Search found 922 matches

by Ben Mathew
Sat May 23, 2020 10:50 am
Forum: Personal Finance (Not Investing)
Topic: The axe falls and I am prepared. What's next?
Replies: 299
Views: 20217

Re: The axe falls and I am prepared. What's next?

This is maybe off topic, but when I first saw this thread I thought about when DH was laid off in the Great Recession. We had a three year old at the time and he liked to loudly announce to strangers, “My dad is laid off.” People often responded, “That’s too bad.” Kiddo was puzzled, “ Laid off” to ...
by Ben Mathew
Fri May 22, 2020 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: The axe falls and I am prepared. What's next?
Replies: 299
Views: 20217

Re: The axe falls and I am prepared. What's next?

Sorry to hear about your layoff, that is always hard even if you are expecting it. I am looking for opinions from those that had gone down the same path. I voluntary retired a bit less than five years ago just before I turned 59. My Social Security and expected expenses were very similar to yours. ...
by Ben Mathew
Thu May 21, 2020 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: Refinance break even
Replies: 30
Views: 1629

Re: Refinance break even

CURRENT LOAN : Monthly payment is $6098 for the next 330 months. NEW LOAN: $500 closing costs today, then $5,600 for the net 360 months. The difference between the two streams (CURRENT - NEW): -$500 today, $498 for 330 months, then -$5,600 in months 331 to 360. The implied interest rate that sets t...
by Ben Mathew
Thu May 21, 2020 3:27 pm
Forum: Personal Finance (Not Investing)
Topic: Refinance break even
Replies: 30
Views: 1629

Re: Refinance break even

CURRENT LOAN : Monthly payment is $6098 for the next 330 months. NEW LOAN: $500 closing costs today, then $5,600 for the net 360 months. The difference between the two streams (CURRENT - NEW): -$500 today, $498 for 330 months, then -$5,600 in months 331 to 360. The implied interest rate that sets th...
by Ben Mathew
Thu May 21, 2020 11:30 am
Forum: Personal Investments
Topic: Growth fund mutual fund vs. Total stock market index
Replies: 15
Views: 717

Re: Growth fund mutual fund vs. Total stock market index

Recent years have been good times for growth. But long term history suggests that it's unlikely to outperform over a lifetime. I suggest going with a market portfolio, or even tilting a bit towards value.
by Ben Mathew
Thu May 21, 2020 11:25 am
Forum: Personal Finance (Not Investing)
Topic: Ages 48-54: Should we bother converting Term-to-75 to Level Term 20 policies?
Replies: 8
Views: 544

Re: Ages 48-54: Should we bother converting Term-to-75 to Level Term 20 policies?

Depending on how much you have saved up, you might not need the insurance and could let it lapse. You and your wife could do a "what if I die" scenarios and work out how the other would manage financially. If you decide you do still need insurance, then go to term4sale.com and see what level term po...
by Ben Mathew
Wed May 20, 2020 7:43 pm
Forum: Personal Consumer Issues
Topic: what to do about 1000s of dandelions/weeds?
Replies: 55
Views: 4056

Re: what to do about 1000s of dandelions/weeds?

- Mow with mulcher before the dandelions go to seed. Use a bagger if they've gone to seed. - Pull out the existing dandelions with a stand up weed puller like this one . - Mow on highest setting to shade out the weeds. - Overseed regularly to crowd out weed seeds. (I do it twice a year). It will get...
by Ben Mathew
Wed May 20, 2020 1:21 pm
Forum: Personal Investments
Topic: $15,000 bonus
Replies: 20
Views: 2738

Re: $15,000 bonus

This is what I was thinking. Cash flow college in the future (or a mix of loans and cash flow) and keep that Roth space going. I can always reduce retirement contributions during the college years, as my pension funds will keep going up. That is a good plan. Money is fungible. Saving for retirement...
by Ben Mathew
Wed May 20, 2020 1:13 am
Forum: Personal Investments
Topic: $15,000 bonus
Replies: 20
Views: 2738

Re: $15,000 bonus

1 will penalty right, unless tour ar 59.5 years. I would do 529, as it grows tax free as well, and there are many good options Roth's dont have penalties on contributions only. Not much of a good tax break for the 529 in my state and higher expense ratios. Thanks! You are not restricted to the 529 ...
by Ben Mathew
Wed May 20, 2020 12:37 am
Forum: Personal Finance (Not Investing)
Topic: Which refinance option to choose? Need some advices to make best decision
Replies: 8
Views: 550

