Search found 1478 matches

by bigred77
Thu May 25, 2017 2:02 pm
Forum: Personal Finance (Not Investing)
Topic: using Roth IRA for downpayment
Replies: 5
Views: 534

Re: using Roth IRA for downpayment

I don't know if your asking this question with getting to a 20% down payment in mind but I would MUCH rather put down less than 20% instead of raiding my Roth funds. You just don't get that space back. It is not the end of the world to do a 80/10/10 financing or even pay PMI for a little while until...
by bigred77
Thu May 25, 2017 1:26 pm
Forum: Investing - Theory, News & General
Topic: BlackRock, Vanguard Mull Pressuring Exxon to Disclose Climate Risks
Replies: 22
Views: 950

Re: BlackRock, Vanguard Mull Pressuring Exxon to Disclose Climate Risks

Active management can sell companies if they don't like their governance. Passive management has to vote in favor of improved governance and sustainability. I would actually prefer it if passive management was truly passive on these issues and abstained, letting active investors drive the discussio...
by bigred77
Thu May 25, 2017 12:31 pm
Forum: Investing - Theory, News & General
Topic: Boglehead Portfolio vs. All Other Possible Investments
Replies: 23
Views: 748

Re: Boglehead Portfolio vs. All Other Possible Investments

Most here (or at least I do) believe it does based on academic research.
by bigred77
Thu May 25, 2017 10:46 am
Forum: Personal Consumer Issues
Topic: Worth it to Refinance?
Replies: 9
Views: 334

Re: Worth it to Refinance?

I would probably use the funds to pay off the student loan in full first. Then I'd throw the remaining money at the car loan and use my former student loan payment to accelerate payments. I would want to free up cash flow first, then use that to pay down debt, or invest, or whatever. You can get PMI...
by bigred77
Thu May 25, 2017 10:38 am
Forum: Personal Consumer Issues
Topic: Should I drink or sell my Pappy 12 year?
Replies: 32
Views: 3185

Re: Should I drink or sell my Pappy 12 year?

As a fellow scotch fan who has never really come to appreciate bourbon my advice would be to sell it and buy as many bottles of Lagavulin as the proceeds will afford.
by bigred77
Thu May 25, 2017 8:56 am
Forum: Investing - Theory, News & General
Topic: How dividends become irrelevant?
Replies: 49
Views: 2285

Re: How dividends become irrelevant?

Good old Modigliani-Miller covered this circa 1960 (not that it is bad to think it through yourself), and ultimately won Nobel Prizes for their efforts. Since then, the game has been to try to explain why companies pay dividends anyway. The "best" explanations are likely going to be somet...
by bigred77
Wed May 24, 2017 11:09 pm
Forum: Investing - Theory, News & General
Topic: Cash flow observation
Replies: 21
Views: 1304

Re: Cash flow observation

It's an important discussion because the paths to a high networth aren't necessarily the exact same paths to a nice cash flow. As my dad's example clearly points out, his path was never the BH path, yet he ended up in a very strong financial position. Now days, someone who wants a nice cash flow wi...
by bigred77
Wed May 24, 2017 4:30 pm
Forum: Personal Consumer Issues
Topic: Lufthansa Premium Economy
Replies: 20
Views: 1417

Re: Lufthansa Premium Economy

I've made numerous long haul, 10 hr+ flights on a pretty diverse set of airlines. I always fly economy. I always fly whatever's cheapest. I had the absolute worst experience with Lufthansa. I'm a big guy, so any long economy flight is rough, but Lufthansa was incomparable with how uncomfortable I wa...
by bigred77
Wed May 24, 2017 2:53 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax benefit of owning a home
Replies: 28
Views: 1349

Re: How to calculate tax benefit of owning a home

What tax benefit? If you compare owning a home Vs living in the street, then you are right there is no tax benefit. If you are comparing owning a home Vs renting then yes, there is a tax benefit of owning over renting. AMT offsets any such benefit - what is given is taken away. I don't understand t...
by bigred77
Wed May 24, 2017 2:50 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax benefit of owning a home
Replies: 28
Views: 1349

Re: How to calculate tax benefit of owning a home

You are right. Many married households living in non-HCOL areas don't see any tax advantages for owning their home.

Higher income and/or HCOL married households can see some benefits.

It's quite the marketing tool for people who make their living in and around residential real estate however.
by bigred77
Wed May 24, 2017 12:19 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Help for Dad
Replies: 13
Views: 445

Re: Portfolio Help for Dad

I second Lifestrategy Conservative.

