Search found 3753 matches
- Mon Mar 18, 2024 5:37 pm
- Forum: Personal Investments
- Topic: Can I retire with $1.75M at age 43?
- Replies: 169
- Views: 10677
Re: Can I retire with $1.75M at age 43?
$35,000 in 1994 turned into $44,575 in 2004, $56,206 in 2014, and $74,291 today. This is one reason why I don't think you have enough, specifically you have too many unknowns about future spending to plan 40 years out. What if stocks are down 50% for a while? What about medical emergencies, legal troubles, etc? What if your housing costs double? I do appreciate the idea of early retirement, and hope to retire at 55 with a comparable amount of net worth as you but with a substantial pension to boot. But that's a 30 year horizon with pension and healthcare for life, here you are describing more of a 40 year horizon and it isn't clear what income you have beyond the $1.75. Think this job sucks? Imagine being 67, in poor health, and having to ...
- Mon Mar 18, 2024 7:02 am
- Forum: Personal Investments
- Topic: Can I retire with $1.75M at age 43?
- Replies: 169
- Views: 10677
Re: Can I retire with $1.75M at age 43?
$35,000 in 1994 turned into $44,575 in 2004, $56,206 in 2014, and $74,291 today. This is one reason why I don't think you have enough, specifically you have too many unknowns about future spending to plan 40 years out. What if stocks are down 50% for a while? What about medical emergencies, legal troubles, etc? What if your housing costs double? I do appreciate the idea of early retirement, and hope to retire at 55 with a comparable amount of net worth as you but with a substantial pension to boot. But that's a 30 year horizon with pension and healthcare for life, here you are describing more of a 40 year horizon and it isn't clear what income you have beyond the $1.75. Think this job sucks? Imagine being 67, in poor health, and having to g...
- Sat Mar 16, 2024 10:02 am
- Forum: Investing - Theory, News & General
- Topic: Vanguard Announces CEO Retirement and Appointment of President
- Replies: 356
- Views: 33853
Re: Vanguard Announces CEO Retirement and Appointment of President
Don't they also make money lending shares?billaster wrote: ↑Sat Mar 16, 2024 10:00 amFlagship status meant something when expense ratios were much higher. Today a $1 million account might mean a lot to you but to Vanguard it amounts to around $400 a year. A lot of people spend more than that at Starbucks. It hardly makes you a special customer.CRC_Volunteer wrote: ↑Fri Mar 15, 2024 11:40 pm I would like to go back to a time when Flagship status meant something...
- Sat Mar 16, 2024 9:11 am
- Forum: Investing - Theory, News & General
- Topic: Great news! No more [fixed real estate] agent commission
- Replies: 163
- Views: 14970
Re: Great news! No more agent commission
There are quite a few jobs in this country that would be obsolete overnight, think of all the tax prep companies which would immediately disappear if US taxes worked like other developed countries. Glad to have middle-men out of the picture whenever possible. As a renter, I only consider no-broker fee apartments. There are about 2 million realtors in the US right now.barnaclebob wrote: ↑Fri Mar 15, 2024 10:02 amAre there even 1 million real estate agents? 1 in 300 people?
- Mon Mar 11, 2024 6:46 pm
- Forum: Investing - Theory, News & General
- Topic: Embracing Principles [during the dot-com bubble and tech surges?]
- Replies: 43
- Views: 3952
Re: Embracing Principles Amidst Bitcoin and Nvidia's Surge?
I don't rethink the lotto after someone wins the lotto. Yes it is annoying to see people get lucky through zero skill, and then pretend that they knew all along it was a sure thing. Here's how this game would go: I get the nerve up to put a significant fraction of my money on the line and buy Nvidia. It goes up! Do I sell at 10%, 15%, 20%? How long do you hold and when do you sell? If you sell too soon and it keeps going up, do you buy back in or stay out and regret staying out? After those regrets build up and you finally buy back in, then it goes down, do you sell at a loss and give up? Or do you ride it out? Now it is going back up again! Do you sell at 10%? 20%? 30%? This game isn't fun, don't play it. Gamble with folding money, not you...
- Sat Mar 09, 2024 2:07 pm
- Forum: Personal Investments
- Topic: I have a couple questions for home savings and would love advice!
- Replies: 10
- Views: 877
Re: I have a couple questions for home savings and would love advice!
