Search found 13505 matches

by Rodc
Tue Jan 31, 2017 9:42 am
Forum: Personal Finance (Not Investing)
Topic: Rate to project out savings
Replies: 21
Views: 4420

Re: Rate to project out savings

I don't think it is possible to accurately plan that far in advance. The two things you need to do: 1. Save at least 15% of your income. 2. Live below your means so that you don't have a large amount of debt. Everything you spend on is in play and includes housing, cars, clothing , vacations, entertainment etc. Control your spending, don't let it control you. +1 I use 1% real as middle of road calculation, 0% as worse case scenario and 2% real as optimistic. I'd go with the middle of road calculation as base case. 2% real is optimism? For stocks? Over 30+ years? We are in real trouble if any of the pessimistic assumptions on the site ever come true. Wouldn't that be a pretty good definition of pessimistic? :) Well, expectations are that lo...
by Rodc
Tue Jan 31, 2017 5:54 am
Forum: Personal Finance (Not Investing)
Topic: Rate to project out savings
Replies: 21
Views: 4420

Re: Rate to project out savings

Nate79 wrote:
Grt2bOutdoors wrote:
Dottie57 wrote:I don't think it is possible to accurately plan that far in advance. The two things you need to do:

1. Save at least 15% of your income.
2. Live below your means so that you don't have a large amount of debt. Everything you spend on is in play and includes housing, cars, clothing , vacations, entertainment etc. Control your spending, don't let it control you.
+1
I use 1% real as middle of road calculation, 0% as worse case scenario and 2% real as optimistic. I'd go with the middle of road calculation as base case.
2% real is optimism? For stocks? Over 30+ years?

We are in real trouble if any of the pessimistic assumptions on the site ever come true.
Wouldn't that be a pretty good definition of pessimistic? :)
by Rodc
Tue Jan 31, 2017 5:51 am
Forum: Personal Finance (Not Investing)
Topic: Rate to project out savings
Replies: 21
Views: 4420

Re: Rate to project out savings

sport wrote:DD got married. :oops: Thanks for the correction.
Well, she is someone's DW!
by Rodc
Mon Jan 30, 2017 10:21 am
Forum: Personal Finance (Not Investing)
Topic: Rate to project out savings
Replies: 21
Views: 4420

Re: Rate to project out savings

3% real is fine. This is not a particularly accurate exercise no matter what you do.

I suggest you also look at something lower and higher. Say 1% and 5%. If 1% is a complete fail you are at some modest risk, so would want to at least consider increasing savings. If you get lucky and have really solid returns you could see what might be a possible early retirement date.

Another huge unknown this far out is what expenses you might need to cover and what discretionary expenses you might want to cover.
by Rodc
Sat Jan 28, 2017 2:43 pm
Forum: Personal Consumer Issues
Topic: Glass top for a new kitchen table
Replies: 15
Views: 3242

Re: Glass top for a new kitchen table

An easy cheap alternative to glass:

Lightly padded vinyl table cloth cut to fit, cover that with a nicer looking table cloth.

The ones I am thinking of are sort of flocked on one side which is the side you put down.

When they are older you can switch to nice placemats at dinner time and otherwise let the wood show.

This looks nice (you can get seasonal table cloths if you like)(if not as nice as the wooden top), easy to clean (toss in washer), cheap to replace when stained.
by Rodc
Sat Jan 28, 2017 8:41 am
Forum: Personal Finance (Not Investing)
Topic: Criteria for admittance to the 2-comma club
Replies: 79
Views: 11021

Re: Criteria for admittance to the 2-comma club

First milestone - $1 million counting home equity. Second milestone - $1 million in investable assets, ignoring home equity. Approaching third milestone - $2 million if I start counting home equity again! 4th milestone - $2 million in investable assets, ignoring home equity - RETIREMENT! +1 Homer, you and I are on the same page and on same schedule. I'm mid 50s and want to hit my 4th milestone at 62!! :sharebeer Then $1 million in retirement income! (I plan on being retired far before this happens!) I plan on retiring before that 4th milestone since DW and I both have pensions "worth" modestly more than $1M together. Like most pensions, they are worth more if we wait to take them, so need enough savings to cover some years of no ...
by Rodc
Sat Jan 28, 2017 8:39 am
Forum: Personal Finance (Not Investing)
Topic: Anyone moved to another state for lower cost of living?
Replies: 72
Views: 15135

Re: Anyone moved to another state for lower cost of living?

