Search found 1219 matches

by dharrythomas
Sat Mar 09, 2024 7:16 pm
Forum: Investing - Theory, News & General
Topic: Moving Tax-Exempt TSP Funds (Combat Zone Contributions) to Roth IRA
Replies: 12
Views: 1976

Re: Moving Tax-Exempt TSP Funds (Combat Zone Contributions) to Roth IRA

If you are a federal civilian employee and have left military service, it is even easier, and has been available for a long time (I executed in 2014). You have the option to combine your military and civilian TSP accounts. Do so. The civilian TSP will not accept the tax free balance from the military account. Then do a direct transfer of the remaining balance in the military TSP to a Roth IRA. Thank you for the tip. I’m getting ready to start the process of moving the majority of my MIL & CIV TSP accounts to my Vanguard IRAs. It sounds like doing this step first may simplify my process a little. I have a small amount of tax exempt in my MIL TSP account. If it goes like I imagine this would result in just one Traditional IRA transfer af...
by dharrythomas
Fri Mar 08, 2024 6:10 pm
Forum: Investing - Theory, News & General
Topic: Moving Tax-Exempt TSP Funds (Combat Zone Contributions) to Roth IRA
Replies: 12
Views: 1976

Re: Moving Tax-Exempt TSP Funds (Combat Zone Contributions) to Roth IRA

If you are a federal civilian employee and have left military service, it is even easier, and has been available for a long time (I executed in 2014). You have the option to combine your military and civilian TSP accounts. Do so. The civilian TSP will not accept the tax free balance from the military account. Then do a direct transfer of the remaining balance in the military TSP to a Roth IRA. Thank you for the tip. I’m getting ready to start the process of moving the majority of my MIL & CIV TSP accounts to my Vanguard IRAs. It sounds like doing this step first may simplify my process a little. I have a small amount of tax exempt in my MIL TSP account. If it goes like I imagine this would result in just one Traditional IRA transfer af...
by dharrythomas
Tue Feb 20, 2024 8:47 pm
Forum: Investing - Theory, News & General
Topic: The number one reason why investors fail
Replies: 94
Views: 15824

Re: The number one reason why investors fail

Yes, Merriman provides good insights. How has that the Ultimate Portfolio done? It underperformed the S&P 500 index fund for 1 yr, 3 yr, 5 yr, 10 yr, and 15 years, not slightly but by a lot. I don't like the ultimate portfolio due to it being overly complex, but the above would be resulting and assuming the recent past is going to continue on and on. The truth is that all portfolios will have rough periods, including dominant US large caps. Long periods of underperformance is not a surprise for anyone who did proper research before diving into factor investing. And it's very possible for someone to still meet their goals despite some underperformance. I like the Paul Merriman Ultimate Buy and Hold Portfolio and it has definitely influe...
by dharrythomas
Sun Feb 18, 2024 3:34 pm
Forum: Investing - Theory, News & General
Topic: REITS As A Supplement to Bonds in Retirement
Replies: 77
Views: 7836

Re: REITS As A Supplement to Bonds in Retirement

Let me join the choir. REITs and any other sector funds are equity. If you want REITs, they count as the part of your equity allocation. REITs are not substitute for fixed income.
by dharrythomas
Sun Feb 18, 2024 3:27 pm
Forum: Investing - Theory, News & General
Topic: The One-Fund Portfolio as a default suggestion
Replies: 872
Views: 235000

Re: The One-Fund Portfolio as a default suggestion

Hi everyone, I finished reading through this entire thread and had a clarifying question: I'm a young investor in my 20s. I have been using the Boglehead VPW Accumulation worksheet to determine my biweekly savings goal which I have set to auto-invest into my 401(k). Currently, I'm making $65,000 with a 90/10 asset allocation in a TDF. That amount per the VPW spreadsheet is $425 per paycheck (assuming retirement at 55 with $50k in existing assets and $2,686 in SS benefits at age 70 not adjusting for inflation). That's a 17% savings rate. I'm really loving the appeal of the one-fund portfolio. I like the idea of once every year running the VPW accumulation spreadsheet to determine my bi-weekly savings amount, and otherwise not having to do a...
by dharrythomas
Sun Feb 11, 2024 3:04 pm
Forum: Investing - Theory, News & General
Topic: Moving Tax-Exempt TSP Funds (Combat Zone Contributions) to Roth IRA
Replies: 12
Views: 1976

Re: Moving Tax-Exempt TSP Funds (Combat Zone Contributions) to Roth IRA

If you are a federal civilian employee and have left military service, it is even easier, and has been available for a long time (I executed in 2014).

