Bogleheads.org

I have done it and it isn't worth it. A lot of the offerings are for income, taxed at regular income. If it is equity related, it comes with a k form that's often late, complicating taxes. They are also illiquid. I have had some investments in legal financing, real estate, transport ship, and private companies. Legal paid off but was late; real estate paid off but taxed at normal income; shipping was late and paid off 80% principal with interest; PE-one company belly up, another about to, and one doing ok. I didn't spend too much money on the "investments". IMO it was and will never be worth it. Boring, simple public investments are the best. To add. If you want something to play around with, sign up for Treasury direct. Yo will g...

https://www.morningstar.com/articles/11 ... increasing

Here's a nice article on the subject. I don't think bond and equity holder pain is going to stop the risk taking. In fact, supporting deposits to an unlimited amount free of charge is not going to help with extreme risk taking. I think if entities who need or want to carry above the FDIC limit, they should be required to buy individual insurance...kind of like flood insurance. It could also be waived as long as they are aware they will be out above the automatic 250,000 limit.

https://www.reuters.com/business/financ ... 023-03-15/

Banking stocks taking a beating. I wonder how far the indexes are going to go down. Anyways fun to watch as long as you don't peak at your portfolio.

https://www.cnn.com/2023/03/12/investin ... index.html

Decided guarantee deposits. Also second bank closed related to crypto.

Ed 2 wrote: ↑Sun Mar 12, 2023 9:00 am

Tooth wrote: ↑Sun Mar 12, 2023 8:57 am My question is why did people all of the sudden need to rush to get money out. Do they have a liquidity problem? On a day to day bases people should not need all the money.

This are not individual account holders. This are business owners who need to do payrolls and pay bills asap.

So the bank did not have enough to satisfy normal operations of clients or they didn't have enough to cover a panic? What I can gather it started from a big investor telling people to pull money out.

Here's my stupid question.
My question is why did people all of the sudden need to rush to get money out. Do they have a liquidity problem? On a day to day bases people should not need all the money.

It is money you don't need, invest it all and do something enjoyable. Have a nice day.

gtrplayer wrote: ↑Sun Feb 05, 2023 3:48 pm

SmoothieJ wrote: ↑Sun Feb 05, 2023 3:41 pm [url]viewtopic.php?t=120071&start=50/url]

I found this pole from 2003. Interested in restarting the thread, or posing the same question.

I am 46, wife at 43. We are at this milestone and just curious where we are compared to our peers.

The median networth for a person in their 40’s is somewhere between $127,000-164,000, according to this yahoo finance article. You’re leaps and bounds above your peers.

https://www.yahoo.com/now/average-net-w ... 06631.html

This is crazy. I always have a perspective that everyone has a lot of money. I think having money distorts perspective.

Grt2bOutdoors wrote: ↑Sun Feb 05, 2023 3:53 pm

Tooth wrote: ↑Sun Feb 05, 2023 3:45 pm At 35. However, a million is the new 100 grand with inflation.

So, have you accumulated $10 million?

No, around 3-4 million but have a good pension and wife still wants to work. Maybe could hit 10 if wife continues to accumulate and market takes off again. I don't have a desire to work for money; I'll work for good food, though. Like good, home cooked meals.

At 35. However, a million is the new 100 grand with inflation.

https://www.morningstar.com/articles/11 ... bt-ceiling

Morningstar has an interesting read on "likely" scenarios for a resolution. Also does a brief analysis of impact. From reading this thread to this analysis I'm sticking with having cash on hand to pay the bills for several months. Even if the dollar is worth nothing in this event, my mortgage and everything else is priced in dollars.

Booogle wrote: ↑Tue Jan 24, 2023 9:36 am What would the effect be on Prime Money Market Funds if we default on Treasuries?

What would the effect be on Stable Value funds in 401ks if we default on Treasuries?

I think there will be panic. There's going to be a virtual run and the market will lock up.

This is the key distinction to scenario 1, treasuries stop paying for awhile but treasury market values don't plunge. It's not realistically 'if' the Fed still accepts treasuries as collateral in that case (besides other high quality bonds banks have): they will unless they don't need to, to prevent a liquidity crisis bringing down the system. That's as certain as anything... This is my sense as well. The inter-bank mechanisms to move liquidity around within the banking system, from where it is plentiful to where it is scarce, seem quite well-developed in the modern era — which is why a bank liquidity crisis due to the U.S. government default drama seems more remote. Though in the worst case (your Scenario 2), we'd definitely be sailing in...

