Search found 21627 matches

by grabiner
Sat Jun 16, 2018 8:40 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 428
Views: 96606

Re: Anyone regret paying off mortgage early?

I regret pay off 4.5% mortgage. I should have invested in Total Stock Index to get the 11% return . BTW, the 4.5% effective rate for me is 4% after the mortgage tax deduction. Even during the 2008 crisis with every equity 40% off, if you stay in course for 2 more years, you will still ahead of payi...
by grabiner
Sat Jun 16, 2018 8:37 pm
Forum: Investing - Theory, News & General
Topic: Which boglehead rule do you break--and are ok with
Replies: 113
Views: 6802

Re: Which boglehead rule do you break--and are ok with

Horror of horrors, I purchased a fixed annuity approx 35 years ago and over the past few years I have added enough money to it so it now comprises approx 15% of my portfolio. Note that what you purchased is a traditional fixed annuity, which pays a guaranteed rate without complicating features; thi...
by grabiner
Sat Jun 16, 2018 8:34 pm
Forum: Investing - Theory, News & General
Topic: Rate hikes vs - Muni, Corp, Total Bond funds
Replies: 14
Views: 1711

Re: Rate hikes vs - Muni, Corp, Total Bond funds

Thank you for your good point and explanation. What would you recommend is the best way to look at a bond fund like VWIUX (Intermediate Muni) over time in light of the changing Federal Funds Rate? Look at the SEC yield of the fund, and at the yield on Treasuries of similar duration to see the relev...
by grabiner
Fri Jun 15, 2018 10:39 pm
Forum: Investing - Theory, News & General
Topic: Gundlach sees 10 yr yields hitting 6%
Replies: 15
Views: 2615

Re: Gundlach sees 10 yr yields hitting 6%

The way to see that he is all alone here is that the current bond market doesn't reflect this difference. If 10-year yields are going to be much higher five years from now, then 15-year yields now should be much higher than 5-year years, since you could buy a 5-year bond now and reinvest it at the n...
by grabiner
Fri Jun 15, 2018 10:36 pm
Forum: Investing - Theory, News & General
Topic: Rate hikes vs - Muni, Corp, Total Bond funds
Replies: 14
Views: 1711

Re: Rate hikes vs - Muni, Corp, Total Bond funds

My own observations (so far) are that while the Federal Funds Rate has more than tripled in the last year and a half it has only gone up about 1.15 points to 1.70%. So while it is up it is a long way from the 5.25% level that it was in 2006. As for the impact on VWIUX Distribution Yield and Price, ...
by grabiner
Fri Jun 15, 2018 10:27 pm
Forum: Investing - Theory, News & General
Topic: Which boglehead rule do you break--and are ok with
Replies: 113
Views: 6802

Re: Which boglehead rule do you break--and are ok with

1 Develop a workable plan 2 Invest early and often 3 Never bear too much or too little risk 4 Diversify 5 Never try to time the market 6 Use index funds when possible 7 Keep costs low 8 Minimize taxes 9 Invest with simplicity 10 Stay the course #9 is the one I violate; I am a slice-and-dicer, overw...
by grabiner
Fri Jun 15, 2018 10:10 pm
Forum: Investing - Help with Personal Investments
Topic: Help with buying municipal bonds please
Replies: 4
Views: 770

Re: Help with buying municipal bonds please

Sometime your tax-exempt income can trigger the dreaded AMT . While some munis are subject to AMT, the only Vanguard muni funds which hold them are High-Yield Tax-Exempt and the money-market funds. Also, the AMT is much less likely to affect investors under the new tax laws. One of the main causes ...
by grabiner
Fri Jun 15, 2018 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: Converting real estate to stocks/bonds: pay off mortgages in the meantime or invest?
Replies: 2
Views: 216

Re: Converting real estate to stocks/bonds: pay off mortgages in the meantime or invest?

Paying down the mortgage on a 5% loan which you will liquidate in one year is equivalent to buying a one-year CD with a 5% yield. Therefore, you should do this instead of bond investments, as long as it doesn't cause liquidity problems. Note that you are not increasing your weight in real estate by ...
by grabiner
Fri Jun 15, 2018 9:57 pm
Forum: Investing - Help with Personal Investments
Topic: Pay down interest only mortgage or invest?
Replies: 5
Views: 586

Re: Pay down interest only mortgage or invest?

