Search found 1526 matches

by smectym
Fri Mar 08, 2024 8:07 pm
Forum: Personal Investments
Topic: what to do with I Bonds
Replies: 24
Views: 3061

Re: what to do with I Bonds

I purchased the below over the past couple of years: https://i.imgur.com/4snhgA3.jpeg There's s really no rhyme or reason as to why I bought these, other than the rates seemed good and everyone was saying to buy I Bonds (at least whatever I was reading at the time)... I'm now trying to decide if I should redeem these and just buy CDs, treasuries, more BND (or something similar) to keep everything consolidated at my regular broker, or should I just leave them as is (and possibly buy more) and let them ride for years to come? Not to jinx anything, but I won't need this $20k for decades, and I already have other bonds/cash in various other accounts. That being said, I wouldn't want to 'forget' about this account in 20-30 years (which would on...
by smectym
Sun Feb 04, 2024 9:36 am
Forum: Personal Investments
Topic: Treasury bill or CD or I bond?
Replies: 4
Views: 1190

Re: Treasury bill or CD or I bond?

Hi, Sorry if this sounds like a redundant question. I have a 5k CD as a portion of my emergency fund (EF) maturing State tax 4.95%. Question 1: I would like to reinvest, not sure which option to pick: 1- Reinvest in 5.15 apy 9 months CD at same bank? 2- Buy (another set of) I bonds 1.3 fixed rate? 3- Buy a 6 months T bill ~ 5.26 or 3 months ~ 5.37 (I prefer buying only at Treasury direct for now) Current emergency fund: 50 k - 10k I bonds at 1.3 fixed rate - 5 K x 2 CD - 30 K vanguard treasury MMF I don't feel comfortable locking my money in a CD for more than a 12-15 months max duration. Question 2: While reinvesting, should I reinvest: 1- Only the CD principal 2- Or the CD principal plus gain for coumpounding interest to avoid inflation ...
by smectym
Sun Dec 31, 2023 8:25 am
Forum: Personal Investments
Topic: FIRE for 44 year old physician and Investment Strategy
Replies: 28
Views: 5308

Re: FIRE for 44 year old physician and Investment Strategy

You are rich. I didn’t see anything about FIRE in your post. Why on earth would you go do consulting for the higher income potential? I understand your desire to switch medical fields if you would find another more interesting but why do you care about the lower salary? Who cares about reimbursement when you have more than 20M of assets? Unless your expenses are sky high, I can’t imagine any of this matters to you. But in seeking to learn, alpha is teaching as well. His questions contain a lot of interesting information. As to his motives—when you have a ton of money any mistakes cost a ton of money too. With wealth comes the responsibility to manage with prudence; and part of prudence is to seek knowledgeable advice. This forum is a widel...
by smectym
Sun Nov 05, 2023 2:08 am
Forum: Investing - Theory, News & General
Topic: Buy Borrow Die & Risk
Replies: 75
Views: 18649

Re: Buy Borrow Die & Risk

It's worse right? A lot worse, because in the latter case, you have twice as many shares of VTI with the same debt to pay off. So to me this sounds like taking all the risks inherent in margin investing and greatly amplifying them because you are spending the money instead of purchasing sellable assets. What I was describing there was not 2 comparable scenarios, but 2 different concepts. To compare those 2 scenarios you would be doing: - Borrow $100 and spend it on food/rent - Borrow $100 and buy VTI, don't eat, sleep outside. Yes, the latter is better for your NW. But what I'm trying to say here is that borrowing against assets instead of selling them is not the type of behavior that is generally thought of when folks think about "le...
by smectym
Wed Nov 01, 2023 8:21 pm
Forum: Personal Investments
Topic: Any love for EE bonds @2.7%?
Replies: 16
Views: 2481

Re: Any love for EE bonds @2.7%?

Raybo wrote: Wed Nov 01, 2023 6:17 pm I don’t have any insight to your question, but I do want to celebrate that today, Nov. 1, two-thirds of my EE Bonds doubled in value.

The last third will double in a month on Dec, 1. That bond is currently worth 50% more than it was purchased for, so the doubling is a real gain on these bonds.
Mine double on Jan 1. I’m happy, but I’m not sure doubling in 20 years will be as good a deal going forward. These EE’s slogged their way through an unprecedented period of low interest rates and inflation. At any rate, we’re not buying more EE, though still buying I bonds.
by smectym
Mon Oct 30, 2023 9:28 pm
Forum: Personal Investments
Topic: Holding 100% VTSAX
Replies: 29
Views: 9969

Re: Holding 100% VTSAX

The only thing wrong with 100% stocks could be your ability to stomach the rollercoaster ride. I think many folks overestimate their risk tolerance. You have to actually experience a few bear markets before really dialing in your AA. Agreed. No question, and how about a bear where the Fed stands back to let the free market take its course instead of galloping in with a trillion here, a trillion there…? Much of the “100% stocks!” bravado has incubated during a historically unprecedented firehose of liquidity aimed at the markets by the global central banks. Some say that “Fed Put” era is now ended. One need not go so far; but it *may* have ended, or future iterations of intervention may be feebler. Of course, as many others have pointed out...
by smectym
Tue Oct 24, 2023 5:56 am
Forum: Personal Finance (Not Investing)
Topic: How are you preparing for your cognitive demise? [Financial aspects]
Replies: 76
Views: 9404

