Search found 348 matches

by ef11
Thu Feb 22, 2024 10:43 am
Forum: Personal Investments
Topic: Unwinding equity linked notes
Replies: 9
Views: 996

Re: Unwinding equity linked notes

On a side note, the money manager had purchased two of the notes in a taxable brokerage account. Can anyone come up with a good idea why he would have done that other than there was free cash in there and he could get a juicy commission from selling that product? If it was a commission based advisor, yes a nice commission. If a fiduciary/AUM fee advisor there was no commission paid to them. Why in a taxable account - interesting question and I'll give you some insight into my research on the products. The are typically very tax-efficient when compared to other income producing types of holdings (bonds, etc). Looking at the BMO term sheet, it does mention tax but doesn't explicitly state how the taxation will be reported. Others, like JPMor...
by ef11
Mon Feb 19, 2024 10:17 am
Forum: Personal Investments
Topic: Is a mega backdoor worth it for young investor?
Replies: 30
Views: 3440

Re: Is a mega backdoor worth it for young investor?

Do it.

I've been maxing out the MBR every year since I was 26 and am now 35. First through my mega corp and now through a Solo 401k. Having so much money in Roth at a young age will certainly be a huge benefit in retirement. If you have the opportunity to do it (many do not, so feel lucky) I'd take full advantage of it.
by ef11
Tue Nov 07, 2023 7:54 pm
Forum: Personal Investments
Topic: Just starting out; picking bond investment funds
Replies: 26
Views: 3607

Re: Just starting out; picking bond investment funds

Target date certainly not a bad idea. International equities may outperform at some point, but have underperformed for some time now. I'd do no more than 15%. Bonds, at your age I'd say 10% at most typically. However, historical data supports strong bond performance (measured via AGG) after the Fed pauses. So 10% there with where yields are today could certainly be reasonable.

Mainly just chiming in to commend you for your focus on your financial future. Continue maxing out those retirement accounts and stay the course. It will pay off big in the long run.
by ef11
Thu Apr 27, 2023 12:44 pm
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

If you can swing it without a partner I'd do it. When I bought into my office building I had no choice but to buy out one of the owners to get my foot in the door and it was less expensive than building a new office. That being said one of my happiest days was buying the other guy out. I had right of first refusal, baring selling 1/2 the building in conjunction with selling his business. Now the whole building is mine free and clear and I can do with it what I want. The rent I collect from my tenant more than pays for all operating/maintenance costs. My Bobcat, Thank you for sharing your thoughts. I agree it would be the best financially to do it that way, certainly. But spreading the risk out and having a partner that has experience in th...
by ef11
Wed Apr 26, 2023 9:11 am
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

Hey Subpar, Thanks again. Yes I can understand not wanting to get into many RE threads here as this is not within the typical Bogle wheelhouse, but nevertheless I appreciate you providing input. 2-3 - good deal, and yes I'm sure there are other things that will reduce NOI during operations. We will work with my CPA on all of this and hopefully finding ways to help out on my taxes. 4 - This is over my head for sure and I'll need to speak with him more about it. If you want to list things I may be missing I'll research and see what I feel definitely needs to be discussed/included. The "leasing all of the units" thing was kind of an idea we had. I would essentially lease the entire building to take risk off from the bank's perspectiv...
by ef11
Tue Apr 25, 2023 5:19 pm
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

I appreciate you playing devil's advocate to some extent, does not bother me! 1. Yes I completely understand where you are coming from. I think my mileage does vary as you mentioned, I'm in a smaller city, population 110,000 surrounding areas around 250,000. New medical school being built from a large state university program and population growth is expected to continue at a much higher rate than national averages. 2. $20-22 is base rent + NNN. Typical NNN on top of base is about $5. So yes NOI of ~ $100,000 The Base + NNN structure seems to be how everything is setup around here..is there a big benefit to this vs doing an all inclusive price? I guess better coverage of potential variable expenses maybe? 3. We have discussed design & ...
by ef11
Tue Apr 25, 2023 2:31 pm
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

Thanks for putting things in these terms. I think I was trying to get here, but couldn't. To be clear, I am paying for the lot at $145,000. Developer/partner is not paying 50% of that. Not sure if you took this into account. I had your partner paying 50% cost of the land in calculations. All things being equal, he will reap 550k profit with 0 down v/s 805k if you own 100%. Partnership is always complex. It all depends on how much time you have to manage this project. Construction projects are complex and costs tend to be always higher than projected. As someone suggested, office market is in downturn at present (It can be market specific). So be careful. https://www.wsj.com/articles/commercial-real-estate-woes-run-deeper-than-in-past-downt...
by ef11
Tue Apr 25, 2023 12:29 pm
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

