Search found 198 matches

by tripleb
Sun Oct 16, 2011 10:55 am
Forum: Investing - Theory, News & General
Topic: High yield bonds instead of annuity - why not?
Replies: 38
Views: 6449

you know that the number of cents per share paid out by Vanguard High Yield has dropped as interest rates have declined over the past two decades, How do you know that is the only reason that the distributions have dropped? What if the fund has suffered net capital losses over those twenty years? What if the per share distribution is also down simply because the fund has less money per share to buy bonds with? What if the trend of capital losses continues for the next twenty years? Ron Ron, I would argue that every one of your "what-ifs" are exactly right, and it's guaranteed that this fund will have a trend of capital losses for the next 20 years. By design, it's 99.99% guaranteed to happen (nothing is 100%). In fact, if the fun...
by tripleb
Sun Oct 16, 2011 8:17 am
Forum: Investing - Theory, News & General
Topic: High yield bonds instead of annuity - why not?
Replies: 38
Views: 6449

99% of investors should be looking for total return. Those investors should follow traditional investment philosophy like "low fees" and indexing because those factors contribute to a higher total return. However, some investors legitimately need to focus on tax-sheltering. In that case, they would invest in things that may have higher fees and create complicated trust positions that cost money. Other investors legitimately may need to focus on creditor protection (i.e. like OJ Simpson with a multi-million dollar civil judgment hanging over his head). In that case, the investment advice would be completely different than traditional investment philosophy. Owl would like to focus on getting a high yield. While the strategy doesn't ...
by tripleb
Sat Oct 15, 2011 10:15 pm
Forum: Investing - Theory, News & General
Topic: How are you doing YTD?
Replies: 68
Views: 6303

+11%

Permanent Portfolio of my own making (4x25%). I hit a rebalancing band near the stock market lows of the year so I gained a decent bit on it's way back up. On one hand you could argue I got lucky and the rebalance hit on the low, but then again if the market continued to fall after the rebalance, then my bonds would have compensated. That's the beauty of the PP :)
by tripleb
Sat Oct 15, 2011 9:25 pm
Forum: Investing - Theory, News & General
Topic: New California Annuity Reform Law
Replies: 7
Views: 873

Anytime the government adds regulations, the net effect is a reduction in services to the consumer, such that the regulated private business can meet required regulations. For example, the recent banking regulation law forced banks to start charging $5/month debit card fees. In this instant case, the likely result will be annuities in California will have a reduced payout of 20 to 50 basis points per year. I'm not commenting on whether the regulation is good or bad. Simply that the act of increasing regulations, on an otherwise free market, will result in reduced output to consumers, all else equal, because some of the resources going towards the previous output, will now have to go towards meeting regulations. I'm stating this as neutrally...
by tripleb
Sat Oct 15, 2011 8:54 pm
Forum: Investing - Theory, News & General
Topic: High yield bonds instead of annuity - why not?
Replies: 38
Views: 6449

Good luck to you Original Poster! Not sure why you solicited feedback and then ignored all of it, but clearly you know your goals better than us. Total return is not what you're looking for, then proper investment strategies are not what you should use. Similarly, if good health is not what you're looking for, then following the advice of a nutritionist would be silly. If safe driving is not what you're looking for, then following the advice of a car mechanic is pointless. Since your goal is counter to appropriate investment strategy (which has the focus on Total Return), you need to use alternative methods of investing as you describe. Nothing wrong with that. I'd offer an alternative situation if your goal is to have $X in your account ea...
by tripleb
Sat Oct 15, 2011 9:21 am
Forum: Investing - Theory, News & General
Topic: Treasury Direct Access Card
Replies: 39
Views: 13355

That said, to my understanding the use of the virtual keyboard would defeat a malicious keystroke capturing utility installed on a public computer, such as a PC at a library. Keeping the Treasury Direct website secure from attack from those attempting to break into accounts trumps issues of user friendliness in the interface IMO. Sure, it does mitigate the risk of a keystroke capturing utility. It does nothing to mitigate the risk of a video capture utility, which does exist, that take and store screenshots every fraction of a second, and upload them to a remote server. Someone can recreate your password based on the screen grabs. It also does nothing to mitigate ARP poisoning where your traffic is routed through someone else's computer th...
by tripleb
Fri Oct 14, 2011 10:44 pm
Forum: Investing - Theory, News & General
Topic: High yield bonds instead of annuity - why not?
Replies: 38
Views: 6449

Re: High yield bonds instead of annuity - why not?