Re: How are you preparing for your cognitive demise?

rickcrna wrote: Mon Oct 23, 2023 11:00 pm I plan to stay in denial of any cognitive decline.
Me too. So far, so good…I hope
by smectym
Sun Oct 22, 2023 12:32 am
Forum: Personal Investments
Topic: Portfolio suggestions. Deploying $1 million. Suggestions
Replies: 4
Views: 1532

Re: Portfolio suggestions. Deploying $1 million. Suggestions

Portfolio suggestions I am 76 years old. My wife is 71. We have been retired for almost 10 years.No debt. I have been a conservative investor. 20%stocks/80% in cash and cash equivalents annuities multi year, guaranteed annuities, and cd. My goal was not to outlive my money for both my wife and myself. Anything left over we would split between two children. We live on about $160,000 a year and we pay taxes from that . 57,000 comes from Social Security. that’s what we take taxable joint account is 1.5 million. My IRA 1.6 million (1 million MYGA 4 companies 5% the rest at Fidelity about 4% return IRA wife MYGA 215,000. 5.3% 10 years. We have $1 million in our joint account sitting in a federal treasury money market which I want to deploy. Thi...
by smectym
Sat Oct 21, 2023 9:01 am
Forum: Investing - Theory, News & General
Topic: Long Treasuries ar over 5% - would you gamble
Replies: 15
Views: 2120

Re: Long Treasuries ar over 5% - would you gamble

Always passive wrote: Sat Oct 21, 2023 12:41 am I wonder if with playing money, anyone is considering buying some TLT or TLH ETF?
Apart from I bonds, which (can be) very long term treasuries, and which we own a lot of, but surely not what OP has in mind—no, 2 years is as far out in the curve we go. We’re almost done building a 2-yr Treasury ladder, or rather, a merry-go-round: each month, as a new bond matures, we will elect whether to spend the redeemed proceeds, or simply roll the bond over (the default).
by smectym
Sat Oct 07, 2023 5:11 am
Forum: Personal Consumer Issues
Topic: Can't log on [to Vanguard website]
Replies: 242
Views: 22049

Re: Word of Caution: Diversify Your Brokerage Accounts (Vanguard Issues)

Seems quite unpleasant. Perhaps not a general problem but rather, account-specific. Vanguard, and other financial entities as well in my experience, often shoot a message suggesting there is some general crisis involving “technical difficulties,” when in point of fact, the only crisis pertains to your account and yours only.

But point well taken: in terms of ensuring continuing access to funds and essential financial services, it’s wise to be so diversified that you’re thinking of simplification, rather than so concentrated that you’re pondering the need for diversification. “Redundancy” sounds bad, but is actually (mainly) good.
by smectym
Fri Oct 06, 2023 1:46 am
Forum: Non-US Investing
Topic: Do you pay tax when a T-Bill matures (foreign investor)?
Replies: 7
Views: 3141

Re: Do you pay tax when a T-Bill matures (foreign investor)?

helloyou wrote: Tue Oct 03, 2023 10:37 am No tax withholding as far as I know (at the broker level, at least for IB and strictly t-bills, not sure about bonds or notes). You are supposed to report the capital gain on your tax return (varies by country).
Correct. In the case of T-bills (as opposed to the case of notes and bonds) the taxable event is the discount at issuance which represents the interest rate required to return the nominal amount of purchase at maturity. In other words, if an investor buys a $1,000 3-month T-bill, the investor will pay a bit less than $1,000, then receive $1,000 three months later. >>The difference is taxable.<<; report it on your tax return. Treasury will provide the 1099 you can give to your accountant.
by smectym
Fri Oct 06, 2023 1:16 am
Forum: Personal Finance (Not Investing)
Topic: Anybody else a retiree who is a conservative investor?
Replies: 62
Views: 8340

Re: Anybody else a retiree who is a conservative investor?

I'm 71, DW 69. Both retired and taking Social Security. 60/40 allocation. I consider myself conservative because the fixed income portion alone could support our spending at a withdrawal rate of 3.7% (although that's not what we're doing). My Investment Policy Statement objectives are to generate income for retirement, achieve real portfolio growth, fund charitable giving and leave legacy. Since we're investing for giving and legacy, I suppose I could have a higher stock allocation, but I'm conservative. Our profile is similar. IRA assets are roughly 35/65 but we also have after-tax assets heavily in cash (VFMXX) in amount sufficient at current rates to throw off monthly income perhaps on par with median household income for working househ...
by smectym
Tue Sep 19, 2023 9:05 pm
Forum: Personal Finance (Not Investing)
Topic: Pension denied with Northrop Grumman
Replies: 43
Views: 11348

Re: Pension denied with Northrop Grumman

It is possible that one thing an employment lawyer will accomplish is to find that the client does not in fact qualify for the pension based on the documentation that would have to be gathered to start a case. Alternatively the lawyer can assist finding where the documentation is that proves the client is qualified. My former employer has bounced the administration site for pension benefits all over the map over the years and you have to pay attention to where the documentation is for what. Note pension and an employee life insurance policy are at one provider on one account. The 401k is administered entirely elsewhere. And there is a Health Care Reimbursement Plan that is the remnant of what was once a retiree health insurance plan and it...
by smectym
Tue Sep 19, 2023 12:49 am
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 2256
Views: 608555