This is relevant to a thought I had in another thread, where one asks about a money market fund. I think you are unlikely to beat a money market fund (offering about 5.3% right now) over the next 12 months with zero volatility. Not sure how a ladder works for money you need in about a year, instead a 52 week bill would work, or a 12 month CD. But those all pay considerably less than the money market.
If I misunderstand your meaning and the money isn't needed in 1 year, then a bond ladder, bond fund, and CD ladder are all solid options. High yield savings account should also be a bit sticky if interest rates drop too, so it will be decent for a while. Graph showing what I mean by sticky: https://i.imgur.com/xGkaNHq.png
If I misunderstand your meaning and the money isn't needed in 1 year, then a bond ladder, bond fund, and CD ladder are all solid options. High yield savings account should also be a bit sticky if interest rates drop too, so it will be decent for a while. Graph showing what I mean by sticky: https://i.imgur.com/xGkaNHq.png
- Sat Mar 09, 2024 1:59 pm
- Forum: Investing - Theory, News & General
- Topic: Money Market or VUSXX
- Replies: 18
- Views: 1786
Re: Money Market or VUSXX
5.41% compound yield, hard to beat that these days. It will almost certainly be the best zero-volatility investment over the next 6-12 months. After that point, hard to say what happens. I use VMFXX, very similar, for my cash. In fact at these interest rates I am squeezing every penny to get more into the fund as early as possible.
- Sat Mar 09, 2024 8:25 am
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
- Replies: 77
- Views: 6549
Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?
Because they seem to be convinced of the same concept that this forum is founded upon: no one can pick stocks be it in a sector, a state, a dividend yield, or a country. Since active management and picking stocks does not work, the only answer is to hold a diversified sampling of the entire market. You can't tell me which country/sector will perform the best and which the worst in the year ahead. So I will own all of the countries and sectors in the proportion that $110 trillion dollars has decided the money should be divvied up. (More than 2x the value of all US real estate, by the way.) That's what Vanguard is angling at, because of the philosophy of one person, after whom this forum is named. The connection there seems pretty obvious. R...
- Sat Mar 09, 2024 8:00 am
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
- Replies: 77
- Views: 6549
Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?
Long-term investors who followed Jack’s advice read comments like this and laugh all the way to the bank. And those who gambled everything on a single stock will laugh at Jack's advice all the way to the bank too. That makes them lucky, not right. BTW, good job picking a starting point that best illustrates your view. Show us 1968 - 1989 or 2000 - 2007 next time. Or better yet, hand draw me a graph of what you think will happen from 2024 - 2037 when I plan to retire. The absurdity of that exercise underscores why I won't put everything in on one country, even if it happens to be the country I love best. I already have an outsize exposure to the US economy through work, taxes, currency, social security, and any number of other ways. And of ...
- Sat Mar 09, 2024 7:53 am
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
- Replies: 77
- Views: 6549
Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?
The argument that in theory one should own the world capitalization makes sense. On the other hand at some point there needs to be a coherent explanation for why US stocks have delivered so drastically much more return than rest of the world stocks over the last 25 years at least. If that explanation is some kind of pure chance then it would help for that to include some statistical expectation for what the time frequency might be for that to change. You wouldn't necessarily be making this statement in 1989 or 2007 when there was widespread hysteria about how international was taking over. Then, it was Japan taking over the world and BRICs, respectively. The US has outperformed for many reasons, I think primarily among them that we have be...
- Sat Mar 09, 2024 6:33 am
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
- Replies: 77
- Views: 6549
Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?
Because they seem to be convinced of the same concept that this forum is founded upon: no one can pick stocks be it in a sector, a state, a dividend yield, or a country. Since active management and picking stocks does not work, the only answer is to hold a diversified sampling of the entire market. You can't tell me which country/sector will perform the best and which the worst in the year ahead. So I will own all of the countries and sectors in the proportion that $110 trillion dollars has decided the money should be divvied up. (More than 2x the value of all US real estate, by the way.) That's what Vanguard is angling at, because of the philosophy of one person, after whom this forum is named. The connection there seems pretty obvious. R...
- Fri Mar 08, 2024 2:38 pm
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
- Replies: 77
- Views: 6549
Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?
