Search found 1966 matches

by bigred77
Tue Jun 12, 2018 11:16 pm
Forum: Investing - Theory, News & General
Topic: Why does CAPM make sense?
Replies: 23
Views: 1036

Re: Why does CAPM make sense?

Your quote said to assume a fixed net profit margin and consider a revenue multiplier of 10x and 0.5x over a couple of decades. You are right, in that case revenue growth is going to correlate pretty darn well with stock returns. Nobody would say your wrong. The problem is profit margins aren’t cons...
by bigred77
Sat Jun 02, 2018 10:50 am
Forum: Personal Finance (Not Investing)
Topic: $1,000,000 in savings account to pay mortgage?
Replies: 32
Views: 4164

Re: $1,000,000 in savings account to pay mortgage?

You do not keep money in a saving account earning 2% just to borrow money at 4% unless you have some unusually high liquidity needs.

You can invest it in higher risk/return assets or pay down the mortgage. But a savings account doesn’t make sense.
by bigred77
Tue Apr 17, 2018 9:43 am
Forum: Personal Finance (Not Investing)
Topic: 2.5% Withdrawal for 50 Years With 50/50 Portfolio?
Replies: 121
Views: 9098

Re: 2.5% Withdrawal for 50 Years With 50/50 Portfolio?

Hate to be the contrarian here but I don't see how the OP fixed income options could possibly provide the amount needed for a 50 year retirement duration. They are all nominal bonds. I went to usinflation.com, plugged in $1,500,000 in 1968, and the result stated one would need over $10,750,000 to b...
by bigred77
Mon Apr 16, 2018 12:03 pm
Forum: Personal Finance (Not Investing)
Topic: Can I retire at age 40?
Replies: 158
Views: 17194

Re: Can I retire at age 40?

I'm all for retiring early but I would keep the pedal to the metal for a few years still. I think about age 45 - 50 you should hit your sweet spot depending on investment returns and how much you continue saving. I would want around 3.5M in investable assets if I planned to retire pre-50 and spend 1...
by bigred77
Thu Apr 12, 2018 12:37 pm
Forum: Personal Finance (Not Investing)
Topic: Could you support family on 1 income?
Replies: 88
Views: 6291

Re: Could you support family on 1 income?

Well our 2nd income stops in August so I hope we make it! I'm early 30s and we just had our first kid. We live in a expensive(ish) city but nothing like NY or SF. All of my friends and peers who started having kids are all dual income except for 1 or 2 who had family financial support. It's relative...
by bigred77
Wed Apr 11, 2018 9:38 am
Forum: Investing - Help with Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 17744

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

You put 1/3 each into the US stocks, International stocks, and US Bonds. You spend 10k a month. You adjust it every year by the CPI change. You rebalance once a year on your birthday. You live your life. Your big financial issue isn't going to be will you run out of money, it will be how will you al...
by bigred77
Fri Mar 30, 2018 11:51 am
Forum: Personal Finance (Not Investing)
Topic: When did you know your kids would go to college?
Replies: 91
Views: 4416

Re: When did you know your kids would go to college?

My son is 5 weeks old and I've known he will be going to college for the past 5 years :D I joke but growing up I just operated under the assumption that college (and graduate school) was just a given. I just knew that's what I needed (and wanted) to do. My parents talked about it as a given, I assum...
by bigred77
Fri Mar 30, 2018 11:38 am
Forum: Investing - Theory, News & General
Topic: What’s the magic savings rate???
Replies: 50
Views: 6619

Re: What’s the magic savings rate???

I'm a proponent of 25% - 33% (if possible). If your making less, a lower savings rate is reasonable. You have to meet your needs and SS should replace a larger percentage of your pre-retirement salary. If you are pursuing an extremely early retirement, you might need to go higher. I've found balance...
by bigred77
Fri Mar 30, 2018 7:09 am
Forum: Investing - Theory, News & General
Topic: Is backtesting worthless? Are there ANY insights you can get from it?
Replies: 69
Views: 4786

Re: Is backtesting worthless? Are there ANY insights you can get from it?

I find backtesting to be very useful. Just keep in mind it’s not appropriate to define absolute statements or rules based on backtesting. “I’m using a 60/40 AA because historical data shows this allocation had superior risk adjusted returns” - Good “I’m using a 60/40 AA because I need 4% annual real...
by bigred77
Wed Mar 28, 2018 3:34 pm
Forum: Local Chapters and Bogleheads Community
Topic: A lot of heavy hitters this morning
Replies: 244
Views: 19241

Re: A lot of heavy hitters this morning

Don’t feel demoralized. Look at it this way - if husband and wife work for even just 20 years and just save normally, they would save Husband 401(k) = 18,500 Husband match = 6,000 Wife 401(k) = 18,500 Wife match = 6,000 2x Backdoor Roth = 11,000 529 = 6,000 (say only $500 per month) HSA = 6,900 Tot...
by bigred77
Wed Mar 28, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: Is technical analysis all smoke and mirrors?
Replies: 62
Views: 5154

Re: Is technical analysis all smoke and mirrors?