Re: Variable Percentage Withdrawal (VPW)

That's fine. But longinvest has insisted that people should spend the VPW withdrawal amount, not use it as a ceiling. I don't think "insisted" is correct, but I'm not going to go back through hundreds of posts to confirm that. I've certainly been using it as a ceiling and am comfortable with that approach. I'm pretty sure longinvest isn't going to scold me. :wink: Ben, pretty sure longinvest has never stated that VPW adherents are violating any protocol if they elect to withdraw less than the full portfolio percentage amount proposed on the VPW grid (vertical axis retiree age, horizontal axis stock/bond portfolio allocation). Nor has longinvest, or any other serious VPW proponent I’m aware of, argued that any withdrawals under th...
by smectym
Mon Sep 18, 2023 9:38 pm
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 2256
Views: 608555

Re: Variable Percentage Withdrawal (VPW)

VPW will provide our upper limit on spending (mostly discretionary as our "floor" covers essentials). That's fine. But longinvest has insisted that people should spend the VPW withdrawal amount, not use it as a ceiling. Ben, pretty sure longinvest has never stated that VPW adherents are violating any protocol if they elect to withdraw less than the full portfolio percentage amount proposed on the VPW grid (vertical axis retiree age, horizontal axis stock/bond portfolio allocation). Nor has longinvest, or any other serious VPW proponent I’m aware of, argued that any withdrawals under the VPW rubric somehow must be *spent*, as in used for consumption, as opposed to saved or invested. In my view the chief problem with retirement sav...
by smectym
Sun Sep 03, 2023 11:08 pm
Forum: Personal Finance (Not Investing)
Topic: If you have a high income ($500K+), how did you do it?
Replies: 190
Views: 24160

Re: If you have a high income ($500K+), how did you do it?

Wanderingwheelz wrote: Sat Sep 02, 2023 8:36 pm Marry someone who has similar aspirations and ambition as you.

It’s far easier to have a $500,000+ income if there are two sources rather than one.
Exactly. We started poor though and remained so for many years. Making $500,000, or even $100,000, wasn’t on our mind at all. Then…one went to law school; then the other. Eventually the money rolled in and we’re very glad to have it but it really just happened, no master plan.
by smectym
Thu Aug 31, 2023 11:02 pm
Forum: Investing - Theory, News & General
Topic: Donating I bonds to avoid capital gains tax
Replies: 33
Views: 3259

Re: Donating I bonds to avoid capital gains tax

I have a whopper of an I-Bond tax liability facing me in about 7 years. I’ve looked at the tax issue from every angle I can think of and concluded I’m just gonna have to suck it up and ante up. The only way I’ve found on charitable donations is to donate the then-value of the I-Bond to the charity and take a corresponding deduction at tax time. But if anyone has found a better idea I’m all ears. This is the right approach. Only the poor have no tax liability. Surely the objective in purchasing the I-bond was to benefit from tax deferral, and pay tax upon redemption. Of course one can always donate the after-tax proceeds. We bought a lot of I-bonds. If we stagger the redemptions right, the tax hit in a given year won’t be an asteroid strike...
by smectym
Thu Aug 03, 2023 9:41 pm
Forum: Personal Investments
Topic: What is your total accumulation number, how did you come to it. No Judgements!
Replies: 404
Views: 77263

Re: What is your total accumulation number, how did you come to it. No Judgements!

Wiggums wrote: Thu Aug 03, 2023 11:49 am
Vtsax100 wrote: Thu Aug 03, 2023 10:58 am I really think that you are underestimating unplanned risks. Health care costs for unplanned health issues are skyrocketing. But only you really know what your health is like and can plan accordingly. My opinion is that you should allow an extra 50% buffer and your number should be 13.5 M.
Only on Bogleheads…
Vtsax is probably posting tongue in cheek though on this forum, tough to be sure
by smectym
Fri Jul 21, 2023 7:48 am
Forum: Personal Investments
Topic: Wellington/Wellesley in this interest rate environment?
Replies: 6
Views: 1792

Re: Wellington/Wellesley in this interest rate environment?

As you noted, I would only invest these funds in a qualified (retirement) account. We used to hold a legacy position in Wellesley in our taxable account and it threw off so many capital gains that it became a tax headache. So we sold it and put the proceeds in our index fund. Tax management may not be an issue for you now, but with enough assets it will be later... From experience I would heed this sound advice. Even if the tax hit from dividends and year-end cap gains seems manageable early in the accumulation phase, (A) every dollar counts when you look the impact of suboptimal tax planning over a longer period of time, and as assets grow, and (B) in some years such as the infamous 2021 tax year, the capital gains are unexpectedly massiv...
by smectym
Sun Jul 16, 2023 10:21 pm
Forum: Personal Consumer Issues
Topic: Is GRE useful for graduate schools that list it as optional?
Replies: 27
Views: 2973

Re: Is GRE useful for graduate schools that list it as optional?