Why don’t you get credit for the 22 years in the military toward your CS time? I know many who have done that. It takes time (like 12 months for paperwork to be routed around for signatures), but may be very worth it in the end. In addition, you can pay a deposit of 1.3% of the pay you received for your military service plus annual interest for the 7 years since you left the military to receive an annuity of 1% of highest pay x 29 years of service. It might end up to be about $10,000. Again, do the math to see if it's worth it. If your high 3 average pay is $50,000, that is $14,500 per year. if you buy the military time back, then my understanding is you have to give up your military retirement pay, to get the CS retirement pay for the sam...

Looking at data regarding from loses resulting from fraud, you'd think financial services would not have lax controls like it did with the gentleman in the story.

https://www.statista.com/statistics/958 ... nt-method/

I wonder if they really don't have skin in the game. Maybe the cost is not high for the banks. Seems high for the consumer. I tried to find stats on frequency of this type of crime but couldn't find it. The money lost to fraud seems to be high from the data source linked above.

It wasn't exactly clear what happened. I'm assuming he requested a rollover from the TSP (not mentioned in the article) to Vanguard, a check was cut and put in the mail but was intercepted and fraudulently cashed with minimal verification by Chase personnel whether due to errors or insufficient process controls. Unfortunately advisors generate income (often commission or a bonus) when new funds are brought in so they are incentivized to say yes, they are not incentivized for detecting fraud. Then he went to news media because he was getting slow rolled and ghosted by Chase while they "investigated". Agree the paper check rollover system needs to be replaced. I'm sure someone knows if the barrier requires a legislative fix or a re...

https://www.wsbtv.com/news/local/atlant ... NSCDMVEHI/

How would an individual stop this from happening? Seems to me, financial institutions sending paper checks is antiquated and creates opportunity for theft.

1. Before a stampede everyone is calm and then everyone tries to get out at the same time. 2. Before a 2008 financial crisis most economist and commentators were saying the risk was max 2-4% of economy, they didn't foresee the huge drop as bad news begat more bad news as more firms became insolvent because of other firms becoming insolvent. 3. Things had to get much worse before people got together to tried putting a TARP on the dumpster fire that was the economy. The same thing happening is a definite possibility. If US defaults then the consequences are unknown. I think there is a good possibility it could happen. so what is your plan? I'm thinking of putting off certain debt repayments and keeping as much cash on hand as possible. May n...

I wrote my representative about what I thought. I think that is the best thing to do.[Off-topic political comment removed. Moderator Pops1860]

An actionable thing to do is have plenty of liquid emergency money to keep your own lights on.

Retired for over one year from the military. Age 45 now. Family of three and pension covers living. Bought a house. First time owner and I'm not too impressed by being an owner but not too much of a load as it is a simple house. Wife went to work and has a solid job as she was underemployed as a military spouse. We don't use her money, she does the max for TSP and IRAs and the rest goes into taxable. My only concern right now is maybe having too much when we have to take money from retirement accounts. It is likely more money on a net bases than we make when working. Also the thought of spending long term monies feels wrong. My wife feels the same. I probably can find a reason to spend on my ten year old son. Currently doing online school w...

Do you pay estimated quarterly taxes on income derived from investments or at tax filing? Am I right assuming there could be a tax penalty for underpayment or does it depend on income source?

Is this a military or civilian account? If military, did you receive combat pay as part of the tsp contribution? If not, no worries. My account is civilian. But your comment will help military TSP holders who will be reading this thread. Thank you, Victoria Good point. If you contributed tax free, combat pay to the TSP account, the other accounts will not be able to handle this. I've checked in the past from Vanguard and Betterment. At that time, they recommended keeping that money in the TSP. I'm not sure if you can partition the account to prevent rollover of combat pay. I've just been keeping the money in the TSP as it is cheap and simple, and I haven't looked at the matter again. If someone is thinking of doing this, I'd recommend doin...