I don't know if I'd call it "smoke and mirrors". I prefer "the observed human tendency to associate patterns with random data". I think technical analysis is not worth your time or attention. I'm open to cases being made for fundamental analysis, but I've yet to be convinced, and I doubt I ever will.
by bigred77
Wed Mar 07, 2018 9:32 am
Forum: Personal Finance (Not Investing)
Topic: Savings % Goal > Top marginal tax rate?
Replies: 49
Views: 2669

Re: Savings % Goal > Top marginal tax rate?

Geez... Tough crowd this morning. I think it's a pretty good rule of thumb OP. The lowest tax bracket is 10% which is good minimum. Married couples making over 100k should be saving 22%. Then after 300k families should be saving 1/3 (or more). In general, hitting higher saving percentages gets easie...
by bigred77
Wed Mar 07, 2018 8:01 am
Forum: Personal Finance (Not Investing)
Topic: Should I "get divorced" for tax purposes (PSLF)
Replies: 57
Views: 4037

Re: Should I "get divorced" for tax purposes (PSLF)

I would not get divorced over a couple thousand dollars a year for the next 8 years. That said I would still minimize you’re household AGI with retirement contributions, file either MFJ or MFS depending on whichever minimizes your total liabilities, pay the minimum on your loans eligible for PSLF, a...
by bigred77
Mon Feb 19, 2018 8:04 am
Forum: Personal Finance (Not Investing)
Topic: First offer on a house...gut check
Replies: 16
Views: 2534

Re: First offer on a house...gut check

Numbers seem fine to me.
by bigred77
Thu Feb 01, 2018 9:19 pm
Forum: Investing - Help with Personal Investments
Topic: What advice would you give yourself if you were 27 again?
Replies: 120
Views: 8708

Re: What advice would you give yourself if you were 27 again?

I would have told myself to stop drinking so much and cleanup my diet and exercise habits.
by bigred77
Wed Jan 31, 2018 8:05 am
Forum: Personal Finance (Not Investing)
Topic: How much have kids added to your personal finance/expenses?
Replies: 111
Views: 9306

Re: How much have kids added to your personal finance/expenses?

I largely agree with those who stated kids cost whatever your willing to spend. Can be a little little extra per month (holding housing costs constant and if you can arrange childcare from family or one parent would be staying home anyway) or can be a huge multiple of that. We have our first kid due...
by bigred77
Thu Jan 25, 2018 7:52 am
Forum: Personal Finance (Not Investing)
Topic: Should I focus on paying down student loans during a Bear Market?
Replies: 14
Views: 1200

Re: Should I focus on paying down student loans during a Bear Market?

A bear market is precisely when you want to throw extra money into your portfolio. The opposite of what you proposed. If your student loans are sub 3% and on a 10 yr term then I would recommend just paying them off on schedule. If you want to pay extra on principal in lieu of taxable investing that’...
by bigred77
Wed Jan 24, 2018 7:13 pm
Forum: Personal Finance (Not Investing)
Topic: Working in the real world
Replies: 118
Views: 9659

Re: Working in the real world

ust heard today that 1/6 millennials has saved up over $100,000, fighting the myth that millennials are not saving. Would it surprise you that the majority of millennials on this board have more than $100,000? It would surprise me if it wasn't. I need to see the source for this.. Very hard to belie...
by bigred77
Mon Jan 22, 2018 10:38 pm
Forum: Investing - Help with Personal Investments
Topic: Pull back on retirement saving to increase savings for kids' college?
Replies: 31
Views: 2696

Re: Pull back on retirement saving to increase savings for kids' college?

If your going to use 529s (and I would encourage you to do so. They are of the most benefit to families with financial situations like yours) I would suggest front loading the contributions and “super funding” their accounts. If you have 200k+ in taxable brokerage accounts I would put 100k for each ...
by bigred77
Sat Jan 20, 2018 8:57 pm
Forum: Personal Consumer Issues
Topic: Pros and Cons of High Rise Condos for retired couple
Replies: 47
Views: 5446

Re: Pros and Cons of High Rise Condos for retired couple

A high rise condo is my retirement plan. No outdoor maintenance. Lock and leave lifestyle. Walkable location. Onsite security and staff. A 1 bedroom unit might be challenging size wise for some. Depends on how much space your used to. Personally I would make that compromise for budgetary constraints...
by bigred77
Sat Jan 20, 2018 8:40 pm
Forum: Personal Finance (Not Investing)
Topic: What's your annual cost of living (expenses)?
Replies: 40
Views: 3673

Re: What's your annual cost of living (expenses)?