You have the option to combine your military and civilian TSP accounts. Do so. The civilian TSP will not accept the tax free balance from the military account.

Then do a direct transfer of the remaining balance in the military TSP to a Roth IRA.
by dharrythomas
Wed Jan 17, 2024 2:12 pm
Forum: Investing - Theory, News & General
Topic: What's a proxy fund for a 60/40 portfolio? To illustrate market return
Replies: 9
Views: 1484

Re: What's a proxy fund for a 60/40 portfolio? To illustrate market return

Balanced Index
or
LifeStrategy Moderate Growth

Depending on whether you want international exposure.
by dharrythomas
Wed Jan 17, 2024 1:45 pm
Forum: Investing - Theory, News & General
Topic: How did you make your first $1M?
Replies: 148
Views: 33618

Re: How did you make your first $1M?

1. Started IRA the year I graduated from college (1984) invested almost every year. Moved to Roth at inception. 2. Lived below our means, after one VA loan, 20% down with accelerated mortgage payoff, mostly used cars (one new before 2015). I didn’t try to keep up with the Jones. 3. Avoided debt. 4. Used workplace retirement accounts. 5. In addition to primary job, 19 years overlap working with the Army Reserve. Wife also worked a number of years. 6. Made a little over the median family income at my primary job. 7. Stayed married and spouse supported the program. 8. Started with balanced mutual funds in 1988. 9. Found Vanguard and Boglehead in the mid-1990s. 10. The rest is time in the market, compounding, and the blessings of the generous o...
by dharrythomas
Mon Jan 15, 2024 4:48 pm
Forum: Investing - Theory, News & General
Topic: Aren't you an above-average investor?
Replies: 169
Views: 17518

Re: Aren't you an above-average investor?

I don’t think the theory is that you can’t beat the market. The theory is that it is incredibly hard to beat the market consistently over time. Such a small percentage manage to achieve it that a buy and hold investor in a low cost broadly diversified market index fund will achieve far above average returns. By definition, the people who aren’t invested in a total market index fund also hold the market portfolio in aggregate. So overall they get the market return less higher fees. In total, they can’t do better. I accept that there are people who will beat the market, their individual returns are often supplemented by the fees the charge others (Buffett for instance during his early pre-Berkshire partnership years). But since beating the ma...
by dharrythomas
Sat Dec 23, 2023 2:27 pm
Forum: Personal Investments
Topic: Any reason not to stuff it all into VTSAX?
Replies: 55
Views: 8599

Re: Any reason not to stuff it all into VTSAX?

KneeReplacementTutor wrote: Sat Dec 23, 2023 12:19 pm Totally makes sense if you can handle the volitility of doing so. Makes no sense whatsoever if you can’t.
And unfortunately, for any particular circumstance, that is impossible to know in advance with certainty.
by dharrythomas
Sat Dec 23, 2023 1:05 pm
Forum: Investing - Theory, News & General
Topic: Replace Bonds With International Stocks?
Replies: 210
Views: 25049

Re: Replace Bonds With International Stocks?

If you want to add international equity, I’d replace some US equity. You can make an argument using data for 100% equity. You can make an argument using dat for 100% small cap equity. If I behaved rationally rather than emotionally with my wife or any other area of my life, I might be willing to try it. Bonds are not part of my portfolio to increase return or reduce long term risk. They are part of my portfolio to dampen long term volatility and protect me from myself. When things are bad, there is a lot of correlation between US and international equities.
by dharrythomas
Sat Dec 23, 2023 12:40 pm
Forum: Investing - Theory, News & General
Topic: Am I the only investor allocating more towards Bonds in 2024?
Replies: 149
Views: 30600

Re: Am I the only investor allocating more towards Bonds in 2024?