So, my question in this framework is: Are there any *good*, convincing reasons not to use the Vanguard High Yield instead of an annuity as 20% of a total portfolio that is otherwise well balanced? 1) You are ignoring total return and focusing solely on dividend yield. The high yield bond fund pays a high rate of yield because of greater risk. It's a guaranteed fact that several of the underlying companies will default, and you will lose principal. So while the high yield bond fund may pay a yield of 8% (for example) your overall total return might be 4% because 4% of the principal was destroyed due to underlying defaults. Thus, if 4% of the principal is gone (for example) you are getting less and less "yield" returned to you each...
by tripleb
Fri Oct 14, 2011 10:33 pm
Forum: Investing - Theory, News & General
Topic: Is stock picking a dying art?
Replies: 38
Views: 3273

Stock picking is a dying art like Alchemy is a dying science.
by tripleb
Fri Oct 14, 2011 10:32 pm
Forum: Investing - Theory, News & General
Topic: Tax "Gain" Harvesting
Replies: 57
Views: 5651

livesoft wrote:Yes, tax gain harvesting makes sense. I don't see any trouble at all with it, so it will be worth the non-trouble.

However, many folks should have hundreds of thousands of dollars in carryover losses. That means they could sell something with a $300,000 capital gain that would be offset by the loss and not even have it show up on their tax return.
I'd love to have hundreds of thousands of dollars in carryover losses. That means I had over $1M at one point, and $600k to $700k now.

I dont think "many folks" in the US have $1M+ of liquid assets. Probably under 5% of the population or less.
by tripleb
Fri Oct 14, 2011 7:20 am
Forum: Investing - Theory, News & General
Topic: Gold's Expected Return
Replies: 97
Views: 11410

I'd argue that Cash and Risk Free Bonds have zero (real) return too. In fact, the return may be negative. Cash is yielding 0% to 1% depending on where you invest it. Inflation is 2% to 3% depending on how you calculate it. That's a real loss of purchasing power. Risk Free Bonds are yielding 2% to 3% depending on duration. Compared to inflation, you are either netting 0 or have a slight loss. TBM is not risk-free. Is has non-treasury bonds in it. That said, I'm doing pretty well with the Permanent Portfolio of 75% assets that have a real return of 0. In fact, PP is beating just about every Boglehead portfolio out there. No guarantee it will continue going forward, but I'll take my chances. Why is PP doing so good with 75% of assets producing...
by tripleb
Thu Oct 13, 2011 9:06 pm
Forum: Investing - Theory, News & General
Topic: Why is insider trading illegal?
Replies: 26
Views: 2459

Here's an article from the late, great, Harry Browne on why insider trading should NOT be illegal: "Railing against insider trading is consistent with the great American philosophy: "If you don't get what you want, sue somebody." Whatever happens, don't take responsibility for your own life. Investors shouldn't have to think for themselves, and they shouldn't have to feel responsible for their investment losses. There are evil people out there who took advantage of them. The Old Level Playing Field The insider scandals have raised again the concept of the "level playing field." We're all supposed to compete on the level playing field of life — in which, I suppose, no one has the advantage of being able to run downhi...
by tripleb
Wed Oct 12, 2011 10:33 pm
Forum: Personal Finance (Not Investing)
Topic: company stock as part of my AA?
Replies: 21
Views: 1669

The biggest reason to now invest in company stock:

If the company has a problem, then you lose your investment, AND your job, and are double screwed.

Just because you work there doesn't mean you are privy to everything that goes on.