Not trying to be pedantic or dismissive of the opportunity -- sounds like it could be decent and fully understand the desire to go this route -- but... 1. Office space is probably the worst real estate asset class right now, and it's likely to be underwritten accordingly. I do not have nearly enough information about your location, so I'll just leave it at that. YMMV, and it sounds like it probably does vary. In my area, I wouldn't expect to see a five-handle cap rate on office space anytime soon. Commercial operators are desperate for leases. 2. Is the $22-$20/ft. base rents, or base rents + NNN pass-throughs? I.e., are you expecting to generate something around $100K annual NOI? 3. Does the quote you received for construction include all...
by ef11
Tue Apr 25, 2023 11:36 am
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

Bottom line Your partner will invest 50% of the land considering construction is fully financed. So, his investment is roughly 72500. He will own 50% of equity. At 5% cap rate, property is valued at 2 million. After taking out all costs, net value of the property is roughly 1.117 million. He will own 50% of the this ~550k at the investment of 72k. It is nice return for his labor of six to eight months. If you do everything on your own, total cost will be about 1.20 million. At 5 Cap rate, your profit will be about 805k and you will own 100%. Difference is roughly 255k at the end of the day for you. If you are busy with your other businesses, it may be worth having this partner. If you want to handle everything on your own (your time also h...
by ef11
Tue Apr 25, 2023 10:14 am
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Re: Buying a Lot & Building Office Building - Questions

Hey Sandtrap, Great questions, let me answer them below: 1. Yes I have a ~$1.2 MM investable portfolio 50% retirement 50% nonretirement (other details, I'm 34, make about $350k/yr going up 70% in 3 years due to contract, total NW $3.7 MM with a little over $2 MM of that being a large piece of land in a desirable area. To this point we have turned down offers to sell but may accept at some point) 2. $145,000 cash for the lot, to be used as the down payment on the construction loan. Monthly, I already pay rent of $3,000/mo from the business, so about the same +/- 3. All financed except the lot. Financing details yet to be determined, construction loan rolled into longer term note (at hopefully lower rates, but can always refi later) 4. Total ...
by ef11
Tue Apr 25, 2023 8:39 am
Forum: Personal Finance (Not Investing)
Topic: Buying a Lot & Building Office Building - Questions
Replies: 18
Views: 1739

Buying a Lot & Building Office Building - Questions

Hello everyone, Not sure if there is a lot of experience on this forum in this regards, but this is generally where I turn to so I at least wanted to ask. I am on the cusp of signing a contract to purchase 0.40 acres of raw land, right where I want to be around other nice office buildings. The contract will have a 60 day feasibility study that allows me to back out if need be, only losing $500. Offering price is $145,000 (quite reasonable in this area) I have a connection with a developer/friend/mentor (was his main business for 30 years, but in his 70s now so does 2-3 houses a year now to stay occupied) however I have seen the office buildings he has built in the area and they certainly pass the test. Looking at 5,000 sqft with 3 suites li...
by ef11
Sat Jan 28, 2023 1:43 pm
Forum: Personal Investments
Topic: 24 Y/O Investment Review
Replies: 7
Views: 1048

Re: 24 Y/O Investment Review

Congrats on a great start!! Your post looks similar to my first "checking in" thread back in 2015. My first post was in 2012 when I was 23, this forum got me started on a successful path. 2015 checking in thread showed I still needed some good Boglehead brainwashing to be successful (still no Roth, what was I thinking?) https://www.bogleheads.org/forum/viewtopic.php?t=180500#p2734397 My checking in after 9 years thread is below. Insane to see the difference in 5 years. YES I did inherit some money, but due to this forum it wasn't squandered and was invested for growth. https://www.bogleheads.org/forum/viewtopic.php?p=5783383#p5783383 Moral of the story, don't live on this forum, but when you are spending time browsing the web, dir...
by ef11
Sat Jan 28, 2023 1:22 pm
Forum: Personal Investments
Topic: Secure 2.0 Catch-up contributions
Replies: 18
Views: 2803

Re: Secure 2.0 Catch-up contributions

Are we to assume all of these changes also apply to a Solo 401k?

For an owner-only S Corp, I assume the $145,000 limit only applies to the W2 salary received...hopefully

I must say, it is a bit scary to see the huge push towards Roth from our government...get more tax dollars now. Well what happens in 10-15 years as our deficits continue to explode, then they do something to come after all this Roth money they helped force to create? Don't see any reason they couldn't. In no way meant to be a political statement, I'm a moderate and both parties are out of control : )
by ef11
Sat Jan 28, 2023 9:11 am
Forum: Personal Investments
Topic: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty
Replies: 334
Views: 96366

Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Curious on the status of the 8,500 shares after this 60% run up from lows. I would assume they were called away.