Roughly 100k in a MCOL city.

2 adults, 0 kids
by bigred77
Sat Jan 20, 2018 6:38 pm
Forum: Investing - Theory, News & General
Topic: Fear of dying with too much money?
Replies: 137
Views: 9275

Re: Fear of dying with too much money?

Dying with too much money is a symptom of a problem I do perceive on Bogleheads and that’s the pursuit of absolute economic certainty regardless of cost. That cost comes in the form of working additional years unnecessarily. It comes in the form of depriving oneself of experiences, conveniences, or ...
by bigred77
Thu Jan 18, 2018 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: What are some good, older threads?
Replies: 20
Views: 2297

Re: What are some good, older threads?

“Best watch for around $5,000” :D

viewtopic.php?t=27707
by bigred77
Thu Jan 18, 2018 10:23 pm
Forum: Personal Consumer Issues
Topic: Short Commute or Nicer House?
Replies: 142
Views: 8679

Re: Short Commute or Nicer House?

Even in perfect conditions you described an extra 25min in the car each way. 50min x 5days x 50weeks = 208+ Lost hours per year (in theoretical perfect conditions) It’s not worth it if it public school quality is the same. Your trading all those hours only for a little bit bigger/nicer house. Over a...
by bigred77
Fri Jan 12, 2018 1:57 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '8% rule' - Where are they now?
Replies: 40
Views: 6998

Re: Year 2000 retirees using the '8% rule' - Where are they now?

:idea: What I am saying is that in 1999, there was almost no good information available on withdrawing income during retirement. It's a good thing that we have widespread access to better information today. I think it's far from ideal for many retirees, but I hear talk of the '4% rule' just about e...
by bigred77
Fri Jan 12, 2018 12:07 pm
Forum: Investing - Theory, News & General
Topic: Shares Are Wildly Overpriced. But Bonds May Be Even Worse
Replies: 35
Views: 6049

Re: Shares Are Wildly Overpriced. But Bonds May Be Even Worse

It's almost like the behavior we'd expect to see if interest rates on treasuries were used to discount the future expected cash flows of companies in order to derive stock prices. :mrgreen: (end sarcasm) i.e. when interest rates are low, we should fully expect to see a higher range of valuations. No...
by bigred77
Wed Jan 10, 2018 9:15 am
Forum: Investing - Theory, News & General
Topic: Running Maximum Withdrawal Percentage: Any data on this?
Replies: 26
Views: 1833

Re: Running Maximum Withdrawal Percentage: Any data on this?

The scary part of that chart is how quickly it rises and falls. I wonder how well it aligns with recessions....in other words, do those scary declines align with recessions? The scary declines are actually right around the tops of the bull markets (the precede the subsequent recessions). If you ret...
by bigred77
Wed Jan 10, 2018 8:04 am
Forum: Investing - Theory, News & General
Topic: Running Maximum Withdrawal Percentage: Any data on this?
Replies: 26
Views: 1833

Re: Running Maximum Withdrawal Percentage: Any data on this?

You are looking for the SAFEMAX rate.

See here: https://retirementresearcher.com/willia ... s-safemax/

There are other articles that discuss it as well.
by bigred77
Tue Jan 09, 2018 8:12 am
Forum: Personal Consumer Issues
Topic: The "Forever Home" Myth: Should I Plan on Buying 2 Homes?
Replies: 36
Views: 3731

Re: The "Forever Home" Myth: Should I Plan on Buying 2 Homes?

I don’t know about forever homes but I agree with the premise to limit the number of times you change personal residences and hold real estate for long(er) periods of time. I’m 32 and I hope to move only once more in my lifetime, when the kids leave for college I’m moving to a condo for less mainten...
by bigred77
Mon Jan 08, 2018 8:03 am
Forum: Forum Issues and Administration
Topic: Help me understand question-less financial status (e.g. "2 comma club") threads.
Replies: 175
Views: 11504

Re: Help me understand question-less financial status (e.g. "2 comma club") threads.