That said, I like the idea of ESOPs if you get them at a discount to market, and then liquidate as soon as you are vested, provided it doesn't take up more than 5% of your portfolio.
by tripleb
Wed Oct 12, 2011 9:22 pm
Forum: Personal Finance (Not Investing)
Topic: Pros and cons of going All-Vanguard for a brokerage house?
Replies: 9
Views: 1509

I dont use TurboTax, or any other tax programs. I dont trust them. I like to manually calculate my taxes and manually project tax liability throughout the year and make decisions based on that projection.

The benefit of using VG for brokerage stuff is that its all at one place, and if you rebalance between something in the brokerage and mutual funds, it's much easier than trying to transfer between institutions.
by tripleb
Tue Oct 11, 2011 8:28 pm
Forum: Personal Finance (Not Investing)
Topic: What is marginal tax rate if subject to AMT?
Replies: 15
Views: 3168

Suppose you're in the 35% tax bracket on the basis of your gross income. Then you have a huge itemized deductions. That pushes your AGI down significantly and you would be in the 25% bracket or maybe the 15% bracket.

AMT kicks you in the nuts and says you're paying at least 28% regardless of what your fancy deductions are.

I suppose if you like being kicked in the nuts, then that's a silver lining.
by tripleb
Tue Oct 11, 2011 6:47 pm
Forum: Investing - Theory, News & General
Topic: Vanguard TIPS Fund
Replies: 11
Views: 3865

I would suggest either:

1) Hold the TIPS directly.

2) Hold the mutual fund, and sell off some of the shares to achieve whatever money you need every month.
by tripleb
Mon Oct 10, 2011 8:14 am
Forum: Investing - Theory, News & General
Topic: Too Much Tax-Deferred Savings?
Replies: 29
Views: 4245

To respond to the conversation in the middle of the thread, dividends within a 401k are tax-free, forever! Dividends are phantom income if you re-invest them. Imagine you had $100k in a 401k and it paid a 2% dividend. That's $2k of a dividend paid. The stocks drop to $98k on the same day that the dividend is declared. You still have $100k but you are left with owing taxes on $2k if that money is in taxable. If the money is in a 401k, you have $100k and no tax owed. I'm a big fan of paying as little taxes as possible. Going forward, who knows if there will still be a preferred capital gains and/or dividend rate. If the rhetoric from government means anything now, I'd suspect those preferential treatment will go away very soon because "w...
by tripleb
Sat Oct 08, 2011 7:08 pm
Forum: Personal Finance (Not Investing)
Topic: When to Retire
Replies: 48
Views: 7640

I've had several jobs. None were terrible. But I have too many hobbies/interests in my personal life and working has always interfered with them.

I've frequently taken off a few months in between full time employment positions and those were the best days of my life.

I'll never find work in a full time capacity that is better than my personal life because I never get bored. I'm a strong candidate for early retirement. I am only working for a paycheck right now. If I won $500k after taxes tomorrow in a special lottery (that doesn't require an entry fee because I don't play) I would immediately retire.
by tripleb
Wed Oct 05, 2011 7:02 pm
Forum: Investing - Theory, News & General
Topic: 401k Taxation Structure Switching Point
Replies: 18
Views: 2184

Thanks for the TL; DR because I didnt :) Have you added a sensitivity analysis on future tax changes (which coincidentally are disallowed for discussion on the forum)? Consider both future tax changes with respect to state/income (i.e. the retiree moves to a non-income tax state, as well as federal tax rate rise). Also, if you can figure it out, do a sensitivity analysis on VAT. i.e. what if income tax drops but VAT is applied. In this case, it would have been an epic fail to do a Roth, because future tax rates will be lower on the income side, but VAT will kill you on purchases. I personally feel VAT will eventually be applied, so I tend to lean towards deferred, rather than Roth, even when I was in the 15% bracket. Also consider the possi...
by tripleb
Wed Oct 05, 2011 8:36 am
Forum: Personal Finance (Not Investing)
Topic: how much for you to retire today?
Replies: 81
Views: 10378