Re: Which refinance option to choose? Need some advices to make best decision

The 20 yr @ 2.875% is significantly more expensive than the 15 yr @ 2.500%. That's because even though you're effectively borrowing only a small fraction of the monthly payment, you're paying the extra .375% on the full principal. To see the cost difference more clearly, you can view the $458 reduct...
by Ben Mathew
Tue May 19, 2020 10:51 pm
Forum: Investing - Theory, News & General
Topic: Bull! by Maggie Mahar, and parallels to today
Replies: 2
Views: 377

Re: Bull! by Maggie Mahar, and parallels to today

Another important difference between the 1990s boom and today is interest rates are much lower now. That in itself can help justify higher valuations today than in the 1990s.
by Ben Mathew
Tue May 19, 2020 10:35 pm
Forum: Personal Investments
Topic: 80/20, 90/10, 100/0 for a low net worth accumulator?
Replies: 36
Views: 2013

Re: 80/20, 90/10, 100/0 for a low net worth accumulator?

Since you are at the start of your accumulation phase, you would be well served by a 100/0 allocation. The reason is that even at 100% stocks, you have very little stocks compared to what you will have when you are close to retirement and 50/50. You could reduce lifetime portfolio risk by increasing...
by Ben Mathew
Tue May 19, 2020 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: investmenting books
Replies: 26
Views: 1329

Re: investmenting books

That Thing Rich People Do, Kaye Thomas

Not a great title, but a great book. It's a short, sensible primer for beginners that covers the basics of investing quickly and correctly.
by Ben Mathew
Tue May 19, 2020 11:20 am
Forum: Personal Investments
Topic: 401k Committee - arguing for Small Value fund
Replies: 13
Views: 740

Re: 401k Committee - arguing for Small Value fund

You could show the true cost of high fees over a lifetime. With a nominal return of 7% before fees, investing $10,000 per year will, after 40 years, result in a balance of: .00% fees: $2,136,096 .05% fees: $2,107,776 (fee drag: $28,319) .88% fees: $1,692,704 (fee drag: $443,392) Research is clear th...
by Ben Mathew
Mon May 18, 2020 3:00 pm
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

it is similar, if not exactly as VPW in wiki, I think. Yes. It's the same as VPW. With the same inputs (expected return and years left), the withdrawal rates calculated will be exactly the same. This is simply amortizing the current value of the portfolio over the remaining living years. This is th...
by Ben Mathew
Sun May 17, 2020 6:00 pm
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

user @Ben Matthew: In another post on SORR recently you posted the formula: WR = r/{(1+r)- 1/(1+r)^t} , r is future return to the end ,t. I tried this formula, and found it a very slight bit off. For instance, if I put a very small # for r (.00001), and t =25, I should get 4% (the inverse of 25 yea...
by Ben Mathew
Sun May 17, 2020 5:20 pm
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

user @Ben Matthew: In another post on SORR recently you posted the formula: WR = r/{(1+r)- 1/(1+r)^t} , r is future return to the end ,t. I tried this formula, and found it a very slight bit off. For instance, if I put a very small # for r (.00001), and t =25, I should get 4% (the inverse of 25 yea...
by Ben Mathew
Sun May 17, 2020 5:09 pm
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

I've recently come to think that all of the talk around Sequence of Returns is really unnecessary. The whole premise is rather contrived: Given a particular set of returns , the sequence in which they occur can affect your final wealth (assuming some non-proportional withdrawals and additions, else...
by Ben Mathew
Sun May 17, 2020 3:46 pm
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

user @Ben Matthew: In another post on SORR recently you posted the formula: WR = r/{(1+r)- 1/(1+r)^t} , r is future return to the end ,t. I tried this formula, and found it a very slight bit off. For instance, if I put a very small # for r (.00001), and t =25, I should get 4% (the inverse of 25 yea...
by Ben Mathew
Sun May 17, 2020 12:12 pm
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

Nice graph that demonstrates the effect of sequence of returns. Some sequence of return risk in retirement is unavoidable given that we have to consume today before we know what tomorrow's returns will be. Perfect avoidance of sequence of returns will require that we let the portfolio run without w...
by Ben Mathew
Sun May 17, 2020 11:29 am
Forum: Investing - Theory, News & General
Topic: Appreciating the magnitude of Sequence of Returns immediately after retirement
Replies: 115
Views: 5834