Thanks, it makes sense. So, as I understand from this discussion it is worthwhile to take GRE and if scores are not good do not submit to those schools for which it’s optional. And for those who say GRE is easy: yes it is relative to LSAT and some others. Still, you’re competing against others who also “think it’s easy” but nevertheless will prep the hell out of it, and such a one will typically score higher. Also, bc GRE is more knowledge-based than GMAT or LSAT, it is far more coachable. TIP: when you’re doing practice tests for GRE (or it’s associated subject test in your field), don’t just check for the right answer. Review every wrong answer. And if you are unfamiliar with anything about the wrong answer, look it up. The “wrong answer...
by smectym
Sun Jul 16, 2023 8:22 am
Forum: Investing - Theory, News & General
Topic: Annuity article by Wade Pfau
Replies: 288
Views: 33952

Re: Annuity article by Wade Pfau

As to the general FIA pitch about protecting against loss by foregoing some stock upside, it’s difficult to see how this same goal isn’t more simply and cheaply achieved in a (more or less) conservative stock/bonds/cash balanced portfolio. And that way, the investor needn’t forfeit stock dividends, which over time are a significant component of equity return. The tax deferred accumulation piece can be addressed by parking the corpus in an IRA. The 2% plus annual expenses for FIA are an obvious deal-killer. One might object that the simple, cheap balanced portfolio lacks the contractual *guarantee* against loss of principal offered by an insurance company; but especially over longer time periods such guarantees (paid for by that guaranteed 2...
by smectym
Sat Jul 15, 2023 2:10 am
Forum: Investing - Theory, News & General
Topic: The Money Guy "know your number" course
Replies: 42
Views: 8597

Re: The Money Guy "know your number" course

stuper1 wrote: Tue Jul 11, 2023 9:56 pm To the OP:

Are you familiar with the VPW Accumulation and Retirement Worksheet, which takes into account future income sources such as Social Security? I have found it a very helpful tool for thinking about the same questions you are raising.

See this thread for more information: viewtopic.php?t=284519
+1

VPW is gold and we use it. Though I will add, primarily to reinforce our deeply entrenched confirmation bias. The whole “what’s your number” industry seems designed to mystify a calculation of basic arithmetic.
by smectym
Sat Jul 15, 2023 12:25 am
Forum: Investing - Theory, News & General
Topic: When Did You De-risk?
Replies: 77
Views: 8885

Re: When Did You De-risk?

Hello, When did you start adding fixed income to your portfolio, or paying off mortgages? Was it a certain age, years before FT retirement, or before you left one job for another? I still feel like it is to early for me to deleverage at all but I do think about when it makes sense to "take chips off the table". I know there are mixed opinions on this. A part of me feels like as long as you have emergency reserves I should just keep risk on until I hit "my number" and then adjust accordingly. For me, currently 33: 100% Stocks/Paper Assets: $956K RE Equity w/ Fixed Debt 3-3.6% rates: $ I levered up and then was able to refi my mortgages during the pandemic overall I am in a good place. It is kind of wild to think that I c...
by smectym
Sat Jul 15, 2023 12:13 am
Forum: Personal Consumer Issues
Topic: SAT Prep Tuitions - Opinions needed (timing/cost/etc..)
Replies: 101
Views: 8442

Re: SAT Prep Tuitions - Opinions needed (timing/cost/etc..)

Standardized tests are only one component of College admissions, their Grades and ECs are equally important. Maybe I’m out of date, but one of my kids got into an Ivy, as far as we can tell, due to his essays but to a greater extent his teacher/counselor recommendations. His grades were okay, but not stellar. His ECs were pretty good. His scores were great, but Ivys have seen great scores before. Historically anyway, never underestimate the ability of a “great score” to overshadow modest shortcomings in grades, E-C etc.—or conversely, to tank an app with lights-out grades if the test score comes up short. Colleges are well aware of SAT/ACT’s predictive accuracy. And yes—the Admissions Office does read the essays, and genuine, distinctive w...
by smectym
Wed Jul 12, 2023 5:54 am
Forum: Personal Finance (Not Investing)
Topic: Early Retirement Budget with $2M Portfolio
Replies: 110
Views: 16620

Re: Early Retirement Budget with $2M Portfolio

I will try to address all the feedback received so far: * I agree that $60K/yr isn't a lot of money for a family of 4 especially in a HCOL area. But it can pay the bare minimum and a little more. And I think that with a 3% withdrawal rate, the $2M portfolio will likely continue to grow over time. I wouldn't be surprised if in 10 years the $2M portfolio has grown a couple more million even with a 3% withdrawal rate. If needed, I can draw down some money later to pay for kids college education. * I have been in the workforce long enough that I will qualify for social security. So even if I quit today and earn no more money, I will still get around $2500/month (in today's dollars) at full retirement age. So this is some extra money that I am ...
by smectym
Thu Jul 06, 2023 9:10 pm
Forum: Personal Finance (Not Investing)
Topic: Citi Bank Suspended Our Credit Card Because We Missed a Payment
Replies: 39
Views: 5865

