Search found 628 matches

by SovereignInvestor
Sun Jan 07, 2024 7:57 am
Forum: Personal Finance (Not Investing)
Topic: Spousal IRA
Replies: 10
Views: 1430

Re: Spousal IRA

Meant that I work spouse doesn't and income is over 300K.

Thanks for the help!
by SovereignInvestor
Fri Jan 05, 2024 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Spousal IRA
Replies: 10
Views: 1430

Spousal IRA

Spouse doesn't work or have income and I work and have income above ROTH or TIRA threshholds. Was going to do contributions to My own IRA and Spousal IRA. What is the applicable contribution limit to each for 2024, assuming we are both under 50. Is it 7000 to my IRA and 7000 for spousal? I thought I heard somewhere that spousal contrivution limit was less. But wanted to double check here.

Thanks.
by SovereignInvestor
Sun Dec 31, 2023 11:48 pm
Forum: Personal Finance (Not Investing)
Topic: [2023 TurboTax Desktop now requires account login to activate]
Replies: 126
Views: 67759

Re: [2023 TurboTax Desktop now requires account login to activate]

Friend posting.

It seems like the 1 account is needed for activation. But once activated then anyone can file return with their own account.

So this would prevent sharing outside of anyone who one wouldn't trust with their own login. Like someone trying to profit from sharing it to other people they don't know.

Can anyone confirm this for my friend?
by SovereignInvestor
Fri Jul 28, 2023 11:25 pm
Forum: Investing - Theory, News & General
Topic: Inflation Tends to Linger. Could It Last a Decade This Time? (Barron's)
Replies: 47
Views: 7136

Re: Inflation Tends to Linger. Could It Last a Decade This Time? (Barron's)

YoY figured have favorable base effect of Gasoline being bear $5/Gal 1 year ago.

But CPI and similar metrics are inflated because they use smoothed rent metrics when new market rents have had no inflation for about a year.

Inflation likely stuck in 3% range. Will require economy in recession to get to 2% IMO
by SovereignInvestor
Fri Jul 28, 2023 11:25 pm
Forum: Investing - Theory, News & General
Topic: Inflation Tends to Linger. Could It Last a Decade This Time? (Barron's)
Replies: 47
Views: 7136

Re: Inflation Tends to Linger. Could It Last a Decade This Time? (Barron's)

YoY figured have favorable base effect of Gasomine being bear $5/Gal 1 year ago.

But CPI and similar metrics are inflated because they use smoothed rent metrics when new market rents have had no inflation for about a year.

Inflation likely stuck in 3% range. Will require economy in recession to get to 2% IMO
by SovereignInvestor
Fri Jul 28, 2023 11:21 pm
Forum: Personal Investments
Topic: What to do with $200k cash?
Replies: 37
Views: 5049

Re: What to do with $200k cash?

USFR yields about 5.4%. US floating rate treasurys noted have no duration/interest rate risk but have higher yields as they feed off 3M T Bill rate.

SPX is at 19.5x forward earnings. Can go higher but that's pretty rich when you can get 5.4% Risk Free.
by SovereignInvestor
Sat Jun 24, 2023 7:54 am
Forum: Investing - Theory, News & General
Topic: Tell me again, why dividends are not useful ?
Replies: 1156
Views: 92032

Re: Tell me again, why dividends are not useful ?

A dividend and buyback are nearly identical. The buyback is an automatically reinvested dividend at the market price selected by company. If you were going to reinvest dividend the buyback does you favor by saving taxes assuming it's in taxable account. If you don't want to reinvest dividend because stock is high. When company does buyback say buying 1% of shares back...then sell 1% of your shares. This is same as if they paid 1% dividend yield at a high market price and you don't want to reinvest. So many people complain about buybacks when 1) if done at attractive prices save you taxes 2) if done at high/unattractive prices can just have you sell the equivalent % of shared as the buyback yield to generate your own dividend because you don...
by SovereignInvestor
Sat Jun 24, 2023 7:44 am
Forum: Personal Consumer Issues
Topic: Should I buy a cordless Dyson vacuum ... and which one? (Update! OMG!)
Replies: 83
Views: 12749

Re: Should I buy a cordless Dyson vacuum ... and which one?

Dyson are great but seem over priced.

I have Tineco Hero which was #1 from consumer reports and have been happy with is nimbleness. Only 180 on prime day.