OP: the subject of your post seems to have little to do with your actual post.

You want a plan but do not really provided a goal or goals, or time line desired for achieving the goal(s). If you had explicit goals like "get to where we had enough money to retire in cali as soon as possible" you could break that down into pieces (SMART goals) and start making concrete plans.

Why would you strive to stay moderately unhappy or not fully comfortable living where you are now? Why not try to love, find joy, find comfort where you are? If you end up loving it more than cali you win! If you still love cali more at least you had the best possible time where you are now.
by Rodc
Thu Jan 26, 2017 3:00 pm
Forum: Personal Consumer Issues
Topic: Full time to part time.
Replies: 41
Views: 6260

Re: Full time to part time.

You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions. And his social security will be way lower if he does this. Okay, let's have a little non-Boglehead reality check here. Having over $600k in retirement savings in one's mid-to-late 30s is exceptionally rare for the vast majority of Americans. It is not "next to nothing" at that age. Heck, I'm a bit older than them and I don't have anywhere near that amount yet (particularly since I entered the workforce at 30). Even if they stopped contributing entirely, left the balances untouched, and made an average of 1% return over inflation, they'd have about $1.5 million saved in their retirement accounts in 25 years. ...
by Rodc
Thu Jan 26, 2017 2:51 pm
Forum: Personal Consumer Issues
Topic: Full time to part time.
Replies: 41
Views: 6260

Re: Full time to part time.

You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions. And his social security will be way lower if he does this. Okay, let's have a little non-Boglehead reality check here. Having over $600k in retirement savings in one's mid-to-late 30s is exceptionally rare for the vast majority of Americans. It is not "next to nothing" at that age. Heck, I'm a bit older than them and I don't have anywhere near that amount yet (particularly since I entered the workforce at 30). Even if they stopped contributing entirely, left the balances untouched, and made an average of 1% return over inflation, they'd have about $1.5 million saved in their retirement accounts in 25 years. ...
by Rodc
Wed Jan 25, 2017 8:16 am
Forum: Personal Consumer Issues
Topic: Full time to part time.
Replies: 41
Views: 6260

Re: Full time to part time.

Goal33 wrote:Is he just lazy? I can't imagine willingly going from 85k to 43k income if I wasn't closer to financial independence.
Because guys are not allowed the same leeway to want to have family time as women. :oops:
by Rodc
Tue Jan 24, 2017 7:49 pm
Forum: Personal Consumer Issues
Topic: Full time to part time.
Replies: 41
Views: 6260

Re: Full time to part time.

blueblock wrote:Sounds good for him. What about you? What do you gain from his plan?
How about equity with her partner? What is good for the gander is good for the goose and vice versa.

Or maybe she can take a turn at full time?

One thing to consider is either one or both can go back to full time when the kids are in school full time. May have to pay for some after school care but that tends to be much less than daycare.
by Rodc
Mon Jan 23, 2017 8:03 pm
Forum: Investing - Theory, News & General
Topic: Unidirectional rebalancing?
Replies: 18
Views: 3525

Re: Unidirectional rebalancing?

FWIW: My 401K originally only had this rebalancing option.

New money could go in 40/60, 70/30 or 100/0 and if wanted you could change to elect to have new money go in 100% stocks, but you could not sell bonds to buy stocks.

By the late 1990s that had changed when we moved to Fidelity and a "modern" 401K plan.
by Rodc
Mon Jan 23, 2017 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax is playing games again.
Replies: 52
Views: 13548

Re: TurboTax is playing games again.

We end up giving a lot of stuff to Goodwill and others. (another entire thread could be devoted to why my wife has so much to donate, but let's not go there. Not to mention kids outgrowing various items).

One thing nice about TurboTax deluxe is the built in tool for valuing a jacket or a pair of shoes, etc. Makes my life way easier - I have no idea what these things are worth. And presumably if ever challenged I have a source of the values to point to - not just some number I made up.

Do any of the other various brands or flavors of TurboTax have similar tools?
by Rodc
Mon Jan 23, 2017 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: Value of company provided benefits
Replies: 9
Views: 1479

Re: Value of company provided benefits

If you are comparing one job offer to another you can value things like vacation time however it suits you.

Companies who provide a total comp sheet to you will always value things in whatever way gives the biggest number. You are free to use your own judgement as to how you want to compute total comp.