Because they seem to be convinced of the same concept that this forum is founded upon: no one can pick stocks be it in a sector, a state, a dividend yield, or a country. Since active management and picking stocks does not work, the only answer is to hold a diversified sampling of the entire market. You can't tell me which country/sector will perform the best and which the worst in the year ahead. So I will own all of the countries and sectors in the proportion that $110 trillion dollars has decided the money should be divvied up. (More than 2x the value of all US real estate, by the way.) That's what Vanguard is angling at, because of the philosophy of one person, after whom this forum is named. The connection there seems pretty obvious. R...
- Fri Mar 08, 2024 2:26 pm
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard so bullish on international exposure in their all-in-one funds?
- Replies: 77
- Views: 6549
Re: Why is Vanguard so bullish on international exposure in their all-in-one funds?
Because they seem to be convinced of the same concept that this forum is founded upon: no one can pick stocks be it in a sector, a state, a dividend yield, or a country. Since active management and picking stocks does not work, the only answer is to hold a diversified sampling of the entire market. You can't tell me which country/sector will perform the best and which the worst in the year ahead. So I will own all of the countries and sectors in the proportion that $110 trillion dollars has decided the money should be divvied up. (More than 2x the value of all US real estate, by the way.) That's what Vanguard is angling at, because of the philosophy of one person, after whom this forum is named. The connection there seems pretty obvious. Ha...
- Fri Mar 08, 2024 9:24 am
- Forum: Personal Investments
- Topic: 16 yr old - how can I best take on high risk?
- Replies: 65
- Views: 5228
Re: 16 yr old - how can I best take on high risk?
If looking for high risk, how about 100% Tesla or Nvidia? Those are/were good examples of high Beta stocks. That's a good way to wind up with nothing in 20-30 years. Most companies simply don't last that long. Putting all your money in a single stock for decades is approaching the risk of putting it all on black at a casino . Could literally ruin your financial life. (Average lifespan of a SP500 company around 20 years.) Recommend 100% VT for your investments. Of course what you do for a living and how much you save is far more important, so focus on your education and skillset now, and your health as it is pointless to be rich without health. I know plenty of millionaires who can't do anything fun with their money because their health is ...
- Fri Mar 08, 2024 8:21 am
- Forum: Personal Investments
- Topic: I bonds selling
- Replies: 26
- Views: 3796
Re: I bonds selling
Unless you can get 10% of your net worth or more in there, I wouldn't bother personally. A big advocate for simplifying your finances.
- Fri Mar 08, 2024 6:18 am
- Forum: Personal Investments
- Topic: 16 yr old - how can I best take on high risk?
- Replies: 65
- Views: 5228
Re: 16 yr old - how can I best take on high risk?
If looking for high risk, how about 100% Tesla or Nvidia? Those are/were good examples of high Beta stocks. That's a good way to wind up with nothing in 20-30 years. Most companies simply don't last that long. Putting all your money in a single stock for decades is approaching the risk of putting it all on black at a casino. Could literally ruin your financial life. (Average lifespan of a SP500 company around 20 years.) Recommend 100% VT for your investments. Of course what you do for a living and how much you save is far more important, so focus on your education and skillset now, and your health as it is pointless to be rich without health. I know plenty of millionaires who can't do anything fun with their money because their health is r...
- Tue Mar 05, 2024 7:17 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can I retire?
- Replies: 41
- Views: 4741
Re: Can I retire?
Either a "humble brag" or a fear of retirement/spending down the nest egg. Psychological problem, not financial.
- Tue Mar 05, 2024 11:58 am
- Forum: Personal Investments
- Topic: Fidelity Calls from "Palumbo Wealth Management Team"
- Replies: 37
- Views: 3495
Re: Fidelity Calls from "Palumbo Wealth Management Team"
This is proceeds from an inherited IRA. My parents like the idea of splitting across two firms so about half at Vanguard, half at Fidelity. Will follow this helpful advice and try the do-not-call request in tandem with making sure this was a legit call. I believe the person was legit in so far as they knew the size of the account and how it was invested, the fidelity looking emails and phone numbers, and pictures of staff that I can find online at Fidelity. So more annoying than a scam.