See Paying down loans versus investing on the wiki. If the mortgage rate is fixed for five years, then paying down the mortgage would give you a risk-free, tax-free 2.5% return over five years. This is the same return you could get on five-year municipal bonds, with comparable risk; Admiral shares o...
by grabiner
Fri Jun 15, 2018 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: Taking $1M+ Long Term Capital Gains
Replies: 68
Views: 6076

Re: Taking $1M+ Long Term Capital Gains

Thanks for the figure of $479K. This would constitute wages + short term gains, correct ? I have to manage my short term gains correctly. Most of it is from expired covered call options. Assume I go beyond $479K, would ALL my LT CG be taxed at 20%; that does not make sense , as I would be better of...
by grabiner
Fri Jun 15, 2018 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: If going Roth, do conversion or 403b?
Replies: 7
Views: 415

Re: If going Roth, do conversion or 403b?

These are equivalent from a tax perspective. If you convert $10,000 of a traditional IRA to a Roth IRA, you will pay tax on $10,000. If you contribute $10,000 to a Roth 403(b) instead of a traditional 403(b), you will increase your taxable salary by $10,000. And either way, you will have $10,000 mor...
by grabiner
Fri Jun 15, 2018 9:26 pm
Forum: Investing - Help with Personal Investments
Topic: Using Wellesley Fund as a bond alternative
Replies: 18
Views: 2027

Re: Using Wellesley Fund as a bond alternative

The Wellesley fund is 65% bonds. Therefore, you can use it for your bond holdings, as long as the amount you want to hold in bonds is 65% of the fund balance. However, I don't like the fund in a taxable account. The stock turnover is fairly high, leading to large capital gains. And both the stocks a...
by grabiner
Thu Jun 14, 2018 8:03 pm
Forum: Investing - Help with Personal Investments
Topic: "Bad" 401K or Taxable Account
Replies: 11
Views: 1034

Re: "Bad" 401K or Taxable Account

The calculation on which is better depends on your tax rates now and when you retire. If your future tax rate will be comparable to today then it's better to put it in taxable. If your future rate is lower, which is likely for most people, then it gets a little harder to decide. Based on some assum...
by grabiner
Wed Jun 13, 2018 10:20 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off mortgage early
Replies: 38
Views: 2820

Re: Paying off mortgage early

First, a mortgage is a negative bond. Second, what is the best use of your cash? Invest it in a 3.8% bond - that is 3.8% risk free. Or do you invest it something else - some higher return higher risk investment? If it were me, I would invest it in equities over a mortgage. I am confident that I wou...
by grabiner
Wed Jun 13, 2018 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off mortgage early
Replies: 38
Views: 2820

Re: Paying off mortgage early

Wiki link: Paying down loans versus investing Since you have four years left before your ARM resets, paying down your mortgage is equivalent to buying a risk-free four-year bond. (After four years, you will still owe money on the mortgage, but you will owe it at the market rate.) 3.8% is a high retu...
by grabiner
Wed Jun 13, 2018 9:55 pm
Forum: Investing - Theory, News & General
Topic: 1 Year Rule - Not allowed to execute new investment strategy until 1 year has passed
Replies: 27
Views: 2357

Re: 1 Year Rule - Not allowed to execute new investment strategy until 1 year has passed

I have a similar rule, but it has one important exception. From my Investment Policy Statement: This statement will be reviewed whenever there is a substantial change in my financial situation, and annually when I rebalance. If there is no substantial change in my financial situation, I will wait at...
by grabiner
Wed Jun 13, 2018 9:48 pm
Forum: Investing - Help with Personal Investments
Topic: "Bad" 401K or Taxable Account
Replies: 11
Views: 1034

Re: "Bad" 401K or Taxable Account

How long do you expect to stay with this employer? An extra 1.5% expenses is enough that you might come out ahead in a taxable account if you stay with this employer for more than 20 years. But if you leave before the 20 years are up, you can roll your high-cost 401(k) into a low-cost IRA, keeping t...
by grabiner
Wed Jun 13, 2018 9:44 pm
Forum: Investing - Help with Personal Investments
Topic: VMATX Maturity/Duration Question
Replies: 5
Views: 388

Re: VMATX Maturity/Duration Question

Keep in mind that for such a fund, the behavior is not symmetrical and linear with respect to rate changes. If rates go up significantly, the duration may increase (as fewer issuers will want to call early) and you may lose more than implied by the average duration measure now. In particular, this ...
by grabiner
Tue Jun 12, 2018 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 428
Views: 96606

Re: Anyone regret paying off mortgage early?