Our Target Date funds in our retirement accounts will increase their bond allocation slightly. I simplified this year to a plan I think my wife can follow if I die first and so that if/when I experience cognitive decline, I can maintain it. Barring a life changing event like death of a spouse, I don’t anticipate any changes. I’m trying not to meddle.
by dharrythomas
Sun Dec 03, 2023 5:34 pm
Forum: Investing - Theory, News & General
Topic: Value vs Growth divergence is at all time high
Replies: 66
Views: 9657

Re: Value vs Growth divergence is at all time high

There are several things to take into consideration. (1) There are several different measures of value, some that may be less useful going forward or in different industries. For instance, book value may not be as important as in the past, when you needed extensive investment in plant and equipment to improve productivity. Metrics are different when your most valuable assets walk out the door every night. (2) Studies show that a small fraction of stocks have driven all of the excess returns over the T-bill rate for as far back as they can look. The problem is the ability to pick these stocks in advance. Of course, there is the option to quit looking for the needle and buy the haystack. (3) Just because the value factor exists, it doesn’t ha...
by dharrythomas
Sun Oct 29, 2023 1:36 pm
Forum: Investing - Theory, News & General
Topic: Is SCV always a long term winner
Replies: 40
Views: 4418

Re: Is SCV always a long term winner

Over the long term, SCV historically has beaten the market BUT none of use gets the long term. We each get a particular slice of the long term that matches our individual investment timeframe.

It is like gambling with a mathematical edge. The strategy will win over the fullness of time, but any one individual can lose everything before the law of large numbers catches up. SCV has higher expected returns, your mileage may vary.
by dharrythomas
Sun Oct 29, 2023 1:30 pm
Forum: Investing - Theory, News & General
Topic: Anyone still favor Vanguard?
Replies: 359
Views: 48425

Re: Anyone still favor Vanguard?

Vanguard holds our investment assets, mutual funds and ETF, outside of a work related retirement account.
by dharrythomas
Sun Sep 24, 2023 4:22 pm
Forum: Investing - Theory, News & General
Topic: Jack Bogle personal portfolio
Replies: 37
Views: 5509

Re: Jack Bogle personal portfolio

The way I understand it, Jack Bogle’s portfolio was more than an order of magnitude greater than mine. He owned some Wellington fund for sentimental or tax reasons, at one point he owned a stake in Wellington Management, he had a son who was a fund manager, he built considerable wealth before either IRAs, 401(K)s, or index funds were a thing. For those and other reasons, I don’t think there is much that I can learn and apply from his portfolio. Now his writing and speeches on the other hand…
by dharrythomas
Thu Sep 07, 2023 6:35 pm
Forum: Investing - Theory, News & General
Topic: Investing strtategy for nonprofit organization
Replies: 4
Views: 640

Re: Investing strtategy for nonprofit organization

I think you are trying to make it too complicated. A non-profit that I volunteer for had a complicated portfolio* with the associated fees. We switched to Vanguard LifeStrategy Conservative Growth (has 40/60 asset allocation) and nothing else. I realize this is not for everyone, but you might backtest Vanguard LifeStrategy Income with its 20/80 asset allocation against the current portfolio. Unless you have no international funds/stocks/bonds, I think VASIX would come out ahead over the long-term after fees. *Complicated in that it had several fixed income annuities. This is perfect! Cheap, broadly diversified, indexed, professional rebalancing daily for risk control, international component, right asset allocation, one fund, easy. Even fo...
by dharrythomas
Tue Sep 05, 2023 8:28 pm
Forum: Investing - Theory, News & General
Topic: What motivated you to save money?
Replies: 232
Views: 27995

Re: What motivated you to save money?

Greed, Fear, Envy, and “The Richest Man in Babylon”!
by dharrythomas
Sun Sep 03, 2023 3:20 pm
Forum: Investing - Theory, News & General
Topic: The Most Popular Portfolio In The World
Replies: 29
Views: 5001

Re: The Most Popular Portfolio In The World

warner25 wrote: Sat Sep 02, 2023 10:15 am In a technical sense, by definition, the most popular portfolio in the world is the market portfolio, right?
Not really. No individual has to hold the market portfolio and few, if any, do. It is just the aggregate of what everyone owns.

