Search found 618 matches

by michaelsieg
Sat Mar 02, 2024 3:04 pm
Forum: Personal Investments
Topic: Age 70s, retired, $360k, switching frOM UBS to Fidelity.
Replies: 22
Views: 2064

Re: Age 70s, retired, $360k, switching frOM UBS to Fidelity.

No matter if the advisor is good or bad, 1.5 AUM in fees means for you as a retiree, that he takes almost 50% of your annual spending money from your savings, if you plan for a 3% withdrawal rate, or 37.5% of your annual spending if you plan for a 4% withdrawal rate - in addition, his funds' average ER are about another 0.6% higher than low cost index funds, which is another 15-20% of your annual spending - so in summary, your advisor reduces your annual spending that you could have from your savings by over 50% - I can't think of any financial advice that would be worth that much!
by michaelsieg
Mon Jan 29, 2024 6:23 pm
Forum: US Chapters
Topic: 🎁 🎉Happy 100th Birthday to Taylor Larimore 🎊🎂
Replies: 429
Views: 41946

Re: 🎁 🎉Happy 100th Birthday to Taylor Larimore 🎊🎂

Happy birthday! Thank you for all you do!
by michaelsieg
Mon Dec 11, 2023 9:46 pm
Forum: Personal Investments
Topic: Physician on FIRE blog has updated its Social Security calculator for 2024
Replies: 7
Views: 2654

Re: Physician on FIRE blog has updated its Social Security calculator for 2024

Thanks for sharing the link.

I have been playing with the tool. But not sure how to calculate the index factor (3rd column in the spreadsheet).

Any help is appreciated.
I think you don't need to calculate it - you enter your yearly SS contributions in column C, and the index factor (Column D) is then used to calculate the index wages (column E)
by michaelsieg
Mon Dec 11, 2023 7:48 pm
Forum: Investing - Theory, News & General
Topic: Sex, Lies, and Optimizing Utility by William Bernstein
Replies: 21
Views: 5328

Re: Sex, Lies, and Optimizing Utility by William Bernstein

Thanks for posting!I I will get the book. William Bernsteins commentaries are as usual incredibly insightful.
For those who have not seen it: Rick Ferry interviews these 2 authors about the book in his latest bogleheads podcast, it is a really interesting. I like how Rick kind of challenges them about their market timing approach. What was also really interesting to me in the interview was when they talked about advisor fees in retirement - they had a great point about how to look at AUM fees.They mentioned that you give away 25% - 33% of your annual consumption in retirement if you pay a 1% in AUM fee, (depending on your planned portfolio withdrawal rate). Never thought of looking at it like this.
by michaelsieg
Wed Nov 29, 2023 9:53 pm
Forum: Personal Investments
Topic: 529 in Ohio
Replies: 12
Views: 1311

Re: 529 in Ohio

I use it and there are several VG fund options. They have target date Vanguard based portfolios, then multiple other VG fund options. You can decide the percentage of in your portfolio for each of these, you have options like VG S&P 500 or VG total international stock market fund, or VG total Bond market and short term TIPS. But there are also others, such as VG strategic equity, VG Windsor II, VG Wellington, and VG high yield corporate. They also have a more complex portfolio based on risk tolerance and a CD option, which is FDIC insured, this one is with Fifth Third Bank. So in summary you have lots of options, the fees range from fund to fund, about 0.1% to 0.3% for most funds. You can deduct $4000 per year per beneficiary from Ohio ...
by michaelsieg
Sat Sep 30, 2023 7:51 pm
Forum: Personal Finance (Not Investing)
Topic: Help Annette Keep Working and Not Retire
Replies: 648
Views: 62267