- Tue Mar 05, 2024 7:00 am
- Forum: Personal Investments
- Topic: Fidelity Calls from "Palumbo Wealth Management Team"
- Replies: 37
- Views: 3495
Fidelity Calls from "Palumbo Wealth Management Team"
My parents keep getting unsolicited calls from the "Palumbo Wealth Management Team" which claims to be from Fidelity. (My parents have an account there.) They are, no surprise, trying to push annuities and life insurance using the typical graph and chart routine. My concerns are two fold: First, is it possible to get Fidelity to stop the high pressure sales calls? My parents have already said no to these products multiple times over the past few years. I am a bit concerned that given enough time and pressure, my parents could get talked into an annuity which they did many years ago, to considerable regret. (It took a decade to unwind the last annuity due to the fee structure and tax implications.) Or is it like Verizon where I wil...
- Mon Mar 04, 2024 6:26 am
- Forum: Personal Investments
- Topic: Good or bad time to invest in S&P 500 for Roth IRA?
- Replies: 30
- Views: 3801
Re: Good or bad time to invest in S&P 500 for Roth IRA?
I put more than half of my bi-monthly 401K contributions into stocks, and will continue doing so for the next 15 years. Set it and forget it, check back in 10-20 years and you are almost certainly going to be happy. You are not buying stocks to gamble that the price might go up, you are buying stocks because corporations make money, like a lot of money, and that is why the stocks will very likely continue to go up. To date, they always have.
- Sun Mar 03, 2024 6:04 am
- Forum: Investing - Theory, News & General
- Topic: Are We in a Stock Market Bubble? (Ray Dalio)
- Replies: 132
- Views: 15383
- Sat Mar 02, 2024 6:24 pm
- Forum: Investing - Theory, News & General
- Topic: Are We in a Stock Market Bubble? (Ray Dalio)
- Replies: 132
- Views: 15383
Re: Are We in a Stock Market Bubble? (Ray Dalio)
P/E of 28 is lofty, but well short of the 36 hit in December 2020 which was the popping of the everything bubble, a rather modest crash in hindsight. If we hit 35 I would say things are overvalued and ripe for a correction but that is nothing to worry about. I don't mind passing back through 4,800 on the way to 10,000+.
- Sat Mar 02, 2024 4:32 pm
- Forum: Personal Investments
- Topic: Invest cash when interest goes down
- Replies: 52
- Views: 5192
Re: Invest cash when interest goes down
For many years I had it at Ally high yield savings, would go back if it approaches or exceeds the yield. Right now offering 4.35% I think, that's a significant difference in my world. Losing out on $500 a year on $50,000, plus the lifetime interest on that $500 even if it is only one more year of current, arguably abnormal conditions.
- Wed Feb 28, 2024 5:52 am
- Forum: Personal Investments
- Topic: VUSXX
- Replies: 17
- Views: 2716
Re: VUSXX
I use this fund, would take it one step further and argue you are unlikely to find anything significantly better if you need the liquidity without any volatility. Sadly its current place near the top of the heap is an aberration and could end by the end of the year if interest rates drop.
- Tue Feb 27, 2024 5:15 pm
- Forum: Investing - Theory, News & General
- Topic: Any Ideas on Future CD Rates?
- Replies: 7
- Views: 1927
Re: Any Ideas on Future CD Rates?
Billions (maybe trillions?) of dollars in smart money are betting on this question. No one here can give you a satisfactory answer beyond what the market has decided. And the market is almost always wrong on interest rates anyway.
I take some solace in the fact that it really doesn't matter that much, and you can also consider splitting the difference between two reasonable options. I would be happy with an intermediate bond fund, 5-year CD ladder, 5 year CD, 3-10 year treasury bonds. SPAXX is a great options right now, but that may not last. It normally underperforms these other options, and that makes sense since zero volatility and complete liquidity normally comes at the cost of less interest.
I take some solace in the fact that it really doesn't matter that much, and you can also consider splitting the difference between two reasonable options. I would be happy with an intermediate bond fund, 5-year CD ladder, 5 year CD, 3-10 year treasury bonds. SPAXX is a great options right now, but that may not last. It normally underperforms these other options, and that makes sense since zero volatility and complete liquidity normally comes at the cost of less interest.
- Sun Feb 25, 2024 9:49 pm
- Forum: Personal Investments
- Topic: Bad idea to get a CD with a "troubled" bank?
- Replies: 6
- Views: 1155
Re: Bad idea to get a CD with a "troubled" bank?
The article also shows the ticker for NY Community Bancorp too, poor guys have gone sideways for the past 24 years in their stock.nisiprius wrote: ↑Sun Feb 25, 2024 9:44 pm Where exactly did you read about this?