Is this a military or civilian account? If military, did you receive combat pay as part of the tsp contribution? If not, no worries.

Wow, that's a super ambitious itinerary with a ton of movement. Keep in mind that every time you move from place to place, there is a lot of time you're not spending on fun/interesting things. Add in moving that much with 3 fairly young kids, and that doesn't sound like a lot of fun. My 2 kids are similarly aged and there's no way I'd try this. I would cut out a minimum of 3 destinations even without the kids. With this itinerary, Florence is between Venice and Rome, so your sequencing doesn't make sense to optimize travel time. Go Milan to Rome, then Florence, then Venice. I'm planning a trip to Italy next summer, and most people have said Venice is really only worth a day trip - if you can cut it out, going MIlan > Florence > Rome then f...

I see the data and it’s very confusing. Job growth slowing down (not the same as unemployment going up), some retail sales (durables) down, but travel is way up. Yet unemployment is at historic lows, and even the housing market is only slowing down, and prices are not dropping (they are just not increasing). Why do very smart people believe there will be a recession? This isn’t just talking heads on TV, it seems like everyone is preparing for a recession—it’s tech companies freezing hiring (and laying off 20% of people, e.g, SNAP), banks holding back dividends, companies cutting travel budgets, closing stores etc. I hope some folks on this forum can help answer this question :) [to the mods: is this an actionable question? I’m not sure but...

Recessions are normal and one should prepare by assessing their situation. Maybe you need an emergency fund, maybe do something at work to increase your value, maybe don't worry about because you're already rich and it would take a zombie apocalypse to give you a bad day. Note to self: watch zombie movies.

I have never earned 500k per year, neither alone or collectively with my spouse. Always saved. Spouse had 90 grand in student loans. While in school she and I worked and payed the interests on the loans to prevent compounding. Once she got a job, she paid off in a few years. The priority still was saving 401k match etc. Once able maxed out 401k, ira, and rest in taxable, accounts grew accordingly. I was lucky and retired from the military, so throughout recession I had a dependable income and now a retirement indexed to inflation. We were able to sock away near 3 million and now own a very simple home of 1600 sq ft. Wife, me and son. No pool, no fancy cars, Nissan versa note used bought three years ago when pcsd back to states. Wife continu...

tj wrote: ↑Sun Jul 10, 2022 12:07 pm

NoRoboGuy wrote: ↑Sun Jul 10, 2022 12:03 pm The G Fund is a rare instance of a "free lunch" in that it provides a higher risk free return than comparable investments available to the general public.

The utility of the fund is it permits one to increase bond duration elsewhere, thereby increasing the overall risk-adjusted return of the bond portfolio.

A lot of feds seem to be concerned that Congress can raid it at any time

Yes, through an act of Congress and a signature by the president. Otherwise it is a conspiracy theory.

Check out https://www.benefeds.com/
This is for federal employees, military retirees etc. I use it.

I have not changed anything. But I'm rich and have an inflation indexed pension for life that covers my needs and wants with a pile of money that goes up or down depending on the mood of the market. The pile I do not need. I know they're people greatly impacted by inflation but if it wasn't for the internet or media and the random person complaining at the gas station while I pump, I would not give any mind to it.

I already invest like a millionaire. I have rather boring investments.

Regardless of the rate, I bonds are a zero real return investment unless the fixed rate goes up. I consider them cash instrument that maintains some buying power. I would not change other elements of the portfolio based on the current rate as the real return has not changed.

Also they are tax deferred until you sell.

I don't have a specific fee advisor. I know you can do an Internet search and find a plethora. Some of the big name places like vanguard and betterment have access to a cadre of fee based human advisors and you do not need an account with them. I did a search for betterment advice and they have fee based packages. Other sites may have the same. I think the advisors are independent from betterment and are contracted. I've never used a service like this so I don't know if they try to push a sale. PC was trying to get money under management for a fee, I didn't need that.

You could also post a portfolio review thread here. They're a lot of smart people that may be able to help or point you in a direction to get help.