I do think most of this is straightforward so most people will come up with similar methods, after all things like healthcare costs or money put in your 401K are hard to argue with.
by Rodc
Mon Jan 23, 2017 6:06 pm
Forum: Investing - Theory, News & General
Topic: Help with Retirement Projection Assumptions
Replies: 35
Views: 7387

Re: Help with Retirement Projection Assumptions

Rodc, The question I have is how does one know by how much to change any of the variables in a way that the change is meaningfully different from the original assumption, but not so unreasonably/unrealistically different that there's no way that scenario will play out. Thanks. That is an excellent question. I would suggest for the sensitivity analysis you choose values that are modestly worse and modestly better than baseline. For stocks maybe +/- 2%. For things like car repairs that would depend on your situation. But as far as "badness" you would want to be consistent - you would not use Zombie Apocalypse bad for one variable and slightly bad for another since the goal is to see which variables you are sensitive to. Hard to do ...
by Rodc
Mon Jan 23, 2017 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Refuse to pay California State Tax—what can they do ?
Replies: 16
Views: 5113

Re: Refuse to pay California State Tax—what can they do ?

I'm no lawyer, but my guess is the worst thing they can do is a great deal worse than $1300.

And they can probably garnish wages, after adding more fees and interest. As for liens I presume there is some sort of reciprocity agreement with VA.

That presumes they have a case that would hold up in court. Not sure how much that process would cost you.

Best of luck
by Rodc
Mon Jan 23, 2017 3:56 pm
Forum: Investing - Theory, News & General
Topic: Hypo: What would you do if you were SURE of impending deline in markets
Replies: 62
Views: 7502

Re: Hypo: What would you do if you were SURE of impending deline in markets

Since it is a hypothetical situation that will never happen (as noted above need to know not just that it will happen but when) any and all answers are fine. You can never find a counter example to a statement about the empty set to prove the statement wrong.
by Rodc
Mon Jan 23, 2017 3:52 pm
Forum: Investing - Theory, News & General
Topic: Help with Retirement Projection Assumptions
Replies: 35
Views: 7387

Re: Help with Retirement Projection Assumptions

Rodc, The question I have is how does one know by how much to change any of the variables in a way that the change is meaningfully different from the original assumption, but not so unreasonably/unrealistically different that there's no way that scenario will play out. Thanks. That is an excellent question. I would suggest for the sensitivity analysis you choose values that are modestly worse and modestly better than baseline. For stocks maybe +/- 2%. For things like car repairs that would depend on your situation. But as far as "badness" you would want to be consistent - you would not use Zombie Apocalypse bad for one variable and slightly bad for another since the goal is to see which variables you are sensitive to. Hard to do ...
by Rodc
Mon Jan 23, 2017 3:48 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone file "decline in value" for property taxes? Advice?
Replies: 26
Views: 3816

Re: Anyone file "decline in value" for property taxes? Advice?

Doesn't hurt to try, but small percentage amounts are often ignored by board of appeals. I am sure it depends on where you are, but +/- 0.5% is noise. In our state the assessments only have to be accurate to +-10%, and really, how accurate can an assessment be? No one knows to much better than that until they put the house on the market. This also may depend on where you are, but here the total prop tax amount to be collected for the town is set. The total assessed value for the town is computed. The tax rate is then total tax/total prop value. There is a limit in that the total tax collected can only go up by 2.5% (plus any new property). So if all the properties drop in price by 50% the tax rate doubles and your tax stays the same + the ...
by Rodc
Mon Jan 23, 2017 5:31 am
Forum: Investing - Theory, News & General
Topic: Help with Retirement Projection Assumptions
Replies: 35
Views: 7387

Re: Help with Retirement Projection Assumptions

...vary the assumptions to learn which changes make a significant difference in the result and which do not. Then spend some time looking at what happens when things that matter are more pessimistic and more optimistic than assumed in the baseline case... Rodc, The question I have is how does one know by how much to change any of the variables in a way that the change is meaningfully different from the original assumption, but not so unreasonably/unrealistically different that there's no way that scenario will play out. Thanks. That is an excellent question. I would suggest for the sensitivity analysis you choose values that are modestly worse and modestly better than baseline. For stocks maybe +/- 2%. For things like car repairs that woul...
by Rodc
Sat Jan 21, 2017 3:48 pm
Forum: Personal Consumer Issues
Topic: East Coast And Work/Life Balance
Replies: 68
Views: 10442