Re: Help Annette Keep Working and Not Retire

I would keep going - similar situation here - I think work is more than a paycheck - and it can get lonely without the interactions we all take for granted at work. I would use the few more working years to prepare for retirement activities and social activities - this is just as important as focussing on the money side of life. Financially you probably could do it, but with your current expenses it would be tight. I would also consider to save from now on purely into a TSM and an international index fund knowing that what you have saved so far is probably enough (and is very (too?) safe) and you can then "stress free" watch how that "discretionary additional saving" is growing - and you would probably have no stress if ...
by michaelsieg
Tue Jan 24, 2023 9:51 pm
Forum: US Chapters
Topic: 🎊Happy 99th Birthday to Taylor Larimore🎉
Replies: 247
Views: 15717

Re: 🎊Happy 99th Birthday to Taylor Larimore🎉

Happy Birthday! And thank you for all that you do for this community
Michael
by michaelsieg
Sun Dec 11, 2022 3:01 pm
Forum: Personal Investments
Topic: Important decision: Rental real estate vs stocks
Replies: 32
Views: 4136

Re: Important decision: Rental real estate vs stocks

I don’t think comparing the down payment amount invested into VTI is quite fair either though. You are using leverage when you buy a house. You could end up underwater. So buying a house might be closer to taking out a margin loan? I agree finite_difference, the leverage makes the difference, so probably a better way to look at the end result would be comparing an index fund with with an additional margin loan investment and the same amount of leverage in real estate with a mortgage. For me the leverage in real estate (versus a fully invested margin loan) feels less risky (- but there are many on this forum who feel different). Having read market timer's story with high margin leverage has had an impact on me.I would recommend for anyone w...
by michaelsieg
Thu Dec 08, 2022 8:23 pm
Forum: Personal Investments
Topic: Important decision: Rental real estate vs stocks
Replies: 32
Views: 4136

Re: Important decision: Rental real estate vs stocks

- If I was to invest $145K in SP500 in 2013, I would have about $500K But you didn't invest 145k, you said that you put very little down, so that way of thinking is not the way I would look at it. The question is, what would be the terminal value of your original downpayment, had you invested it in the S&P 500. Also, as a previous poster mentioned, you have to look at all the numbers, cash flow, taxes and mortgage principal, which is likely substantial with a 15 year mortgage. The advantage of rentals really is that you have an asset that is uncorrelated to the equity markets and with the leverage you have should have a fairly predictable positive return. Each rental has different numbers for the return, I personally look at cash on ca...
by michaelsieg
Sun Nov 20, 2022 9:39 pm
Forum: Investing - Theory, News & General
Topic: Vanguard dividend growth
Replies: 39
Views: 4285

Re: Vanguard dividend growth

I split my "quality" factor funds between VIG and VDIGX - seems like a reasonable compromise for the quality factor. If I remember well, the Vanguard dividend growth fund (VDIGX) was closed for new investors a few years ago (has since reopened), because it outperformed significantly and too much money flowed in it. I have both these funds in tax sheltered accounts.
by michaelsieg
Thu Nov 10, 2022 8:00 pm
Forum: Investing - Theory, News & General
Topic: November "Vectors"
Replies: 3
Views: 957

Re: November "Vectors"

Thanks for posting Taylor! - I liked the article - the returns after bear markets were even more remarkable than I thought.
by michaelsieg
Wed Jun 29, 2022 10:11 pm
Forum: Personal Investments
Topic: Dr. William Bernstein on Bonds
Replies: 106
Views: 22973

Re: Dr. William Bernstein on Bonds

If I understood the OPs situation correctly, then I think the OPs question in his case could be answered that bonds might not be needed in his portfolio - especially in times like this with high inflation. If I understood it well, he has 15 years of living expenses in bonds, which represent 10% of his portfolio, meaning that he has about 150 years of living expenses saved. A total stock market fund will just with dividends alone more than cover his annual expenses and one might make the point that with a portfolio that size, the percentage of bonds becomes irrelevant - absolute numbers are more relevant - it might make sense to have 5-10 years of living expenses in inflation protected bonds, but more probably does not make sense. The discus...
by michaelsieg
Sat Jun 18, 2022 2:00 pm
Forum: US Chapters
Topic: Hats Off to LadyGeek
Replies: 62
Views: 8357