Also have a shark Vertex and that is more comparable with strongest Dyson. Got for 250 on prime day.
by SovereignInvestor
Mon Jun 05, 2023 8:34 am
Forum: Personal Finance (Not Investing)
Topic: Is it worth keeping credit card debt if you can "beat" the interest rate?
Replies: 54
Views: 4561

Re: Is it worth keeping credit card debt if you can "beat" the interest rate?

With all due respect a lot of bitter responses.

It is minimal effort to park all my cash in short term treasurys and then have a reminder like 1 month before the CC into period ends to pay it off or transfer balance new 0%, APR card.

It is a non trivial amount of money 1K...even to the poster with 300K income it likely is worth it.

If someone makes 10M a year and profits 1K off of this it may not even be worth it. But for the rest of us 1K with minimal effort of setting a reminder and using the same CC for all transactions,, isn't that hard.
by SovereignInvestor
Sun Jun 04, 2023 10:04 am
Forum: Personal Finance (Not Investing)
Topic: Is it worth keeping credit card debt if you can "beat" the interest rate?
Replies: 54
Views: 4561

Re: Is it worth keeping credit card debt if you can "beat" the interest rate?

Yes I'm doing this right now with 0%, intro spending credit cards. Have about 20K in debt that has another 12 months 0% interest. The 20K I have in cash bot paying the debt is getting 5.3% in USFR so I'm making near 100/ month in free carry. Then in 11 months I take the 21K and pay off the 20K debt and pocket 1K.

Balance transfers are a little less lucrative as you have to pay upfront fee so 3% over 18Months is 2% annual...as opposed to 0% cost of capital.
by SovereignInvestor
Sun Jun 04, 2023 7:42 am
Forum: Investing - Theory, News & General
Topic: Treasury Must Issue 1.4T in New Debt Between Now and Year End
Replies: 56
Views: 7642

Re: Treasury Must Issue 1.4T in New Debt Between Now and Year End

I'm not even remotely an expert in this area but I don't see others mentioning that there will likely continue to be lots of demand for US debt from overseas. Rates are higher than they have been for the last 15 years or so and the US dollar has generally been getting stronger. I know there's been some fuss over China "liquidating" its US Treasury holdings but I believe much of the total drawdown has to do with interest rates rising a lot in the US over the last 15 months. In other words, the bond pain that was experienced by members on this forum was also experienced by foreign holders of US Treasuries, especially those holding bonds of longer durations. To be clear, I am just spitballing here. Foreign demand for treasurys has b...
by SovereignInvestor
Sat Jun 03, 2023 9:07 pm
Forum: Investing - Theory, News & General
Topic: Treasury Must Issue 1.4T in New Debt Between Now and Year End
Replies: 56
Views: 7642

Re: Treasury Must Issue 1.4T in New Debt Between Now and Year End

As for where the extra trillion will come from? Some pundits predict liquidity issues. But I don't think so. There's plenty of liquidity. Banks have more than $3 trillion in cash reserves on deposit at the Federal Reserve. That money is presently stuck there because the Federal Reserve is paying overnight reserve interest of 5.08%. If Treasury auctions exceed that rate by a few basis points, bankers will push those reserves out of their bank accounts and into Treasuries. Likewise there are about $3 trillion of cash in money market accounts that is stuck there with repos paying 5.08%. If auction rates rise above that rate by a few basis points, money market fund managers will sell their repos and instead buy Treasuries. So there's plenty of...
by SovereignInvestor
Sat Jun 03, 2023 9:00 pm
Forum: Investing - Theory, News & General
Topic: Treasury Must Issue 1.4T in New Debt Between Now and Year End
Replies: 56
Views: 7642

Re: Treasury Must Issue 1.4T in New Debt Between Now and Year End

Annualized deficit is in the 1.5T range. But the June-YE deficit could be closer to 900B as interest rates keep rising. Treasury General Fund (TGA) drew down from around 450B at start of 2023 to now under 50B, so of the YTD deficit of say 600B...most of that didn't require net debt issuance, it was paid for by draining cash at Treasury "checking" account. The fed also did QT of about 300B YTD but this was heavily offset by the emergency bank lending facilities so the QT effect was much less. Now for June to end of 2023...the TGA is targeting a 500B build level and 600B by September. So say 600B by year end, so to build TGA from 50B to 600B that requires 550B of debt plus the 900B say June-Dec deficit means a total of 1.5T net liqu...
by SovereignInvestor
Fri Apr 28, 2023 11:54 am
Forum: Personal Investments
Topic: selling most of I Bonds with 0% fixed rate in May
Replies: 45
Views: 7901