Re: Citi Bank Suspended Our Credit Card

We have never been late paying our bills, but for the first time, we missed paying our monthly bill on July 1st. Honestly, we did not get the monthly statement in the mail, plus life got in the way so it was overlooked. We went shopping today and could not access our cards. Of course, we had another card to use. I called Citi Bank and they waived the late fee but said they could not re-activate the card until the payment arrives. (payment was sent) So is it standard practice for credit card companies to block access to your card, if you are late with a payment by only 5 days? There were no notifications emailed that this was going to happen. CK, there really is no predictable industry “standard practice” governing such decisions by a credi...
by smectym
Thu Jul 06, 2023 8:33 pm
Forum: Personal Investments
Topic: VWIAX
Replies: 62
Views: 9146

Re: VWIAX

If the market value of my holdings in VWIAX is $1,000,000 January 1 and I receive $58,000 in dividends during 2023 that $58,000 will not contribute a single dollar of additional growth to that $1,000,000 no matter the stock price into the future, correct or am I missing something? It would if you reinvested the $58k by buying more VWIAX. Then you would have $1,0058,000, which would throw off more dividends next year, which you could reinvest, and so on... Or maybe I'm misunderstanding your misunderstanding? Yes, even though the word “income” in the fund can create a supposition that the investor would always receive the quarterly dividends to pay living expenses, that point is often preceded by years or decades of reinvesting divs and cap ...
by smectym
Sun Jun 25, 2023 4:21 am
Forum: Investing - Theory, News & General
Topic: How many of you are staying the course with bonds?
Replies: 190
Views: 25916

Re: How many of you are staying the course with bonds?

    Stinky wrote: Thu Nov 10, 2022 5:00 am
    tommy85 wrote: Wed Nov 09, 2022 10:12 pm With all the talk about switching out of bonds in the forum here and local chapters, I wonder how many of you are staying the course with bonds. I have at least 30 years horizon before I retire
    I'm just curious - what percentage of your portfolio is in bonds?

    If you're 30 years out from retirement, you're likely about 35 years old.

    Most 35-year-olds wouldn't have a significant allocation to fixed income.
    A 35-yr old who set up a 40% bond allocation in 1985 had a pretty good run during the ensuing long-term bull market in bonds that ended only very recently.
    by smectym
    Sun Jun 25, 2023 3:45 am
    Forum: Personal Consumer Issues
    Topic: Anyone get a new 15” MacBook Air?
    Replies: 22
    Views: 4455

    Re: Anyone get a new 15” MacBook Air?

    SeattleLaw wrote: Sat Jun 24, 2023 9:32 pm I’m curious if people who’ve gotten one enjoy it. How’s the size and portability? Any downsides over the 13” model? It sure seems to hit a sweet spot on power and price?
    I got one to replace an aging MacBook Pro that I used as a non-travel desktop surrogate, just to save the +$1,000 price differential over a new Pro. I also have another Air used for travel.

    The Air feels a little petite compared to the Pro as might be expected but still quite adequate. Keyboard a bit cramped compared to Pro but don’t really mind it. The compromise worth the cost savings. To me, the price of the Air seems a bargain by Apple standards.
    by smectym
    Tue Jun 20, 2023 9:47 pm
    Forum: Personal Investments
    Topic: How safe are the paper bonds?
    Replies: 28
    Views: 2267

    Re: How safe are the paper bonds?

    One bank (Chase) limits paper bond cashing to something like $500/day for accounts 1+ year old. Other banks may have similar redemption limits. When did this happen? Is it a published policy or something at one branch? We cashed considerably more than $500 in one day at a local Chase branch in December. A Chase spokesperson was quoted in the Detroit Free Press article dated May 2023 (linked below) saying the limit was $500 for customers with accounts 1+ years old at all branches. https://www.freep.com/story/money/personal-finance/susan-tompor/2023/05/23/fake-savings-bonds-how-to-cash-banks-treasurydirect/70233192007/# In 2020 we cashed some large-denomination EE’s that had hit the doubling point, at Chase. We’ve been customers at Chase for...
    by smectym
    Tue Jun 20, 2023 9:38 pm
    Forum: Personal Finance (Not Investing)
    Topic: Hard conversation w/ Mom money
    Replies: 93
    Views: 11639

    Re: Hard conversation w/ Mom money

    P.S. don't forget to post when your kids start telling you how to live your life so we can see if your thinking changes! A+++ Except in very limited circumstances, seniors are adults and have earned the right to conduct their own lives, finances included, as they see fit. Just because someone disagrees with the senior's choices or believes they are unwise, that doesn't give them the right to intervene or otherwise involve themselves. While many who seek to influence, change or even control the senior's choices are well-intentioned, it isn't their place to do so absent threat of harm or mental incapacity. Seniors are NOT children, so on behalf of seniors everywhere to the younger "we know better than you" Bogleheads, thank you for...
    by smectym
    Tue Jun 20, 2023 2:05 am
    Forum: Personal Investments
    Topic: How would you invest 500K taxable in fixed income Right Now?
    Replies: 24
    Views: 3592

    Re: How would you invest 500K taxable in fixed income Right Now?