Re: East Coast And Work/Life Balance

Traveler wrote:I live in Atlanta, in one of those awful states others were making fun of, have a paid-for home and a nice income that will allow me to retire early. The metro area is one of the largest in the country, has cultural activities, any sports team you can think of, lots of hiking within a 30 minute drive, mild winters (it's been 65+ the last week) and somewhat brutal summers. Nobody could pay me enough to move to the mid-Atlantic or NE given the cost of living hike and the potential for feet of snow at a time. No thanks. I'll stay down here in one of those awful states.
Good thing too. If we all liked the same location it would be too crowded. :)
by Rodc
Sat Jan 21, 2017 12:01 pm
Forum: Personal Finance (Not Investing)
Topic: When/If a degree is useful for software developers?
Replies: 45
Views: 5482

Re: When/If a degree is useful for software developers?

I am enjoying all these posts:

Q Is a degree useful?

A: I have a degree and have been employed in a software field for decades so no a degree is not useful. :oops:

Bottom line is that a degree will be useful in the sense that it will open some non-trivial number of doors that will be closed due to no degree. In the end he it may or may not have been useful in the one job he ends up taking. It helps the odds.
by Rodc
Sat Jan 21, 2017 9:44 am
Forum: Investing - Theory, News & General
Topic: Using "worst case" portfolio results to help determine asset allocation - yea or nay?
Replies: 35
Views: 6378

Re: Using "worst case" portfolio results to help determine asset allocation - yea or nay?

CUlater, here's an article that puts things in perspective https://www.thebalance.com/u-s-stock-bear-markets-and-their-subsequent-recoveries-2388520 Here's peak/trough/recovery https://blog.wealthfront.com/no-need-to-fear-market-corrections/ I realize you are familiar with the data, but to address your specific question: So, my question is should investors such as me use these "worst case" portfolio return scenarios to benchmark their "risk tolerance?" More specifically, does it make sense to ask oneself this sort of question to help determine the best (for me) asset allocation: "if a stock market drawdown of 37% or greater were to begin tomorrow and take a decade or longer to recover, what asset allocation can I s...
by Rodc
Sat Jan 21, 2017 9:30 am
Forum: Personal Finance (Not Investing)
Topic: Annual Vacation Budget
Replies: 320
Views: 44823

Re: Annual Vacation Budget

I can absolutely get spending 3-4k on a vacation and I might do that someday in the future. So someone saying they spent 3k for their Hawaii vacation seems reasonable. But these numbers like 18k etc sound insanely high unless you are spending months in hong kong living high on the hog. Here is an example. Family of four going to Switzerland for a week in February. This is a scout trip so perhaps airline tickets could have been cheaper if we had more flexibility on times and need to keep a large group on one flight - I did not book the flights so don't know. But, flights are about $1000 each round trip so that is $4K right there. We are staying at a scout facility which I think helps a lot - room, food, skiing, ice climbing, snow shoeing, s...
by Rodc
Sat Jan 21, 2017 9:04 am
Forum: Investing - Theory, News & General
Topic: Help - Which of these bond funds are best for my bond allocation?
Replies: 11
Views: 3381

Re: Help - Which of these bond funds are best for my bond allocation?

dbr wrote:
mhalley wrote:First thing is to eliminate the long term bond funds as we know interest rates are going to rise. Then you eliminate the short term ones due to the extremely low yield, leaving vgit.
I think that is a reasonable answer.
This is what I would do.

Unfortunately for some reason it was eliminated from my 401K last year as one of my no fee to buy options so I now have vanguard's TBM.

Not my first choice but good enough that I lose no sleep over it.
by Rodc
Sat Jan 21, 2017 8:44 am
Forum: Personal Consumer Issues
Topic: Jackson Hole in July?
Replies: 16
Views: 3603

Re: Jackson Hole in July?

I think when my kids were 7, maybe 6, we spent two weeks in that area in July. About a week in Jackson Hole, two or three days in Jackson, and four or five days in Yellowstone. One son cried for 30 minute prior to going to bed the last two nights, "I don't ever want to leave Wyoming!" So I think it was a hit. Did some wonderful easy hikes, nice views, fields of wildflowers. Did the snake river float. Hired a guide from Exum to do an easy three pitch mountain climb (the boys named it Mt Basic. :) ) There is if memory serves a Ripley's Believe it or Not museum in Jackson. Go see the old Faithful Inn. Go see various hot springs and such in Yellowstone. Played in Lake Jenny. Saw deer, a moose, I saw a mother and baby bear coming down ...
by Rodc
Sat Jan 21, 2017 5:36 am
Forum: Personal Finance (Not Investing)
Topic: Load up on cash - it might be one of your best investments
Replies: 53
Views: 12171

Re: Load up on cash - it might be one of your best investments

"cash" is just really short "bonds".