A web search turned up a CNBC article, [url=https://www.cnbc.com/2024/02/16/you-won ... rates.html]
- Sun Feb 25, 2024 6:32 am
- Forum: Investing - Theory, News & General
- Topic: Could I-bonds really return >10% in hyperinflation scenarios
- Replies: 52
- Views: 7988
Re: Could I-bonds really return >10% in hyperinflation scenarios
The US Govt was paying over 15% on 10 year treasuries in living memory, why would a tiny product like I bonds be an issue?
Or do you mean 50+ percent per year? In those scenarios, a default and currency reset is quite likely, not to mention bigger economic and societal problems. Then you might want to have a stash of gold coins somewhere or own land.
Look to Argentina which has defaulted so many times and is once again clocking around 100 percent inflation. Thankfully a country doesn't have to collapse even if its economy does. But if things get really bad, no government product will save you because the government itself, at least vis-a-vis economic matters, is failing.
Or do you mean 50+ percent per year? In those scenarios, a default and currency reset is quite likely, not to mention bigger economic and societal problems. Then you might want to have a stash of gold coins somewhere or own land.
Look to Argentina which has defaulted so many times and is once again clocking around 100 percent inflation. Thankfully a country doesn't have to collapse even if its economy does. But if things get really bad, no government product will save you because the government itself, at least vis-a-vis economic matters, is failing.
- Sat Feb 24, 2024 1:20 pm
- Forum: Investing - Theory, News & General
- Topic: Berkshire Hathaway annual letter is out
- Replies: 41
- Views: 7208
Re: Berkshire Hathaway annual letter is out
And again in humility and honesty, Buffett says this openly, and he advises people to just buy the SP500.
Do I think his investments in Japan of about $6 billion directly impacted the price of an index worth over $6 trillion? 1/1000th of the market cap, so probably not. But could he sway the perception for other investors enough? Quite possibly.
- Sat Feb 24, 2024 10:10 am
- Forum: Investing - Theory, News & General
- Topic: Berkshire Hathaway annual letter is out
- Replies: 41
- Views: 7208
Re: Berkshire Hathaway annual letter is out
Humble, honest, informative... this guy is the real deal. And a great year for BRK.A (well ahead of SP500 year to date, 1 year, and 5 year spans.) BRK.A returned 500x since 1984 compared to SP500 returning 30X before dividends, remarkably steady too. The pivot to Japan seems well timed, or perhaps even a factor in Japan doing well over the past year.
- Sat Feb 24, 2024 9:33 am
- Forum: Investing - Theory, News & General
- Topic: Japan’s Nikkei 225 briefly crosses 30,000 for first time in more than three decades
- Replies: 60
- Views: 7372
Re: Japan’s Nikkei 225 briefly crosses 30,000 for first time in more than three decades
It will be a fascinating race to watch now that both are neck and neck. Dow was at 2,700 last time the N225 was this high! (Winter 1989.) Amazing how the "yellow scare" of the late 80's, as typified by the book and movie Rising Sun, so rapidly reversed and the US economic miracle kept going for decades.
- Thu Feb 22, 2024 6:43 am
- Forum: Investing - Theory, News & General
- Topic: Japan’s Nikkei 225 briefly crosses 30,000 for first time in more than three decades
- Replies: 60
- Views: 7372
Re: Japan’s Nikkei 225 briefly crosses 30,000 for first time in more than three decades
Sorry to revive such an old thread, but maybe worth noting that the N225 has now hit an all time high and is a good day or two away from 40,000.
Of course far short of the inflation adjusted level of 1989, but nevertheless a nice milestone and incredible year for the Japanese stock market.
Also something of a head scratcher, how can public perception of a stock market change so abruptly, and why? And for that matter, why are all of the world's stock markets apparently up a healthy amount today including US futures? Is it just the NVDA news from yesterday?
Of course far short of the inflation adjusted level of 1989, but nevertheless a nice milestone and incredible year for the Japanese stock market.
Also something of a head scratcher, how can public perception of a stock market change so abruptly, and why? And for that matter, why are all of the world's stock markets apparently up a healthy amount today including US futures? Is it just the NVDA news from yesterday?