Would be the right choice I think unless pension and SS income drive him into the 25%+ tax bracket. Even then I wold consider trading off some tax inefficiency for the simplicity of leaving it alone in a single fund.
by bigred77
Wed May 24, 2017 12:09 pm
Forum: Investing - Theory, News & General
Topic: DFA Retirement Income Strategies
Replies: 18
Views: 1285

Re: DFA Retirement Income Strategies

I agree investors would benefit from thinking about their retirement savings in terms of "how can I securely generate an inflation protected income stream to meet my goals" instead of "how can I maximize my portfolio balance" or "how can I reach my number". I just don't...
by bigred77
Wed May 24, 2017 11:49 am
Forum: Investing - Help with Personal Investments
Topic: Arrived at milestone - what should be my next step?
Replies: 14
Views: 1285

Re: Arrived at milestone - what should be my next step?

If I were in your shoes, where it appears you have about 10k in free cash flow per month, I would do the following: - If you feel better with 50k sitting into savings and it would only take you 3 months to get there, then do it. - I would then prioritize all of your tax advantaged space first, befor...
by bigred77
Tue May 23, 2017 5:37 pm
Forum: Investing - Theory, News & General
Topic: Are risk factors just ways to take on additional risk?
Replies: 27
Views: 977

Re: Are risk factors just ways to take on additional risk?

In my mind, it's fair to say that (risk) factor investing is just a way to take on different sources of risk than just market beta.

If your portfolio is exposed to different sources of risk, it has different sources of return. It can make for a more efficient portfolio.
by bigred77
Tue May 23, 2017 3:46 pm
Forum: Investing - Theory, News & General
Topic: Question on Shiller CAPE predictions
Replies: 66
Views: 2154

Re: Question on Schiller CAPE predictions

Personally, I use a 5% real return for my own projections of equity performance, which is about 30% less than historical averages. I don't even factor in the fact that I expect MCV, my primary asset class, to outperform the S&P 500, which it's probably going to do over the next 20 years. I make...
by bigred77
Tue May 23, 2017 2:38 pm
Forum: Investing - Theory, News & General
Topic: Question on Shiller CAPE predictions
Replies: 66
Views: 2154

Re: Question on Schiller CAPE predictions

Personally, I use a 5% real return for my own projections of equity performance, which is about 30% less than historical averages. I don't even factor in the fact that I expect MCV, my primary asset class, to outperform the S&P 500, which it's probably going to do over the next 20 years. I make...
by bigred77
Tue May 23, 2017 2:25 pm
Forum: Investing - Theory, News & General
Topic: Question on Shiller CAPE predictions
Replies: 66
Views: 2154

Re: Question on Schiller CAPE predictions

Your scoff that it has less than 50% predictive power. I think it has about 30% predictive power, making it one of the strongest predictors out there. Nothing else comes close. So what? If I need to drive in a nail, and all I have is a saw and a wrench, then the wrench is the "best" tool,...
by bigred77
Tue May 23, 2017 1:52 pm
Forum: Investing - Theory, News & General
Topic: Question on Shiller CAPE predictions
Replies: 66
Views: 2154

Re: Question on Schiller CAPE predictions

Your scoff that it has less than 50% predictive power. I think it has about 30% predictive power, making it one of the strongest predictors out there. Nothing else comes close. So what? If I need to drive in a nail, and all I have is a saw and a wrench, then the wrench is the "best" tool,...
by bigred77
Tue May 23, 2017 1:35 pm
Forum: Personal Finance (Not Investing)
Topic: % Roth vs. % traditional
Replies: 91
Views: 3155

Re: % Roth vs. % traditional

I am a bit confused here. You said "If your certain you will be in a lower tax bracket in retirement, a traditional 401k or IRA would be preferable to Roth accounts. ". If so, why did you recommend having a mix (maxing out traditional 401k before a ROTH IRA)? Why not recommend traditional...
by bigred77
Tue May 23, 2017 1:07 pm
Forum: Investing - Theory, News & General
Topic: Question on Shiller CAPE predictions
Replies: 66
Views: 2154

Re: Question on Schiller CAPE predictions

So I'm still not sure any of this weighs in on my original question, which is whether the "future explanatory power" or predictive nature of the CAPE is based on whether one is currently invested, or if one is NOT YET invested. Again, if the market crashes tomorrow and goes down by 50%, a...
by bigred77
Tue May 23, 2017 12:40 pm
Forum: Investing - Theory, News & General
Topic: "The Problem With Factor Investing Research"
Replies: 58
Views: 2451

