, the cost per year will be roughly...
by AlphaLess
Sun Aug 13, 2023 3:52 pm
Forum: Investing - Theory, News & General
Topic: We need to talk about Vanguard Wellesley ( VWIAX )
Replies: 135
Views: 31202

Re: We need to talk about Vanguard Wellesley ( VWIAX )

In my opinion, a fund like this is a poor choice.

Primary reason:
- tax inefficiency.

Every dollar that I invest goes into one of:
- ROTH bucket,
- pre-tax (traditional) bucket,
- after-tax bucket.

In each bucket, there is strong preference for specific type of asset.

E.g.:
- pre-tax gets taxable bonds (Treasuries),
- ROTH gets equities,
- after tax, the largest, can get either equities or munis (tax-exempt bonds), but not taxable bonds,

A bundled fund such as this one is a poor fit, and will never be part of my portfolio.
by AlphaLess
Sun Aug 13, 2023 3:18 pm
Forum: Personal Investments
Topic: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?
Replies: 209
Views: 81010

Re: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?

OP, In retirement, you should keep 2 to 3 years of expense in cash. Then, you can "Sleep Well At Night" (SWAN) regardless of whatever going on with the stock market. And, that gives you maximum flexibility in tax management. You can withdraw at the most tax efficient time and method. That should worth a fair amount of money to you. KlangFool KlangFool: are you sure this advice is sound? Many people retire with assets equal N times their yearly spend. Depending on age, and other circumstances, that N may be high (30), or low (12). Are you sure that someone with 12x assets over yearly spend should keep 2-3 years of spend in cash? What if cash is yielding 0%? If someone retired with 12X, the person is in trouble. 2 to 3X in cash wil...
by AlphaLess
Sun Aug 13, 2023 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Tax strategies for high income
Replies: 86
Views: 15208

Re: Tax strategies for high income

Have your spouse become a real estate professional, buy an apartment complex, deduct depreciation. When you sell, 1031 and start the process over again. Can you elaborate a bit more on this? Is the real estate professional part to be able to offset depreciation against W2 income? Yes, provided at least 750 hours are spent in real estate and 50% of their time generating income comes from real estate endeavors. That's why it's very hard for working spouses to qualify, but easy for a stay-at-home spouse. Example: - spouse one makes $5M a year in a W-2 job, - spouse two is a part time real estate agent and makes $X in commissions (net of costs, etc), - spouse two has a rental generating $Y per year in depreciation losses. Your 50%: does that r...
by AlphaLess
Sun Aug 13, 2023 10:19 am
Forum: Personal Investments
Topic: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?
Replies: 209
Views: 81010

Re: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?

bltn wrote: Sun Aug 13, 2023 9:47 am
rkhusky wrote: Sat Aug 12, 2023 10:13 am I'm not missing the point. There is such a thing as an irrational fear. Life savings buried in the backyard is not the right answer, even if it makes that person comfortable.
If one disregards a retired investor s concern for safety, then maximal returns is the "right" answer.
The right answer is "maximal expected sharpe".

Suppose Max_Ret is your portfolio (Maximal return), and Max_Sharpe (Maximal return) is mine.

I can slightly leverage Max_Sharpe to have the SAME dollar volatility as yours, but HIGHER return.

Thus, your portfolio is inefficient relative to mine.
by AlphaLess
Sun Aug 13, 2023 10:17 am
Forum: Personal Investments
Topic: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?
Replies: 209
Views: 81010

Re: Retired Eight Weeks Ago, Just Sold Stocks For Rest of the Year. Bad Idea?

KlangFool wrote: Fri Aug 11, 2023 2:35 pm OP,

In retirement, you should keep 2 to 3 years of expense in cash. Then, you can "Sleep Well At Night" (SWAN) regardless of whatever going on with the stock market. And, that gives you maximum flexibility in tax management. You can withdraw at the most tax efficient time and method. That should worth a fair amount of money to you.

KlangFool
KlangFool: are you sure this advice is sound?