Re: Appreciating the magnitude of Sequence of Returns immediately after retirement

Nice graph that demonstrates the effect of sequence of returns. Some sequence of return risk in retirement is unavoidable given that we have to consume today before we know what tomorrow's returns will be. Perfect avoidance of sequence of returns will require that we let the portfolio run without wi...
by Ben Mathew
Fri May 15, 2020 11:49 am
Forum: Personal Consumer Issues
Topic: Secrets to a great lawn
Replies: 65
Views: 5183

Re: Secrets to a great lawn

Small lawn in the Pacific Northwest. Cool season grasses (perennial rye and fescue). This regime has worked well for me: - Organic lawn fertilizer like this one . Naturally slow release. No risk of fertilizer burn. I don't apply on a schedule. I wait for the grass to start turning yellow, so I know ...
by Ben Mathew
Thu May 14, 2020 5:47 pm
Forum: Personal Investments
Topic: Advice for 22 year old on investing for home downpayment?
Replies: 29
Views: 1784

Re: Advice for 22 year old on investing for home downpayment?

I am viewing my entire portfolio as separate buckets. I already have a retirement bucket (my 401k and ROTH IRA) with its own AA. I hope to have an independent home downpayment bucket with its own self contained AA (probably a less aggressive AA than my retirement portfolio given that I hope to liqu...
by Ben Mathew
Thu May 14, 2020 3:18 pm
Forum: Personal Investments
Topic: Market vs. Limit Orders
Replies: 59
Views: 3575

Re: Market vs. Limit Orders

The reason why many people feel they save money when placing limit orders is that they see the savings when the market moves lower and their order fills, but ignore the losses when the market moves higher and their order did not fill. Probably because the hypothetical loss of something they never o...
by Ben Mathew
Wed May 13, 2020 12:33 pm
Forum: Personal Investments
Topic: Market vs. Limit Orders
Replies: 59
Views: 3575

Re: Market vs. Limit Orders

Sure. Suppose the price of a stock is $100, and you place a limit order to buy at $95. It doesn't fill and remains open. If good news about the stock comes in and the price increases to $110, your order goes unfilled--no gain or loss to you. If bad news comes in and the price drops to $90, your ord...
by Ben Mathew
Tue May 12, 2020 3:19 pm
Forum: Personal Investments
Topic: Market vs. Limit Orders
Replies: 59
Views: 3575

Re: Market vs. Limit Orders

When I tried to do exactly that at Fidelity, the online system would not allow me to do it. My recollection is that I entered an amount, say $45.67, that was slightly above the asking price, clicked "place order," and it popped up a message saying something curt like "error, $45.67 exceeds asking p...
by Ben Mathew
Tue May 12, 2020 1:15 pm
Forum: Investing - Theory, News & General
Topic: proportional withdrawal -> no sequence-of-returns risk
Replies: 30
Views: 1344

Re: proportional withdrawal -> no sequence-of-returns risk

The problem with a withdrawing a fixed percentage of current balance is that it says that a 65 year old and a 90 year old can take out the same proportion of their portfolio. Almost always, the 90 year old can take out a lot more of the portfolio because they don't have as many years left (unless th...
by Ben Mathew
Tue May 12, 2020 12:13 pm
Forum: Personal Investments
Topic: Market vs. Limit Orders
Replies: 59
Views: 3575

Re: Market vs. Limit Orders

Thanks for taking the time to explain.... Sure. Suppose the price of a stock is $100, and you place a limit order to buy at $95. It doesn't fill and remains open. If good news about the stock comes in and the price increases to $110, your order goes unfilled--no gain or loss to you. If bad news com...
by Ben Mathew
Mon May 11, 2020 4:26 pm
Forum: Personal Investments
Topic: Market vs. Limit Orders
Replies: 59
Views: 3575

Re: Market vs. Limit Orders

Open limit orders leave you exposed to better informed market participants who will pick off your order when they learn new information. Generally speaking, open limit orders should only be used by professional market makers--never by individual (or even institutional) investors. Could you explain ...
by Ben Mathew
Mon May 11, 2020 12:27 pm
Forum: Personal Investments
Topic: Market vs. Limit Orders
Replies: 59
Views: 3575

Re: Market vs. Limit Orders

Open limit orders leave you exposed to better informed market participants who will pick off your order when they learn new information. Generally speaking, open limit orders should only be used by professional market makers--never by individual (or even institutional) investors. Market orders are g...
by Ben Mathew
Sat May 09, 2020 11:11 am
Forum: Personal Investments
Topic: Limit Roth Conversion by IRMAA or Tax Bracket?
Replies: 19
Views: 1199

Re: Limit Roth Conversion by IRMAA or Tax Bracket?