- Wed Feb 21, 2024 7:22 pm
- Forum: Personal Finance (Not Investing)
- Topic: Be careful - could happen to anyone [fraudulent bank transactions]
- Replies: 77
- Views: 12240
Re: Be careful - could happen to anyone
Use my checking account as a firewall, only a few thousand in there at a time.
- Wed Feb 21, 2024 6:31 am
- Forum: Investing - Theory, News & General
- Topic: Meredith Whitney makes a bold prediction regarding the housing market
- Replies: 19
- Views: 3891
Re: Meredith Whitney makes a bold prediction regarding the housing market
Actually we predict a gravitational bifurcation over the next one to fifty seconds as small, light things, like feathers and dust, float longer, and heavy things fall faster.
- Mon Feb 19, 2024 9:48 am
- Forum: Personal Investments
- Topic: Daughters employer 401K vendor is changing
- Replies: 19
- Views: 1528
Re: Daughters employer 401K vendor is changing
"subsidiary of Empower Annuity Insurance Company of America" yeah doesn't sound great, I think most likely the investment options will be decent, but they will constantly pester you for advisory services for a fee, and possible pushing of "annuities." That's what I get from my workplace Voya formerly ING formerly State Street something something. It's fine as long as I avoid the minefield of buttons on the web page trying to sign me up for an advisor.
- Mon Feb 19, 2024 6:27 am
- Forum: Personal Investments
- Topic: Investments for 17 & 19 YO Children
- Replies: 11
- Views: 1322
Re: Investments for 17 & 19 YO Children
I recommend CDs or other liquid, non-volatile investments for now. They have more flexibility in their 20's when the money might be needed for a car, apartment, travel, or other expenses. There is also something to be said for starting with a simple investment that shows monthly interest payments so they understand how that works and can immediately see the benefits. That's what got me hooked on saving many years ago. Once they get jobs and start saving for retirement, there will be ample opportunities for stocks in meaningful amounts. You can focus on growing their inheritance through stocks for way down the road, don't expect a person that young to be able to hold on to stocks for 10+ years and deal with long periods of losing money on th...
- Sat Feb 17, 2024 9:16 pm
- Forum: Personal Finance (Not Investing)
- Topic: Is anyone using cash for a discount on everyday items?
- Replies: 83
- Views: 6087
Re: Is anyone using cash for a discount on everyday items?
Widespread (and now illegal) signs in NYC saying 4% charge for CC over cash. The new law just went into effect(1), they have to do it a bit differently. I had been buying pizza for cash for this reason but honestly it is barely worth the effort, since I get at least 2% cash back on the card and 5.5% on any money I invest for a month before paying CC bill. Switched back to CC for convenience sake. I also save money at this pizza place by no longer giving them tips. 2020-24 their prices went up astronomically and they added this CC surcharge. Prices go up, tips go down. 1: https://www3.erie.gov/consumerprotection/featured/general-business-law-ss518-credit-card-surcharge-notice-requirement Also, my family got a huge discount paying cash for a ...
- Fri Feb 16, 2024 7:14 am
- Forum: Personal Investments
- Topic: The Surprising Return of Interest
- Replies: 68
- Views: 8875
Re: The Surprising Return of Interest
Has anyone else been somewhat surprised at the surprising return of interest? In preparing my 2023 tax return, I noticed a somewhat startling surprise at how much more interest there is versus 2022 and certainly versus 2021. I'm kind of a total return investor, so that's really the number that matters. And much of my interest is from Vanguard tax free bond funds. It's interesting thought because it does stuff, such as trigger IRMAA. A good, first world problem to have, but worth noting and discussing. I guess my point is that we're back to a pre-2008 world, where bonds actually pay interest. Are there any other caveats or benefits to having more interest, other than the obvious? Lots of nostalgia for past interest rates, but unfortunately ...
- Wed Feb 14, 2024 6:40 am
- Forum: Personal Finance (Not Investing)
- Topic: First time owing federal taxes
- Replies: 39
- Views: 3586
Re: First time owing federal taxes
Hi all - just got word from my tax preparer that I owe about $800 in federal taxes this year. This is my first time owing money. They said that my interest from my HYSA (Ally) was the cause. Ugh. No, you have always owed federal taxes while earning money. Just it is normally taken out earlier in the year. Would you rather have gotten no interest from Ally and then had no taxes? Or gotten this $800 in interest and reinvested it for most of the year before having to hand it in April the following year? You can just take out a bit more money earlier from your paycheck, or keep it and earn 5.5% interest on the money you pay in mid April rather than the prior year. I pay $800-$1200 a year, mostly from taxable interest like you. No big deal, jus...