Many people retire with assets equal N times their yearly spend. Depending on age, and other circumstances, that N may be high (30), or low (12).

Are you sure that someone with 12x assets over yearly spend should keep 2-3 years of spend in cash?
What if cash is yielding 0%?
by AlphaLess
Sun Aug 06, 2023 8:59 pm
Forum: Personal Finance (Not Investing)
Topic: Tax strategies for high income
Replies: 86
Views: 15208

Re: Tax strategies for high income

trustquestioner wrote: Tue Aug 01, 2023 5:18 pm Have your spouse become a real estate professional, buy an apartment complex, deduct depreciation. When you sell, 1031 and start the process over again.
Can you elaborate a bit more on this?

Is the real estate professional part to be able to offset depreciation against W2 income?
by AlphaLess
Sun Aug 06, 2023 8:45 pm
Forum: Personal Investments
Topic: Purchasing Treasury Bonds to pay off mortgage using interest
Replies: 16
Views: 3417

Re: Purchasing Treasury Bonds to pay off mortgage using interest

My thought is that if you do not believe that the stock market will return at least 3% annually for the next 30 years, then you might as well get out of stocks now. I would invest in the stock market rather than Treasury bonds to pay off a 3% mortgage as time goes on. Indeed, I did that: One year an emerging markets index fund I owned went up 30% which was ridiculous, so I sold shares and paid off my 6% mortgage. The EM fund reverted to the mean in the months after I sold the shares. That is, stock funds give you the option to wait until they go way up. If they go down, then you just wait until they go way up. What you describe with a stock fund can also happen with the bond fund. Suppose the 30-year is 4.2% now. Support you buy $100 worth...
by AlphaLess
Wed Aug 02, 2023 10:19 am
Forum: Personal Consumer Issues
Topic: If you could wake up anywhere tomorrow morning, where would it be?
Replies: 140
Views: 15949

Re: If you could wake up anywhere tomorrow morning, where would it be?

jebmke wrote: Wed Aug 02, 2023 9:40 am
AlphaLess wrote: Wed Aug 02, 2023 8:57 am
sc9182 wrote: Tue Aug 01, 2023 9:48 pm
AlphaLess wrote: Tue Aug 01, 2023 9:20 pm 68F daily low
74F daily high
low humidity
extremely clean air
clean water
low UV index
access to nature: mountains, forests, oceans
I've heard of couple of places like this - one of them has largest (some of the frequent) Volcanic activity surrounding it.
Second one is frequented by Hurricanes/Tsunamis. Only paddle/sail-boating allowed, no gas/electricity/no-running-water .. and ample varieties of venomous snakes.

Other than that - life is great over there !
What are the locations?

You can avoid the hurricanes tsunamis by not being there during those.
Tsunamis don't have a season.
You are correct! I think I thought I read Hurricanes and Typhoons.
by AlphaLess
Wed Aug 02, 2023 9:54 am
Forum: Personal Finance (Not Investing)
Topic: Any pure trip cancellation insurance?
Replies: 9
Views: 1417

Re: Any pure trip cancellation insurance?

exodusing wrote: Wed Aug 02, 2023 7:01 am Do any carriers sell pure trip cancellation insurance (or at least minimal coverage for other problems)?

We are planning a rather expensive cruise and don't want to risk getting sick at the last minute so we couldn't go. We have evac, interruption, baggage, etc. through our credit card, so we don't need to pay for that.

The closest I've found so far is Allianz, which charges much less for a policy with lower emergency medical, evac, etc. coverage than seems standard (e.g., $500,000 evac limit rather than $1,000,000).
There are a few aggregation sites.