Re: Hats Off to LADYGEEK

Thank you for keeping this forum civil, your work and input is greatly appreciated!
by michaelsieg
Sat Jun 04, 2022 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: Unwinding A Real Estate Rental Portfolio
Replies: 52
Views: 6235

Re: Unwinding A Real Estate Rental Portfolio

I also think you don't look at the "total return", but only at the cash flow side of these rentals. Real estate in general keeps up in value with inflation. You have to consider capital appreciation too. Recently, real estate was appreciating faster than other consumer prices - so that 1M real estate portfolio likely is worth 10%-15% more now than it was a year ago - it almost certainly outperformed equity markets. I think 1/3 of portfolio holdings in real estate is a great diversifier (I have about the same amount in my AA). For your mental accounting, I put real estate in an own category but more on the fixed income side. Currently, your real estate return is almost guaranteed to be higher than bonds (with the exception of ibond...
by michaelsieg
Wed Mar 09, 2022 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: Closing on house in 1 week builder raises price by 10K
Replies: 111
Views: 14507

Re: Closing on house in 1 week builder raises price by 10K

I would just pay it. No matter what the contract says. The value of your home probably increased by about 10% since you signed the contract, he is raising the price less than 3%. His building materials likely went up much more than that. Likely your builder could walk and sell it for much more than the 10k extra he is charging you, therefore I would pay it and let it go. Time also has a value, in the end it will cost you ( in addition to much more money) a lot of lost time in your own home if you don't pay the 10k and walk away from the house. Write it off mentally and enjoy your new home!
by michaelsieg
Fri Feb 11, 2022 6:21 pm
Forum: Personal Consumer Issues
Topic: Best nonstick pans?
Replies: 122
Views: 14298

Re: Best nonstick pans?

I bought the Tramontina non-stick pans a year ago. Extremely happy. They also were a top choice on the recent Wirecutter review. The only issue (which does not bother us) is that the metal on the outside stains/darkens with time, but the cooking surface a year out is still great. I highly recommend it, they definitely lasted longer than the All Clad we had before.
by michaelsieg
Thu Feb 10, 2022 7:24 pm
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 2256
Views: 605771

Re: Variable Percentage Withdrawal (VPW)

I am not sure if this has been mentioned before, but inflation is currently higher than the model projects. For those with a non-COLA pension, it might make sense to consider adjusting the amount they want to set aside for the investment portfolio based on the currently prevailing inflation rate (to maintain long-term real spending power of the pension). In the future, when hopefully inflation rates go back to the historic averages, spending can be increased. I used #Cruncher's formula that was linked earlier here and came to the following numbers for a 10,000/yr pension - this is showing the amount that can be spent, the rest should be invested assuming a 3.5% real return (I think #Cruncher calculated it for a 50 year pension): $7,287.89 -...
by michaelsieg
Wed Jan 26, 2022 10:11 pm
Forum: US Chapters
Topic: Happy 98th Birthday to Taylor Larimore 🎂🍰🎉🎊❤️🎁⭐️
Replies: 264
Views: 19417

Re: Happy 98th Birthday to Taylor Larimore 🎂🍰🎉🎊❤️🎁⭐️

Happy Birthday! - Thank you for all you do and all the help you give and have given!
Michael
by michaelsieg
Sat Jan 15, 2022 8:41 am
Forum: Personal Finance (Not Investing)
Topic: Path to UHNW
Replies: 202
Views: 25020

Re: Path to UHNW

As they say in Star Wars: "There is always a bigger fish"
by michaelsieg
Tue Nov 30, 2021 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Rental property- sell? any way to take cash out?
Replies: 11
Views: 1468

Re: Rental property- sell? any way to take cash out?