Single, no children I can retire on $500k and live a similar lifestyle to how I live now. The founder of early retirement extreme retired on $300k. His lifestyle is much more aggressive than mine. But still I don't clip coupons, and I can easily make it on $15k per year and live nice on $1250 a month ($700/month rent; $250 a month food; $50/month utilities; $30 a month car insurance; $30 a month gym membership; $30/month internet; $10 or less prepaid cell phone; $80 a month high deductible health insurance). If I decide to buy a new TV I'll do part time work for a couple weeks and buy one. If I need to buy a new car, I'll do part time work for a couple months and buy one. If I decide to stay completely retired, I'll do without a new TV or n...
by tripleb
Wed Oct 05, 2011 12:44 am
Forum: Investing - Theory, News & General
Topic: How do I count an annuity in my Asset Allocation
Replies: 26
Views: 3049

I propose 2 options. I) Immediately take whatever money you get from the annuity and invest it into your overall portfolio which may be 40/60 or whatever you use. Then you are essentially counting the "actionable" amount of the annuity towards your AA. 2) Consider the annuity as the ability to reduce some risk in your overall investable assets and reduce the amount of stocks you are holding if you are using a traditional bogleheads AA. To simply say that you should ignore it is failing to realize the implications and opportunities as described above. If you follow the above approach, then the same logic applies to the money you get from similar sources like Social Security. However, I don't think anyone handles their money that w...
by tripleb
Tue Oct 04, 2011 8:50 pm
Forum: Personal Finance (Not Investing)
Topic: Is the algorithm for credit scores public (rev. engineered)?
Replies: 11
Views: 2017

To clarify other responses and add some more: 1) FICO is a "black box" algorithm that cannot, and will never be publicly revealed. Much like the Coca Cola recipe, it's proprietary trade secret intellectual property. 2) Due to the significant amount of data that exists, people have reasonably reverse engineered FICO within about 15% or so of the actual score, based on guessing how the algorithm works (if curious, research "multiple regression analysis") 3) Other companies have models that are similar to FICO using point #2 (but not exact, due to point #1) such as FAKO. 4) FICO is owned by one of the Big 3 Credit Bureaus. 5) FICO is an algorithm that must be applied to data. This data comes from the Credit Bureaus. Thus, i...
by tripleb
Tue Oct 04, 2011 8:42 pm
Forum: Personal Finance (Not Investing)
Topic: Unusual way to defer taxes
Replies: 32
Views: 3584

I've skimmed through all the posts. In my opinion this sounds amazing, and I'd even consider going out of my way to work for a company who offers this, just because of how amazing this is. 1) You can avoid state income tax entirely. You work in a state with high income tax, defer the income, and retire in a state with no income tax. 2) You can potentially avoid federal income tax entirely. Depending on how much and how often you withdraw, and what other deductions you have (i.e. accelerated depreciation on an investment property, or capital gains losses, plus personal deduction/standard exemption every year) you might pay $0 tax on a lot or maybe all of this income. 3) You can drastically increase your creditor protection. IRAs are immune t...
by tripleb
Tue Oct 04, 2011 8:32 pm
Forum: Investing - Theory, News & General
Topic: Jason Zweig on Stock Buybacks in the WSJ
Replies: 51
Views: 4737

In addition, any gains in the stock price are likely to be short-lived, since the market will adjust after the buyback is finished (sort of like how a price gaps down when a dividend is paid, but that change is usually swamped by swings in the stock price shortly thereafter). If you feel that the price swings down after dividend is paid but then recovers shortly thereafter, then there's free money to be had by buying dividend stocks just before they hit ex-dividend date, and then sell "a short time after" the dividend is paid once the stock recovers. You recoup the cost of the stock but got a free dividend! The main problem, though, is assuming that anything a large company does is in the shareholders' best interest. I know the f...
by tripleb
Tue Oct 04, 2011 8:25 pm
Forum: Investing - Theory, News & General
Topic: Jason Zweig on Stock Buybacks in the WSJ
Replies: 51
Views: 4737

I've already proposed a solution to this. Shareholders should be able to choose if they want to receive the earnings as cash dividend or keep it in the company. Retired guys can choose to take the cash dividend. Accumulators can choose to not receive cash. You can make an election the same way you vote for proxy. You can already do this now. Just take the appreciation you get from the buyback and sell that number of shares to take out the cash. In fact this is far superior to a special one time dividend, because who is to say that you happened to need exactly the amount of that dividend to spend? More likely you will need more or less, in which case with the buyback version you can simply sell more or less of your appreciated shares to get...
by tripleb
Tue Oct 04, 2011 8:21 pm
Forum: Investing - Theory, News & General
Topic: How do I count an annuity in my Asset Allocation
Replies: 26
Views: 3049