E.g.

https://www.squaremouth.com/
https://www.insuremytrip.com/
by AlphaLess
Wed Aug 02, 2023 8:57 am
Forum: Personal Consumer Issues
Topic: If you could wake up anywhere tomorrow morning, where would it be?
Replies: 140
Views: 15949

Re: If you could wake up anywhere tomorrow morning, where would it be?

sc9182 wrote: Tue Aug 01, 2023 9:48 pm
AlphaLess wrote: Tue Aug 01, 2023 9:20 pm 68F daily low
74F daily high
low humidity
extremely clean air
clean water
low UV index
access to nature: mountains, forests, oceans
I've heard of couple of places like this - one of them has largest (some of the frequent) Volcanic activity surrounding it.
Second one is frequented by Hurricanes/Tsunamis. Only paddle/sail-boating allowed, no gas/electricity/no-running-water .. and ample varieties of venomous snakes.

Other than that - life is great over there !
What are the locations?

You can avoid the hurricanes tsunamis by not being there during those.
by AlphaLess
Wed Aug 02, 2023 8:56 am
Forum: Investing - Theory, News & General
Topic: Why Roth never Wins when given equal tax treatment with Traditional IRA
Replies: 434
Views: 41145

Re: Why Roth never Wins when given equal tax treatment with Traditional IRA

EdNorton wrote: Mon Jul 24, 2023 12:39 pm Seems to me, with equal growth and equal tax rates at contribution and withdrawal, it's a wash. What I don't understand is why you use different rates of growth, 2x and 4x, and vice versa.
:sharebeer
Indeed. Overall, a very confusing article.
by AlphaLess
Tue Aug 01, 2023 9:29 pm
Forum: Personal Investments
Topic: Talk Me Out Of (Or Into) Selling Off My Bonds And Moving To Equities
Replies: 88
Views: 6028

Re: Talk Me Out Of (Or Into) Selling Off My Bonds And Moving To Equities

I had similar “problems” at your age. My thought was, should I continue to play offense or start thinking about defense? One tactic is to aim for 60/40 on your first $10 million and then 100/0 afterwards. Muni bonds at your annual income level should be a consideration. VWALX has served me well. I looked into VWALX and it seems like it's a lower return than treasury bills. What am I missing? Munis need to be considered at their tax-adjusted rate. Munis make sense for high-tax-bracket households. E.g., VWALX current yield is 4.2%. Someone in the 37% Federal income bracket will choose this instead of a treasury+corporate bond index fund. By doing so, they will save 37% (FIT) + 3.8% (Net Investment Tax) on their Federal taxes = 40.8%. Cal it ...
by AlphaLess
Tue Aug 01, 2023 9:25 pm
Forum: Personal Investments
Topic: Talk Me Out Of (Or Into) Selling Off My Bonds And Moving To Equities
Replies: 88
Views: 6028

Re: Talk Me Out Of (Or Into) Selling Off My Bonds And Moving To Equities

the_wiki wrote: Mon Jul 31, 2023 3:01 pm A 5% allocation of bonds is insignificant. Sell it or don't, you aren't going to notice.
Indeed.

If the realm of possibilities is bonds from 0% to 100%, you are basically at one end of the limit (close to 0%).

Unless, of course, you are willing to go more than 100% equity.
by AlphaLess
Tue Aug 01, 2023 9:21 pm
Forum: Investing - Theory, News & General
Topic: How long is a 3% withdrawal “safe”?
Replies: 53
Views: 5818

Re: How long is a 3% withdrawal “safe”?

randomguy wrote: Tue Aug 01, 2023 4:11 pm

Interest isn't getting reinvested. They aren't going to sell 1k of them at 150k. This CD goal wasn't to make money for the bank. It was to generate millions of dollars of publicity.
Great points. Thank you for clarifying.
by AlphaLess
Tue Aug 01, 2023 9:20 pm
Forum: Personal Consumer Issues
Topic: If you could wake up anywhere tomorrow morning, where would it be?
Replies: 140
Views: 15949

Re: If you could wake up anywhere tomorrow morning, where would it be?

68F daily low
74F daily high
low humidity
extremely clean air
clean water
low UV index
access to nature: mountains, forests, oceans
by AlphaLess
Tue Aug 01, 2023 1:16 pm
Forum: Investing - Theory, News & General
Topic: How long is a 3% withdrawal “safe”?
Replies: 53
Views: 5818

Re: How long is a 3% withdrawal “safe”?