    Vivbet wrote: Sun Jun 18, 2023 6:29 pm Assuming that’s all you had for fixed income, and you had no emergency fund or tax deferred space, how would you invest it? I’m sure the answers will be varied based on circumstances, tax bracket, etc… Thanks :)
    I’d buy 50% 3-month bills and 50% 2-yr notes on Treasury Direct: zero commission, zero ER.
    by smectym
    Tue Jun 20, 2023 1:07 am
    Forum: Personal Investments
    Topic: VWENX underperforming
    Replies: 25
    Views: 3843

    Re: VWENX underperforming

    As of one year ago: 401a has jpmorgan target retirement 2025 $140k 403b fidelity puritan $160k Ira vanguard Wellington $190k Roth IRA $30k cash Each account is down at least 15% My wife working she is 56yrs so we don’t need to withdraw from anything now but I am concerned I get $1500 from social security $375 month from Roth IRA Everything besides the $190k in the IRA is now currently cash. So your port is ~$515k right now, and your AA is about 24% stocks / 13% bonds / 63% cash. That's already really, really, really conservative. That's about the lowest stock allocation you can get away with if you don't have enough cash to pay for your entire retirement. I would just leave it alone. You have more than enough cash to wait out any market vo...
    by smectym
    Tue Jun 20, 2023 12:56 am
    Forum: Personal Investments
    Topic: Why do I seem to be behind in investments?
    Replies: 23
    Views: 3214

    Re: Why do I seem to be behind in investments?

    Why would you expect the 50/10/40 allocation you're invested in to match the performance of those indexes? Good question...Why wouldn't they be doing better? Or is it not possible to do better? Granted, I am thankful for any gain...but how could I more closely match those gains or if I tried to match them is it possible that I would be chasing my tail and could do worse then my current allocations? Sorry, this is all new to me. Thank you. [/qu liveinaz, you’re asking the right questions. But in my experience anyway, investing has been a long series of “mistakes”: we have underperformed the index, or what our friends are getting, or what an optimally tax-efficient portfolio would show. It goes on and it’s a humbling experience. Yet, we have...
    by smectym
    Tue Jun 20, 2023 12:31 am
    Forum: Investing - Theory, News & General
    Topic: SPIA: What Do You Think?
    Replies: 91
    Views: 9906

    Re: SPIA: What Do You Think?

    One problem: inflation Life expectancy 86, but chance for much longer. So in 20 years at 3% inflation they are only getting the equivalent of $3217 Within the world of SPIA, one potential solution to minimize inflation risk is to discard any dogma that the only SPIA solution to be considered is the life annuity. Term annuities of 5 or 10 years can be purchased with a commensurately smaller capital allocation, but hitting the desired monthly income target. Keep remaining capital in the market, balanced to the investor’s risk profile. Buy new term limited annuities as the old ones expire, until the investor hits the point where a new life SPIA pays out more than the term alternative. At that point, consider the life SPIA; but if, as in the q...
    by smectym
    Mon Jun 19, 2023 2:12 am
    Forum: Investing - Theory, News & General
    Topic: Why not 100% TMF?
    Replies: 88
    Views: 15312

    Re: Why not 100% TMF?

    anon_investor wrote: Mon Nov 29, 2021 12:38 pm
    prioritarian wrote: Mon Nov 29, 2021 12:23 pm
    Booogle wrote: Mon Nov 29, 2021 9:38 am
    anon_investor wrote: Mon Nov 29, 2021 9:04 am Wouldn't NTSX be easier? I feel like using 90% VTSAX, 10% TMF would require a lot of attentiveness and rebalancing to be effective.
    Yes, but what about all the people who bought equities 10 years before NTSX existed?
    >> This is definitely my dilemma. I have so much money locked into equities (e.g. >200% gains) that I will likely never rebalance.

    The problem is, if you don’t rebalance, maybe the market rebalances for you
    by smectym
    Tue Jun 13, 2023 10:58 pm
    Forum: Personal Finance (Not Investing)
    Topic: Should we pay $70-$90k private school tuition for next 12 years
    Replies: 183
    Views: 19646

    Re: Should we pay $70-$90k private school tuition for next 12 years

    I live in Los Angeles. The Los Angeles unified school districts are nearly universally Terrible. Some of them, however have magnet schools within them. The magnet schools typically are great if you can get in. Our district is not Los Angeles unified. our first kid went to the local public school. The school quality is great. But getting into high school the kids are largely rich, spoiled brats. There is a lot of social pressure to wear the right clothes and drive the right cars. The younger one chose not to go to that high school, but rather to a nearby magnet school. Much more middle-class students. The kids and that’s cool. We’re much more normal and definitely not spoiled brats. Good kids. Everyone in the family, including the older chi...
    by smectym
    Tue Jun 13, 2023 10:38 pm
    Forum: Personal Finance (Not Investing)
    Topic: If your net worth is over $3 million, how did you do it?
    Replies: 913
    Views: 239869

    Re: If your net worth is over $3 million, how did you do it?