There's a few problems with ignoring it. Also a few problems with including it: 1) If you ignore it, then you fail to realize your true level of risk that you need to take with your investable portfolio. Consider 2 extreme examples to elucidate this concept: a) You have an annuity that pays you $10M per year. You have $500k in a 401k. You don't need to take any risk in the 401k because your annuity is set. You can put the 401k as 100% TIPS/MMF/TBM. b) You have an annuity that pays you $1 per year. You have $500k in a 401k. You decide that you need to be 40% Stocks and 60% Bonds in order to produce enough appreciation so that you don't outlive your money. 2) You cannot rebalance from an annuity. Thus, it's not fair to count it as Bonds, beca...
by tripleb
Mon Oct 03, 2011 12:04 pm
Forum: Investing - Theory, News & General
Topic: Jason Zweig on Stock Buybacks in the WSJ
Replies: 51
Views: 4737

FlyingMoose wrote:
tripleb wrote:Let's say...
People like you (who fall for this kind of trickery) are the reason we're having so many problems in this country right now. You probly also believe that the twin towers were blown up by the government, and that the moon landing was a hoax.
Please present a substantive counter-argument rather than resulting to personal attacks.
by tripleb
Mon Oct 03, 2011 10:16 am
Forum: Investing - Theory, News & General
Topic: Jason Zweig on Stock Buybacks in the WSJ
Replies: 51
Views: 4737

If a dividend payout presents you with unwanted cash for which you think the best use is reinvestment in the company, you can buy the stock. I can only buy back 85% of the value that I received as a dividend because I must give 15% to the federal government in taxes. If it's all about a tax dodge, sure, tax policies can skew people into doing things that would otherwise not make economic sense The money is already taxed twice prior to the dividend getting paid out. First it's taxed as income tax as I earn the money from my job that I will use to invest in the company. Second it's taxed at the corporate level as their earnings. I hardly think that wanting to avoid paying a third layer of taxes on my dividend income would be considered "...
by tripleb
Mon Oct 03, 2011 8:46 am
Forum: Investing - Theory, News & General
Topic: Jason Zweig on Stock Buybacks in the WSJ
Replies: 51
Views: 4737

Let's say I own $1000 of a stock. I have a choice of getting a $100 special dividend, or having the stock appreciate to $1100 through a buyback. In the case of the dividend, I immediately pay 15% in taxes, or $15 and get $85 in my pocket. Additionally, this special dividend screwed up my tax planning for the year, and may have pushed my adjusted gross income up just a little bit into a range that phases me out of another deduction. Thus, the actual marginal tax rate may be significantly higher than 15% if I am borderline on a phaseout. Or, I can get $100 in "hypothetical money" as another posted put it, through appreciated stock price. I could easily sell $100 worth of shares, if I wanted this money now as cash, and pay 15% long t...
by tripleb
Sun Oct 02, 2011 7:44 pm
Forum: Investing - Theory, News & General
Topic: Gold, silver bullion coins’ ‘fondle factor’
Replies: 28
Views: 3143

I like fondling paper Savings Bonds.
by tripleb
Sun Oct 02, 2011 7:18 pm
Forum: Investing - Theory, News & General
Topic: Why not 100/100 asset allocation
Replies: 234
Views: 24456

Mel Lindauer wrote: You're missing one very important word in your statement. It should say:
More risk=higher EXPECTED returns.
Mel,

I'd take it one step further and say:

More PERCEIVED risk = high expected returns.