So in taxable accounts, that would mean (closest) Vanguard World Stock Index and the market weighting of Total Bond Index and Total International Bond Index, but since those are separate, this would require continual rebalancing.. But of course, even that varies depending on the circle you draw around markets. Private markets? Commodities? Real Estate?
by dharrythomas
Sun Jul 09, 2023 5:30 pm
Forum: Investing - Theory, News & General
Topic: Monte carlos withdraw success rate vs real life implementation
Replies: 51
Views: 4663

Re: Monte carlos withdraw success rate vs real life implementation

It is more art than science.

My recommendation would be to save more than the minimum and either take a fixed % of the portfolio or accept that you may have to vary withdrawals depending on conditions.

Most people here do not live a minimal retirement, the statistics for the country as a whole are not great. Many people retire on Social Security. Many others retire with only enough to generate less than $10K per year off their portfolio. Anyone with $2M and a paid off house is in the top 10% entering retirement.
by dharrythomas
Sun Jul 09, 2023 4:46 pm
Forum: Personal Investments
Topic: Is it too late for me to get started?
Replies: 59
Views: 11166

Re: Is it too late for me to get started?

1. It is never too late to get started. Earlier is better, but today is better than later. 2. The only fast ways come with great risk, few winners, and many losers. The Boglehead way works with a compound interest chart. There is no way to skip the left side of the chart. Warren Buffett got incredibly wealthy, as opposed to just very rich, in large part by starting early and working and living for a long time. He was out of school and working for Ben Graham in the 1950s. He’s still at it about 70 years later and accrued most of his wealth after age 65. 3. Doing something that motivates you to get up in the morning is important. Money is important. Money is a factor in every decision. Money often isn’t the most important factor. As long as y...
by dharrythomas
Mon Apr 24, 2023 8:30 pm
Forum: Investing - Theory, News & General
Topic: Bogle's view on ETF's
Replies: 61
Views: 5783

Re: Bogle's view on ETF's

For Vanguard funds, the difference in the expense ratio between the ETF and Admiral Shares is easily eclipsed by the bid ask spread. I suspect for an investor, that nets out and in reality makes a nominal difference in returns. But apparently, since there is less investor handholding required for ETFs, it saves money for Vanguard and allows lower expenses across all share classes. In the interest of full disclosure we own both as well as Target Date Funds, which as I understand it are Mutual Funds that own ETFs. By making the ETF a share class, Vanguard has been able to spread the tax efficiency across share classes and at least in theory lower the tax drag and increase returns for all share classes in a way that doesn’t show up in the tota...
by dharrythomas
Sat Mar 04, 2023 4:13 pm
Forum: Investing - Theory, News & General
Topic: MUST LISTEN "Bogleheads on Investing" podcast with financial historian Edward Chancellor
Replies: 165
Views: 22882

Re: MUST LISTEN "Bogleheads on Investing" podcast with financial historian Edward Chancellor

Great podcast. Really enjoyed listening this morning.

I’ve been saying that the suppressed interest rates of the last 20 years have caused malinvestment and it would take time to work thru the pain. It is finally nice to listen to someone (someone actually still living) who I can interpret as agreeing with me!
by dharrythomas
Mon Feb 27, 2023 2:26 pm
Forum: Personal Investments
Topic: Anyone dealt with a Qualified Plan Loan Offset?
Replies: 4
Views: 418

Re: Anyone dealt with a Qualified Plan Loan Offset?

You probably need to see a tax advisor. You should also check the date that the loan was defaulted. There is a limit to the amount of time you can hold the funds and then do a rollover. If was in 2022, you’re probably already too late.

I just took a TSP loan, the disclosures were clear to us about needing to pay off the loan if I changed employment.

Good luck.
by dharrythomas
Sat Feb 04, 2023 6:26 am
Forum: Investing - Theory, News & General
Topic: Target funds attractive right now?
Replies: 13
Views: 2905

Re: Target funds attractive right now?

I the Target Date funds, particularly with the expenses so low. My entire TSP account, my entire Traditional IRA, and the bulk of our Roth IRAs are in Target Date funds. Broad diversification, rock bottom pricing, automatic rebalancing, professional management with reducing risk as we age, you don’t have to stick with the date closest to your 65th birthday, so you can refine your risk. What is not to like?