Re: "The Problem With Factor Investing Research"

I think factor investing research (sans commercial connections) is an attempt to better understand and explain investment returns. The problem is nobody is very good at it yet. People are getting better. People are making progress. But valuation (as measured by PE ratios and PE10 ratios) is probably...
by bigred77
Tue May 23, 2017 12:34 pm
Forum: Investing - Theory, News & General
Topic: "The Problem With Factor Investing Research"
Replies: 58
Views: 2451

Re: "The Problem With Factor Investing Research"

The problem with academic finance/economics is that they have what Munger calls "physics envy". "One of the problems he described was based on what he called "Physics Envy". This, Charlie Munger says, is "the craving for a false precision. The wanting of formula ...&qu...
by bigred77
Tue May 23, 2017 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: % Roth vs. % traditional
Replies: 91
Views: 3155

Re: % Roth vs. % traditional

I am a bit confused here. You said "If your certain you will be in a lower tax bracket in retirement, a traditional 401k or IRA would be preferable to Roth accounts. ". If so, why did you recommend having a mix (maxing out traditional 401k before a ROTH IRA)? Why not recommend traditional...
by bigred77
Tue May 23, 2017 11:53 am
Forum: Investing - Help with Personal Investments
Topic: To me this is the most significant investment lesson ever
Replies: 16
Views: 2781

Re: To me this is the most significant investment lesson ever

After dabbling in RE and stocks for decades, I have come to the conclusion that I do not get nervous when a market tanks, and since businesses have to borrow to survive, businesses will always do better long term than the bonds they borrow with. Otherwise the businesses will fail. The entire world ...
by bigred77
Tue May 23, 2017 9:50 am
Forum: Personal Consumer Issues
Topic: Is it worth it spending money to keep your house looking sharp?
Replies: 37
Views: 3689

Re: Is it worth it spending money to keep your house looking sharp?

Our house is in a small gated community where all the houses are 3 stories tall on super tiny lots (basically 3k sq ft homes on 3k sq ft lots). Being in such close quarters with each other, our HOA dues are on the higher side, but we hire out professional landscapers for the whole community (some ho...
by bigred77
Tue May 23, 2017 8:03 am
Forum: Personal Finance (Not Investing)
Topic: Present value of COLA pension
Replies: 18
Views: 1137

Re: Present value of COLA pension

Valuing that pension is going to be pretty tough to do with any degree of precision. I would agree with others that said 25X the yearly benefit is as good a rule of thumb as any (depending on age). If your 45 years old that might be a little low. If your 65 years old it might be a little high. It's...
by bigred77
Mon May 22, 2017 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: % Roth vs. % traditional
Replies: 91
Views: 3155

Re: % Roth vs. % traditional

What is the optimal proportion of Roth and Traditional contributions to your retirement? I have a traditional 401k and a roth IRA. I have heard that it is good to have a mix of both because each should be withdrawn at a different phase of your retirement (although I don't know how that works). Has ...
by bigred77
Mon May 22, 2017 7:09 pm
Forum: Personal Finance (Not Investing)
Topic: % Roth vs. % traditional
Replies: 91
Views: 3155

Re: % Roth vs. % traditional

What is the optimal proportion of Roth and Traditional contributions to your retirement? I have a traditional 401k and a roth IRA. I have heard that it is good to have a mix of both because each should be withdrawn at a different phase of your retirement (although I don't know how that works). Has ...
by bigred77
Mon May 22, 2017 3:37 pm
Forum: Investing - Help with Personal Investments
Topic: Quickest Path to Financial Independence
Replies: 24
Views: 3564

Re: Quickest Path to Financial Independence

You need 25 times your annual expenses in order to start the conversation. So for 50k - 100k in income you need $1.25M - $2.5M to get in the ballpark. Being in the ballpark assumes your "passion projects" as an artist could possibly bring in some additional income. If you are implying that...
by bigred77
Mon May 22, 2017 2:08 pm
Forum: Investing - Help with Personal Investments
Topic: Yet Another Real Estate vs Stock Market Thread
Replies: 40
Views: 2851

Re: Yet Another Real Estate vs Stock Market Thread

Your analysis seems to ignore appreciation (I'd expect values to go up with inflation) and your example is, at best, a marginal deal a lot of investors wouldn't bother with. But the main thing you're ignoring is the availability of cheap, safe, long-term, fixed-rate leverage. Good RE investors rout...
by bigred77
Mon May 22, 2017 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Help finding private loan for additional education
Replies: 8
Views: 389

Re: Help finding private loan for additional education

Can he get 0% credit card with an 18k limit before he quits his job? I've seen some with 18 -21 months intro periods.