Re: selling most of I Bonds with 0% fixed rate in May

I’m not an I bond guy, but … If one has built up a portfolio of I bonds over a number of years (which is what it takes with the $10k per person per year purchase limit), it seems like selling one’s I bonds would almost be a ”no way back” decision, as it would take many years to rebuild the portfolio. So is it sound to liquidate an I bond portfolio based on the possible direction of short term interest rates? maybe I am not seeing something correctly but I am thinking the same... its like an IRA with a 30 year term and a guaranteed 0% actual with a slight upside potential. What would one gain by vacating this space and never be able to get back into it? All the equivalent fixed income investments outside of the treasury I bonds should not b...
by SovereignInvestor
Wed Apr 26, 2023 12:28 pm
Forum: Personal Investments
Topic: selling most of I Bonds with 0% fixed rate in May
Replies: 45
Views: 7901

Re: selling most of I Bonds with 0% fixed rate in May

USFR or TFLO likely have higher yields than SGOV. SGOV has lot of 1M bills which are being pressed down in yield.

TFLO USFR have floating rate treasury notes which reset every auction to 3Month treasury rate.
by SovereignInvestor
Fri Dec 23, 2022 11:52 pm
Forum: Personal Finance (Not Investing)
Topic: High Yield Savings account
Replies: 45
Views: 6829

Re: High Yield Savings account

SGOV. It's an ETF that rolls over monthly T bills. Yields around fed fund rate minus a little. Also since it's Treasurys...should be no state income tax. Just to piggyback off this, Ultrashort bond ETF's are also an option if $$ is in a brokerage account. Quick search: JPST (JPMorgan) has a SEC 30 day of 4.33%. PULS (PGIM) SEC 30 day yield of 4.43% Another option is Bank of America...through their brokerage arm Merrill Edge. Requires an initial deposit of $100,000 to open the account but can be withdrawn any time after. Current rate is 3.98%. Easy to transfer in and out of the account. Thank you. I have $$ in brokerage account and looking for T-bill or other value investment options. No problem. Also key is no state income tax on treasury ...
by SovereignInvestor
Wed Dec 21, 2022 10:09 pm
Forum: Personal Finance (Not Investing)
Topic: High Yield Savings account
Replies: 45
Views: 6829

Re: High Yield Savings account

SGOV.

It's an ETF that rolls over monthly T bills.

Yields around fed fund rate minus a little.

Also since it's Treasurys...should be no state income tax.
by SovereignInvestor
Sun Jul 10, 2022 11:12 pm
Forum: Investing - Theory, News & General
Topic: I'm not sure why stock market will continue to go up
Replies: 154
Views: 17039

Re: I'm not sure why stock market will continue to go up

In the long run the stock market trackes earnings per share..since PE can't expand and contract forever. Earnings per share track nominal GDP plus the benefit of buybacks. Buyback run rate ad a percent of market cap has averaged around 3% for last 20 years. So EPS can grow rought 3 points faster than nominal GDP. Nominal GDP is real GDP plus inflation. It should reflect both US and non US GDP since nearly half of S&P sales are overseas. Real GDP is aggregate output or total workers times the productivity (output per worker) The labor force at least in Us is expected to grow albeit very slow over next few decades. This is not true for EU,, China or Japan which have poor demographics. Productivity generally keeps advancing or is positive ...
by SovereignInvestor
Sun Jul 10, 2022 12:22 am
Forum: Personal Investments
Topic: I'm 100% equities... but I'm considering I-Bonds
Replies: 82
Views: 9432

Re: I'm 100% equities... but I'm considering I-Bonds

I am similar age and bought I bonds and also have 100% equities.