I am sorry to disagree, but I have taken out mortgages on investment properties that are fully paid off. This is a very common practice and you don't need to sell the property to another entity (that you own as well)- mortgage rates for residential investment properties are not quite as low (or I can't find any that are as low) as home owner's mortgages. I am currently refinancing a property and I am getting a rate of 3.5% on a ARM. So all I am saying is that a cash out refinance is an option and many real estate investors use this to grow their portfolio. The mortgage interest of your refi is fully deductible from your rental income.
by michaelsieg
Mon Nov 08, 2021 9:19 pm
Forum: Investing - Theory, News & General
Topic: Should the Shiller P/E ratio be used to help determine your investment asset allocation?
Replies: 9
Views: 1121

Re: Should the Schiller P/E ratio be used to help determine your investment asset allocation?

You will get different opinions here. Some will call it market timing...I hope this discussion does not go there. I don't do it, but I think it is important to be sure that your asset allocation is where you want it to be, it is easy with the current highs to be over your chosen equity allocation. I also expect that future returns (over 10 years) will likely be lower, if these valuations persist, but no one knows. Who knows, maybe equity indices stay near where they are for a while and inflation just slowly reduces our perceived gains.... Bogle said that small corrections of 5-10% of your portfolio in unusual/extreme market conditions can be considered. He did it around 2000 at the time of the internet bubble, based on market valuations but...
by michaelsieg
Wed Oct 20, 2021 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: Selling Real Estate - How Many Yrs Primary Residence to be Eligible for 1031 Exchange
Replies: 5
Views: 745

Re: Selling Real Estate - How Many Yrs Primary Residence to be Eligible for 1031 Exchange

I understand you want to live in one of her rentals. If plan to live there, I would suggest she remains the owner and once she passes, there will be no capital gain taxes, but the basis of the rentals will stepped up when you inherit the apartment unit. The way I understand it (but I am not an expert in commercial real estate tax law), a 1031 exchange works to defer capital gains of a property sale, if you buy another commercial property after you sell a commercial property - that does not seem to apply to your situation. If you search on google there are good articles about how to do a 1031 exchange, there are strict time limits and if she is contemplating such an exchange, it is important to do this within the strict time limits. If you s...
by michaelsieg
Fri Oct 08, 2021 9:35 pm
Forum: Personal Finance (Not Investing)
Topic: [Commercial Real Estate] Question [Dental office bldg]
Replies: 23
Views: 1804

Re: CRE Question

I think more important than the appraisal are the tenants and the leases. Are they locked in for several years or could they walk after you buy the property? Also I would look into their business - is there one or several practices, are they late in their career or is it a large group practice? Also look at the rent roll for the past 1-2 years. You might want to go by the building during business hours and get an idea about how busy this or these tenants are. Also, try to find out why the current owner wants to sell. Once you have a reasonable idea about the projected income, you can figure out a price that is reasonable. Obviously, if you want to mortgage the property, you also will need an appraisal, but your bank will also want to know w...
by michaelsieg
Mon Aug 30, 2021 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: Spend $75,000 to update rental property?
Replies: 38
Views: 4963

Re: Spend $75,000 to update rental property?

Another option is to do the updates with your cash, then take out a new mortgage with a new appraisal, which likely will be higher than the current value - you have a great mortgage rate on your commercial property and if you get the same conditions after your remodel, you likely can take out most of the money used for the remodel at the time of your refinance.
Good luck
Michael
by michaelsieg
Tue Jun 01, 2021 10:38 pm
Forum: Investing - Theory, News & General
Topic: Madsinger Monthly Report status?
Replies: 9
Views: 2313

Re: Madsinger Monthly Report status?

Great to hear that he is well - I was also looking for the updates, it is a great data collection.
by michaelsieg
Thu May 27, 2021 4:22 pm
Forum: Personal Consumer Issues
Topic: Yubikey? Collective wisdom sought.
Replies: 49
Views: 6495

Re: Yubikey? Collective wisdom sought.