    My guess is that most of the people who "did it", did so because, in the words of Warren Buffett (did I spell that right? I always mix up the spelling with Jimmy's), you "won the ovarian lottery". Most are probably reasonably smart (not stupid, anyway), born middle- to- upper class, and fortunate enough to have lived and invested in the USA (or similar "wealthy" country) during what may have been the most stable 78 years, and the greatest period of economic growth, since the invention of agriculture. And you were never tempted by overspending and "keeping up with the Joneses". Certainly, but except for the "born to middle-to-upper-class" criteria, that pretty much describes every poster on ...
    by smectym
    Tue Jun 13, 2023 10:15 pm
    Forum: Personal Finance (Not Investing)
    Topic: If your net worth is over $3 million, how did you do it?
    Replies: 913
    Views: 239869

    Re: If your net worth is over $3 million, how did you do it?

    Irrelevant to debate the existence or destruction of the "American Promise" because it has absolutely nothing to do with that specific poster as their financial situation is based almost solely on decisions they made. Not sure how objective fact is "judgement". It's judgment because there are millions of inputs that affect the outcome, and you only know of a few in this case. And success requires hard work AND luck AND "a promise". :oops: That specific person has found "success", they are starting at the top of their field (on tenure track at a good university). They knowingly chose a profession that required a lot of schooling, with a low degree of employability, that doesn't pay particularly well, ...
    by smectym
    Thu Jun 08, 2023 7:40 pm
    Forum: Investing - Theory, News & General
    Topic: Wealthfront's New Moderate Risk "Automated Bond Portfolio" to Juice Money Market Rates
    Replies: 7
    Views: 3007

    Re: Wealthfront's New Moderate Risk "Automated Bond Portfolio" to Juice Money Market Rates

    smectym wrote: Thu Jun 08, 2023 7:32 pm Looks like an interesting experiment. I’m happy to just take the VFMXX rate. If I wanted a bit more risk in hopes of a higher yield, probably move some chips to Vanguard Ultra-Short.

    In general, perhaps be leery of excessive complexity, the 17 ETF’s and all that.
    Though having said that, I see that at the moment ultra-short (VUBFX) is a tad behind.

    https://investor.vanguard.com/investmen ... file/vubfx
    by smectym
    Thu Jun 08, 2023 7:32 pm
    Forum: Investing - Theory, News & General
    Topic: Wealthfront's New Moderate Risk "Automated Bond Portfolio" to Juice Money Market Rates
    Replies: 7
    Views: 3007

    Re: Wealthfront's New Moderate Risk "Automated Bond Portfolio" to Juice Money Market Rates

    Looks like an interesting experiment. I’m happy to just take the VFMXX rate. If I wanted a bit more risk in hopes of a higher yield, probably move some chips to Vanguard Ultra-Short.

    In general, perhaps be leery of excessive complexity, the 17 ETF’s and all that.
    by smectym
    Wed May 31, 2023 9:52 pm
    Forum: Personal Finance (Not Investing)
    Topic: How to annuitize inheritance for 63 yr old son with no assets
    Replies: 66
    Views: 6811

    Re: How to annuitize inheritance for 63 yr old son with no assets

    Goal33 wrote: Wed May 31, 2023 4:18 pm 63 years old? I'd recommend giving him his share the same as the rest. It's spendthrift brother's problem. You said no dependents but I wasn't sure if that means there are no grandkids on that side. Another idea is to just skip entirely and leave that money to his kids.
    Well, yes it is his money, but if he were amenable to having it managed for him, that’s the better course.
    by smectym
    Tue May 30, 2023 2:50 pm
    Forum: Personal Investments
    Topic: Is this good enough to keep 15x in safe assets ?
    Replies: 16
    Views: 2904

    Re: Is this good enough to keep 15x in safe assets ?nk

    It appears you have 6x in TIPS, not 3x. Does the duration of these bonds match the time when you plan to use them? That would be my main concern. If there is a reasonable chance of needing these dollars sooner, I would weight towards moving funds toward MMFs given current yields. I’d probably agree with Random, lean into the money market funds a bit more, during this perhaps fleeting window in which MM offers an unusual combination of safety, liquidity and yield. The usual rationale for holding CDs vs. a money market fund is that by locking up funds you don’t need right away for a time certain, you can get a better rate. But from what I’ve seen, that isn’t really true today. The inverted yield curve seems to be in play with Bank CD’s as we...
    by smectym
    Sat May 27, 2023 4:32 am
    Forum: Investing - Theory, News & General
    Topic: Do you track your returns, and if so, why?
    Replies: 103
    Views: 8701

    Re: Do you track your returns, and if so, why?

    jebmke wrote: Thu May 25, 2023 11:44 am
    dogagility wrote: Thu May 25, 2023 11:41 am I track my retirement portfolio balance yearly relative to my prior projections. I enjoy it (when the balance is increasing!), and it helps me see how far off reality is from my expectations of reality.
    I keep track of my balance (but not projections since I make none). The balance, of course, can be influenced by many things unrelated to returns. It is also an essential ingredient in understanding if there are sufficient funds to get you from today into the ground.
    Also a balance tracker—both necessary and a mild challenge bc our funds are fragmented, some here some there. I don’t track returns so much.
    by smectym
    Fri May 26, 2023 7:46 pm
    Forum: Personal Investments
    Topic: Octogenarians Vanguard Portfolios…
    Replies: 21
    Views: 3170

    Re: Octogenarians Vanguard Portfolios…

    livesoft wrote: Thu May 25, 2023 5:03 pm I'm sorry but it is difficult for me to understand what you posted. That's probably because it doesn't follow the recommended Asking Portfolio Questions format shown here: https://www.bogleheads.org/wiki/Asking_ ... _questions In particular, dollar amounts instead of percentages of total portfolio (all adding up to 100%) are hard to think about.