We do not hold them in our taxable accounts.
by dharrythomas
Thu Jan 26, 2023 3:48 pm
Forum: Personal Investments
Topic: Need investing advice for elderly mother
Replies: 25
Views: 2803

Re: Need investing advice for elderly mother

I’d pay off the house. Based on the info provided, I’m assuming, she is not itemizing her taxes. Since you went to Fidelity, I’d use Fidelity Freedom Index for someone who is already retired for the IRA. She’s going to have to start taking RMDs from the IRA. Depending on her ability to drive, I’d revisit selling the car. You not only save the payment, but also insurance. Depending on the loan, you could consider paying off the car also. Without the house and car payment, she should be at about the median retirement savings for someone her age and have a positive cash flow. What you can’t do is take the bulk of her savings, invest it in CDs and expect it to be OK for 20 years. The math doesn’t work! You have to generate some income/growth on...
by dharrythomas
Fri Jan 20, 2023 7:49 pm
Forum: Personal Investments
Topic: Questions about converting my old Vangaurd Mutual Fund Accounts
Replies: 16
Views: 1940

Re: Questions about converting my old Vangaurd Mutual Fund Accounts

I do find having a settlement fund in each account annoying. It adds a step to making an investment because everything goes into the settlement account and then can be invested. Doing a Roth conversion was more complicated on the brokerage platform, I had to log into the web site, couldn’t use the app, and then if you did withholding, the withholding came from the settlement account and the withholding was calculated 2 different ways depending on whether the entire transaction was from the settlement account or the withholding was from the settlement account and the rest was from a mutual fund or ETF. For me that became an all week process: (1) sell to put some money in the settlement fund, (2) after settlement, go back and fill out the con...
by dharrythomas
Fri Jan 06, 2023 10:54 am
Forum: Investing - Theory, News & General
Topic: Slow bleeding in Asset value is driving me nuts
Replies: 220
Views: 23428

Re: Slow bleeding in Asset value is driving me nuts

AlohaBill wrote: Fri Jan 06, 2023 9:54 am Chinese water totture? Is that something akin to good old American water boarding?
It would depend on your perspective. Both are torture, but of very different types. Either can break a person, one slowly, the other much faster. It probably says something unfavorable about me that I know the difference between the two forms of torture.
by dharrythomas
Thu Jan 05, 2023 10:20 pm
Forum: Investing - Theory, News & General
Topic: Slow bleeding in Asset value is driving me nuts
Replies: 220
Views: 23428

Re: Slow bleeding in Asset value is driving me nuts

Good luck! No one knows how long this is going to last. Some people dump stocks in a sharp decline, some people get tried of the water torture of a slow decline consistently over time. Some believe that a bear market is only over when the market capitulates, max pain and people give up on easy gains in the market and sell. Then it sits near the bottom for a while and does nothing. I’ve also heard that bear markets are when stocks go back to their rightful owners. If you can’t handle the pain, the options are market timing or staying out of the market. I don’t recommend either course of action. I have no recommendation other than realizing that the pain of loss is part of the process and then learn how to endure the pain. The pain will be va...
by dharrythomas
Tue Jan 03, 2023 8:38 pm
Forum: Investing - Theory, News & General
Topic: Tesla: Growth or Value?
Replies: 204
Views: 17246

Re: Tesla: Growth or Value?

Tesla’s best days were when they had a tax credit that others couldn’t take advantage of If you're thinking of the $7500 EV tax credit, looks like things have been flipped where Tesla's most popular Model Y with 5 seats SUV is ineligible for the tax credit as the IRS considers it a sedan with a maximum MSRP of $55k: https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after The 7-seat / 3-row version of Model Y qualifies with a MSRP under $80k, so it'll be interesting to see how Tesla reacts to this decision. It seems like the legislative branch intended to promote clean American-made EVs, but the executive branch found a way to exclude Tesla and promote hybrids instead. But ...
by dharrythomas
Mon Jan 02, 2023 7:20 pm
Forum: Personal Investments
Topic: How is this possible? [Negative return on investment over past 10 years]
Replies: 110
Views: 17310

Re: How is this possible? [Negative return on investment over past 10 years]