- Wed Feb 14, 2024 6:11 am
- Forum: Investing - Theory, News & General
- Topic: Low-cost provider that's not Vanguard?
- Replies: 47
- Views: 3919
Re: Low-cost provider that's not Vanguard?
My parents wanted the same thing and I completely understand the concerns. It is not just about the firm, but also the risk of an account getting hacked and emptied or at least locked for a few months after the hack. So I helped them split evenly between Vanguard and Fidelity. Fidelity keeps calling them to try and sell annuities/active management of the account, and the higher ERs cost them about $1000 a year in lost return, so be aware of those issues in the non-Vanguard world. Vanguard is too cheap/lazy to bother you usually, which I appreciate.
- Wed Feb 14, 2024 5:35 am
- Forum: Personal Investments
- Topic: How much did you pay Vanguard this year?
- Replies: 66
- Views: 6929
Re: How much did you pay Vanguard this year?
Just ER fees, maybe $175 a year?
- Tue Feb 13, 2024 7:16 pm
- Forum: Investing - Theory, News & General
- Topic: Who is buying bonds?
- Replies: 69
- Views: 8716
Re: Who is buying bonds?
Governments, individuals, pension funds, brokerages, insurance companies...Cocoa Beach Bum wrote: ↑Mon Feb 12, 2024 4:32 pm Yeah, who the heck is buying the billions of dollars of new bonds issued so far this month?
- Tue Feb 13, 2024 5:11 am
- Forum: Investing - Theory, News & General
- Topic: VTI, VXUS and I Bond? If you could buy unlimited I bonds...
- Replies: 30
- Views: 3486
Re: VTI, VXUS and I Bond? If you could buy unlimited I bonds...
Why do you think Treasury Direct is particularly vulnerable to this or especially lacking in recourse compared to other options?hoofaman wrote: ↑Tue Feb 13, 2024 5:06 am The concern I have with I bonds is having my account hacked and potentially and the money stolen. I'm just not sure what would happen in that situation and what my recourse would be. Otherwise from just an investment standpoint I love I bonds and buy the max per year for our household
I can almost buy enough I bonds to meet my needs right now, but have to keep 50-100K in a taxable bond fund too, which is perfectly fine. I like having something liquid on the side with easy access.
- Mon Feb 12, 2024 6:26 pm
- Forum: Personal Finance (Not Investing)
- Topic: Frustrated at Capital Gains on Sold Inherited Property
- Replies: 17
- Views: 2001
Re: Frustrated at Capital Gains on Sold Inherited Property
Yeah the act of selling something is how its value is determined. Don't think there are any meaningful capital gains here.
https://uscode.house.gov/view.xhtml?edi ... sort&num=0
https://uscode.house.gov/view.xhtml?edi ... sort&num=0
- Mon Feb 12, 2024 3:30 pm
- Forum: Investing - Theory, News & General
- Topic: Who is buying bonds?
- Replies: 69
- Views: 8716
Re: Who is buying bonds?
Currently 95% equity and 5% cash in MMF. Thinking about switching to 90% Equity and 10% BND, minimal cash. Take a few chips off the table. BND provides some income also. BND seems out of favor but looks respectable to me. I'm no expert however. 95/5 to 90/10 won't make a significant difference so it isn't worth the trouble to worry about. If you feel 90% is too risky, and I would agree that is the case for many, myself included, then you have to make real moves in AA to deal with that. At least 20% in bonds else it isn't going to do much. BND has over $300 billion in assets, not counting the assets in similar mutual fund options at Vanguard alone. I would guess over a trillion if you count all of the intermediate, total bond type funds. Th...
- Mon Feb 12, 2024 10:35 am
- Forum: Personal Investments
- Topic: Time to Build my Own Annuity with 20 year Bonds??
- Replies: 28
- Views: 4509
Re: Time to Build my Own Annuity with 20 year Bonds??