Whatever you do, don't hindsight yourself to death. You made a prudent move for yourself and your family by reducing exposure to a single stock!
by ef11
Fri Jan 13, 2023 8:44 am
Forum: Personal Finance (Not Investing)
Topic: Ability to Update Date of Death Appraisal/Cost Basis on Land
Replies: 11
Views: 1040

Re: Ability to Update Date of Death Appraisal/Cost Basis on Land

The answer is it depends. It depends on whether you filed things with the IRS and whether it’s worth it to fight them if they audit you. If you actually gave the service actual numbers, you’re going to need a tax attorney to walk you through the steps and potential costs. If you didn’t, then it may be worth it, but you’ll still need an attorney to go over the pitfalls. Makes sense. We did not provide any type of appraisal, just the M-2 that stated capital contribution of the appraised value. To provide these numbers, original appraisal was at $2 MM. Four years later, the appraisal was $8.25 MM. Every $1 MM in basis we improve saves us ~$200,000 in LT Capital Gains tax of course. So that being said, yes I think it would be worth it to try.....
by ef11
Thu Jan 12, 2023 3:24 pm
Forum: Personal Finance (Not Investing)
Topic: Ability to Update Date of Death Appraisal/Cost Basis on Land
Replies: 11
Views: 1040

Re: Ability to Update Date of Death Appraisal/Cost Basis on Land

Bump.

Hoping BSteiner shows back up for some additional insight :beer
by ef11
Wed Jan 11, 2023 8:06 am
Forum: Personal Finance (Not Investing)
Topic: Ability to Update Date of Death Appraisal/Cost Basis on Land
Replies: 11
Views: 1040

Re: Ability to Update Date of Death Appraisal/Cost Basis on Land

bsteiner wrote: Wed Jan 11, 2023 7:56 am
ef11 wrote: Wed Jan 11, 2023 7:29 am ...
Tax files are 1065 each year and K1s to the partners.
...
No 8971 required.
Did the partnership make a Section 754 election?
To add more clarity, three individuals inherited this property as of 1/2018 (date of death). It was then listed on the original 2018 tax return for our LLC as a capital contribution. We moved the ownership from our personal names to an LLC. Every indicator on the 2018 1065 regarding a 754 election is marked NO, so it does not appear we made a Section 754 election.

From your questions, seems you are in the know on this stuff. I really appreciate your input.
by ef11
Wed Jan 11, 2023 7:29 am
Forum: Personal Finance (Not Investing)
Topic: Ability to Update Date of Death Appraisal/Cost Basis on Land
Replies: 11
Views: 1040

Re: Ability to Update Date of Death Appraisal/Cost Basis on Land

bsteiner wrote: Wed Jan 11, 2023 7:01 am What company records?

What tax files?

Was there a Federal estate tax return?

Was the basis reported on Form 8971?

Was there a state estate tax return?
Thank you for the questions, I have updated the original post to include some of these details.

Tax files are 1065 each year and K1s to the partners.
Original cost basis was listed as a capital contribution of property for the value of the original appraisal, on Schedule M-2. I assume to update to a higher number we could list an additional capital contribution of the difference between an updated appraisal and original...
No 8971 required.
by ef11
Wed Jan 11, 2023 6:52 am
Forum: Personal Finance (Not Investing)
Topic: Ability to Update Date of Death Appraisal/Cost Basis on Land
Replies: 11
Views: 1040

Ability to Update Date of Death Appraisal/Cost Basis on Land

Hello & Happy New Year to all Bogleheads, I'll try to keep this short and sweet. We inherited land in 2018 that has been in our family for over 100 years. It is 121 acres outside of a super growth city and has several mega corps that have developed within 5 miles of it, property values have increased dramatically in just a few years time. We had an appraisal done in 6/2019 with a date of death valuation of 1/2018. At the time, very few comparable sales at all for the appraiser to use, but we needed something to establish our cost basis on the inheritance. Most recent appraisal done in 2022 now values the land at 4X what our 2018 appraisal listed, a 400% increase in just 4 years... We have talked to appraisers that say based on the lack ...
by ef11
Mon Jan 09, 2023 10:13 am
Forum: Personal Investments
Topic: JP Morgan chase has no Moody's or S&P rating
Replies: 6
Views: 714

Re: JP Morgan chase has no Moody's or S&P rating

salilsurendran wrote: Sun Jan 08, 2023 4:29 pm
Geologist wrote: Sun Jan 08, 2023 3:55 pm The units for most bonds are in thousands, so the minimum is $1000. Prices are listed in relation to 100.
So basically you are saying that if the price is listed as 99 then I will pay $990 for $1000 bond.
Correct. Bond nomenclature they just cut a digit off, I assume to make it easier for everyone that trades and discusses bonds on a regular basis.
by ef11
Sun Dec 25, 2022 12:26 pm
Forum: Personal Investments
Topic: How to assess your portfolio performance?
Replies: 32
Views: 3361

Re: How to assess your portfolio performance?