Reason is for the emergency fund...after 1 year the I bonds become just as liquid as cash basically. They're as safe at least but getting interest equal to inflation is higher than any CD or money market would likely give. Also the interest is deferred in terms of tax and exempt from state tax. So one can keep the 10K growing with inflation until one needs it then liquidate some or all and get a higher return than if it was cash or in money market.
by SovereignInvestor
Wed Jun 15, 2022 10:13 pm
Forum: Investing - Theory, News & General
Topic: The Fed raised interest rate today
Replies: 117
Views: 15993

Re: The Fed raised interest rate today

10 year inflation breakevens are around 2.7%, so the 10Y note at 3.3% is above inflation. 5 year yield of 3.4% is also about 5 year breakeven of 2.9%.

So the fed has done the job of taking yield curve above inflation.
by SovereignInvestor
Wed Jun 15, 2022 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage ARM vs fixed tradeoffs
Replies: 8
Views: 1293

Re: Mortgage ARM vs fixed tradeoffs

The risk of interest rates doesn't exist in a vaccum---what would make the rate ever reset to 8%+? Sky high inflation, which means likely a much higher income to pay off the debt after the reset.

The interest savings is huge and heavily favors the ARM.

I have an ARM, and what I recommend and have done is in years 5-7 at any time the rates are attractive that way there is more of a chance in that window the rates swing down to a favorable (or less unfavorable) level, can refinance to buy some time, can even refi into another ARM,
by SovereignInvestor
Sat Jun 11, 2022 8:47 am
Forum: Investing - Theory, News & General
Topic: Is VTI a potential tax bomb?
Replies: 34
Views: 4491

Re: Is VTI a potential tax bomb?

You can always sell your shares before final liquidation.

There would be arbitrageurs who would prevent it from being at a big discount to NAV, and if you sell VTI then wouldn't you only owe CG tax on any gain you have in price of shares, and it wouldn't matter what the fund gains were?
by SovereignInvestor
Sat Jun 11, 2022 8:17 am
Forum: Personal Consumer Issues
Topic: YouTube TV
Replies: 127
Views: 16862

Re: YouTube TV

Recently switched to YoutubeTV from DirectTV Stream, and YouTube is so much better and was cheaper.

Can pause and rewind mid show. Better searching for programs you'd like. Minimum price gets 3 Streams and once and a bunch of profiles. Its a great value.
by SovereignInvestor
Wed Nov 24, 2021 7:28 am
Forum: Personal Finance (Not Investing)
Topic: Umbrella liability - is it necessary?
Replies: 135
Views: 45522

Re: Umbrella liability - is it necessary?

sport wrote: Fri Nov 05, 2021 12:28 pm I always figure that if an insurance company can find an excuse not to pay, they won't pay. So, I try to err on the side of safety. Insurance companies are not your friend. Same thing with banks.
Subjective. If insurance companies weakly defended themselves and paid out claims generously the premiums would be sky high which is not friendly to consumers.

So either way people hate insurance companies.
by SovereignInvestor
Mon Nov 08, 2021 11:55 pm
Forum: Investing - Theory, News & General
Topic: Stock buybacks made with corporate debt
Replies: 11
Views: 1293

Re: Stock buybacks made with corporate debt

Buybacks are often a no Brainers.

A rated corporations can issue 10 year debt below 3% often. Any stocks that yield over 2%....the 3% interest cost net of tax deduction is often closer to 2%, so the buyback is cash flow neutral.

A stock like JNJ. The yield is around 2.6%, and their 19 year bonds are around that yield. But after interest deduction the net interest cost is around 2% so they literally save cash flow by buying back stock not even accounting for fact that dividend tends to grow over time while interest and debt are fixed.
by SovereignInvestor
Fri Oct 29, 2021 7:25 am
Forum: Investing - Theory, News & General
Topic: Old thread from 2018 that predicted low future returns
Replies: 43
Views: 4198

Re: Old thread from 2018 that predicted low future returns

You don't get something for nothing. These returns were basically printed using borrowed "money" and keeping interest rates artificially low for more than a decade. We're now an additional $22T in debt since 2008 because if it. This is not prosperity. It's an illusion IMO. It won't end well for most of the population either. 22T is nothing when household NET worth is well over 100T. As the debt keeps growing it tends to be inflationary so wealth grows. The markets know this and will do well over time and. Not be scared by numbers lime 22T which are small compared to the wealth of the country. Would you be worried about someone with 22K of debt if they had stocks, bonds, businesses,etc worth 142K? https://www.pymnts.com/consumer-f...
by SovereignInvestor
Fri Oct 29, 2021 7:19 am
Forum: Investing - Theory, News & General
Topic: Old thread from 2018 that predicted low future returns
Replies: 43
Views: 4198