Many years ago (around 2003) my Merrill Lynch financial advisor recommended I invest in a portfolio of stocks that would mimic an index fund. I received hundreds of transaction statements for small lots ranging from 3 to 30 shares. When I realized what Merrill Lynch had done I immediately told them to sell all of these small lots and reinvest back into a traditional index fund. I never did comprehend why Merrill Lynch thought that constructing an individualized index fund (other than the fees generated) was a better investment for a retail investor than buying a traditional index fund. It certainly was not simpler. However, I am sure other financial advisors have done the same. They didn't think it was better for the retail investor, they ...
by dharrythomas
Mon Jan 02, 2023 5:55 pm
Forum: Personal Investments
Topic: Transfer from Brokerage settlement fund (VMFXX) to IRA Brokerage
Replies: 6
Views: 1045

Re: Transfer from Brokerage settlement fund (VMFXX) to IRA Brokerage

Doing a Roth conversion is much more complicated in the new system also. Turned a one transaction process into a multi-day multi-transaction ordeal requiring the website. And I have both apps.

Good luck.
by dharrythomas
Mon Jan 02, 2023 5:49 pm
Forum: Personal Investments
Topic: PAS a quick review.
Replies: 9
Views: 1717

Re: PAS a quick review.

Thanks and good luck. My perception was that PAS was a slightly more expensive clone of the Target Retirement Funds.
by dharrythomas
Mon Jan 02, 2023 5:37 pm
Forum: Investing - Theory, News & General
Topic: New Brokerage accounts make Roth conversion harder
Replies: 3
Views: 510

New Brokerage accounts make Roth conversion harder

Doing a series of partial Roth conversions. Last year it was log into the app and one transaction including withholding Federal income tax (old enough there is no penalty). This year, I can’t do the transaction from either app, I have to log onto the website. From the website, I started the transaction and then found out that the default does not allow for withholding. When I went into the new transaction, I find that withholding comes from the settlement account, so I had to sell some mutual fund shares to put money in the settlement account. Then I’ll have to go back and do another transaction on Wednesday.

We’re not leaving anytime soon, but it is irritating to have systems made much harder as I age.
by dharrythomas
Sun Jan 01, 2023 2:04 pm
Forum: Investing - Theory, News & General
Topic: College Tuition Agreement With Children?
Replies: 140
Views: 12294

Re: College Tuition Agreement With Children?

I didn’t try to micromanage what the kids studied. When they started school in 2005 and 2008, I told them we’d help pay for them to go to a state school. If they wanted to go to a private school they’d have to pay the difference. Clearly, we didn’t have $350K set aside. We told them that if they didn’t have scholarships to pay for everything, they’d need to take the automatic level of federal student loans and then we’d figure out the difference. Then I sat them down and explained that student loans are not dischargeable in bankruptcy and if they didn’t finish we wouldn’t even think about helping them pay it back. Between scholarships, work, loans, and parental contributions, we muddled through. Both kids now have graduate degrees, jobs, sp...
by dharrythomas
Sat Dec 31, 2022 12:10 pm
Forum: Investing - Theory, News & General
Topic: Tesla: Growth or Value?
Replies: 204
Views: 17246

Re: Tesla: Growth or Value?

Tell me how much of a drag Musk’s unloading of Solar City on Tesla creates. What exactly are you referring to here? Tesla incorporated Solar City into it's Tesla Energy line of business years ago. I'm not aware of any plans for Tesla to unload any part of that business that will generate over $4B in revenue this year. Revenue is nice, I’d worry more about net income and cash flow. The Energy division may also eat into borrowing capacity when rates are rising and other EV manufacturers are expanding production.I’m not sure what the status of the business is now, but had it been profitable on its own at the time, Musk never would have sold it to Tesla. In addition, Tesla’s best days were when they had a tax credit that others couldn’t take a...
by dharrythomas
Tue Dec 27, 2022 7:21 pm
Forum: Investing - Theory, News & General
Topic: Tesla: Growth or Value?
Replies: 204
Views: 17246

Re: Tesla: Growth or Value?