Yes seems extremely strange your advisor would fire you for asking some questions...regardless, not someone you want to work with anyway if that's the outcome of asking questions.

But yes, most firms (Fidelity, VG, etc) will show you % performance over time. Inflows/outflows during the time period can complicate things and a standard measure is a Time-weighted return that takes all of that into account. I don't believe most standard % shown by those companies would offer that.

Seems like you are making a smart move looking into doing it on your own.
by ef11
Sun Dec 25, 2022 12:21 pm
Forum: Personal Investments
Topic: Self Employment Income - Tax Avoidance
Replies: 6
Views: 990

Re: Self Employment Income - Tax Avoidance

Yes Solo / Individual 401k is best option to defer.

The IRS changed the rules in terms of the deadline to set up. It used to be 12/31 but due to the secure act I believe you have until your tax filing deadline to not only fund it, but also establish it.

You could check out MySolo 401k for one option, that is who I use. Lot's of info on their website.
by ef11
Thu Oct 27, 2022 10:09 am
Forum: Personal Investments
Topic: time to go long on fixed income?
Replies: 29
Views: 3085

Re: time to go long on fixed income?

I don't think it is a terrible idea, you can get BBB+ and higher corporates, especially utilities paying > 6% YTM over 7-10 years at a 10-15% discount to the par "guaranteed by the company" value. Current prices on bonds are about as cheap as they have been in 15 years, so it is natural to think it is a good investment option. I do think it depends on age though...at 33 I have to say, yes that may be a pretty good deal BUT does the S&P 500 outperform that? I don't need income and am looking to grow my assets and my monthly free cash flow as much as possible as I climb "mount retirement" Also, you need to factor in tax implications. S&P 500 growth is "cheaper" than interest taxed at ordinary income tax r...
by ef11
Tue Sep 20, 2022 8:06 am
Forum: Personal Investments
Topic: SHYG - 30 Day vs TTM vs YTM
Replies: 2
Views: 437

SHYG - 30 Day vs TTM vs YTM

Good morning,

I have a question on SHYG (iShares 0-5 YR High Yield Corporate Bond).

30 Day Yield shows 8.12%
TTM Yield shows 5.33%
YTM shows 8.64%
Duration is 2.6
Avg Maturity is 3.15

The 9/2 (monthly) dividend payment was $0.194464 and divided by the current price of $40.90 multiplied by 12 = 5.7% This is way below the 30 day yield...

Adding up the prior 12 months dividends, it equals $2.17505 divided by $40.90 = 5.32%. This matches the TTM Yield.

Typical consensus on these funds I believe if purchased and held for either 2.6 or 3.1 years (duration/maturity) we can expect to get the YTM of 8.64%, is this correct?

And why does the 30 day yield formula not seem to work out to the 8.12% shown on the iShares website?

Thank you!
by ef11
Mon Jul 11, 2022 3:41 pm
Forum: Personal Investments
Topic: settling a spat [continue investing during downturn?]
Replies: 53
Views: 6037

Re: settling a spat

Stocks are the only thing no one wants to buy while they’re on sale. This is so true. You have to be a disciplined long-term investor. Typically when you feel scared about buying the S&P 500 because it has been going down, is the absolute best time to click the "buy" button. I was on a $16,000/mo IVV investment plan starting January of 2020...I bought $16,000 on the below days: 1/27/2020 1/31/2020 2/24/2020 2/28/2020 3/9/2020 3/12/2020 3/16/2020 The streets got more and more bloody, so I advanced my monthly purchases into March/February. Now those are some of the best tax lots in my portfolio...The beauty of indexed investing is, you don't have to worry about buying Enron on the way down to $0. If the S&P ever goes to $0,...
by ef11
Thu Jun 09, 2022 11:57 am
Forum: Personal Investments
Topic: Resolution Funding Corp 8.875% 04/15/2030
Replies: 8
Views: 741

Re: Resolution Funding Corp 8.875% 04/15/2030

To put it in layman's terms, this bond matures 4/2030 at a price of $100.