I hope they will be allowed to continue. I think they are motivating to others (in a “testimonial” sort of way). I also think it’s probably pretty cathartic to be able to share some exciting news like that in what I think is an appropriate forum when most other avenues would consider such news taboo...
by bigred77
Thu Jan 04, 2018 10:40 pm
Forum: Investing - Theory, News & General
Topic: Article claims: Housing was the world’s best investment over the last 150 years
Replies: 14
Views: 1674

Re: Article claims: Housing was the world’s best investment over the last 150 years

Tell me how the heck they calculated standard deviation for global “housing”. Real Estate is not a liquid, transparent, daily market like publically traded equities. If I buy a house today and sell it in 5 years, I have 2 data points. If I try to calculate my annual standard deviation I’m just guess...
by bigred77
Thu Jan 04, 2018 9:10 pm
Forum: Investing - Help with Personal Investments
Topic: 31..any reason not to allocate 100% stocks in 403b?
Replies: 20
Views: 1568

Re: 31..any reason not to allocate 100% stocks in 403b?

I am 75/25 in my early 30s because I view the significant reduction in portfolio volatility for the price of slightly lower annual returns to be good value. I’m sure in all likelihood I’d end up with more money 30 years from now if I was 100% stocks but I prefer a smoother ride in case I want or nee...
by bigred77
Mon Jan 01, 2018 11:49 pm
Forum: Personal Finance (Not Investing)
Topic: What is your threshold for paying down debt?
Replies: 89
Views: 6514

Re: What is your threshold for paying down debt?

There is a reason businesses have debt, which we rarely discuss--discipline. I feel like we'd be less disciplined about budgeting/saving if we didn't have a mortgage and many investors feel that companies are the same. Maybe other Bogleheads don't feel like discipline would be an issue for them... ...
by bigred77
Sun Dec 31, 2017 4:21 pm
Forum: Investing - Theory, News & General
Topic: Is Beta a distinct factor or a summation of other factors
Replies: 42
Views: 2225

Re: Is Beta a distinct factor or a summation of other factors

I overweight small and value because I'm trying to overweight higher risk, higher return (hopefully), higher standard deviation sub-populations of the overall market that will hopefully be relatively non-correlated to the other parts of my portfolio. I don't think that means I'm conceding the overal...
by bigred77
Sun Dec 31, 2017 1:05 am
Forum: Personal Finance (Not Investing)
Topic: Question on Mortgage Interest deduction under Trump Tax
Replies: 13
Views: 2433

Re: Question on Mortgage Interest deduction under Trump Tax

The final bill suspends (eliminates) the deduction for interest arising from home equity indebtedness for taxable years beginning after December 31, 2017 and through December 31, 2025. Any new mortgage debt acquired after Dec. 15 caps out at $750,000. This $750K total may be split between a first m...
by bigred77
Sun Dec 31, 2017 12:05 am
Forum: Personal Finance (Not Investing)
Topic: Question on Mortgage Interest deduction under Trump Tax
Replies: 13
Views: 2433

Re: Question on Mortgage Interest deduction under Trump Tax

I thought all interest from all home equity loans would no longer be deductible after Dec. 31, 2017. That's for existing equity loans and for new ones activated in 2018. Am I in error? TKS !! Not true. Home equity debt classified as “acquisition debt” used to purchase or “substantially improve” you...
by bigred77
Sat Dec 30, 2017 9:44 pm
Forum: Personal Finance (Not Investing)
Topic: Target Net Worth
Replies: 39
Views: 5018

Re: Target Net Worth

5 million in 2017 dollars but plan to adjust spending to whatever I end up with at age 55 (or whenever I just can’t stand working any longer). My target networth assumes I will need about $1M for a large condo in a prime location and that we utilize the 4% rule with the remainder. We also have a med...
by bigred77
Sat Dec 30, 2017 6:25 pm
Forum: Personal Finance (Not Investing)
Topic: What is your threshold for paying down debt?
Replies: 89
Views: 6514

Re: What is your threshold for paying down debt?

Except it’s not extreme. IB has margin rates well under 3%. Cheaper than your mortgage. So why not? Why would you rather use debt on your dwelling instead of on your stocks? Way easier and cheaper to use margin instead of a mortgage as well. 2.25% (fixed) <-- The rate of my student loans. All other...
by bigred77
Sat Dec 30, 2017 4:47 pm
Forum: Personal Finance (Not Investing)
Topic: What is your threshold for paying down debt?
Replies: 89
Views: 6514

Re: What is your threshold for paying down debt?

