Search found 162 matches

by ncole1
Sun Jan 24, 2016 10:35 am
Forum: Investing - Theory, News & General
Topic: Why don't people like the higher level of real estate allocation in Swensen lazy portfolio?
Replies: 33
Views: 4712

Re: Why don't people like the higher level of real estate allocation in Swensen lazy portfolio?

Call me a non-diehard if you like, but REIT's are ridiculously overvalued and it is not a good time to buy in when the price to book ratio is well over 2:1
by ncole1
Sun Jan 24, 2016 10:24 am
Forum: Investing - Theory, News & General
Topic: 30Yr Mortgage or Sell Mutual Funds and Purchase House
Replies: 27
Views: 3819

Re: 30Yr Mortgage or Sell Mutual Funds and Purchase House

You need to consider the tax basis of the investments. I would suggest selling only insignificantly appreciated assets, and only making whatever down payment you can without letting the tax man "rob" you
by ncole1
Sat Jan 23, 2016 9:00 pm
Forum: Personal Finance (Not Investing)
Topic: Need Advice - Student Loans
Replies: 6
Views: 820

Re: Need Advice - Student Loans

I will make this question with a little background short and sweet. I can't decide whether I should pay my student loans in one lump sum or start saving for retirement and a 20% down payment more aggressively 23 yr old $43k income 100% employer funded retirement 3% annuity and pension after 10 year...
by ncole1
Sat Jan 23, 2016 8:38 pm
Forum: Personal Finance (Not Investing)
Topic: Need Advice - Student Loans
Replies: 6
Views: 820

Re: Need Advice - Student Loans

I will make this question with a little background short and sweet. I can't decide whether I should pay my student loans in one lump sum or start saving for retirement and a 20% down payment more aggressively 23 yr old $43k income 100% employer funded retirement 3% annuity and pension after 10 year...
by ncole1
Sat Jan 23, 2016 8:21 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay dow mortg

They are not just not comparable in terms of wrongness. They simply aren't comparable. Yes, I took many logic courses and one of the first things they teach is the Fallacy of Proof by Analogy. Drawing parallels between a violent sexual crime and defaulting on a financial obligation is not convincin...
by ncole1
Sat Jan 23, 2016 8:18 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

You will NOT make more in a diversified portfolio than you will paying down the mortgage BY SCRAPPING ONLY THE BOND PORTION AND NOT THE STOCKS, as long as the post tax bond yield is below the post tax mortgage rate. Thus, Edelman's strategy is sub-optimal. ' Only if your assumption holds. It hasn't...
by ncole1
Sat Jan 23, 2016 8:15 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

Twins Fan wrote:Why was this one dug up from the grave? :confused :happy
Because I am in the mid-atlantic under 2 feet of snow and can't leave the house. I'm bored. :mrgreen:
by ncole1
Sat Jan 23, 2016 8:09 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

I agree. For some posters on this forum, there seems to be no such thing as enough liquidity to still be reasonably safe if the mortgage is paid down (not even paid off in full, just paid down). I never understood this mentality. If I owed $400k and had $400k in savings, is it really a huge risk to...
by ncole1
Sat Jan 23, 2016 11:22 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

during the radio show Ric Edelman said people should always get a 30-year mortgage and never pay down the mortgage. He did not say the reason, but said if you want to know get his book or attend his seminar. I guess he believes using the money for paying down mortgage to invest in stock market will...
by ncole1
Sat Jan 23, 2016 11:07 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

Aren't we getting far, far away from the original post? If you read the actual Edelman article, he does not advocate buying bonds paying 2% over paying down a mortgage. His point is, on average , over the long term , you are far more likely to make more money by investing in a diversified portfolio...
by ncole1
Sat Jan 23, 2016 11:03 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

You accounted for the deduction of mortgage interest but neglected the tax on the interest income you earn from the savings account. :oops: Doh. You're right, I missed that. But FWIW, I would invest that money into stocks/bonds, where the taxes could be minimized/deferred, as opposed to just sticki...
by ncole1
Sat Jan 23, 2016 11:01 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

Unless you have enough cash or secure assets that can be converted to cash at the amount of your mortgage on short notice or you can use that money in a 100% safe way to generate the mortgage payments plus income taxes, plus a significant premium to make up for the hassle of writing mortgage checks...
by ncole1
Sat Jan 23, 2016 10:55 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay dow mortg

This argument is flawed, because the contract does not say that you may default. It doesn't say that I "may"? Oh boy. It's a contract. It lays everything out quite clearly. Specifying the "punishment" for something, no matter how precisely, does NOT amount to an abolishment of m...
by ncole1
Sat Jan 23, 2016 10:52 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mort

No, I don't think Edelman is correct. It makes little sense to hold fixed income investments in a taxable account paying 2% when your mortgage is costing 4%! Of course it could make sense. You may want a hedge against future higher inlation or interest rates. :confused Inflation is non-issue becaus...
by ncole1
Sat Jan 23, 2016 10:45 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay dow mortg

Drawing parallels between a violent sexual crime and defaulting on a financial obligation is not convincing or productive. Both are 'wrong', fine. The punishment for default typically fits the 'crime' (using that term very lightly). Effectively the public branding of default/bankruptcy and the inab...
by ncole1
Sat Jan 23, 2016 10:33 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mort

Nope. I am not assuming purchasing only bonds at all. I am assuming purchasing $X in bonds and $Y in stocks. The argument is to compare this to prepaying the mortgage by $X and still investing $Y in stocks. You are comparing prepaying a mortgage versus putting the same amount into bonds. Since you ...
by ncole1
Sat Jan 23, 2016 10:24 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mort

First, your assumption that if you die you don't get anything is incorrect. There are plenty of annuity options that have a return of premium death benefit. Please refer back to my earlier post where I specifically said "...unless it pays the full remaining balance out in the event of death be...
by ncole1
Sat Jan 23, 2016 10:14 am
Forum: Personal Investments
Topic: Payoff Margin Loan?
Replies: 20
Views: 2539

Re: Payoff Margin Loan?