Yes the coupon is high, but in 8 years the price will go from $137 to $100, representing a big loss in market value. YTM is definitely important!
by ef11
Tue Jun 07, 2022 10:54 am
Forum: Personal Investments
Topic: Can I do more than a Simple IRA in my situation?
Replies: 11
Views: 800

Re: Can I do more than a Simple IRA in my situation?

Hello Airban, It is a great question and the SIMPLE has likely served a good purpose for both you and your employees to build up retirement savings while getting current year tax deductions. SIMPLEs allow for decent contribution limits and as the name implies, can be relatively simple to administer with low costs. The next step up would be to look at an employer sponsored 401k, just like most larger companies have. This would allow you to make up to $20,500 in contributions per year, or $27,000 once over age 50. Safe Harbor options mean you match ~3% of employee pay, similar to what you are doing on the SIMPLE I'm sure. Administration costs of $1,000-$2,000 per year is the downside, but the additional $6,500 of contribution tax-deductible h...
by ef11
Fri Jun 03, 2022 9:18 am
Forum: Personal Investments
Topic: 24 Y/O Financial Overview - Poke Holes Please!
Replies: 5
Views: 944

Re: 24 Y/O Financial Overview - Poke Holes Please!

You are doing very well. I began posting on this forum at 23 years old after starting my first job out of college. Now 10 years later, my portfolio looks great (>$1.4 MM) and I dump money into as much tax-advantaged savings as possible (Max Solo 401k, Mega Backdoor Roth, Regular Backdoor Roth, HSA) and additional free cash flow goes into taxable account primarily IVV (S&P 500) and VXF (Extended Market). At your age, saving and investing consistently and staying the course will pay off big in the long run. Congrats on getting such a good start and keep it going more and more each year. Use this forum to learn all you can, but understand the vast majority of this is easy. Set your IPS, save & invest consistently into low cost funds. D...
by ef11
Fri Jun 03, 2022 9:09 am
Forum: Personal Investments
Topic: Funds for Implementing SVC Tilt
Replies: 4
Views: 708

Re: Funds for Implementing SVC Tilt

I've been using VIOV since I implemented it in early 2021...seems to be working as anticipated. Weather it will help over 30+ years, unsure.
by ef11
Wed Apr 20, 2022 5:07 pm
Forum: Personal Investments
Topic: Trying to stop friend from investing in Citi structured notes
Replies: 39
Views: 4582

Re: Trying to stop friend from investing in Citi structured notes

I have seen these products structured in ways that somewhat make sense, but only when using real equity indexes (S&P NDX DJI, etc) and either a large amount of downside protection and guaranteed interest payouts of 7+% or very little protection and serious upside leverage (180+%). These made up indexes with large fees associated with them like the Citi Dynamic Asset Selector 5 Excess Return Index seem to be a poor index that generates returns for the banks in fees and suppresses returns for the investors so the bank ends up having to pay the owner less. I assume this note may even have full protection of principal, while offering leveraged upside returns of an index that won't have very good returns longer term...For example, S&P wa...
by ef11
Tue Mar 29, 2022 12:23 pm
Forum: Personal Investments
Topic: Year 9 as a Boglehead: A Baby, A Home, and A Big Number
Replies: 23
Views: 4773

Re: Year 9 as a Boglehead: A Baby, A Home, and A Big Number

Congrats!

Glad to see your latest update as I do similar and we have PMd about them in the past. We are both at the same time frame and both have NW in the 7 figures now...the one common denominator we know of is THIS FORUM.

Thanks to all and congrats!!
by ef11
Wed Aug 25, 2021 2:23 pm
Forum: Personal Investments
Topic: Defined Benefit Plan - Make Sense for me?
Replies: 37
Views: 4421

Re: Defined Benefit Plan - Make Sense for me?

It seems many people are posting that don't understand what a Cash Balance plan is, but seems you have also gotten some good advice. I was looking at doing one for myself, being 1099 and in the 35% tax bracket, but succession plan will make me a part owner and we have employees, so it is not feasible for me anymore. Goal would be to defer in the 35% tax bracket and then take the income later at a much lower bracket, but since your "lower bracket" is likely 33% or higher, then I think I would push for the Solo 401k with Mega Backdoor. That is what I have done for many years. There are others that offer DB/CB plans for what appear to be cheaper rates. July Services is one I have looked at in the past. Thanks EF. Great that you may ...
by ef11
Wed Aug 25, 2021 11:47 am
Forum: Personal Investments
Topic: Defined Benefit Plan - Make Sense for me?
Replies: 37
Views: 4421

Re: Defined Benefit Plan - Make Sense for me?