Re: Old thread from 2018 that predicted low future returns

I remember opposing all the people who predicted low returns. In fairness I didn't expect +60% in S&P since then. It more like 8% long run returns insread of 5% or lower. The issue is many used the horribly wrong CAPE which is bad because the gap between forward earnings and past 10 year inflation adjusted has widened over time so the data is bad. The CPI has changed over time with its adjustment power being decreased after 1995..buybacks became huge factor after 2000...and the tax rates plunged after 2017...which made pro forma earnings much larger than trailing..with a gap bigger than the past for those 3 reasons so a CAPE of 25 in 2018 was the equivalent of say 18 in 1985 just from data changed alone. Any statistician would know not ...
by SovereignInvestor
Tue Apr 13, 2021 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Losing Down Payment Money when under Contract
Replies: 3
Views: 809

Losing Down Payment Money when under Contract

A friend is in contract to buy a Co-Op and put 20K down at contract. The co-op purchase price is 250K and they were looking to get a 200K mortgage with 50K down (20K at contract and 30K at closing). The bank pre approved them for a 200K mortgage when they made the offer.

After the formal application process, the bank was concerned about the Coop balance sheet and wanted 75K down instead of 50K. My friend cannot afford 75K down....if the deal doesn't go through because my friend cannot afford to put 75K down would he lose his 20K he put down at contract? Technically he is only approved at 75K and he doesn't have that much cash so would that qualify as not being approved?
by SovereignInvestor
Wed Mar 03, 2021 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: ROTH IRA 1st Time Home Buyer, Co-Op
Replies: 2
Views: 429

ROTH IRA 1st Time Home Buyer, Co-Op

I am 30 years old, and say I have $50K in my ROTH IRA, and $40K is contributions and $10K is gains. My ROTH is over 5 years old.

Can I pull out the entire $50K without tax and penalty...by doing $10K as being towards 1st time home purchase, and then the other $40K as contributions? Would this be done in 1 withdrawal, and treating parts of it separately, or 2 separate withdrawals ($10K and then $40K)?

Also, does a Co-Op qualify as a "home" for being able to pull out $10K for 1st time home purchase?

Thanks BH for your help!
by SovereignInvestor
Fri Nov 20, 2020 1:00 am
Forum: Personal Investments
Topic: Any way to exclude FAANG company from S&P index fund?
Replies: 20
Views: 4395

Re: Any way to exclude FAANG company from S&P index fund?

See what you're trying to do but clear way is long SPX index and short the individual stock. But usually stock agreement plans with companies don't allow employees to short to hedge their stock.

If MSFT got hammered its likely their profits would go to another SPX component or batch of components...this probably true of AMZN, probably go to other retailers, or AAPL, or NFLX.
by SovereignInvestor
Wed Nov 11, 2020 11:33 pm
Forum: Personal Finance (Not Investing)
Topic: Umbrella Insurance for business. Needed?
Replies: 4
Views: 486

Re: Umbrella Insurance for business. Needed?

Umbrella insurance is typically secondary insurance to one's primary insurance of homeowner's & auto insurance. It typically extends the liability policy limits to XYZ amount. Commercial policies are not cookie cutter. Therefore, I truly do not understand the idea of "commercial umbrella insurance". IE, if you want umbrella insurance, you'd typically ask your broker to just get you a higher liability limit. Say you're a business who has commercial auto for a fleet, and workers compensation for employees, and general liability insurance for premises/operations and/or products. Then instead of increasing limits on every coverage (Workers compensation typically has no limit), then the business can just stick with common say 1 mi...
by SovereignInvestor
Mon Nov 02, 2020 8:02 pm
Forum: Personal Finance (Not Investing)
Topic: What are the financial risks of not owning a house?
Replies: 106
Views: 12477

Re: What are the financial risks of not owning a house?