JIMX7 wrote: ↑Fri May 13, 2022 11:02 am Anyone here have any advice on Personal Capital on thier Robo advisor platform ? Think there are numerous ones out there and are better now than years ago. I am sitting to aggressive at my age of 70.
I thought I knew more than I actually did. I need income and tax help on my portfolio.
Thanks

Awhile back I did one of those free consultations; fees are too high. Why not go with a fee only advisor with your specific questions? Robo advisors could be ok like digital from vanguard or betterment. Could take the work out of managing if have no desire.

I believe there's not a human alive that hasn't succumbed to what you ended up putting yourself through; we are kind hardwired for it. Good learning experience for metacognition and may result in better behavior going forward.

Are you willing to share your funny money details?

Interesting. Why wouldn't the feds increase the limit to encourage more people to lock money away? Would this help decrease liquidity in the economy and help decrease inflation? Because the people most affected by inflation don't have the disposable income to buy more. If would essentially be a gift to the 5%. I don't think your argument holds water since the government as two inflation-protected offerings: 1. I Bonds with a $10k purchase limit. 2. TIPS with an unlimited purchase limit. Why the disparity? I feel like a celebrity getting quoted by you! With that out of the way... Unless they're able to hold TIPS in a tax-advantaged account, at least they're paying regular income tax on the inflation adjustments. Since I Bonds aren't subject...

Interesting. Why wouldn't the feds increase the limit to encourage more people to lock money away? Would this help decrease liquidity in the economy and help decrease inflation? Or it would cause the government pay more interest dollars in which more money could be needed to print, and increase the inflation? Only if that money went into the economy and increased demand, right? If the money went into an economy of excess labor and excess resources, inflation would not go up much. Since the money is locked for a year, the next year could have conditions that favor excess supply. May be. Your original idea could make sense in theory, but in general, I don't think people savings "on a large scale" can move the needle of the inflatio...

Interesting. Why wouldn't the feds increase the limit to encourage more people to lock money away? Would this help decrease liquidity in the economy and help decrease inflation? Because the people most affected by inflation don't have the disposable income to buy more. If would essentially be a gift to the 5%. If we are at a point that people don't have excess, the demand should level off and decrease inflation. Targeting the money of the 5% should pull money out that would be invested in assets like houses. If I'm an investor in and uncertain market with increased inflation, wouldn't sticking my money into a safe real return asset be better than a less safe asset that may or may not perform. Wouldn't this help to slow asset prices?

BogleMelon wrote: ↑Wed May 11, 2022 12:35 pm

Tooth wrote: ↑Wed May 11, 2022 12:18 pm Interesting. Why wouldn't the feds increase the limit to encourage more people to lock money away? Would this help decrease liquidity in the economy and help decrease inflation?

Or it would cause the government pay more interest dollars in which more money could be needed to print, and increase the inflation?

Only if that money went into the economy and increased demand, right? If the money went into an economy of excess labor and excess resources, inflation would not go up much. Since the money is locked for a year, the next year could have conditions that favor excess supply.

Interesting. Why wouldn't the feds increase the limit to encourage more people to lock money away? Would this help decrease liquidity in the economy and help decrease inflation?

I believe the idea is from the financial services industry trying to sell product; for a lot of people, simple explanations are the way to go.

I'm riding it down to zero and back again.

Think of excess investment money as paying a debt to a person in the future; it is not your money.

Since I don't work, I buy twice monthly with my wife's money. Last month, I did even better and bought her an emerald necklace. She likes it when I spend her check. She also gets the max from her 401k. Been doing some tax harvesting as the future will be wonderful.

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vineviz wrote: ↑Sat Apr 23, 2022 2:01 pm

Tooth wrote: ↑Sat Apr 23, 2022 1:56 pm I'd say no as you cannot rebalance from a pension.

Why do you think that’s a concern?

A pension is not a bond substitute as it can't be sold or used to provide diversification to the portfolio. It is independent. As another poster stated in reply, you can't sell a pension to pay for an emergency.

I'd say no as you cannot rebalance from a pension.

We spend $45000. I'm retired and my military pension covers. We could spend 70000 without touching additional funds. With my math we could spend very safely 170000 per year if needed or wanted to. Wife is currently working and maxing 401k with match as well as all of net income in portfolio. Already own a home with mortgage of 2.5% with less than a grand outlay per month to pay. We'll likely have more than we need in a few life times. Lucky, not the wealthiest poster or the best looking but pretty good.