It seems many people are posting that don't understand what a Cash Balance plan is, but seems you have also gotten some good advice.

I was looking at doing one for myself, being 1099 and in the 35% tax bracket, but succession plan will make me a part owner and we have employees, so it is not feasible for me anymore.

Goal would be to defer in the 35% tax bracket and then take the income later at a much lower bracket, but since your "lower bracket" is likely 33% or higher, then I think I would push for the Solo 401k with Mega Backdoor. That is what I have done for many years.

There are others that offer DB/CB plans for what appear to be cheaper rates. July Services is one I have looked at in the past.
by ef11
Fri Jun 25, 2021 10:34 am
Forum: Investing - Theory, News & General
Topic: Jeremy Grantham revisited
Replies: 34
Views: 6055

Re: Jeremy Grantham revisited

In my opinion, the geniuses of investing are found on this forum. They would say, stay the course and tune out the noise.

I run into so many people that listen to "experts" and try to time the markets...their loss.
by ef11
Mon May 03, 2021 9:03 am
Forum: Personal Investments
Topic: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years
Replies: 42
Views: 6157

Re: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years

Nothing in the OP makes me think this is sketchy, but slightly off-topic - In a situation like this, who would be the custodian of the numerous individual corporate bonds the advisor uses to build portfolios? s The accounts are held at Fidelity. It's possible that this advisor is "the bond whisperer" that other advisors use. The bond market is complex and I wouldn't doubt that among investment advisors in an investment house you'll get a couple investors that will do all the bonds for the house. The other investors will have certain clients that only want bonds, so they point them at this guy rather than waste their time with them. In turn, this guy will give up clients that want stock exposure to his colleagues. And it may not b...
by ef11
Sat May 01, 2021 9:35 am
Forum: Personal Investments
Topic: How am I doing? What could I DO better? 33yr old
Replies: 9
Views: 2683

Re: How am I doing? What could I DO better? 33yr old

You're doing great. I'm 32 and single as well, so similar situation. 100% start doing the backdoor Roth every year. You are maxing the pre-tax available avenues with your 401k, so the only other thing you can do retirement account wise is the backdoor Roth. It grows tax free for life and can also help bridge the retirement account gap as you can take out contributions anytime without penalty. Obviously taxable account would be the first place to pull from though, which you are planning. If you can find a side job that pays you as a contractor (1099 income), then you can open a Solo 401k and really boost your retirement plan contributions. Finding a side job isn't always an easy task though, but is an option. Stay the course, you're doing a ...
by ef11
Fri Apr 30, 2021 1:20 pm
Forum: Personal Investments
Topic: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years
Replies: 42
Views: 6157

Re: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years

To be completely clear, yes it is over $100 MM in total assets for hundreds of clients. I am of course in no way interested in taking this advice. I just thought it was really interested an advisor would treat all client's money this way. The returns I stated were after fees, which are between 1-2% apparently and this father is paying 1% by my calculations. The advisor is fee only, no commissions on bonds or things of that nature. But yes, to me investing in a few individual corporate bonds seems almost as risky as picking individual stocks. Especially if trying to buy them at a discount to the par value, that would only be available on riskier debt over the past few years more than likely. I have NO desire to interject myself, we just had ...
by ef11
Fri Apr 30, 2021 9:58 am
Forum: Personal Investments
Topic: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years
Replies: 42
Views: 6157

Re: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years

Yes, I understand the comments made so far.

The father told me that he had brought up getting some stock exposure over the last several years but the advisors input is always that stocks always crash and they are too risky and he will never buy any stocks for anyone. So it seems he is not only implementing this strategy for people that want no stock exposure, but actively convincing his clients that the stock market is terrible and will always crash.

I just don't see how anyone can be satisfied with 3% returns over the last 5 years...and the advisor tells him he can take 6% of his account value when he retires without dipping into his principal. Which is clearly not true.
by ef11
Fri Apr 30, 2021 9:43 am
Forum: Personal Investments
Topic: Friend's Father's Financial Advisor - 100% Bonds Last 10 Years
Replies: 42
Views: 6157

Friend's Father's Financial Advisor - 100% Bonds Last 10 Years

Hello! I was talking to a friend's father that is in his late 50s and he mentioned how his financial advisor only invest in corporate bonds. This was very surprising to me, so I started asking more questions. Apparently this advisor doesn't believe in ANY equity exposure and trades individual corporate bonds in client accounts, no matter what their age or risk tolerance. I was completely mind blown hearing this. He told me that because interest rates have been so low, his accounts have been in 50-100% cash over the last few years. He also stated that even in his taxable accounts, he does the same trading which generates short-term capital gains. My mind is getting more blown by the minute. Apparently the advisor buys the bonds when they are...
by ef11
Sat Apr 24, 2021 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: Getting Business Credit Cards for Signup Bonuses
Replies: 5
Views: 693

Re: Getting Business Credit Cards for Signup Bonuses

Pdxnative wrote: Sat Apr 24, 2021 12:06 pm Most business cards won’t show up on your personal credit, just the hard pull will.