Then when he re-enters the workforce he would obviously have to prioritize paying this down as quickly as possible (or get another 0% offer to do a balance transfer).
by bigred77
Mon May 22, 2017 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: Present value of COLA pension
Replies: 18
Views: 1137

Re: Present value of COLA pension

Valuing that pension is going to be pretty tough to do with any degree of precision. I would agree with others that said 25X the yearly benefit is as good a rule of thumb as any (depending on age). If your 45 years old that might be a little low. If your 65 years old it might be a little high. It's ...
by bigred77
Mon May 22, 2017 9:32 am
Forum: Personal Finance (Not Investing)
Topic: Net worth is overrated
Replies: 76
Views: 8617

Re: Net worth is overrated

I don't know that I agree. If I could only track one financial metric for my household, I'm pretty sure net worth would be my choice. I'm not saying it's perfect. I'm not saying in isolation it is a good comparative metric to decide one household is "doing better" than another. But I do th...
by bigred77
Fri May 19, 2017 12:45 pm
Forum: Investing - Help with Personal Investments
Topic: Int'l Investing as % of Total Equity Side
Replies: 7
Views: 774

Re: Int'l Investing as % of Total Equity Side

I'm a very strong proponent of holding US and International fairly close to their market weight. I think most are usually better off holding US and INTL in a 50/50 split rather than 100/0. In your specific case, I think it's fine to just leave it alone. Your investment time frame is on the shorter s...
by bigred77
Fri May 19, 2017 11:51 am
Forum: Investing - Help with Personal Investments
Topic: Fixing 20 Years of Mistakes
Replies: 9
Views: 1313

Re: Fixing 20 Years of Mistakes

I think target date retirement funds were created just for you.

If the majority of your investments are in retirement accounts and 529s. You can liquidate everything and move it to target date funds with no tax penalties.
by bigred77
Fri May 19, 2017 8:19 am
Forum: Investing - Help with Personal Investments
Topic: I am a huge believer in Passive Indexing.. but.....
Replies: 42
Views: 3093

Re: I am a huge believer in Passive Indexing.. but.....

Ok, I just need people to walk me off the ledge here. for background, I have been a passive index investor since 1984 and have never looked back. It is the bulk of everything I do. However, about 3 years ago I "peaked". I took some "fun money" (approx $100K) and decided I would ...
by bigred77
Thu May 18, 2017 8:49 pm
Forum: Investing - Theory, News & General
Topic: Milestone and not peeking. . .
Replies: 57
Views: 5641

Re: Milestone and not peeking. . .

That's pretty awesome. Congrats!
by bigred77
Thu May 18, 2017 5:57 pm
Forum: Personal Finance (Not Investing)
Topic: Why 20% House Down Payment?
Replies: 14
Views: 1819

Re: Why 20% House Down Payment?

20% gives you some leeway to get out of a property (if you need to), even if the value drops a little bit, without the pain of bringing a check to closing. You're bringing a check to closing regardless - whether that's the 20% at the closing when you buy the house, or to cover the value drop at clo...
by bigred77
Thu May 18, 2017 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Why 20% House Down Payment?
Replies: 14
Views: 1819

Re: Why 20% House Down Payment?

The standard advice for a down payment on a mortgage is 20%+. In the context of financially responsible individuals, such as Bogleheads, why is this the recommendation? Allow me to explain the various points that are making me question this advice: - The money you have as principal in your house is...
by bigred77
Thu May 18, 2017 12:13 pm
Forum: Investing - Help with Personal Investments
Topic: Forced Retirement
Replies: 28
Views: 2739

Re: Forced Retirement

Any kids or legacy desires? If not, a SPIA might help you meet your goals. It's not inflation adjusted, but should allow you more spending power early, during your healthiest, most active retirement years. I'd also consider paying off the mortgage to free up cash flow a bit (it might make some sense...
by bigred77
Thu May 18, 2017 11:07 am
Forum: Investing - Theory, News & General
Topic: For those with $500k-$1m in investments...
Replies: 138
Views: 12222

Re: For those with $500k-$1m in investments...