Risk is a measure of standard deviation and is only known historically. Going forward, it's possible bonds will have more risk than stocks. However, the perceived risk going forward is that stocks will be more risky than bonds.
by tripleb
Sat Oct 01, 2011 11:19 pm
Forum: Investing - Theory, News & General
Topic: Are we all wrong on taxes and asset location?
Replies: 22
Views: 4065

I know a successful professional athlete that smokes weed before every game. That doesn't mean that I will be better athlete if I smoke weed. I'd stick with traditional Boglehead principles regardless of what this guy does.
by tripleb
Fri Sep 30, 2011 6:12 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard, Kindle and Security
Replies: 3
Views: 1258

I don't think Kindle 3rd gen's web browser is very good.

On top of that, if there's some browser vulnerability that a hacker discovers in the Kindle 3rd Gen browser, it's likely to never be fixed by Amazon since there's probably only 1 guy working at Amazon, for 5% of his time, working on that built-in crappy browser.

I'm willing to bet there's more hackers working on that browser than actual amazon developers.
by tripleb
Thu Sep 29, 2011 7:26 am
Forum: Personal Finance (Not Investing)
Topic: the health reform law and early retirement
Replies: 11
Views: 1569

Here's some bullet points on my thoughts applicable to the situation of someone nearing retirement age: 1) If health care reform remains in place, your cost of insurance will go up 9.9% per year (as the new law requires any premium raises above 10% to be approved by the government), and because all the new "benefits" of the law are directed to poor people, it will be paid for through cost shifting to people with money. 2) Health care reform will be ruled unconstitutional due to the inability for the government to require people purchase health insurance. One this mandate is struck down, the rest of the bill fails. 3) You are better off staying at work in perpetuity if you are unhealthy. 4) You are better off retiring early and foc...
by tripleb
Sat Sep 24, 2011 5:49 pm
Forum: Investing - Theory, News & General
Topic: Why Stocks Are Doing So Poorly
Replies: 95
Views: 12286

Ignoring the deep water aspect, one bit of oil well innovation has been all over the news lately: HYDRAULIC FRACTURING. It may be controversial, but it is new and innovative, making vast quantities of energy economically viable. So if it wasn't for this new technology, gas might have gone up 500% over the last decade instead of only 200%. Very innovative. I like what a previous poster had to say about innovation and patent trolls. It seems that in today's world, as opposed to 10 years ago, the way to make money is to sue people and try to claim patents, rather than invent new things. Other popular sources of money seem to be government grants, re: solar energy and others. Neither of these will actually "grow" the economy because ...
by tripleb
Sat Sep 24, 2011 3:08 pm
Forum: Investing - Theory, News & General
Topic: Why Stocks Are Doing So Poorly
Replies: 95
Views: 12286

Why Stocks Are Doing So Poorly

Forget about unemployment. Forget about inflation, deflation, or stagflation. Forget about Operation QEx Twist. The reason stocks are doing crappy is due to a failure to innovate. Why has Apple done huge gains over the last decade? They are innovating. Just about all other companies are failing to innovate. Look at Microsoft. They are losing $1B per year on Bing. They tried to break into the search engine market that was and is still dominated by Google. You can keep throwing more and more cash into it, but there's not much more to innovate on search algorithms in isolation. The future of searching online is trust-based recommendations from your social circle. Thus, Google+ will eventually tie into search algorithm and return search results...
by tripleb
Sat Sep 24, 2011 7:39 am
Forum: Personal Finance (Not Investing)
Topic: How many credit cards should Adam keep open?
Replies: 10
Views: 1603

Who's Adam?
by tripleb
Thu Sep 22, 2011 6:59 pm
Forum: Investing - Theory, News & General
Topic: Ways to Guarantee an Investment Loss while being Neutral?
Replies: 11
Views: 1663

Based on the comments in the linked threads along with this thread I imagine I can achieve what I want buy selling covered calls on SP500 Index EFT while buying puts on VTI - TSM ETF. They are 80% similar and probably have 0.95 to 0.98 correlation, yet different enough that the IRS can't claim I am engaging in straddling.