Even if I didn't have the mortgage, I would still itemize, because I have over $12K in other deductions. State and local taxes are limited to $10K, so a single taxpayer needs at least $2K of other deductions such as charity to reach $12K. Since I do this, every additional dollar of itemized deducti...
by grabiner
Tue Jun 12, 2018 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: Explanation of free credit scores
Replies: 16
Views: 1610

Re: Explanation of free credit scores

As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores se...
by grabiner
Tue Jun 12, 2018 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage or keep cd
Replies: 7
Views: 714

Re: Pay off mortgage or keep cd

Maybe a no brainer, though wanted to get opinions... we owe just over 100k on home mortgage at ~3% fixed rate. We have that much in no penalty cd that is earning 2%. Any reason to keep cd vs paying off mortgage, esp now considering we will not be itemizing mortgage interest deduction any longer... ...
by grabiner
Tue Jun 12, 2018 7:53 pm
Forum: Personal Finance (Not Investing)
Topic: Shifting money for house from stock funds
Replies: 12
Views: 869

Re: Shifting money for house from stock funds

If your taxable account is much larger than you need for your down payment, you can do the switching in your employer plan. If you need a $200K down payment, you can have $200K in an intermediate-term bond fund (now) and a short-term bond fund (within 3 years), leaving the taxable account all stock....
by grabiner
Tue Jun 12, 2018 7:45 pm
Forum: Investing - Theory, News & General
Topic: can a mutual fund manager tax loss harvest?
Replies: 7
Views: 452

Re: can a mutual fund manager tax loss harvest?

Thanks, all. So, I guess "tax-managed" funds would do it. I wonder how common it is among funds that do not declare themselves as tax-aware. If a fund isn't tax-managed, the transaction cost of tax loss harvesting hurts the reported returns, and the actual returns for fundholders who hold it in 401...
by grabiner
Tue Jun 12, 2018 7:42 pm
Forum: Investing - Theory, News & General
Topic: Withdraw from TIRA or Roth, it doesn't matter?
Replies: 14
Views: 1120

Re: Withdraw from TIRA or Roth, it doesn't matter?

I have always read that it's best leave the Roth as long as possible and withdraw from TIRA first (at least as long as the withdrawals will not push you into a higher tax bracket). However, if I plan do conversions to the top of the 12% bracket each year, it seems that it does not actually matter w...
by grabiner
Tue Jun 12, 2018 7:26 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3352

Re: Larry Swedroe: What Makes Factors Endure

One thought: it's not clear to me that that investability should be required in order for something to be a factor. Imagine a factor-like entity that is not investable. Actually, I think any valid factor pretty much has to be investable by definition. Investability doesn't mean that it is possible ...
by grabiner
Tue Jun 12, 2018 7:18 pm
Forum: Investing - Theory, News & General
Topic: Imagine a 10 year, 0%, noncallable loan
Replies: 49
Views: 2932

Re: Imagine a 10 year, 0%, noncallable loan

i think there are two things that i am trying to understand on a fundamental level, 1) how to appropriately value this loan, i.e., leverage, without complicating things with interest rates/payments, and 2) how to quantify/compare the opportunity presented by the loan against the steady liability of...
by grabiner
Tue Jun 12, 2018 7:10 pm
Forum: Investing - Help with Personal Investments
Topic: High Yield Municipal Bonds: Short or intermediate/long term, which to choose from?
Replies: 4
Views: 582

Re: High Yield Municipal Bonds: Short or intermediate/long term, which to choose from?

There is no free lunch in investing. The longer the duration of your bonds, the more interest-rate risk you take. But other bond investors know the same thing, and will demand higher yields for the longer duration. And you can't avoid the risk of high-yield bonds by selling when a recession hits; ev...
by grabiner
Tue Jun 12, 2018 6:58 pm
Forum: Investing - Help with Personal Investments
Topic: Why don't we index the Nasdaq too?
Replies: 16
Views: 1953

Re: Why don't we index the Nasdaq too?

The problem with investing in the Nasdaq index is that it isn't an index of stocks with an investment-relevant characteristic. Small-cap stocks behave differently from large-cap stocks; therefore, you might want a small-cap index fund tracking the Russell 2000, or a large-cap index fund tracking the...
by grabiner
Tue Jun 12, 2018 6:52 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Int. Growth vs. Vanguard Total Int.
Replies: 9
Views: 635

Re: Vanguard Int. Growth vs. Vanguard Total Int.

International growth has beaten international value since 2010. Therefore, international growth funds, whether index or active, are likely to have beaten international blend or value funds. That said, Vanguard International Growth tracked international growth indexes such as EFG (iShares EAFE Growth...
by grabiner
Tue Jun 12, 2018 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 428
Views: 96606

Re: Anyone regret paying off mortgage early?