I'm a smidge away from your lower bound (give me a year's more contributions and a flat market to get there) but I will answer anyway. We are 100% in retirement accounts. The only thing we have outside of retirement accounts and home equity is a small but growing balance of cash that we are building...
by bigred77
Thu May 18, 2017 11:01 am
Forum: Personal Consumer Issues
Topic: Paying balance of costly ambulance ride
Replies: 18
Views: 1028

Re: Paying balance of costly ambulance ride

That seems pretty absurd to me. I would call my insurance company first to see what they say and then dispute it with the ambulance company. My mother had an ambulance ride last year. We called 911 and didn't ask any questions. It was $100 out of pocket to her and they settled the rest with the insu...
by bigred77
Thu May 18, 2017 10:55 am
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2960

Re: Justification for holding Emerging Markets?

I overweight EM for the same reason I overweight US SCV. I believe those equity classes contain more risk, and thus, over the long term, should deliver more reward than well established large cap companies in developed countries. I also believe them to be less than perfectly correlated with total st...
by bigred77
Wed May 17, 2017 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Conceptual strategy to safely fund an early retirement?
Replies: 10
Views: 932

Re: Conceptual strategy to safely fund an early retirement?

I wouldn't have 2/3 of my portfolio in cash and short term CDs if I was retiring at 47 (or retiring anytime for that matter) because that's just way too conservative/inefficient. However, If you are using a 3.5% initial withdrawal rate and assuming a COLA'd pension that accounts for 50% of your inco...
by bigred77
Wed May 17, 2017 8:36 am
Forum: Investing - Help with Personal Investments
Topic: What if I have enough money?
Replies: 22
Views: 4198

Re: What if I have enough money?

I would get sell off all individual company stock as soon as it is practical and as tax efficient as possible. I would use index funds instead of individual stocks. I would tally up to see how much I want/need to spend annually in retirement. What will your annual expenses be including healthcare? D...
by bigred77
Tue May 16, 2017 4:07 pm
Forum: Investing - Help with Personal Investments
Topic: Article: "Our emergency fund is exactly $0.00"
Replies: 73
Views: 7262

Re: Article: "Our emergency fund is exactly $0.00"

However as for his strategy of using 0% interest credit cards, I can tell you that it doesn't work that way. 0% interest is usually only offered as a limited signup reward. So unless you would like to apply for a new credit card every time you make a large purchase, it doesn't float this boat. I ag...
by bigred77
Tue May 16, 2017 4:03 pm
Forum: Investing - Help with Personal Investments
Topic: Should I transfer my investment in real estate to stocks??
Replies: 19
Views: 1149

Re: Should I transfer my investment in real estate to stocks??

The question is, I have additional 500k invested in a limited partnership in a hotel property that is consistently producing ~6% annual return. If I sell my share, I would be getting back tax-free 400k in cash, which I am thinking about putting it into my stock portfolio. In the unlikely event that...
by bigred77
Tue May 16, 2017 3:50 pm
Forum: Investing - Help with Personal Investments
Topic: Article: "Our emergency fund is exactly $0.00"
Replies: 73
Views: 7262

Re: Article: "Our emergency fund is exactly $0.00"

From the article "Our net worth is solidly in the seven figures and north of 30-35 times our projected retirement spending budget." So yeah, they 1000% don't have a need for any cash laying around if they don't want to. We never had an emergency fund until we got around to seriously consid...
by bigred77
Tue May 16, 2017 2:50 pm
Forum: Investing - Help with Personal Investments
Topic: VNQ vs Crowdedfunded Real Estate
Replies: 16
Views: 1269

Re: VNQ vs Crowdedfunded Real Estate

I am familiar with privately appraised RE as an institutional asset class. The lack of correlation is something of an illusion. Whereas REIT prices adjust instantly to perceived market changes, reported Net Asset Values of RE Limited Partnership investments don't. In reality, over longer periods of...
by bigred77
Tue May 16, 2017 2:11 pm
Forum: Personal Consumer Issues
Topic: How much to tip movers?
Replies: 44
Views: 3326

Re: How much to tip movers?

Apparently I am being underpaid.

I always help out friends who move because it's an excuse to drink beer during the day and a good excuse to get some exercise. My compensation is usually $9 worth of Miller Lite and maybe a pizza at the end.

Go to advanced search