It depends on the returns, but a "safe" withdrawal at 4% is 25 years and 33 years at 3%. 100% TIPS is all you need to get 4% for 25 years or 3% for 33 years. Indeed. I was using very pessimistic returns projections. Actually, there is a bank in NH that offers a 100 year CD with 4.5% returns, so there is that. What? Walden Mutual. Actually it is 4.75% and is limited to $150,000 per person. You would want to be under the FDIC limit anyway. 1.045 ^ 100 = 81.5x $150K * 81.5x = $12.2M I doubt FDIC insurance will be $12M in 100 years. If just 1000 people invest in that CD, at $150K each, Walden is on the hook to be ready to W/D $12B in 100 years. For a bank that just got established, I highly doubt Walden is going to be around in 100 y...
by AlphaLess
Tue Aug 01, 2023 12:46 pm
Forum: Investing - Theory, News & General
Topic: How long is a 3% withdrawal “safe”?
Replies: 53
Views: 5818

Re: How long is a 3% withdrawal “safe”?

If one determines to use a 3% withdrawal at age 55, how long would it be considered safe and why? Depends on who is doing the considering. The Ultimate Guide to Safe Withdrawal Rates would say "at least 60 years". Assuming 3% at age 55 means an even lower rate when SS kicks in, that's even safer. With projected lower returns, is 3% what we considered 4% for decades? No way to know. The Ultimate Guide is great. Thanks again for reminding us of its existence. I think that the safety of a given withdrawal algorithm depends on several things: - current valuation of assets. Bonds are easy to value: just take the yield (inflation-adjusted). For equities, use CAPE (Shiller), - future earnings growth rate. CAPE = P/E, which is Price over...
by AlphaLess
Mon Jul 31, 2023 11:38 pm
Forum: Investing - Theory, News & General
Topic: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)
Replies: 782
Views: 234916

Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

lucastx wrote: Sat Jun 17, 2023 11:54 am The portfolio started at $1M and is currently worth $866K. Approximately 87% of the portfolio remains. Where is the 24% coming from, is that the total amount of the withdrawals?
$1M in Jul of 2019 inflation-adjusted to Jul of 2023 -> $1.188M.

$866K / $1.188M = 73%.
by AlphaLess
Mon Jul 31, 2023 11:05 pm
Forum: Personal Investments
Topic: Vanguard Online Cash Withdrawals Challenges For New Accounts
Replies: 103
Views: 16333

Re: Vanguard Eliminates Online Cash Withdrawals

nalor511 wrote: Mon Jul 31, 2023 3:33 pm Open an account with Fidelity. Transfer the funds in kind from the Fidelity website. Link your bank account to Fidelity. Withdraw.

A year is a long time, but, Fidelity will probably hold your funds for a week or two.
Roger this.
by AlphaLess
Mon Jul 31, 2023 10:59 pm
Forum: Investing - Theory, News & General
Topic: How long is a 3% withdrawal “safe”?
Replies: 53
Views: 5818

Re: How long is a 3% withdrawal “safe”?

Harmanic wrote: Mon Jul 31, 2023 7:47 pm
cacophony wrote: Mon Jul 31, 2023 7:46 pm
Harmanic wrote: Mon Jul 31, 2023 7:40 pm It depends on the returns, but a "safe" withdrawal at 4% is 25 years and 33 years at 3%.
100% TIPS is all you need to get 4% for 25 years or 3% for 33 years.
Indeed. I was using very pessimistic returns projections.