The only issue with Macs is that the keys don't work when you try to log in with Safari, I use Google Chrome and it works well.
by michaelsieg
Mon Apr 19, 2021 9:30 pm
Forum: Investing - Theory, News & General
Topic: EM has concentrated risk in china/taiwan
Replies: 94
Views: 10953

Re: EM has concentrated risk in china/taiwan

Thank you all for posting! I have overall about 8.5% of my portfolio in EM, but I have only about 45% of my assets in equities, so relative to my equity holdings it is overweight (slightly over 20%). I use the RAFI funds/portfolio with a small value tilt that Robert T has written about. But overall, I have an atypical mix, with some physical real estate/rentals (about 20%) and 10% gold/commodity index and the rest FI. I know it is probably too conservative, but I can sleep well at night and not worry. Staying the course for several years now - I am trying minimize the risk of failure rather than maximize returns.
Thanks all for sharing your insight!
Michael
by michaelsieg
Sat Apr 17, 2021 7:57 pm
Forum: Investing - Theory, News & General
Topic: EM has concentrated risk in china/taiwan
Replies: 94
Views: 10953

Re: EM has concentrated risk in china/taiwan

Not really, I am usually going with the world market cap rate, but have slightly overweighted EM, as I think that these economies have a large proportion of the world's population and probably have a higher growth rate long term. I really don't worry about the "concentrated" risk in the US, probably also because of much more regulatory protections for individual investors in the US (and in other developed economies). But in EM, I think that there are additional risks - therefore a 50% single region exposure seems high.
by michaelsieg
Sat Apr 17, 2021 7:27 pm
Forum: Investing - Theory, News & General
Topic: EM has concentrated risk in china/taiwan
Replies: 94
Views: 10953

EM has concentrated risk in china/taiwan

I just listened to one of the Whitecoat investor podcasts about the 10 commandments of FI, and he mentioned that most EM funds have about a 50% concentration in China and Taiwan. I have my EM allocation in PXH and I have to be honest, I have not checked the specific country allocation since I decided to invest in it a few years ago. But when I checked today, it is indeed about 50% China/Taiwan. I recall reading the CS yearbook a few years ago, where they had a graphic with the international market capitalizations, and if I recall well, China was not that prominent at the time. I assume that their market cap has significantly increased since then, but I am still concerned, that I have such a concentrated risk in one economic region, even if ...
by michaelsieg
Fri Apr 02, 2021 7:11 pm
Forum: Personal Consumer Issues
Topic: Best nonstick pans?
Replies: 122
Views: 14298

Re: Best nonstick pans?

Also frustrated with our non-stick pans - just went on the Tramontina website and ordered a new one - hope this one will last longer than the 2 previous ones. Thanks for posting the reviews!
by michaelsieg
Fri Apr 02, 2021 6:37 pm
Forum: Investing - Theory, News & General
Topic: High-Yield (VWEHX) as inflation protection?
Replies: 14
Views: 2434

Re: High-Yield (VWEHX) as inflation protection?

I looked this in a previous post a few years ago and spent some time putting the numbers together. I think it is a reasonable way to protect against inflation, but there are other key aspects with this fund - it is really very tax inefficient - you should hold this fund in a retirement account or Roth account, if you decide to invest in it. The way I think of it is that it has some market beta, and those who owned it during the financial crisis remember 8-10% drops in value a day, so it can be very volatile. I know Larry Swedroe and Rick Ferri used to argue if this should be in a portfolio or not - I decided to hold it after looking into it, but there are good arguments that there are other ways to hold market beta. But let me focus on your...
by michaelsieg
Sun Mar 07, 2021 9:41 pm
Forum: Personal Finance (Not Investing)
Topic: Coast to retirement jobs late 40s medicine
Replies: 37
Views: 5076

Re: Coast to retirement jobs late 40s medicine

Admin has the power as they can non renew my contract. It won’t be fun looking for another job because i was non renewed, especially for not doing enough work. I would consult an attorney and have him go over your contract with you. Most non-competes only apply if you quit. If they lay you off or don't renew your contract, the non-conmpete usually goes away. To have legal counsel before you approach them would be well spent money. It would also make your negotiations easier if you know that if they want to let you go you will be free to go to another local hospital system. Increasing your RVU load also is usually a change to your written agreement, which usually needs consent of both contract parties. You might have the option to insist on...
by michaelsieg
Fri Dec 25, 2020 12:35 am
Forum: Personal Investments
Topic: How to co-purchase property for investment?
Replies: 8
Views: 1298

Re: How to co-purchase property for investment?