TropikThunder wrote: Sun Oct 18, 2020 1:40 am
SovereignInvestor wrote: Sat Oct 17, 2020 6:15 am There are risks especially if one doesn't save the money they are saving by not having to pay PITI and instead only rent.
I always laugh when I read comments like that. With my most recent refinance, the PITI on my 1,800 sq ft 3/2.5 townhouse in a Seattle suburb is $1,737. Compare that to the $1,750 rent for the 817 sq ft 2/2 apartment we moved to the house from. What was that again about investing the money you save by renting?
Opportunity cost not considered. To rent you put nothing down. To own the property how much equity do you need down which is generating no return?
by SovereignInvestor
Mon Nov 02, 2020 8:01 pm
Forum: Investing - Theory, News & General
Topic: How on earth can overweighting US stock over international stock possibly be considered Boglehead?
Replies: 253
Views: 20314

Re: How on earth can overweighting US stock over international stock possibly be considered Boglehead?

If one is a US consumer who spends US dollars then international adds an additional risk of FOREX without any additional return prospect so whats the point?

The S&P gets around 40-50% of sales overseas anyway.

Counting US stocks as 100% domestic is improper accounting, they are only 60% domestic at most.
by SovereignInvestor
Sun Oct 25, 2020 6:41 pm
Forum: Personal Finance (Not Investing)
Topic: Can my wife and I afford a $600K + house?
Replies: 134
Views: 17297

Re: Can my wife and I afford a $600K + house?

Yeah its more about old stock of houses. If a roof lasts 30 years and is say 9K to replace (not unheard of in VHCOL) , that's 300/year right there on average. If one of 5 major appliances breaks every 3 years (assume avg. 15 year life) and is 1K installed then that's around 300/year for appliances. Heating systems installed are often in order of 10K or so and have maybe 20 year life or so, so 500/year. Also they need servicing. Do this for every thing that can wear or break over time and it adds to a lot. Plumbing, Electrical, Masonry, so many things. This 1K figure is also geared towards old stock houses in VHCOL area which is why I asked about the age and assumed OP is least handy (not sure). If house is newer or OP is very handy or OP do...
by SovereignInvestor
Sat Oct 24, 2020 6:47 pm
Forum: Personal Finance (Not Investing)
Topic: Can my wife and I afford a $600K + house?
Replies: 134
Views: 17297

Re: Can my wife and I afford a $600K + house?

Seems like you could do it but I would add on maintenance and utilities. Maintenance/renovation, in that area can easily be 1K or quite a bit more, a month if the house is not new. Plus utilities. There's numerous polls that show greatest regret of millenial and new homebuyers is the maintenence costs which add up and are not known as easily in advance from the lenders estimates. As a recent homebuyer..in a similar HCOL, I attest that I underestimated maintenance costs by nearly 50% too low and the house was in decent shape. PITI plus taxes plus maintenance and utilities seems like it may exceed 5K based on the 700K offer. How much is budgeted for a child? 11K monthly income minus your expenses and say 5.5K for the house to be safe leaves j...
by SovereignInvestor
Sat Oct 17, 2020 6:15 am
Forum: Personal Finance (Not Investing)
Topic: What are the financial risks of not owning a house?
Replies: 106
Views: 12477

Re: What are the financial risks of not owning a house?

There are risks especially if one doesn't save the money they are saving by not having to pay PITI and instead only rent. Talk to someone with middle class income l in SF or NYC who rented for 30+ years and didn't save enough money and their rent has skyrocketed. They rent surges may price them out of being able to afford to stay but if they owned they would have somewhat locked in affordability. Yes of course if someone saved and invested the difference in rent vs owning years ago then they'd have enough wealth to pay the high rent so the real risk is what I mentioned in first paragraph. High inflation in housing costs in desired area to live is the big risk. High overall inflation may lead to higher interest rates which may keep a lid on ...
by SovereignInvestor
Fri Oct 02, 2020 10:29 am
Forum: Personal Finance (Not Investing)
Topic: If you have a pension, how do you view it?
Replies: 203
Views: 18455

Re: If you have a pension, how do you view it?

Get a quote for an annuity from an insurance company at the same age as you'd take pension and see the single premium needed to generate the monthly annuity income equal to.amount from pension. That would be the dollar value of the pension.