Tell me how much of a drag Musk’s unloading of Solar City on Tesla creates. What exactly are you referring to here? Tesla incorporated Solar City into it's Tesla Energy line of business years ago. I'm not aware of any plans for Tesla to unload any part of that business that will generate over $4B in revenue this year. Revenue is nice, I’d worry more about net income and cash flow. The Energy division may also eat into borrowing capacity when rates are rising and other EV manufacturers are expanding production.I’m not sure what the status of the business is now, but had it been profitable on its own at the time, Musk never would have sold it to Tesla. In addition, Tesla’s best days were when they had a tax credit that others couldn’t take a...
by dharrythomas
Tue Dec 27, 2022 7:03 pm
Forum: Investing - Theory, News & General
Topic: In what situations mega backdoor roth is not worth it
Replies: 19
Views: 4797

Re: In what situations mega backdoor roth is not worth it

sailaway wrote: Tue Dec 27, 2022 4:53 pm
dharrythomas wrote: Tue Dec 27, 2022 10:06 am It is almost always worth it, as long as it doesn’t uncomfortably squeeze your disposable income or emergency account. You’ve already maxed a 401(k), so the question is Roth or taxable account. In that case, over the long run, the right answer is almost never taxable account.
We have considered selling from taxable to be able to use the MBR now that we have downshifted. We probably won't, but we have considered it.
Selling, paying taxes, and moving isn’t always worth it, but for new investment Roth is generally better than taxable.
by dharrythomas
Tue Dec 27, 2022 10:06 am
Forum: Investing - Theory, News & General
Topic: In what situations mega backdoor roth is not worth it
Replies: 19
Views: 4797

Re: In what situations mega backdoor roth is not worth it

It is almost always worth it, as long as it doesn’t uncomfortably squeeze your disposable income or emergency account. You’ve already maxed a 401(k), so the question is Roth or taxable account. In that case, over the long run, the right answer is almost never taxable account.
by dharrythomas
Tue Dec 27, 2022 9:54 am
Forum: Investing - Theory, News & General
Topic: Tesla: Growth or Value?
Replies: 204
Views: 17246

Re: Tesla: Growth or Value?

Tell me how the auto market plays out with all the other manufacturers moving into EVs. Tell me how much trouble Twitter causes for Musk. Tell me how much of a drag Musk’s unloading of Solar City on Tesla creates. Also remember the number of car companies that have been started in just the US and realize that only Ford survived, everyone else was taken over for next to nothing or had their stockholders written to zero in bankruptcy court.

Clearly, Tesla is a better value than previously, but I can’t project this market far enough into the future to determine whether Tesla is a value stock or a value trap. My crystal ball is cloudy, so I’m sticking with indexes, if it goes up, we’ll make money, if it goes to zero, we won’t lose too much.
by dharrythomas
Sun Nov 20, 2022 3:35 pm
Forum: Personal Investments
Topic: What did you do with your monthly mortgage payment amount after your house was paid off?
Replies: 48
Views: 4503

Re: What did you do with your monthly mortgage payment amount after your house was paid off?

I took about 1/3 and increased my TSP contribution. I let the rest go to the bank account and let DW have additional money to spend on the house or whatever else or an additional cushion. Part of the benefit of achieving some of these goals is the ability to loosen up a little. The idea is not to maximize account balances, the idea is to have enough and a comfortable margin for a good life and then enjoy. Money is a tool, it is not the point.

By the way, DW didn’t think 2/3 was enough. We balance each other.

If you are building a plan that is so tight that you need every dollar to perform as planned for 40 years, good luck. That would not match my life experience.
by dharrythomas
Sun Oct 23, 2022 8:34 pm
Forum: Investing - Theory, News & General
Topic: Wellington Fund
Replies: 83
Views: 12928

Re: Wellington Fund

Wellington and Balanced Index funds are both very good funds. I have owned both and still own one of them. There is one point that I believe has not been mentioned. Capital Gains. The Balanced Index fund has fewer capital gains each year, therefore giving it an advantage over Wellington, in the taxable portion of the portfolio, which is where I use it. I think it hasn't been mentioned mostly because almost nobody would own an active fund in a taxable account. Never say never. I was dumb enough to do it for many years. And, pay a lot of unnecessary taxes at that time. KlangFool Me too. The Bogleheads (special thanks to Taylor Lattimore and Rick Ferri who corrected many of my misconceptions without being insulting) educated me and have great...
by dharrythomas
Sun Oct 23, 2022 6:03 pm
Forum: Investing - Theory, News & General
Topic: Wellington Fund
Replies: 83
Views: 12928