I think many bogleheads created habits and attitudes concerning debt when they were younger. Debt is usually most useful when your in your 20s and 30s and just starting out (education, buying a house, buying a car, etc) and don’t have a ton of assets to work with. Bogleheads who came of age decades ...
by bigred77
Thu Dec 28, 2017 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing out retirement accounts
Replies: 55
Views: 4594

Re: Maxing out retirement accounts

My household has the opportunity to put away about 80k per year in tax advantaged space (including employer match) but we can’t (or won’t) put that much away. Our goal has always been to aim to sock away 25% -33% of Income from day 1 (when we were in our early 20s). One day when the house is paid of...
by bigred77
Thu Dec 28, 2017 6:53 pm
Forum: Personal Finance (Not Investing)
Topic: Another should i buy my dream porsche thread...
Replies: 240
Views: 13073

Re: Another should i buy my dream porsche thread...

Wow never thought this topic would generate 3 pages of responses. A few things to clarify. I never said I would buy the Porsche outright cash. I would never Dump a 3rd of my net worth on a depreciating asset. Monthly payments would be around 1600.00 a month which I can easily swing. This is kind of...
by bigred77
Tue Dec 26, 2017 2:13 am
Forum: Investing - Theory, News & General
Topic: Implications of tax bill on residential real estate (house prices)
Replies: 62
Views: 6304

Re: Implications of tax bill on residential real estate (house prices)

Many home owners who stretched their means to buy high priced and high property taxed homes are very likely to hit with higher federal tax in 2018. For example a married couple with $160K annual income jointly income bought a home at 5x their income, $800K house with $14K annual property tax. They ...
by bigred77
Mon Dec 25, 2017 10:54 am
Forum: Investing - Theory, News & General
Topic: 1st, your education. Then...Location, Location, Location
Replies: 66
Views: 9039

Re: 1st, your education. Then...Location, Location, Location

As an older millennial I agree with most of the original post. Graduate degrees seem like the bare minimum these days if you want to climb the “megacorp” corporate ladder. Big cities are where most of the jobs seem to be. I didn’t job hop but I think that’s good advice for the masses. My addition wo...
by bigred77
Mon Dec 25, 2017 10:43 am
Forum: Investing - Help with Personal Investments
Topic: DD new job has Roth 401K and company 6% match, what is her max employee contribution?
Replies: 7
Views: 537

Re: DD new job has Roth 401K and company 6% match, what is her max employee contribution?

She can contribute the full 18.5k and the company match will be on top of that amount. No need to deduct the match from 18.5k.
by bigred77
Sun Dec 24, 2017 1:00 pm
Forum: Investing - Theory, News & General
Topic: Implications of tax bill on residential real estate (house prices)
Replies: 62
Views: 6304

Re: Implications of tax bill on residential real estate (house prices)

I don’t think the new tax law changes will impact housing prices all that much. The law impacted my household negatively (as in I’m going to be paying higher taxes in 2018) but even if I knew about the tax law changes it still wouldn’t have changed my previous housing decisions. It would have made t...
by bigred77
Sun Dec 24, 2017 1:43 am
Forum: Investing - Theory, News & General
Topic: What is or was your target multiplier (_ x annual expenses) for retirement?
Replies: 41
Views: 5608

Re: What is or was your target multiplier (_ x annual expenses) for retirement?

I pretty much plan to work until 55 and then adjust my expenses to equal 4% of my investable assets, whatever I end up with, and make sure over 50% of those expenses are discretionary. I will likely annuitize some funds at some point but plan to keep all other assets at around a 60/40 AA. I reserve ...
by bigred77
Sat Dec 23, 2017 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 HELOC Rules, Foreign tax credit, ACA tax
Replies: 12
Views: 1197

Re: 2018 HELOC Rules, Foreign tax credit, ACA tax

I saw the text above on kitces website and am planning on “acquisition debt” in the form of HELOCs or HELs to still be deductible (no idea about a cap but I assume total acquisition debt in the aggregate must be under the 750k debt. I haven’t confirmed or verified that assumption because I’m well un...
by bigred77
Sat Dec 23, 2017 1:51 am
Forum: Personal Finance (Not Investing)
Topic: Do you see a meaningful change in your income with new Tax Bill?
Replies: 266
Views: 23487

Re: Do you see a meaningful change in your income with new Tax Bill?

Our household will see an increase in taxes by about 10%. We had heavy property tax, mortgage interest, and sales tax deductions under the old rules. Nothing life changing but I’m not exactly thrilled about it. Once our new baby is born we’ll benefit from the tax credit and if we have a second child...
by bigred77
Wed Dec 20, 2017 9:44 am
Forum: Personal Finance (Not Investing)
Topic: House purchase considerations
Replies: 33
Views: 3105

Re: House purchase considerations

If I were potentially in the housing market like you are I would simply wait until the tax bill shakes out so I had some certainty, then I could make a decision with full information. I really don't think it will impact prices up or down 10% but I would personally just want to pencil out the numbers...