I would do a multi owner LLC. You will have to file a separate tax return for a multi owner LLC.
by michaelsieg
Thu Oct 22, 2020 3:43 pm
Forum: Personal Finance (Not Investing)
Topic: Payoff rental mortgages?
Replies: 46
Views: 3475

Re: Payoff rental mortgages?

I am not sure that selling the properties is the right answer, the 1% rule is really a rule of thumb and if you are below that but still have a nice positive cash flow there is no reason to incur transaction costs, which usually the seller has to bear at the time of the property sale. Looking at my area, the rental property math really changed significantly, mainly due to much lower mortgage interest rates, which has pushed property prices up. I now get 4% fixed offers for 30 year commercial properties, which is much lower than even a year ago. I can't find any rentals in our area that would currently satisfy the 1% rule, other regions may vary, but this rule was also made at a time, when commercial loans were significantly higher. The cash...
by michaelsieg
Thu Jun 18, 2020 9:32 pm
Forum: Personal Consumer Issues
Topic: Sellers agent not letting me view property without preapproval or "proof of finances"
Replies: 189
Views: 13642

Re: Sellers agent not letting me view property without preapproval or "proof of finances"

I have not read the entire thread, but we recently put our home on the market and did something similar.. We are a family with kids and we were concerned about the safety of having strangers walk through our home during the covid-19 pandemic. Also, our real estate agent said that she noticed that many people during the lock-down were bored and many went to look at homes without intent to buy - just to check out some homes in the neighborhood. We were uncomfortable in the first place to have people walking through our home and only wanted people who are seriously interested in buying. We made real estate agent tell the potential buyer's agents that anyone who comes looking at our home needs to be pre-approved for our asking price and be some...
by michaelsieg
Fri May 01, 2020 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: Who owns the IP - School or Me?
Replies: 23
Views: 2983

Re: Who owns the IP - School or Me?

Most of what matters has been said by other posters. You have to distinguish between having an idea/a plan or a concept that you think is an invention that might change /improve/introduce new technology versus owning actual intellectual property. To own intellectual property you have to file a patent, which has to be granted. This is a much harder process than one might think- most people need help doing this with an experienced patent lawyer who can help wording your ideas in a way that you get the broadest protection of your idea. The problem that you are having is that you are in a school, and all schools that I know (there might be exceptions) will insist that they are a crucial part of any invention that happens on their campus or by t...
by michaelsieg
Thu Mar 05, 2020 10:22 pm
Forum: Personal Finance (Not Investing)
Topic: weird thing about applying for an Amex credit card
Replies: 24
Views: 2820

Re: weird thing about applying for an Amex credit card

What's also amazing is that AmEx gives the 6% on purchases at Aldi, which really reduces our grocery bill.
by michaelsieg
Sat Jan 25, 2020 5:49 pm
Forum: US Chapters
Topic: Happy Birthday Taylor! 96 years young!
Replies: 139
Views: 8362

Re: Happy Birthday Taylor! 96 years young!