Re: Wellington Fund

Wellington and Balanced Index funds are both very good funds. I have owned both and still own one of them. There is one point that I believe has not been mentioned. Capital Gains. The Balanced Index fund has fewer capital gains each year, therefore giving it an advantage over Wellington, in the taxable portion of the portfolio, which is where I use it. I think it hasn't been mentioned mostly because almost nobody would own an active fund in a taxable account. Never say never. I was dumb enough to do it for many years. And, pay a lot of unnecessary taxes at that time. KlangFool Me too. The Bogleheads (special thanks to Taylor Lattimore and Rick Ferri who corrected many of my misconceptions without being insulting) educated me and have great...
by dharrythomas
Tue Oct 18, 2022 7:12 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on Research Affiliates?
Replies: 12
Views: 1545

Re: Thoughts on Research Affiliates?

Fundamental Indexing is probably one of a number of reasonable ways to value tilt. My value tilt worked great 20 years ago during the dot com crash, not so much most of the time since then.
by dharrythomas
Tue Aug 30, 2022 6:20 pm
Forum: Investing - Theory, News & General
Topic: New fee for Vanguard mutual [and brokerage accounts - July 2023 updates]
Replies: 2094
Views: 215633

Re: New fee for Vanguard mutual accounts

Once they get us all on one platform, then the push for ETFs begins in earnest. The more in ETFs vs Funds, the bigger the cost differential. The bigger the cost differential, the more people will move. A virtuous cycle or a death spiral for the mutual funds, take your pick. Apparently, the two are not going to coexist peacefully, so Vanguard decided to disrupt itself. At least since they are share classes of the same fund, it will not create a taxable event. Given the volume of holdings in mutual funds they have via 401k plans, your fears will likely never be recognized in your lifetime. Maybe not, but I was an adult when K-Mart passed Sears to become the largest retailer in the US. We saw WalMart coming, but not Amazon. Talk about disrupt...
by dharrythomas
Tue Aug 30, 2022 6:03 pm
Forum: Investing - Theory, News & General
Topic: Stocks in the long run…are still risky
Replies: 74
Views: 13526

Re: Stocks in the long run…are still risky

https://mebfaber.com/2022/08/24/biwv6-joachim-klement/ The title says it all. I’ve seen other research that says stocks beat bonds in the long run, but sometimes the long run is over 40 years. Good luck. OP, it was my honor and pleasure to do a podcast with Meb Faber last year on my paper, Stocks for the Long Run: Sometimes Yes, Sometimes No. You may enjoy: https://mebfaber.com/2021/06/28/e324-edward-mcquarrie/ Here I’ll just echo a point Nisiprius and others have made. Return = +f(risk) High returns are received for taking on a large amount of risk. High returns over the long term require that stocks remain risky over intervals of arbitrary length. The risk that fuels strong returns can’t just be present in the short term. Many people mis...
by dharrythomas
Tue Aug 30, 2022 5:49 pm
Forum: Investing - Theory, News & General
Topic: New fee for Vanguard mutual [and brokerage accounts - July 2023 updates]
Replies: 2094
Views: 215633

Re: New fee for Vanguard mutual accounts

Once they get us all on one platform, then the push for ETFs begins in earnest. The more in ETFs vs Funds, the bigger the cost differential. The bigger the cost differential, the more people will move. A virtuous cycle or a death spiral for the mutual funds, take your pick. Apparently, the two are not going to coexist peacefully, so Vanguard decided to disrupt itself.

At least since they are share classes of the same fund, it will not create a taxable event.
by dharrythomas
Fri Aug 26, 2022 9:24 pm
Forum: Personal Investments
Topic: Any Reason to Stay in TSP
Replies: 75
Views: 10443

Re: Any Reason to Stay in TSP

I agree, when I retire, I’m moving everything, assuming of course, that my wife gives me permission to move the funds. I want the Roth portion in an IRA, I’m planning to do Roth conversions, and then if I live long enough, planning to do QCDs. Everything should be easier from outside the TSP. Unlike some others, I never expected the mutual fund window to improve things, but the cost is easily avoidable—I’m still 100% LifeCycle Fund. I didn’t like the politicians meddling in the Board’s international investment policy a couple of years ago, but I guess that is to be expected for a government plan. Like Vanguard, the system transition is a little uneven. The expenses are higher but still rock bottom. Regardless, the TSP is still by far the be...