The problem I have is that I believe options have time frames built into them, so I can't indefinitely hold the option that "won" for 5 years to realize the gain. Anyone familiar with how the timing of options works?
by tripleb
Thu Sep 22, 2011 6:08 pm
Forum: Investing - Theory, News & General
Topic: Ways to Guarantee an Investment Loss while being Neutral?
Replies: 11
Views: 1663

And all of these machinations why? To save at maximum 35% * $3000 federal income tax? No wait, you don't save it, only get a deduction today and a tax bill when you realize the capital gain later. I'll be paying nearly 50% in effective marginal taxes next year when you factor in phaseout of various deductions I forgo by just exceeding a certain income level along with penalties I am personally subject to for exceeding a certain AGI due to my unique circumstances. If I can hang onto the "gain" for another 6 or 7 years when I retire, I'll be in the 0% tax bracket. So, yes, I would save it outright. As to how I got nearly 50% you have to take my word for it but I estimate about 43% to 47% tax savings on the $3k so even if manufactur...
by tripleb
Wed Sep 21, 2011 5:15 pm
Forum: Investing - Theory, News & General
Topic: Ways to Guarantee an Investment Loss while being Neutral?
Replies: 11
Views: 1663

Ways to Guarantee an Investment Loss while being Neutral?

I suspect most Bogleheads will scoff at the idea, but there are quite a few experts in investing here so I am posing the question. I am in a position where I'd like to guarantee a $3k taxable loss in 2012 so that I can reduce my taxes by over $1k by writing the $3kinvestment loss off my W2 income. However, I'd like to remain market neutral in my position. In other words, I want to realize a $3k loss in one taxable account and recognize a $3k gain in either a second taxable account, or an IRA. If the gain occurs in a second taxable account, I'll simply hold off on realizing those gains for several years until my effective tax rate is lowered. I've run several ideas in my head including pairs of inverse leveraged ETFs. The downside is obvious...
by tripleb
Wed Sep 21, 2011 9:46 am
Forum: Investing - Theory, News & General
Topic: Opening Treasury Direct Account with EIN for a Trust/LLC
Replies: 0
Views: 328

Opening Treasury Direct Account with EIN for a Trust/LLC

I couldn't find the paperwork on the TD website to open an account for an entity that has an EIN. Anyone successfully do it?
by tripleb
Tue Sep 13, 2011 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: 401k for house down payment
Replies: 26
Views: 3999

You could look at it this way. They aren't making any more land. The only thing for house prices to do is go up! :twisted:
by tripleb
Mon Sep 12, 2011 3:05 pm
Forum: Personal Finance (Not Investing)
Topic: 401k for house down payment
Replies: 26
Views: 3999

If you're having a difficult time coming up with the downpayment, then you cannot afford the house and shouldn't buy it.

Imagine you lose your job or are unable to work. How can you come up with the mortgage payments then? If it's that hard to get the downpayment together, you don't have the cushion available in the event of unemployment.
by tripleb
Fri Sep 09, 2011 5:46 pm
Forum: Personal Finance (Not Investing)
Topic: Switching from Cash Basis to Accural Basis As a W2 Employee
Replies: 7
Views: 2221

PaddyMac wrote:
tripleb wrote:My intent is to declare my first paycheck in January 2012, as income from December 2011, as the income was actually earned for work performed in 2011. Doing so will save me a couple thousand dollars in taxes, and ethically I feel justified in doing so since it's not my fault my employer is paying me in 2012 for services performed in 2011.
I'm not sure how it saves you in taxes to get more income in 2011?
I have non-refundable tax credits that will get wasted in 2011 if I don't get more income. I have made full IRA Roth Conversions and still have tax credits remaining.

Additionally I'll be in the 28% tax bracket next year compared to 0% this year.
by tripleb
Fri Sep 09, 2011 8:04 am
Forum: Personal Finance (Not Investing)
Topic: Switching from Cash Basis to Accural Basis As a W2 Employee
Replies: 7
Views: 2221

Sidney wrote:Can you clarify. Is it your intent to classify January, 2011 income as 2010 income and file an amended return for 2010, including the Jan. 2011 in your 2010 AGI?
My intent is to declare my first paycheck in January 2012, as income from December 2011, as the income was actually earned for work performed in 2011. Doing so will save me a couple thousand dollars in taxes, and ethically I feel justified in doing so since it's not my fault my employer is paying me in 2012 for services performed in 2011.
by tripleb
Fri Sep 09, 2011 7:09 am
Forum: Personal Finance (Not Investing)
Topic: Switching from Cash Basis to Accural Basis As a W2 Employee
Replies: 7
Views: 2221

Switching from Cash Basis to Accural Basis As a W2 Employee

Anyone have experience switching between Cash Basis and Accrual Basis tax reporting as a W2? My employer reports the W2 on a cash basis, but for tax purposes, I'd like to submit my taxes on an accrual basis.