    We have had a portfolio at Vanguard continually since 1982.
    I don’t mind the dollar amounts, they add color and sometimes a certain asset level might elicit a different set of responses from the forum—but agree with livesoft, percentage of portfolio is, appropriately, the default protocol.
    by smectym
    Mon May 15, 2023 10:31 am
    Forum: Investing - Theory, News & General
    Topic: Equity Risk Premium: Why measure vs. Nominal Treasury?
    Replies: 180
    Views: 7751

    Re: Equity Risk Premium: Why measure vs. Nominal Treasury?

    Yes, and hasn’t Vanguard’s capital markets model (albeit a model not always celebrated for its accuracy) also projected lower long-term equity returns. Right now some investors are struggling with whether to reallocate to equities out of a money market fund, e,g. VFMXX, currently earning ~5% notionally risk-free. Is there an intuitive way to understand equity risk premium vis-a-vis that asset. If the long-term expectation for equity returns is 4-6%, with considerable associated risk and volatility, why is it rational to relinquish the “risk free” 5% return in favor of the equities risk/reward proposition? Yes, that's the question. It's the classic 'there is money on the sidelines' phenom that gets talked about in the financial press. If st...
    by smectym
    Mon May 15, 2023 9:31 am
    Forum: Investing - Theory, News & General
    Topic: Equity Risk Premium: Why measure vs. Nominal Treasury?
    Replies: 180
    Views: 7751

    Re: Equity Risk Premium: Why measure vs. Nominal Treasury?

    I am arguing that this is fundamentally a very pessimistic way of looking at earnings. I am arguing that for teh long term investor, stock earnings should be considered REAL and be measured directly against TIPS yields. Being pessimistic about earnings under current conditions seems normal. Cost of capital has an impact on earnings and is reflected in discounted cash flow models. I think it's logical to be pessimistic about earnings as we enter a new economic regime; Warren Buffet and Charlie Munger both made remarks about expecting less earnings in the future at the recent Berkshire Hathaway annual conference. Munger said, "Get used to making less." Yes, and hasn’t Vanguard’s capital markets model (albeit a model not always cele...
    by smectym
    Mon May 15, 2023 8:24 am
    Forum: Personal Finance (Not Investing)
    Topic: Sending/Transferring money to kids in college
    Replies: 25
    Views: 2110

    Re: Sending/Transferring money to kids in college

    30 years ago, when I was in college, my parents just deposited to my account using standard deposit slips. These days, I imagine Venmo, Zelle, or Cash app (or any of the others I don’t know about) would work just fine. With most, if you use your bank account info to fund the app there is no charge (there would be a charge if you use your credit card to fund the transaction.) A lot easier now than 10 years ago. In the first year or two after my kid went to school 3,000 miles from home, we were struggling with stone-age apps like Western Union. With the advent of Chase QuickPay, and the subsequent widespread adoption of Zelle and similar services to facilitate near-instant interbank fund transfers, you don’t need a joint checking account to ...
    by smectym
    Fri May 12, 2023 9:36 pm
    Forum: Personal Finance (Not Investing)
    Topic: How am I doing on retirement savings?
    Replies: 31
    Views: 4365

    Re: How am I doing on retirement savings?

    His and her age: 43 Combined retirement savings: $1.35 million Investments: 1/3 small cap; 1/3 mid-cap; 1/2 large cap Tax liability: 1/3 Roth (never pay taxes again); 2/3 401k (pay taxes upon withdrawal) Annual contributions: Varies, between $40,000 and $65,000 Pensions: Four pensions total, including 2 social securities, his pension, and her pension. Likely income appears to be $60,000 per year in pensions Retirement goal: His goal is 55, but might work to 60 or 62 since he loves his job. Her goal is 65 since she loves her job. Predicted retirement expenses: This is a big guess. House will be paid off; no commuter expenses to/from job; no income tax save 401k withdrawals, no retirement contributions, and no childcare costs. That is where ...
    by smectym
    Fri May 12, 2023 8:20 pm
    Forum: Personal Finance (Not Investing)
    Topic: First Republic line of credit - 100k @ 2.25%, any concerns? [And other financial considerations]
    Replies: 277
    Views: 54099

    Re: First Republic line of credit - 100k @ 2.25%, any concerns? [And other financial considerations]

    jpsfranks wrote: Mon May 01, 2023 10:18 am On the one hand it sounds like Chase bought the whole operation which should include the linked checking accounts etc, so they will presumably keep servicing the existing accounts under the current terms until they have a chance to sift through things and migrate everything to their systems. I wouldn't count on them continuing the discounts on the lines of credit long term, though.

    This will be the second time Chase has taken over a failing bank where I had accounts, Washington Mutual being the first.
    We had large CD’s at both Washington Mutual and IndyMac. My bank-picking acumen was not the greatest.