Yes, but I have over $12K in deductions even before my mortgage. I pay more than $10K in state and local income and property tax, and donate more than $2K to charity. Therefore, I get the full benefit of my mortgage interest as a deduction. This is much less common for a married couple, which would...
by grabiner
Mon Jun 11, 2018 10:23 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 428
Views: 96606

Re: Anyone regret paying off mortgage early?

A lot of people might consider where we live a high cost of living area, but I would disagree. Our mortgage is $500K, and we live beyond comfortably. With a 2.75% interest rate, we only have $14K a year of interest. But it is also hard to generate a lot of mortgage interest because there is a mortg...
by grabiner
Sun Jun 10, 2018 8:56 pm
Forum: Investing - Theory, News & General
Topic: Investment money is "Fungible"
Replies: 82
Views: 5482

Re: Investment money is "Fungible"

So I get the bit where mental accounting doesn't make sense -- spending one's tax refund as if it were free money or cash in the wallet as not really counting -- or extreme envelope-style budgeting (which makes sense only if one really needs to get control.) But I'm not seeing it why it's a sign of...
by grabiner
Sun Jun 10, 2018 8:30 pm
Forum: Investing - Theory, News & General
Topic: TLH (tax loss harvesting) and ESPP. And betterment real?
Replies: 19
Views: 1318

Re: TLH (tax loss harvesting) and ESPP. And betterment real?

There is nothing wrong with using capital losses to offset long-term gains. You don't save as much in taxes as if the losses offset ordinary income, but you still save in taxes. Therefore, while you shouldn't take long-term gains just because there are offsetting losses, you still benefit if you hav...
by grabiner
Sun Jun 10, 2018 8:20 pm
Forum: Investing - Help with Personal Investments
Topic: No brainer for 401k contribution in state w/ income tax?
Replies: 6
Views: 771

Re: No brainer for 401k contribution in state w/ income tax?

Currently in a state with income tax of a flat rate 5% . Planning to move in retirement years(20 years away) to a state with no income tax. Currently in the 22% income tax bracket, married filing jointly. Assuming will be in lower federal bracket in retirement. Both wife and my employers have no 40...
by grabiner
Sun Jun 10, 2018 8:03 pm
Forum: Investing - Help with Personal Investments
Topic: Where to invest $50K+ down payment money for five years?
Replies: 45
Views: 3155

Re: Where to invest $50K+ down payment money for five years?

For five years, you can invest in a five-year CD (if you know that it will be a full five years; you don't want to be forced to break the CD one month early), or an intermediate-term bond fund which has a duration of about five years. Even in five years, there is substantial risk of losing money in ...
by grabiner
Sun Jun 10, 2018 7:55 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 428
Views: 96606

Re: Anyone regret paying off mortgage early?

A lot of people might consider where we live a high cost of living area, but I would disagree. Our mortgage is $500K, and we live beyond comfortably. With a 2.75% interest rate, we only have $14K a year of interest. But it is also hard to generate a lot of mortgage interest because there is a mortg...
by grabiner
Sun Jun 10, 2018 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Are insurance rates non-negotiable/fixed?
Replies: 13
Views: 529

Re: Are insurance rates non-negotiable/fixed?

While rates are set by formulas, you can sometimes get the insurance company to update the data it uses. For example, when I lived in NJ, my insurance rate depended on my credit. My rate was set when I got a new policy in 2010, but I had to request a recheck of my credit to get a better rate in 2012...
by grabiner
Thu Jun 07, 2018 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Investing or Paying Off The House
Replies: 14
Views: 1191

Re: Investing or Paying Off The House

Please help me think through an issue. I'll be receiving an after-tax bonus of $200-$225k in the next couple weeks and my wife and I are deciding whether to pay off our house or to invest the money in stock indexes. We've done well by investing aggressively, with a 90/10 stock-to-bond mix and I wan...
by grabiner
Thu Jun 07, 2018 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my HELOC, Refinance or Invest
Replies: 18
Views: 1359

Re: Should I pay off my HELOC, Refinance or Invest

Not to hijack, but I have a very similar question. The choice for me is between taxable vanguard index funds and a tax deductible HELOC @ 5.6%. Any calculators or graphs out there that can help me decie at what rate I should keep the HELOC and invest vs paying it off based on my tax/market assumpti...
by grabiner
Wed Jun 06, 2018 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my HELOC, Refinance or Invest
Replies: 18
Views: 1359