But the Sapphire Preferred isn’t a business card. You’re probably thinking of the various Ink cards.

You can open and close business cards without much consequence for your personal credit, aside from the hard pulls. As noted, consumer protections are different.
Yes you are correct, I was thinking of the Chase Ink Preferred with 100,000 intro offer. I have edited the original post.

It does require $15,000 of spending in the first three months though, which may be tough. Would have to get creative with gift cards etc.
by ef11
Sat Apr 24, 2021 9:36 am
Forum: Personal Finance (Not Investing)
Topic: Getting Business Credit Cards for Signup Bonuses
Replies: 5
Views: 693

Getting Business Credit Cards for Signup Bonuses

Hello all, I have a single-owner S Corp, have very minimal actual business expenses. To date, I only use personal credit cards and track any business expenses in a spreadsheet. Works fine, no issues. I'm thinking about starting to signup for Business Credit Cards to get excellent signup bonuses. For instance, Chase Ink Business Preferred is offering 100,000 points and has a $95 annual fee. I already have a personal Chase Sapphire Reserve, so I can transfer those 100,000 points to my personal ultimate rewards account and it is worth $1,500 in travel. I may look to sign up for other cards under both personal and business accounts to get double signup bonus points. Is there any issue with doing this? Do business cards affect my personal credit...
by ef11
Wed Feb 03, 2021 8:10 pm
Forum: Personal Investments
Topic: Backdoor Roth - A Literal Penny for Your Thoughts
Replies: 17
Views: 1458

Re: Backdoor Roth - A Literal Penny for Your Thoughts

I use Fidelity and the way I avoid this issue is by not going from bank to Traditional IRA to Roth IRA.

I make sure I have money in my individual brokerage account. Then I move $6,000 from that to my Traditional IRA. Since the money was already at Fidelity it settles immediately and becomes available to transfer immediately. One minute later I transfer from Traditional to Roth. All done in a few minutes so no interest accumulates.
by ef11
Tue Feb 02, 2021 8:03 am
Forum: Personal Investments
Topic: Checking in After Nine Years - Achieved 7 Figures
Replies: 27
Views: 5992

Re: Checking in After Nine Years - Achieved 7 Figures

I understand the perspective, but I think this is overblown. OP’s title is essentially saying, “Hi everyone, it’s been 9 years since the last time I posted, and I’d like to drop by to say hello. I just hit a million bucks and would like some input.” Then they lay out how they got there, clearly indicating the inheritance in the chart. What’s so bothersome about that to accuse them of being misleading? The funny thing is people here on the forum get to $1MM all the time in less than a decade, it’s almost commonplace. OP does the same, while documenting the inheritance, and folks call them out? The point of sharing this information here isn’t to be “impressive”. It’s to get counsel and fine tune the portfolio. Well done, OP. So many people i...
by ef11
Tue Feb 02, 2021 6:31 am
Forum: Personal Investments
Topic: Checking in After Nine Years - Achieved 7 Figures
Replies: 27
Views: 5992

Re: Checking in After Nine Years - Achieved 7 Figures

I think that it's misleading. As an example imagine if somebody posted that they made it to 1,000,000 after 2 years you'd be like wow but then if you found out that they got 950k out of inheritance you'd be like that's not very impressive. I realize you don't care where the money comes from, it's yours, but think of the people who are reading this, we thought you saved or made 1 mil on your own in 9 years, but you only made half. We are all happy you have been posting here for 9 years and have 7 figures, but the post title didn't indicate that half of it came from inheritance. Sorry I didn't put every detail about my situation in the title, the details are all included in my posts though about where the money came from. Your example of som...
by ef11
Mon Feb 01, 2021 9:57 pm
Forum: Personal Investments
Topic: Checking in After Nine Years - Achieved 7 Figures
Replies: 27
Views: 5992