Then it should be treated as fixed income/bond and pretax since pensions are generally taxable.
by SovereignInvestor
Wed Sep 09, 2020 6:39 am
Forum: Personal Finance (Not Investing)
Topic: Share your net worth progression
Replies: 4288
Views: 1082077

Re: Share your net worth progression

In case any readers of this thread need a healthy dose of reality/perspective, check out the NY Times net worth ranker: https://www.nytimes.com/interactive/2019/08/12/upshot/are-you-rich-where-does-your-net-worth-rank-wealth.html Many of the responses in this thread are those in the 99th percentile for their age range (or thereabouts). Be careful when using the chart. Net worth is total assets minus total liabilities and can consist of many things including savings, investments, home equities, business asset, etc. If your net worth is mostly in 401ks or IRAs, make sure you subtract out 20-30% because that's Uncle Sam's money. TravelforFun Its uncle Sam's money only if you are up and are cashing out whilst still earning salary. Not exactly....
by SovereignInvestor
Mon Sep 07, 2020 8:35 am
Forum: Personal Consumer Issues
Topic: advice for light switch timer
Replies: 44
Views: 2865

Re: advice for light switch timer

They make dusk to dawn bulbs on Amazon that have built in light sensor.

I have used (via amazon)

"Govee LED Dusk to Dawn Lights Bulb 13.5W Sensor Light Bulbs with Photocell" for over 2 years now and they are great. Just buy bulb, put in outdoor socket and permanently leave switch on and the bulb only goes on when its dark outside, and goes off at dawn anywhere from 5am to 7am depending on time of year.

No need for switches or adjustments to the fixture and they're like $8/bulb. But mostly for clozed fixtures. If ezposed then they make outdoor floodlight bulbs with the dusk to dawn light sensor.
by SovereignInvestor
Thu Sep 03, 2020 1:45 pm
Forum: Personal Investments
Topic: Family member has one million in one stock , doesn't want to cash out
Replies: 314
Views: 45842

Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Instead of selling none and being concentrated or selling all and leaving gain in table and taking massive tax hit, perhaps selling N%, where 0 < n < 100% is a good idea.
by SovereignInvestor
Sat Aug 15, 2020 8:10 am
Forum: Personal Finance (Not Investing)
Topic: 10/1 ARM vs 10 year fixed - arbitrage?
Replies: 3
Views: 398

Re: 10/1 ARM vs 10 year fixed - arbitrage?

The problem is the 10/1 ARM has you borrowing at 3.0% and stuffing money in MM at well below that. The savings between the two likely won't be enough to pay off 10/1 balance after 10 years since the 0.5 % interest rate savings is likely much smaller than what you're losing by getting under 1% in MM while balance accrues 3.0% interest. If would be better if you took 10/1 ARM and either: 1) Made same monthly payment as 10 Year fixed option but since rate is lower you would pay off mortgage before 10 years. Or 2) Calculate how much the monthly payment you should make with 10/1 ARM given its rate in order to amortize the balance in 10 years. The payment will be less than that of 10 year fixed since the ARM has lower rate, so the different betwe...
by SovereignInvestor
Sat Aug 08, 2020 4:09 pm
Forum: Personal Investments
Topic: Margin usage in different ways.
Replies: 13
Views: 1427

Re: Margin usage in different ways.

Why borrow on margin at a premium to risk free rate when you can buy call options that implicitly borrow at risk free rate. Only drawback is taxability when rolling options but this is mitigated by doing lojg equity index call LEAPS in an IRA.
by SovereignInvestor
Thu Jul 30, 2020 4:04 pm
Forum: Investing - Theory, News & General
Topic: Ridiculously Misleading Headline About the Q2 GDP
Replies: 28
Views: 2699

Re: Ridiculously Misleading Headline About the Q2 GDP

Seasonally adjusted annualized rate or SAAR is not as relevant when the recession is caused by one time shock government imposed lockdowns.

Its not realistic to expect that to continue for 4 quarters so annualizing isn't as relevant.

For a normal organic recession due to normal business contraction (ie every recession but this one), a decline in 1 quarter would likely indicate more so that it would continue in the next quarter so annualizing is more relevant.
by SovereignInvestor
Mon Jul 27, 2020 10:01 pm
Forum: Personal Finance (Not Investing)
Topic: Using IB margin to pay off mortgage
Replies: 37
Views: 6050

Re: Using IB margin to pay off mortgage

I would recommend against it since broker can call in theory at any time and ruin your life.