Re: Should I pay off my HELOC, Refinance or Invest

Thanks, I have the cash to pay it off so sounds like that is the best thing to do. I have the ability to refinance into one loan, probably at 4% or so. Does that change your opinion at all? Even keeping a 4% HELOC isn't a good deal. Paying off the 4% HELOC would be equivalent to buying a risk-free ...
by grabiner
Wed Jun 06, 2018 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage interest during life of loan
Replies: 6
Views: 781

Re: Mortgage interest during life of loan

This is completely wrong. Comparing two mortgages with equal interest rates, one with 5 years remaining and the other with 29 years, it makes even more sense to pay off or accelerate payments on the shorter duration loan, since you will realize the benefit earlier. (Or refinance to a shorter durati...
by grabiner
Wed Jun 06, 2018 8:31 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage interest during life of loan
Replies: 6
Views: 781

Re: Mortgage interest during life of loan

The math you quoted is wrong, and you are correct. While it is true that the late payments on a mortgage are mostly principal, your effective interest rate is always equal to the loan rate, and your return on a mortgage prepayment is always equal to the interest rate, Suppose you and I both have 4% ...
by grabiner
Tue Jun 05, 2018 11:14 pm
Forum: Investing - Help with Personal Investments
Topic: Do you change your AA in discrete chunks or gradually?
Replies: 20
Views: 1356

Re: Do you change your AA in discrete chunks or gradually?

I have made both types of changes, but my general principle is that planned changes should be made slowly, while unplanned changes should be made when necessary. For example, when I bought a home in 2013, this changed my risk tolerance, as I now had much higher living expenses for 15 years (while pa...
by grabiner
Tue Jun 05, 2018 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: Should I use an HSA?
Replies: 15
Views: 1392

Re: Should I use an HSA?

Since you are a federal employee, the way the government subsidizes premiums makes high-deductible plans with HSAs financially very attractive. The government pays 75% of the insurance premium (up to a limit), and if that premium includes an HSA contribution, the government is effectively paying 75%...
by grabiner
Sat Jun 02, 2018 3:42 pm
Forum: Investing - Help with Personal Investments
Topic: Picking bonds for my HSA
Replies: 10
Views: 961

Re: Picking bonds for my HSA

What do you think of Vanguard Treasury Money Market Investor (VUSXX) for Californians? It's fine for a cash holding, if it returns more than the bank-account option. Thus, if you save one year's deductible for likely current-year expenses, that could be in the Treasury fund. However, for longer-ter...
by grabiner
Sat Jun 02, 2018 3:36 pm
Forum: Investing - Help with Personal Investments
Topic: Capital gains distribution for index funds
Replies: 11
Views: 1346

Re: Capital gains distribution for index funds

Small-cap and value stocks which rise in price become large-cap and growth stocks, and thus small-cap or value index funds will have capital gains from index changes. However, the ETF creation-redemption process allows index ETFs, and Vanguard's index funds which have an ETF share class, to avoid m...
by grabiner
Fri Jun 01, 2018 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: Investing vs Paying down loan
Replies: 9
Views: 1077

Re: Investing vs Paying down loan

I have itemize the mortgage interest on the mortgage since it was opened. My plan is to continue itemizing even with the new tax laws and higher standard deduction. I have calculated to be able to itemize again. Returns from the after tax account has provided > 9% over a 10 year span. Understanding...
by grabiner
Fri Jun 01, 2018 9:22 pm
Forum: Investing - Help with Personal Investments
Topic: HSA
Replies: 5
Views: 656

Re: HSA

So I just tried to buy SUB, MUB, CMF for my HSA and Fidelity blocked it. Citing that these were tax free and couldn’t be put in an HSA. These are all tax free muni bond etfs. I only have 10k to invest in the HSA and wanted something relatively stable and also to avoid CA tax should I need the funds...
by grabiner
Fri Jun 01, 2018 9:11 pm
Forum: Investing - Help with Personal Investments
Topic: Capital gains distribution for index funds
Replies: 11
Views: 1346

Re: Capital gains distribution for index funds

I don't know if anyone explained why actively managed mutual funds normally distribute capital gains and index funds normally do not distribute capital gains or small capital gains. Actively managed funds sell & buy stocks based on their assumption that a particular stock is over valued, there is a...
by grabiner
Fri Jun 01, 2018 9:04 pm
Forum: Investing - Help with Personal Investments
Topic: HSA as retirement vehicle
Replies: 33
Views: 3054

Re: HSA as retirement vehicle

If you are not maxing out your retirement accounts, it is better to spend money from your HSA, and use the money you aren't spending for medical costs to contribute to your IRA or 401(k). The IRA and 401(k) can be spent on anything in retirement, and are likely to have lower costs, particularly with...