Re: Checking in After Nine Years - Achieved 7 Figures

Thank you all for the replies! Good move to invest your inheritance! Have you thought about switching from a five- to a three-fund portfolio? In particular, your ACWI fund has a high expense ratio, and I'm not sure if having 10% of your portfolio dedicated to FREL is going to do much for you in the long run. But I'm a relentless simplifier. All told, you're in an excellent place financially. I forgot to update my current allocation initially, the allocation in my signature is correct and I have corrected the original post as well. Mr. Larimore commented in my thread last January and recommended eliminating REIT from the portfolio, which I did in January and switched to a 10% Small-Cap Value tilt. This tilt has done very well during the last...
by ef11
Mon Feb 01, 2021 4:02 pm
Forum: Personal Investments
Topic: Checking in After Nine Years - Achieved 7 Figures
Replies: 27
Views: 5992

Checking in After Nine Years - Achieved 7 Figures

Hello all, It has been almost nine years since my first post on this forum and since I started my career fresh out of college. I'm posting my current status as well as links to my eight (and seven, six, five, four) year status for comparison purposes. I find this exercise really helps me focus and remain disciplined year after year. See this link for my "Checking In After Eight Years" thread, which also includes a link to "Checking In After Seven/Six/Five/Four Years" https://www.bogleheads.org/forum/viewtopic.php?t=300495 Emergency funds: $7,000 in checking account Debt: 280,000 @ 3.25% (Home Value $325,000) Tax Filing Status: Single Tax Rate: 24% Federal, 0% State State of Residence: Texas Age: 32 Desired Asset allocati...
by ef11
Mon Jan 11, 2021 10:44 am
Forum: Personal Investments
Topic: Solo 401k, pro rata rule and after-tax non-Roth to Roth IRA rollover
Replies: 7
Views: 695

Re: Solo 401k, pro rata rule and after-tax non-Roth to Roth IRA rollover

I have the exact setup you describe with three separate Fidelity accounts for Pre-tax, Roth, and After-tax. I simply move a lump sum amount to After-tax, and then move from After-tax to Roth in the same day so there is absolutely no earnings on the money to simplify things. When I was at a MegaCorp, I always rolled from After-tax to Roth IRA, but now that I have a Solo I have started moving from After-tax to Solo 401k Roth in case I want to self-direct some of those funds in the future. At some point I may switch back to After-tax to Roth IRA for friendlier Roth distributions at a later point. I am only 32, so I have plenty of time to beef up both Solo 401k Roth and Roth IRA. I think having large balances in both Roth accounts will give me...
by ef11
Mon Jan 11, 2021 9:58 am
Forum: Personal Investments
Topic: Solo 401k, pro rata rule and after-tax non-Roth to Roth IRA rollover
Replies: 7
Views: 695

Re: Solo 401k, pro rata rule and after-tax non-Roth to Roth IRA rollover

I have the exact setup you describe with three separate Fidelity accounts for Pre-tax, Roth, and After-tax. I simply move a lump sum amount to After-tax, and then move from After-tax to Roth in the same day so there is absolutely no earnings on the money to simplify things. When I was at a MegaCorp, I always rolled from After-tax to Roth IRA, but now that I have a Solo I have started moving from After-tax to Solo 401k Roth in case I want to self-direct some of those funds in the future. At some point I may switch back to After-tax to Roth IRA for friendlier Roth distributions at a later point. I am only 32, so I have plenty of time to beef up both Solo 401k Roth and Roth IRA. I think having large balances in both Roth accounts will give me ...
by ef11
Tue Nov 03, 2020 8:08 am
Forum: Personal Investments
Topic: Funds that split index into dividend and non-dividend?
Replies: 8
Views: 875

Re: Funds that split index into dividend and non-dividend?

I feel there is quite a bit of validity to a strategy like this for two types of people: 1. People that have very large taxable and tax-advantaged accounts ($2 MM +) 2. People that have a very long time horizon that could eliminate some of the tax drag in taxable accounts. I fall into category 2 and currently have about 50% of my assets in taxable with likely much more coming in the next 1-10 years. Cutting the dividend exposure on a $2 MM taxable account from 2.81% to 0.67% would reduce taxable dividends by 2.14% or $42,800 in a $2 MM taxable account. Assuming qualified dividends at 20%, that would save $8,560 in taxes, or 0.428% per year, and more as the accounts grow. My situation would roughly be 35 years old with $2 MM in taxable, that...
by ef11
Fri Oct 23, 2020 8:06 am
Forum: Personal Investments
Topic: Financial Planning 23 Y/O
Replies: 21
Views: 1730

Re: Financial Planning 23 Y/O

Congrats on being on this forum at 23, it will make a world of difference for your future.

I also started here at 23, this is my first ever post which is very similar to yours. viewtopic.php?t=92480

I would maximize your 401k and Roth for sure. Each year you don't take advantage of that space it is lost.

I am 31 now and have accumulated over $1MM thanks in big part to the discipline this forum instilled in me.