Happy birthday Taylor! It was great to meet you at the Bogleheads conference a few years ago!
Thank you for all you do and have done!
Michael
by michaelsieg
Tue Jan 14, 2020 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: Daycare Provider Wants to Charge $20/week for Receipt
Replies: 145
Views: 11850

Re: Daycare Provider Wants to Charge $20/week for Receipt

It sounds like you need about 31 weeks to get to the $5000 spending . After a few months, you ask for one receipt for all your payments - my dependent care administrator is very picky and we have to give all of the above mentioned information, otherwise they don't pay us back. So make sure she has all this information (name of child and dates of service) and her tax id on the receipt before you pay her for the receipt. It makes no sense to get weekly receipts, too much hassle of submitting to your dependent care account weekly. We do it just once or twice a year for larger amounts. She will not be able to charge you with a $600 bill for your receipts after 30 weeks, or let me rephrase this, I could not imagine that anyone would do this.
by michaelsieg
Sat Jan 11, 2020 11:43 pm
Forum: Investing - Theory, News & General
Topic: A Returns Spreadsheet for Bogleheads
Replies: 444
Views: 123279

Re: A Returns Spreadsheet for Bogleheads

Thank you longinvest - I really appreciate it ! I will enter it this way - curious to see what the return will be.
by michaelsieg
Sat Jan 11, 2020 10:33 am
Forum: Investing - Theory, News & General
Topic: A Returns Spreadsheet for Bogleheads
Replies: 444
Views: 123279

Re: A Returns Spreadsheet for Bogleheads

Dear longinvest, Thanks again for your spreadsheet, I update it monthly and it has really helped looking at the returns across all our accounts and thanks for refining it over time! I am trying to include our direct real estate returns with your spreadsheet and I am not sure how to do it. 3 years ago, we started to participate in a few rental units, which are now about 20% of our portfolio. Since then, I have not used the cashflows for these rentals in my return calculations, and just assumed a constant value of the real estate (being conservative) – but in the long-term, I have to start tracking the real estate returns as well, just assuming the value is stable is probably not a good solution (It adds a 20% “deadweight” to my portfolio and...
by michaelsieg
Fri Jan 03, 2020 6:23 am
Forum: Personal Finance (Not Investing)
Topic: Determine real rate of return efficiently in Excel
Replies: 7
Views: 1107

Re: Determine real rate of return efficiently in Excel

I agree that the CPI normalization for each transaction is probably more precise. But it is always good to check/control the results as complex spreadsheet operations (at least in my hands) can sometimes be off and it can be difficult to figure out where the error is.

To check if your complex calculation is correct, you could calculate the nominal return over the 10 years and adjust for the inflation over the entire period using an inflation calculator like this - this allows you to exactly match the time period of your data:

https://data.bls.gov/cgi-bin/cpicalc.pl

It would be interesting to see how close the two results are.
by michaelsieg
Thu Jan 02, 2020 10:23 pm
Forum: Personal Finance (Not Investing)
Topic: Determine real rate of return efficiently in Excel
Replies: 7
Views: 1107

Re: Determine real rate of return efficiently in Excel

Thanks ace golfer - I forgot to mention how I calculate the real return using the spreadsheet, which is not as accurate as your method. I simply use the formula:
real return = ((1 + nominal return) / (1 + inflation)) - 1. 
and then calculate it once a year using the spreadsheet - obviously not as precise, as it assumes that inflation is constant over the year.

Probably a similar approximation could be made by the topic author by taking the nominal return over 10 years and divide by the inflation over 10 years using the above formula - might be less work and probably close enough.
by michaelsieg
Thu Jan 02, 2020 7:08 am
Forum: Personal Finance (Not Investing)
Topic: Determine real rate of return efficiently in Excel
Replies: 7
Views: 1107

Re: Determine real rate of return efficiently in Excel

I use Longinvest's spreadsheet going back for 5 years now. It is an Excel spreadsheet, which calculates the annual compound return as well as the time weighted annual return. I have the data going back to 2014 entered in it and it helps for our situation, as we get the monthly returns across several retirement accounts. The link to his spreadsheet is here:


viewtopic.php?f=10&t=150025
by michaelsieg
Wed Jan 01, 2020 6:57 pm
Forum: Investing - Theory, News & General
Topic: roth 403b question
Replies: 4
Views: 468

Re: roth 403b question

Thank you! Appreciate your help!