According to IRS paperwork, it says I can secure IRS permission to change the accounting basis I file my taxes. It doesn't go into detail on how, how if I can do it as a W2 employee.

I could save a significant amount of taxes this year if I can count my January paycheck on an accrual basis for 2011 income (in the $2k to $3k range of tax savings).
by tripleb
Thu Sep 08, 2011 7:59 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Materials ETF (VAW) vs. Commodity Asset Class
Replies: 3
Views: 2543

No, the ETF of materials companies has little correlation to a commodities fund. Just because commodities are going up, doesn't mean the companies that excavate those commodities from the ground will go up In fact, they could work in reverse. Imagine an oil company that forward sold all their oil at $X per barrel. Then oil goes up 10%. The oil company is required to sell the oil at 10% below current market value, at a loss, because they signed the contract before the rise. Similarly, precious metal miners are no substitute for precious metals, if your portfolio calls for it. You have to take a root cause approach and ask why you want commodities to begin with. The reason is probably inflation protection. From there, you have 3 options: 1) T...
by tripleb
Mon Sep 05, 2011 11:42 pm
Forum: Personal Finance (Not Investing)
Topic: Pre-nup?
Replies: 205
Views: 26310

I refuse to get married until all humans of consenting age are free to marry each other. Eventually once gay marriage is legalized (and it will be, just like slavery eventually got banned, and women eventually got the right to vote), then I'll have to think of another reason why I won't get married. I think marriage is a really really bad idea. If you want to spend the rest of your life with someone, then by all means go ahead. Fill out living wills and grant each other the legal right to make decisions for the other in the event of a medical issue. If you want to share the same last name so people don't make fun of you, then have one of you legally change your name to match the other. If you want to wear pretty rings so people will know yo...
by tripleb
Mon Sep 05, 2011 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: Excess uninsured/underinsured motorist coverage
Replies: 33
Views: 5878

Do you have to pay income taxes on that insurance payout of $1M? I would imagine that you must need to pay them, because the insurance company is getting a tax-writeoff on the $1M and the government only lets one business take a writeoff when someone else is recognizing taxable income.

Thus when you win a free widget in a contest from a company, you get a 1099 for the value that the company deducted off their taxes.

However it seems reprehensible that the government would take a cut of insurance payouts so I imagine they don't. Anyone know?
by tripleb
Sun Sep 04, 2011 11:32 pm
Forum: Personal Finance (Not Investing)
Topic: Should I close extra credit cards?
Replies: 19
Views: 2457

Disable paper statements and get emails. Log into account 1x per month to verify no fraudulent activity. Then forget about it. Several reasons why: 1) You may need the credit at a point in time. Even if there's a 0.1% chance you might need it, that need may exist. If the cost to maintain the credit line is 30 seconds per month to log into the account, then it's worth it as an insurance plan. 2) Your FICO score *will* drop when you close accounts. FICO is based partially on average account age. This factor is one of the most significant factors towards the FICO compared to the rest. You may not care about your FICO now, but if you ever plan to: a) Buy a new house on a mortgage b) Buy a car on a loan c) Open a new credit card for any reason, ...
by tripleb
Sun Sep 04, 2011 11:22 pm
Forum: Investing - Theory, News & General
Topic: Your first 10k .. Where would you put it?
Replies: 27
Views: 3474

I like the Permanent Portfolio. I'm not a big fan of the mutual fund since it diverges from the 25x4 model but for amounts under $20k I'd considering using it - ticker is PRPFX. If you're using Vanguard, and have access to free VG ETFs, I'd throw in a little bit of EDV. Maybe 10% EDV and 90% PRPFX.