I am 72, retired, and file as HoH. My MAGI for 2020 is expected to be $106K from pension, Soc Sec, etc. before making any Roth conversions. If I convert less than $30K to Roth this year, I can stay within my current IRMAA bracket and within a marginal income tax bracket of 24% federal (9.3% state)....
by Ben Mathew
Sat May 09, 2020 2:31 am
Forum: Forum Issues and Administration
Topic: Thank you, moderators!
Replies: 46
Views: 2647

Re: Thank you, moderators!

Indeed. Thank you!
by Ben Mathew
Fri May 08, 2020 7:39 pm
Forum: Personal Investments
Topic: Limit Roth Conversion by IRMAA or Tax Bracket?
Replies: 19
Views: 1199

Re: Limit Roth Conversion by IRMAA or Tax Bracket?

I am 72, retired, and file as HoH. My MAGI for 2020 is expected to be $106K from pension, Soc Sec, etc. before making any Roth conversions. If I convert less than $30K to Roth this year, I can stay within my current IRMAA bracket and within a marginal income tax bracket of 24% federal (9.3% state)....
by Ben Mathew
Thu May 07, 2020 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Pay Sibling's Undergrad or Refinance Parent's Mortgage
Replies: 52
Views: 3148

Re: Pay Sibling's Undergrad or Refinance Parent's Mortgage

The problem with a cash out refinance is that the higher interest rate applies to the entire balance, making the effective interest rate on the extra amount borrowed very high. Parents should use some of the $85K in cash for the first couple years, and you can chip in later years (very kind of you t...
by Ben Mathew
Thu May 07, 2020 10:47 am
Forum: Investing - Theory, News & General
Topic: A bond rule of thumb better than "age in bonds"
Replies: 152
Views: 10362

Re: A bond rule of thumb better than "age in bonds"

What I call "optimal" here doesn't directly take investor risk tolerance into account, so that's a wrinkle for sure. Instead, it is a mathematically optimal glide path that is intended to minimize the dispersion of terminal wealth at the date of retirement. In short, the starting assumptions are an...
by Ben Mathew
Thu May 07, 2020 10:28 am
Forum: Investing - Theory, News & General
Topic: A Risk-Tolerance Question
Replies: 50
Views: 2541

Re: "Down Big"

I have 88% stock, overweighting small-cap, value and emerging markets. I was down about 40% at the March low, but stayed the course and have recovered much of that. I own some Total Stock Market, but every other stock fund I hold is down 20% or more, so my overall loss is about 20%. But this is onl...
by Ben Mathew
Wed May 06, 2020 6:36 pm
Forum: Investing - Theory, News & General
Topic: A Risk-Tolerance Question
Replies: 50
Views: 2541

Re: "Down Big"

I have 88% stock, overweighting small-cap, value and emerging markets. I was down about 40% at the March low, but stayed the course and have recovered much of that. I own some Total Stock Market, but every other stock fund I hold is down 20% or more, so my overall loss is about 20%. But this is onl...
by Ben Mathew
Wed May 06, 2020 3:19 pm
Forum: Personal Investments
Topic: Close to retirement and don't know what to do
Replies: 33
Views: 4042

Re: Close to retirement and don't know what to do

Vanguard's target date funds feature glide paths that are fairly well designed. I would stay put. Losses are a necessary part of investing. The cost of avoiding all losses is very high.
by Ben Mathew
Wed May 06, 2020 3:08 pm
Forum: Personal Investments
Topic: When to put 5k into the market
Replies: 27
Views: 1990

Re: When to put 5k into the market

willthrill81 wrote:
Tue May 05, 2020 10:49 am
"The best time to plant a tree was 20 years ago. The next best time is today."
- Chinese proverb
Great quote.
by Ben Mathew
Wed May 06, 2020 11:07 am
Forum: Investing - Theory, News & General
Topic: A Risk-Tolerance Question
Replies: 50
Views: 2541

Re: A Risk-Tolerance Question

I think the "sleep well at night" metric is useful to some extent, but the problem is that an investor's comfort/discomfort with taking on stock market risk comes from many sources, including: - A mental model of why the stock market fluctuates in general, and why it's dropped in this instance. For ...
by Ben Mathew
Tue May 05, 2020 2:21 pm
Forum: Personal Finance (Not Investing)
Topic: Payoff Mortgage in 2 years or max out 401k
Replies: 34
Views: 1985