Don't consider an asset in isolation but rather how it fits in with your other assets to build a portfolio and how that portfolio is positioned to best meet your needs.

Being just very stable FI, cash might allow you to hold more in stocks and still have the level of risk you want vs holding long bonds, just for one example. That may or may not be useful.

But losing money year by year to inflation, missing out on stock returns 2 out of 3 years, etc by holding cash as (extra) "dry powder" is a poor gamble in my opinion. Not to mention if you have a stock-bond portfolio you always have money to buy stocks - just rebalance like you normally would.
by Rodc
Sat Jan 21, 2017 5:20 am
Forum: Personal Consumer Issues
Topic: New SUV, $50G, Pilot/Highlander/Other
Replies: 151
Views: 32265

Re: New SUV, $50G, Pilot/Highlander/Other

Get a base model Forrester.

Then folks on threads like this can call you cheap.

Take money saved, eat in nice restaurants and post in the How much do you spend at restaurants thread and have folks tell you that you are a spend thrift.

Or go for broke and spend the money saved on vacation and post in the How much do you spend on vacation thread, and get lit up!

:)
by Rodc
Fri Jan 20, 2017 4:38 pm
Forum: Investing - Theory, News & General
Topic: Using "worst case" portfolio results to help determine asset allocation - yea or nay?
Replies: 35
Views: 6378

Re: Using "worst case" portfolio results to help determine asset allocation - yea or nay?

One of my pet peeves is that some of the retirement simulators report a chance of "failure" like you would keep mindlessly spending until you are broke and homeless. There should be some better way to phrase that since it means that you would need to change your plans and cut cut some of your expenses. As long as you were planning on more than a minimal retirement then you can likely cut your spending some and still be comfortable. I agree... People on this very board constantly mention "failure" as something to be completely avoided... "5% chance of failure! That's unacceptable!" And then they work 5-10 years longer and die at their desk trying to double their money one more time to get to a 0.1% chance of &q...
by Rodc
Fri Jan 20, 2017 4:34 pm
Forum: Personal Finance (Not Investing)
Topic: Annual Vacation Budget
Replies: 320
Views: 44823

Re: Annual Vacation Budget

I agree with your way of calculation. If you have a budget of $xxx,xxx, that means you can spend cash upto $xxx,xxx. Think about it this way, if the airline bumps you from cattle class to first class, would that change your budget for that trip? If you are going for a cruise at the lowest category and paying $400/person for a cruise that folks pay up to $1,000/person (bigger cabin, etc), does that change your cost for the cruise? metrunt: Based on the OP (below), what he/she is trying to figure out is exactly what you (and I) are doing, i.e., maximize the fun while minimizing the expenses (i.e., creative ways of paying for the vacation without impacting the budget). An Asker - I don't think you understand how metrunt is calculating his vac...
by Rodc
Fri Jan 20, 2017 3:27 pm
Forum: Personal Consumer Issues
Topic: East Coast And Work/Life Balance
Replies: 68
Views: 10442

Re: East Coast And Work/Life Balance

skteam wrote:
RoadHouseFan wrote:Everything is better in Texas. Recommend pursuing opportunities in the following states (in no particular order):

Texas
Alabama
Georgia
North Carolina
South Carolina
Tennessee
Kentucky
Indiana
Yikes--be careful. Alabama ranks at the bottom of some metrics that matter--like life expectancy, obesity, income, graduation rates, etc. May be a fine place to live for some people, but comparing NJ to Alabama is...hard.
Huntsville is an outpost of high education and solid socio-economics (lots of high tech, good schools I think, good restaurants). If I had to move to the south I think I could enjoy Huntsville.
by Rodc
Fri Jan 20, 2017 3:25 pm
Forum: Personal Consumer Issues
Topic: East Coast And Work/Life Balance
Replies: 68
Views: 10442