Actually, there is a bank in NH that offers a 100 year CD with 4.5% returns, so there is that.
But will that bank be around in 100 years?
by AlphaLess
Mon Jul 31, 2023 8:51 pm
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Millennials Need 3-4 Million To Retire

Median income in the U.S. is somewhere around $60k a year. One could create a ladder of of TIPS that would sustain $60k a year, inflation indexed for 30 years with $1,396,035 Say they get $18k a year from Social Security at age 62 reducing the $60k needed to $42k, which would require $977,271 to create from a TIPS ladder for 30 years. Say they realize that most 62 year olds aren't going to make it 30 years, a more realistic life expectancy is more like 22 years (SS actuarial table for female)... A TIPS ladder that would support $42k for 22 years would take about $765,861 A retiree wouldn't have the 7.6% of OASDI/Medicare taxes on their income, they won't have continued retirement savings, say 12% of pre-tax going into 401k, and most (if no...
by AlphaLess
Mon Jul 31, 2023 10:10 am
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Millennials Need 3-4 Million To Retire

Median income in the U.S. is somewhere around $60k a year. One could create a ladder of of TIPS that would sustain $60k a year, inflation indexed for 30 years with $1,396,035 Say they get $18k a year from Social Security at age 62 reducing the $60k needed to $42k, which would require $977,271 to create from a TIPS ladder for 30 years. Say they realize that most 62 year olds aren't going to make it 30 years, a more realistic life expectancy is more like 22 years (SS actuarial table for female)... A TIPS ladder that would support $42k for 22 years would take about $765,861 A retiree wouldn't have the 7.6% of OASDI/Medicare taxes on their income, they won't have continued retirement savings, say 12% of pre-tax going into 401k, and most (if no...
by AlphaLess
Mon Jul 31, 2023 10:00 am
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Do You Need Multiple Millions to Retire?

randomguy wrote: Sun Jul 30, 2023 10:27 pm
AlphaLess wrote: Sun Jul 30, 2023 7:30 pm
randomguy wrote: Sun Jul 23, 2023 10:44 am
...

You can get excited about getting 4% CDs. Personally I preferred having sub 2% inflation. A lot more predictable...

Is it OK to have 6% CDs and sub 2% inflation?
Well it is better than having a 6% CD and 12% inflation...
Definitely.
by AlphaLess
Sun Jul 30, 2023 7:30 pm
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Do You Need Multiple Millions to Retire?

randomguy wrote: Sun Jul 23, 2023 10:44 am
...

You can get excited about getting 4% CDs. Personally I preferred having sub 2% inflation. A lot more predictable...

Is it OK to have 6% CDs and sub 2% inflation?
by AlphaLess
Sun Jul 30, 2023 7:29 pm
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Do You Need Multiple Millions to Retire?

If inflation is in the 2-3% range over the next couple of decades, which is the time frame for retirement for me, then my own estimate is $3-4 million. This based on succeeding in roughly 5th percentile returns, and retiring 5+ years before taking social security. Obviously, it's too early for me to make a decision about when to take social security, but plugging the nominal scenario into FIRECalc, etc, helps me be get a sense of whether my savings rate is adequate. Also obviously, planning for 5th percentile market conditions, and retiring 5+ years before taking social security is more conservative than the average retiree. Interesting article discussing some recent claims about multimillion portfolios as a retirement requirement: The Sen...
by AlphaLess
Sun Jul 30, 2023 7:27 pm
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Millennials Need 3-4 Million To Retire

I came across this article that is saying the millennials should aim to have 1 million saved by age 40, and up to 4 million by age 62 to live "comfortably". I would be very surprised if the majority of Boglehead millennials have saved over 1 million by 40 let alone the average millennial. Thoughts? https://www.yahoo.com/video/4-million-retirement-much-millennials-162038372.html I am not a millennial -> I am older. At 32, I started working after grad school. My goals were as follows: - 35 - $0.5M, - 40 - $1.0M, - 43/44 - $2.0M, - 50 - $4.0.M. I am under 50, and 3x the goal of 50. Shooting for $20M by 50, maybe sooner. Why? Many risks: - inflation, - stock market valuations too high, - longevity; plan to live over 100, - climate =>...
by AlphaLess
Sun Jul 30, 2023 7:18 pm
Forum: Personal Consumer Issues
Topic: What Car Should I Buy If Money Were No Object?
Replies: 116
Views: 13895

Re: What Car Should I Buy If Money Were No Object?