Re: Payoff Mortgage in 2 years or max out 401k

I would suggest that you prioritize the 401K and backdoor Roth over prepayment of the mortgage. Since you are maxing out your tax advantaged space, any dollars you don't put in this year cannot go back in future years. So it's important to continue maxing out every year. You are probably underexpose...
by Ben Mathew
Sun May 03, 2020 11:07 am
Forum: Personal Consumer Issues
Topic: Lawnmower recommendation
Replies: 65
Views: 3894

Re: Lawnmower recommendation

I got the Ego electric lawnmower last year and am happy with it.
by Ben Mathew
Sun May 03, 2020 11:03 am
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Still the Right Strategy
Replies: 82
Views: 3975

Re: Lifecycle Investing - Still the Right Strategy

Does this strategy advocate that a young investor forego using his 401k (beyond employer match) in order to invest in taxable accounts to obtain the desired 2:1 leverage (or as close to that as possible)? Clearly, maxing out an IRA and using it for leverage would be important for such an investor i...
by Ben Mathew
Sat May 02, 2020 9:52 pm
Forum: Personal Finance (Not Investing)
Topic: Please help me unravel my parents mess
Replies: 55
Views: 6606

Re: Please help me unravel my parents mess

- They are in good shape thanks to their own savings, and no thanks to their "retirement guy" who was only interested in lining his own pocket. - Holding a large fraction of their retirement savings in XOM is risky, as you said. Ideally they would sell their XOM holdings and buy broadly diversified ...
by Ben Mathew
Tue Apr 28, 2020 5:59 pm
Forum: Investing - Theory, News & General
Topic: Where can I find earnings-per-share (EPS) for VTSAX and other stock funds?
Replies: 10
Views: 635

Re: Where can I find earnings-per-share (EPS) for VTSAX and other stock funds?

Any other ideas? Seems like a key piece of information that should be readily available.
by Ben Mathew
Sun Apr 26, 2020 9:23 pm
Forum: Personal Investments
Topic: How to approach buying a home and retirement savings
Replies: 35
Views: 1550

Re: How to approach buying a home and retirement savings

The extra income a month wouldn’t be used for the new home. That money would be saved for any home expenses that can arise. All maintenance would be done by me. I guess the biggest risk is the home being vacant. Before I purchased the home, the home was being used as a rental for 10 years. The home...
by Ben Mathew
Sun Apr 26, 2020 10:06 am
Forum: Personal Investments
Topic: How to approach buying a home and retirement savings
Replies: 35
Views: 1550

Re: How to approach buying a home and retirement savings

The extra income a month wouldn’t be used for the new home. That money would be saved for any home expenses that can arise. All maintenance would be done by me. I guess the biggest risk is the home being vacant. Before I purchased the home, the home was being used as a rental for 10 years. The home...
by Ben Mathew
Sat Apr 25, 2020 8:12 pm
Forum: Personal Investments
Topic: Question about target date funds
Replies: 6
Views: 386

Re: Question about target date funds

403b is not taxable, so you are fine. The problem with holding target date funds in a taxable account is that they have unfavorable tax treatment for the interest from bonds as well as the capital gains on stocks that you sell to maintain a declining glide path as you age. Neither a Roth account nor...
by Ben Mathew
Fri Apr 24, 2020 9:58 am
Forum: Investing - Theory, News & General
Topic: Which % to be held in bonds, if Not age?
Replies: 70
Views: 4307

Re: Which % to be held in bonds, if Not age?

Lifecycle investing implies a glidepath that is declining before retirement (future wage income is declining) and constant after retirement (because there is no more wage income coming in). Vanguard target date funds' glide paths are based on this idea. Vanguard's approach to target date funds Vangu...
by Ben Mathew
Mon Apr 20, 2020 3:26 pm
Forum: Investing - Theory, News & General
Topic: whos' just about had it w/ SCV ?
Replies: 263
Views: 16394

Re: whos' just about had it w/ SCV ?

Yep, it's worth noting that the growth/value spread is pretty much as high as it has ever been. But it's also important to recognize that there IS a new normal, such that the spread SHOULD be higher than normal. The declining interest rate/low-inflation/deflation environment justifies some of it. M...