Absolutely a good option. Same with CD ladders, bond mutual funds, I-bonds, and other similar options. Each has pros and cons that one must think about such as liquidity, volatility, and inflation. I go with I-bonds personally, but to do that right you need to slowly accumulate for a decade+. If I were already 50 years old+, I would consider it possibly too late for I-bonds to be a significant option and would look elsewhere. If income for life is your priority, you could wait for retirement then buy an SPIA which is basically like buying your own pension plan. Just consider a very real scenario: in 20 years stocks are up 100 - 200%. Would you have regrets? Balance that against the other option: in 20 years stocks have mostly gone sideways ...
- Sun Feb 11, 2024 4:55 pm
- Forum: Personal Investments
- Topic: Seeking advice on annuities
- Replies: 27
- Views: 2893
Re: Seeking advice on annuities
- Sat Feb 10, 2024 8:35 pm
- Forum: Personal Investments
- Topic: Seeking advice on annuities
- Replies: 27
- Views: 2893
Re: Seeking advice on annuities
Not the worst annuities so not a terrible mistake. Not a move I would have made in your shoes but in a few years you could always be done with them.
This "advisor" is really a broker, they are there to sell you products that benefit them. They sold you annuities because all "advisors" do, because annuities get them a commission and index funds don't. It is a rather unethical business, but so are many forms of insurance, time shares, warrantees, etc. The bigger issue is what this broker is going to try and sell you next? And how much are you paying for their biased advice? So the major mistake is working with them, since you are clearly capable of doing it on your own.
This "advisor" is really a broker, they are there to sell you products that benefit them. They sold you annuities because all "advisors" do, because annuities get them a commission and index funds don't. It is a rather unethical business, but so are many forms of insurance, time shares, warrantees, etc. The bigger issue is what this broker is going to try and sell you next? And how much are you paying for their biased advice? So the major mistake is working with them, since you are clearly capable of doing it on your own.
- Sat Feb 10, 2024 6:05 pm
- Forum: Investing - Theory, News & General
- Topic: AVUV - PE ratio single digits [Avantis US Small-Cap Value ETF]
- Replies: 104
- Views: 7906
Re: AVUV - PE ratio single digits
Given the top heavy nature of VTI and current high multiple, why not put some into AVUV? Single digit multiple! Only issue is risk to small banks but JPow seemed to call it a manageable situation. Jerome Powell also said inflation was transitory. As indeed it was, a relatively brief (if painful) flash of inflation that lasted about two years. If one's investing timeframe is 20+ years, and if one's life is 70+ years, 2 years of inflation is entirely transitory. Compare that to 1972-82 which was long-term, secular inflation of staggering proportions. To get $1 worth of goods in 1972 would cost you $2.29 in 1982 and $3.36 in 1992. By comparison, April 2021 - May 2023, which represents most of the area under the curve for this transitory pulse...
- Sat Feb 10, 2024 8:11 am
- Forum: Personal Investments
- Topic: Anyone Moving from 100% stocks?
- Replies: 47
- Views: 5720
Re: Anyone Moving from 100% stocks?
Anyone moving or considering moving away from 100% stocks due to market overheating/ bubble in the top 7 stocks? Never was 100% stocks and never will be for precisely this sort of emotional problem you seem to be grappling with. But if I did, I would stick with it. The whole point of 100% stocks is to ride out the storms and reach the distant shore wealthy and retired. You elected to sail in a Dragonfly 40 C-Ultimate, while others of us are using larger, slower, steadier monohulls with more ballast. You will almost certainly beat us to the other side, but not without a rougher ride. I value the comfort in that, you seem to have leaned in the direction of speed. You went 100% stocks, it would seem, in the correct understanding that stocks n...
- Sat Feb 10, 2024 7:35 am
- Forum: Investing - Theory, News & General
- Topic: New article casting doubt on index investing
- Replies: 51
- Views: 6532
Re: New article casting doubt on index investing
I agree the US market cap is unreasonable and think international is undervalued significantly for ideological/political reasons, not intrinsic economic reasons. The Nikkei 225 has been on an absolute tear during the past year (+35%) yet is still at a P/E of 16. Toyota is up over 50% during the past year, and is only now hitting the PE ratio of 10! Buffett is pouring billions into Japanese stocks, etc. etc. But I don't think index investing has anything to do with this strange US outperformance, nor does it leave one uniquely exposed to it. On the contrary, index investing allows you to capture market returns no matter how inexplicable they are. If international swings back, true index investors will benefit from that. If the US continues t...