This topic is actionable to me. What kind of car should I buy? Money really isn't an issue. Here are the variables I am looking at: 1. Road conditions in the urban environment where I live are not the best. So, even if I wanted a low-slung 911 turbo, I'm not getting it because the ride will feel terrible. Same for other vehicles that only come in 21-inch wheels. Not prudent with potholes a common sight. 2. Not attracting too much attention. Yes, I'd like to drive a nice-looking car, but no way am I tooling around in a Rolls or Bentley. Way too attention-grabbing. Just not my style. 3. High quality, great looks, and high performance are important. Thanks for your thoughts. What is the objective? 2 and 3 read like objectives, but a bit vague...
by AlphaLess
Wed Jul 19, 2023 9:17 pm
Forum: Personal Consumer Issues
Topic: credit card question - upcoming large charges
Replies: 21
Views: 1823

Re: credit card question - upcoming large charges

anoop wrote: Wed Jul 19, 2023 6:55 pm
AlphaLess wrote: Wed Jul 19, 2023 4:42 pm
anoop wrote: Wed Jul 19, 2023 12:34 pm
WhiteMaxima wrote: Wed Jul 19, 2023 12:21 pm 1st Open couple of reward sign in bonus cards.
2nd Make sure you have the money and pay off balances

Done
The only reason I don't like to open many cards is due to data breaches. The more places your information is, the higher the probability for it to get hacked and misused.
Well, as soon as your information is breached, that is it. Second, third, fourth breach does not matter.

Assume that all of your personal information is on the dark web. Live your live accordingly.
Sometimes only partial info may be breached, so it's not the same. If your SSN has never been breached, e.g., then putting it everywhere increases the probability it will.
Nearly 100% of US person's SSNs with names have been breached, multiple times.
by AlphaLess
Wed Jul 19, 2023 9:16 pm
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Millennials Need 3-4 Million To Retire

I came across this article that is saying the millennials should aim to have 1 million saved by age 40, and up to 4 million by age 62 to live "comfortably". I would be very surprised if the majority of Boglehead millennials have saved over 1 million by 40 let alone the average millennial. Thoughts? https://www.yahoo.com/video/4-million-retirement-much-millennials-162038372.html I am not a millennial -> I am older. At 32, I started working after grad school. My goals were as follows: - 35 - $0.5M, - 40 - $1.0M, - 43/44 - $2.0M, - 50 - $4.0.M. I am under 50, and 3x the goal of 50. Shooting for $20M by 50, maybe sooner. Why? Many risks: - inflation, - stock market valuations too high, - longevity; plan to live over 100, - climate =>...
by AlphaLess
Wed Jul 19, 2023 5:39 pm
Forum: Investing - Theory, News & General
Topic: Millennials Need 3-4 Million To Retire
Replies: 504
Views: 59889

Re: Millennials Need 3-4 Million To Retire

I came across this article that is saying the millennials should aim to have 1 million saved by age 40, and up to 4 million by age 62 to live "comfortably". I would be very surprised if the majority of Boglehead millennials have saved over 1 million by 40 let alone the average millennial. Thoughts? https://www.yahoo.com/video/4-million-retirement-much-millennials-162038372.html I am not a millennial -> I am older. At 32, I started working after grad school. My goals were as follows: - 35 - $0.5M, - 40 - $1.0M, - 43/44 - $2.0M, - 50 - $4.0.M. I am under 50, and 3x the goal of 50. Shooting for $20M by 50, maybe sooner. Why? Many risks: - inflation, - stock market valuations too high, - longevity; plan to live over 100, - climate =>...
by AlphaLess
Wed Jul 19, 2023 5:36 pm
Forum: Investing - Theory, News & General
Topic: an AI engine's "thoughts" on US stocks and bonds
Replies: 75
Views: 6847

Re: an AI engine's "thoughts" on US stocks and bonds

AI does not have thoughts.

Garbage in => Garbage out.

The "AI" that you speak of is just recycled Google search results. If recycled Google searched results could have provided superior returns, someone would have already done that.