Re: East Coast And Work/Life Balance

Here are some additional information: Even back in Texas, it was not just an 8 hour work schedule. I had the flexibility to go and come back anytime depends on the meetings. I also caught up on work after my toddler went back to sleep. When I had more work, I left home around 6 AM and come back by 4.30 to pick up my little one. Husband dropped the kid in daycare around 8 AM and worked a little late (max 5.30). We both stayed up late and caught up on extra work when needed. I don't think southern people work less hours compared to North (again, my observation). We moved quite a bit in the last 8 years and all within the southern states (last few years, mostly within Texas). I was always open to move and new experience except this time. Even...
by Rodc
Fri Jan 20, 2017 5:50 am
Forum: Investing - Theory, News & General
Topic: Using "worst case" portfolio results to help determine asset allocation - yea or nay?
Replies: 35
Views: 6378

Re: Using "worst case" portfolio results to help determine asset allocation - yea or nay?

larryswedroe wrote:BTW- the worst drawdown was far worse than 37%, in 2008 bear from top to bottom was more like 60%, and in 2000-02 was closer to 50% if memory serves.

As to your question, while you certainly should CONSIDER the worst case, that doesn't imply that it alone should determine you AA. What you need to consider is what options you have, if any, that you could exercise if the worst case shows up so that your plan doesn't blow up. For example, you could take more risk if you could cut expenses, move to lower cost of living area, perhaps work longer than planned (assuming economy allows that), and so on. The ability to adopt options is important in planning, but unfortunately too many ignore that when building plans.

Larry
+1
by Rodc
Fri Jan 20, 2017 5:47 am
Forum: Investing - Theory, News & General
Topic: "Stealth Wealth: I’m Just an Ordinary Average Guy"
Replies: 445
Views: 127230

Re: "Stealth Wealth: I’m Just an Ordinary Average Guy"

I guess if you want those things and you can afford them, fine, but it would seem to me that anyone who lived a low-key lifestyle wouldn't want to be flashy just because they turned forty. The traditional Harley sales suggest many do. I would think after sacrificing for the kids, saving for retirement, climbing the corporate ladder and realizing you aren't getting any younger a lot of folks around 40 start treating themselves before they hit the nursing home. In 2008, Harley-Davidson said its average rider was 48 years old, up from 46.1 in 2004 and 43.4 in 1999, Farley says. Extrapolating from those figures, she believes the current average rider is over 50 and, by definition, still a boomer. http://www.reuters.com/article/us-harleydavidso...
by Rodc
Fri Jan 20, 2017 5:39 am
Forum: Investing - Theory, News & General
Topic: Y2k retiree how is s/he holding up after 2016
Replies: 26
Views: 5986

Re: Y2k retiree how is s/he holding up after 2016

[*]My AA of 75/25 today may benefit from transitioning to 80/20 (or even higher if I could stomach that) vs. the current plan of going to 70/30 by retirement. I suggest you are reading rather more into the the results than the input data support. See for example AlohaJoe. We only have a couple of more or less independent 40+ year periods of data to work with. There is no way that really supports things like "80% stocks is better than 75%". It is only enough to support general conclusions like: "For a very long retirement you should consider having a majority of your investments in stocks which have tended to do much better than bonds over long periods, especially in the US, but please note the data are not definitive since w...
by Rodc
Fri Jan 20, 2017 5:23 am
Forum: Personal Finance (Not Investing)
Topic: Convincing spouse to sell losing investment
Replies: 58
Views: 7116

Re: Convincing spouse to sell losing investment

Proceed with great caution. Your marriage is at risk. People argue more, and more bitterly, about money than about anything else, and everything described makes it sound as if this is a time of financial stress for the both of you. This all falls in the category of "easy to say and hard to do," but if you think about it I think you'll agree that in theory it's what you should be doing. First, be glad that even though the amount in question is large and important, it's not essential to your joint financial future. It's only in books that couples say "I wouldn't mind losing everything and starting from zero as long as I was still with you," but losing 39% isn't losing everything. A 39% loss is perfectly survivable financi...
by Rodc
Thu Jan 19, 2017 7:25 pm
Forum: Investing - Theory, News & General
Topic: Mathematics of international asset allocation
Replies: 44
Views: 7594

Re: Mathematics of international asset allocation

if you don't use mathematics as a guide, what do you use?
Mathematics in inexpert hands can be more harmful than helpful. Many learn to move symbols around on a page and yet never really understand either the power or the limitations of mathematics.

