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What about the following (numbers approx.): 100k in equities 25k in equities using margin at IB with 1.5% interest 25k in savings account with 2.25% interest That would allow me to have a higher equities allocation and still having a liquidity reserve. These numbers don't seem to add up. 1.5% is th...

I'd personally limit use of leverage to maintaining a 0% average cash allocation even while earning a paycheck, having occasional larger expenses, etc. This. I think one of the biggest benefits of using margin is optimizing cash allocation. Instead of parking money in a savings or checking account,...

Is there any particular reason you think the CFA/financial planning community isn't saying this? Most of them (just personal observation) advocate the Roth. Or how about good ole Ed Slott as another example; "go from forever tax to never tax!" I'm pretty sure Tony Robbins in his latest financial bo...

Sorry need to add interest rates, my Home is worth about 490K, I owe 275K at 4.25% interest, and I have a HELOC at just under 5%... Lending club is a peer to peer lending service, like an online bank, with different risks and returns but for their safest of investments, they claim a return of about...

Another possibility is borrowing to meet your living expenses until medicare kicks in or ACA is otherwise over. There's at least one thread on asset-based lending. Except for Interactive Brokers, most of the discounters have very high margin rates. +1 You can borrow and defer the capital gains inde...

WhiteMaxima wrote: ↑

Fri Mar 02, 2018 1:39 pm

Why doesn't Havard chose 3 fund folio? Do they think they are smarter than market?

Illiquidity premium

..
VTI

because i have a mortgage...and like all young families my house is my biggest "asset". nonetheless, search threads on "mortgage as a negative bond" and it suggests that i should be 100% bonds , so from that perspective i'm already way too aggressive to even have stocks at all. i obviously disagree...

because i have a mortgage...and like all young families my house is my biggest "asset". nonetheless, search threads on "mortgage as a negative bond" and it suggests that i should be 100% bonds , so from that perspective i'm already way too aggressive to even have stocks at all. i obviously disagree...

Personally I would hold onto it, but it all depends on your risk tolerance. 6% of your portfolio is certainly much higher than ideal, but the ability to defer capital gains tax (or avoid it entirely) is a very real benefit--a rather substantial one, if your cost basis is ~$3 per share. That benefit ...

Unless I'm missing something, it seems your Monte Carlo simulations show the effects of variability in the actual time-weighted returns as well, not just in the sequence of returns. They are both risks to keep in mind, but I don't see how you can draw any conclusions on sequence risk specifically wh...

IB is definitely geared towards active investors, especially those who want to trade 'exotic' instruments. Not suitable for buy-and-holders at all. This includes a pretty sizeable leap of logic; The same argument has been made about Merrill Edge and their free trades, and it is poor reasoning IMO. ...

All, Negative cash flow is not the same thing as losing money. Can you please explain? Part of the mortgage payment goes towards the principal on the loan, building equity. It would be like saying that making a 401k contribution is losing money. A complete discounted cash flow analysis that include...

All,

Negative cash flow is not the same thing as losing money.

Convert to Roth.

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

- You are limited to $200,000 per day in withdrawals. - You are limited to $600,000 per week in withdrawals. Good post.. just a slight clarification, those are only the limits if you have either the basic security card or the "IB Key" app for 2FA. There is no limit on withdrawals if you use the Dig...

As mentioned in the thread you linked, Interactive Brokers has the best margin loan rates of anywhere I've seen: currently 1.72% - 2.92% depending on loan size (fed funds rate plus 0.3% - 1.5%) . I've done my fair share of looking and don't think you can find any other security-based loan with a bet...

I have problem with his initial assumptions. Real-World Costs Of course …money is never free. I then raided the Federal Reserve Bank of St. Louis’s database (FRED), downloaded the monthly federal-funds interest rate, and simulated three borrowing costs. I permitted institutions to borrow at the fed...

Interactive Brokers

bling, Which part do you not understand? I have a choice A) Keep one year of the emergency fund and get 0% return. In exchange, I do not face the danger of selling my portfolio at 50% or more losses for at least one year. B) Do not keep one year of the emergency fund and have to sell at 50% or more...

bling, Which part do you not understand? I have a choice A) Keep one year of the emergency fund and get 0% return. In exchange, I do not face the danger of selling my portfolio at 50% or more losses for at least one year. B) Do not keep one year of the emergency fund and have to sell at 50% or more...

bling, Which part do you not understand? I have a choice A) Keep one year of the emergency fund and get 0% return. In exchange, I do not face the danger of selling my portfolio at 50% or more losses for at least one year. B) Do not keep one year of the emergency fund and have to sell at 50% or more...

willthrill81 wrote: ↑

Mon Feb 12, 2018 7:06 pm

I'd invest significantly more in my Roth account if for no other reason than the returns are uncorrelated to that of stocks

Correlations always increase in bear markets. If the stock market crashes, you can count on seeing a big spike in P2P lending defaults.

Buying non-divided paying stocks would also increase his likelihood of achieving more wealth, to be fair. This is one of those cases where reduced diversification increases volatility, but does not change expected return. Correct. Most of us invest with an eye towards risk-adjusted return. No reaso...

Thesaints wrote: ↑

Sat Dec 09, 2017 5:16 pm

This is one of those cases where reduced diversification increases volatility, but does not change expected return.

Wrong. Better tax efficiency means higher expected (after-tax) returns.

I don't see how proper financial planning with a view towards maximizing after-tax returns can be taken to extremes. I've seen that statement before and it's never made any sense. Maximizing after-tax returns would mean buying only individual zero-dividend domestic stock(s) in taxable and never sel...

I don't see how proper financial planning with a view towards maximizing after-tax returns can be taken to extremes. I've seen that statement before and it's never made any sense. Maximizing after-tax returns would mean buying only individual zero-dividend domestic stock(s) in taxable and never sel...

double post

I don't see how proper financial planning with a view towards maximizing after-tax returns can be taken to extremes. I've seen that statement before and it's never made any sense. Maximizing after-tax returns would mean buying only individual zero-dividend domestic stock(s) in taxable and never sel...

Here is my thought about the mortgage. My interest rate is 3.25. I deduct my mortgage from my taxes, and it comes off the top. Of course taxes are progressive so it comes off the highest rate I pay. So I figure after the tax deduction I figure I pay an effective mortgage rate of 2.75% My 10 year ra...

D) I sell 40K to 50K of my stocks and realized about 20K to 25K worth of long-term capital gain. Can I do better? You can withdraw via portfolio loan / margin to avoid having to realize gains. See: https://www.bogleheads.org/forum/viewtopic.php?f=2&t=201734 Leverage isn't for everyone, but it's a p...

In this post , I did a Portfolio Visualizer run comparing an 80/20 LifeStrategy fund and a 60/40 LifeStrategy fund for the 20-year time frame 1995 to 2015. The difference was about 0.2% CAGR per year. Ha! The tax drag alone on a bond fund can cost upwards of 1% a year vs equities in the higher tax ...