If one insists then do risk is mitigated with using low leverage maybe 20% max, and maybe buy way OTM index put options out 2 or 3 years and keep rolling. Make the strike a bit higher than where you'd get a margin call. The cost of puts are deductible if they go worthless and adds to the effective interest rate as a cost of borrowing in a small way, and if they are ITM then they save you from insolvency
by SovereignInvestor
Tue Jul 14, 2020 3:36 pm
Forum: Personal Consumer Issues
Topic: Indoor Plants + Gnats
Replies: 19
Views: 1245

Re: Indoor Plants + Gnats

These worked for me with fruit flies.

https://www.amazon.com/dp/B086SLCJDV/re ... dFbFNTZ6DK
by SovereignInvestor
Fri Jul 03, 2020 9:21 am
Forum: Investing - Theory, News & General
Topic: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?
Replies: 747
Views: 54716

Re: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?

US outperformance isn't driven by solely Megacaps.

Look at US mid caps and small caps. They put up great returns the last 10 years although S&P large caps have outperformed them because large caps have mega caps.

International had major issue of strong dollar. Most of EU finance sector has been crushed due to negative interest rates.

Also whether warranted or not US outperformance has been driven by PE expansion.

If US had stable PE over last 10 years and the US Dollar didn't appreciate the outperformance of US would be much less.
by SovereignInvestor
Sat Jun 27, 2020 9:42 am
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance?
Replies: 146
Views: 10697

Re: How much umbrella insurance?

An insurer has a duty to settle below policy limit if they are able to. Otherwise the insurer is forced to pay Loss in excess of policy limit. If someone has $5M of assets and $5M umbrella and the plaintiff was willing to settle at $5M but the insurer wanted to try to defend to get case dismissed and it didn't work and judge awarded $10M. Then in this case the umbrella insurer is on the hook for $10M. This is good to know. Yes which is why when buying umbrella the better question is what's the most someone would settle a negligence claim against me at...not what judgment would be awarded. This is there to protect consumer. Here's an example: If there is a negligence case against insured and say it's known to be pure 50/50 whether trial awa...
by SovereignInvestor
Sat Jun 27, 2020 7:18 am
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance?
Replies: 146
Views: 10697

Re: How much umbrella insurance?

An insurer has a duty to settle below policy limit if they are able to. Otherwise the insurer is forced to pay Loss in excess of policy limit. If someonenhas $5M of assets and $5M umbrella and the plaintiff was willing to settle at $5M but the insurer wanted to try to defend to get case dismissed and it didn't work and judge awarded $10M. Then in this case the umbrella insurer is on the hook for $10M. Others posted about why the rate per $1M coverage increase as umbrella limit rises which is counter intuitive. A couple reasons why it would happen: 1) Adverse section. People buying that high of coverage know they need it and are more likely to be sued for negligence. 2) Many plaintiffs and insurers often have settlement at policy limits. So ...
by SovereignInvestor
Thu May 21, 2020 10:49 pm
Forum: Investing - Theory, News & General
Topic: Who's right about the future? Stock or Bond market?
Replies: 51
Views: 6373

Re: Who's right about the future? Stock or Bond market?

yohac wrote: Thu May 21, 2020 3:52 pm My worthless opinion is that the S&P 500 should not be higher than last October, when the unemployment rate was 3.6% and there was no pandemic. Yet here we are. Perhaps people are betting that the government simply won't allow the market to crash. In which case, earnings don't really matter and yes, FOMO takes total control.
Agree. But devils advocate is that last October we didn't know the fed can and will unleash endless QE to fight any shock. I mean that is a massive put option. The S&P is becoming like a FOMC insured savings account. To the extent that is the case the risk premium may need to decrease.
by SovereignInvestor
Wed May 20, 2020 9:42 pm
Forum: Personal Investments
Topic: Hold 50% WFC.PL and 50% in BAC.PL
Replies: 9
Views: 1581

Re: Hold 50% WFC.PL and 50% in BAC.PL

Writing off an entire asset class doesn't make sense. At the right prices preferred stocks are attractive. Bank preferred usually have qualified dividends and are non cumulative so they County as equity so they yield less due to favorable tax treatment. REIT and utility preferred are often more diversifying with utilities not having as much systematic risk of financial world and many REITs having hard physical assets that provide good recovery in a bankruptcy. Many issues are illiquid which is advantageous if bought well below par because they sell off a lot in quick panics which allows investor to get a good deal. The bank preferred tend to be the most liquid which provides not edge for individual investor. One has to diversify themselves ...