You can use history. You can use theory. You can use common sense. You can use a blend off all these things. You can even use mathematical models if you first actually understand their limitations.
by Rodc
Thu Jan 19, 2017 7:20 pm
Forum: Investing - Theory, News & General
Topic: Mathematics of international asset allocation
Replies: 44
Views: 7594

Re: Mathematics of international asset allocation

dharrythomas wrote:The biggest thing wrong with the model is that you're using expected values for 5 variables. You're guessing and need to be right 5 times.

You're covering up the imprecision of the process and hiding it behind a precise answer to your equation.
I might just say I would phrase it as "You're covering up the inaccuracy of the process and hiding it behind a precise answer to your equation"

I want a fountain of youth, but just because I want it really badly, does not mean one exists.

Models are fun. Some are even useful. This one not not so much.
by Rodc
Thu Jan 19, 2017 7:12 pm
Forum: Investing - Theory, News & General
Topic: Y2k retiree how is s/he holding up after 2016
Replies: 26
Views: 5986

Re: Y2k retiree how is s/he holding up after 2016

livesoft wrote:The following may interest readers of this thread.
Case Study 2000-2016
Just skimmed it, but it seems that is a Monte Carlo result, not a result based on real funds over that time period. Is that right?
by Rodc
Thu Jan 19, 2017 7:01 pm
Forum: Investing - Theory, News & General
Topic: "Millennials may need to double how much they save for retirement"
Replies: 173
Views: 24734

Re: "Millennials may need to double how much they save for retirement"

livesoft wrote:Not much in that article that didn't apply to 18-30 year-olds when I was that age and my parents before me. You are supposed to have a negative net worth durinng those years. So Millennials can look forward to the days when they become the Old Farts just like everybody else did.
Yes, that is the way it works!
by Rodc
Thu Jan 19, 2017 7:00 pm
Forum: Investing - Theory, News & General
Topic: "Millennials may need to double how much they save for retirement"
Replies: 173
Views: 24734

Re: "Millennials may need to double how much they save for retirement"

Durzo wrote:http://economicalmillennial.com/numbers ... -is-17612/

I'm just gonna leave this here.

For those curious a new study by Robert Farrington (The College Investor) found the average networth of Americans 18-30 is $-17,612. It takes into account all assets and all liabilities.

Reminds me of the Louis CK skit on negative money. "Millenials need $17,612 just to be broke. They can't afford something even if it's free. How much does that cost? Oh, its free. Dang I can't afford free right now."
:)
by Rodc
Thu Jan 19, 2017 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: ok to pull plug and retire?
Replies: 52
Views: 10650

Re: ok to pull plug and retire?

Is this an honest question or a humble brag?
by Rodc
Thu Jan 19, 2017 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Is it ok to stop contributing to retirement accounts?
Replies: 11
Views: 3780

Re: Is it ok to stop contributing to retirement accounts?

We're married, I just say partner out of habit - workplace norms. My husband is a CA public school teacher, is vested in CALSTRs and has 20 more years until he retires at 62. There is no 403b match for him, but any leftover funds could be invested in a ROTH/spousal ROTH. I work in HR and could return to work when my child is school-aged, and to help with college costs for our 8 and 10 years old. We have not saved for college for the kids because we've been maxing out the retirement accounts and were planning to pay as we go. It's calculated, but we figured the kids would qualify for more need-based financial aid if we had little money saved outside of retirement and home equity. Does this seem like a reasonable plan? We're prepared to have...
by Rodc
Thu Jan 19, 2017 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: Pay down 1.9% loan or invest
Replies: 61
Views: 8096

Re: Pay down 1.9% loan or invest

I knew people who where out of work or under-employed for more than a year during the crashes of the economy in 2002/2003 and 2008. Some thought their jobs were safe, and did not have enough saved for such an emergency. So six months is good, but 12 months of savings is a lot better. On the other hand, you can withdraw your contributions from your Roth IRA without tax or penalty if you do run into a bad bump in the road of life. So it's a secondary source of emergency funds. And it does feel good to have no debt. So in your circumstances, I'd pay it off. jimb I presume the idea was to keep the 12 months of money, just not all in cash. That is, put half in a taxable stock and/or bond portfolio. To the OP: Do what makes you happy. You won't ...
by Rodc
Thu Jan 19, 2017 6:21 pm
Forum: Personal Consumer Issues
Topic: East Coast And Work/Life Balance
Replies: 68
Views: 10442

Re: East Coast And Work/Life Balance

Generalizations are often wrong. I note that you are not working more hours in the day. I used to go in very late when my kids were toddlers so we could spend the morning having fun while they were nice and perky! Wife would pick them up around 3:30pm (started work at 7:00am) after I dropped them off at 9:30am which kept their day short. Going in late when you have toddlers can be a good thing. Many places people go in way early to miss or at least partially mitigate rush hour traffic. My boss works 7:30am to 4:30pm. I work 9am to 5:30pm so I can see my now high school kids in the morning before school, hit the gym for an hour or so (at work), and then leave to go pick up my son from his after school job at 6:00pm. You do what works for you...
by Rodc
Wed Jan 18, 2017 7:39 pm
Forum: Investing - Theory, News & General
Topic: Should you be worried about losing money in bonds?
Replies: 14
Views: 5371

Re: Should you be worried about losing money in bonds?

Chart of historical drawdowns of U.S. bonds vs. stocks since 1926. How risky do bonds look? If you update the chart to account for inflation, they would look risky. For example, from the end of 1940 to the end of 1981, 10-year treasuries had a 55% loss after accounting for inflation (see http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html and table 24 from http://www.bls.gov/cpi/cpid1404.pdf). Yes, it is not the year to year losses that one should be concerned with but the slow multi-decade bleeding. TIPS may or may not help as we do not know what TIPS might have yielded. We know the real yield on 10-year (and other) nominal treasuries was provided a negative real yield over that time. Would the real yield of TIPS re...
by Rodc
Wed Jan 18, 2017 5:32 am
Forum: Personal Finance (Not Investing)
Topic: Is it ok to stop contributing to retirement accounts?
Replies: 11
Views: 3780

Re: Is it ok to stop contributing to retirement accounts?

Life is all about trade offs. Security now vs security later. Consumption now vs later. Time now vs time later. Many people have made the choice you are considering in less favorable situations. If his pension is really something like 80% of last 3 year's salary (ie future salary not current salary) that would be better. If his job is secure (like high school English teacher) that is better still. If you can somehow keep your skills and connections current that would be good. Finding a way to make some retirement contributions would be good, but you do have a very good start especially given the pension. How do you plan on saving for college or is no college funding part of the trade off? But it would certainly not be a huge gamble to becom...
by Rodc
Tue Jan 17, 2017 7:14 pm
Forum: Investing - Theory, News & General
Topic: "Millennials may need to double how much they save for retirement"
Replies: 173
Views: 24734

Re: "Millennials may need to double how much they save for retirement"

Day9 wrote:
Rodc wrote: ...
But even that hides a lot. More scary are the numbers by education and race.
Especially net worth by demographic. The differences are much more pronounced than income.
Indeed.
by Rodc
Tue Jan 17, 2017 6:29 pm
Forum: Investing - Theory, News & General
Topic: "Millennials may need to double how much they save for retirement"
Replies: 173
Views: 24734

Re: "Millennials may need to double how much they save for retirement"

But if you read the article closely you'll see that new graduates graduated with an average of $35,000 in debt. I read the article and looked up Mark Kantrowitz who gave that figure. I think we all know what Fake News is and need more than a quickie on MarketWatch to get our facts straight. I would've guessed that those grad students would bring the average UP since the costs for professional school is higher and much fewer students go to such schools. There are many physicians on this forum writing about their loans. :) And yes, I know that med schools loans are not the biggest fraction of student loans. If we took a random poll of people on this forum and assumed it was representative of the United States as a whole, we would have an ext...
by Rodc
Tue Jan 17, 2017 6:20 pm
Forum: Investing - Theory, News & General
Topic: Deciding on types of bonds is harder than stocks!
Replies: 20
Views: 4348

Re: Deciding on types of bonds is harder than stocks!

One thought is that the more debate there is the less the answer matters. Another thought is that bonds supply an excellent pinhead on which to dance. There is a reason the three fund portfolio often recommended here simply selects a total bond market index even though the nature of that index can be debated forever. I doubt anyone can argue that half TIPS and half Treasuries in a portfolio of stocks and bonds is a serious error. Trying to find better portfolios to replace good enough portfolios is an engrossing pastime but does not always benefit the investor. + 1 This is an area where losing sleep over the decision makes no sense. If you want to feel better plot the growth of $10K for TBM, intermediate treasuries, intermediate TIPS, and ...