Emergency funds: I have Three to six months of expenses in savings Debt: No debt at all Tax Filing Status: Married Tax Rate: 15% State of Residence: Florida Age:59 Desired Asset allocation: 45/ 55 Desired International allocation: ?? Retired for 7 years, do some part time work and am withdrawing fr...
by ncole1
Sat Jan 16, 2016 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: How much House can I afford with an income of $98,000? My husband gave me a bizarre number
Replies: 110
Views: 24472

Re: How much House can I afford with an income of $98,000? My husband gave me a bizarre number

Hello. Hopefully someone can give me a hand. My husband's income is $98,000 per year. I'm raising our kids and caring for an aging parent. I found a house that would work well for us--it's $359,900. We have no credit card debt, 2 car payments that amount to $700 per month, and $110,000 saved. The b...
by ncole1
Tue Dec 22, 2015 11:49 am
Forum: Personal Finance (Not Investing)
Topic: Pay down mortgage, or invest?
Replies: 61
Views: 5744

Re: Pay down mortgage, or invest?

About a year ago, my wife and I moved into a substantially larger home. Right now I have a mortgage on my house in the amount of $1,130,000. The rate is 3.75%, 30 year term. As you probably know, mortgage interest is only deductible on the first $1mm of principal. Should I be paying down my mortgag...
by ncole1
Thu Oct 22, 2015 2:08 pm
Forum: Personal Investments
Topic: Another Mortgage Thread With a Twist
Replies: 29
Views: 3935

Re: Another Mortgage Thread With a Twist

Thanks for all the feedback. It's good to "talk" it through. :happy You still haven't told us about the cost basis (for tax purposes) of the investments. Would you incur a large CGT bill by selling them? Somewhat large but it's always a large tax bill it seems. :-\ Ok, if your basis is la...
by ncole1
Thu Oct 22, 2015 10:57 am
Forum: Personal Investments
Topic: Another Mortgage Thread With a Twist
Replies: 29
Views: 3935

Re: Another Mortgage Thread With a Twist

TinyElvis wrote:Thanks for all the feedback. It's good to "talk" it through. :happy
You still haven't told us about the cost basis (for tax purposes) of the investments. Would you incur a large CGT bill by selling them?
by ncole1
Thu May 21, 2015 12:38 pm
Forum: Personal Investments
Topic: Paying down high interest debt
Replies: 17
Views: 2656

Re: Paying down high interest debt

Welcome. It sounds like you're generally on the right track--especially your recent success paying down high-interest credit card debt. Two things jumped out at me. The first is that your emergency fund is too small for someone in your situation. I would grow that while paying off the debt. I know ...
by ncole1
Thu May 21, 2015 12:34 pm
Forum: Personal Investments
Topic: Bond Funds in Rising Interest Rate Environment
Replies: 12
Views: 4581

Re: Bond Funds in Rising Interest Rate Environment

From the reading I have done, it would seem that the value of a bond fund would decrease as interest rates rise. As interest rates continue to rise, the fund would continuously have bonds maturing that would then be reinvested in higher rate bonds. After the initial dip it would seem that bond fund...
by ncole1
Thu May 21, 2015 12:27 pm
Forum: Personal Finance (Not Investing)
Topic: To refinance or not to refinance
Replies: 13
Views: 3461

Re: To refinance or not to refinance

Ok so after doing the calculations it seems like a smart move as long as I intend to keep the house and it appraises for the same or more then it did when I bought it. Just wanted to get a few more opinions before I go through with a refinance. Here are the numbers, According to the realtor it woul...
by ncole1
Thu May 21, 2015 12:10 pm
Forum: Personal Investments
Topic: Post tax investing or Pay off 2.95% Mortgage?
Replies: 39
Views: 6686

Re: Post tax investing or Pay off 2.95% Mortgage?

joebh, I get your point that people are biased to think they made the right decision such as paying off a mortgage in retrospect. But I did NOT pay off my mortgage when I could, and I regretted it. Why did I not believe the choice I made was the right one with this same bias? OP, As far as paying o...
by ncole1
Thu May 21, 2015 12:10 pm
Forum: Personal Investments
Topic: Post tax investing or Pay off 2.95% Mortgage?
Replies: 39
Views: 6686

Re: Post tax investing or Pay off 2.95% Mortgage?

Paying that off when your rental mortgage is at a higher interest rate makes ZERO sense. Don't do it...
by ncole1
Wed May 20, 2015 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Living on last months income.
Replies: 33
Views: 10623

Re: Living on last months income.

I don't do any formal buffer, but I do have an emergency fund and I also pay many of my bills a couple of weeks, or even almost a month in advance. The latter is mostly just to suppress paranoia about a check being lost in the mail, as my landlord will not take online payments. If I pay in advance, ...
by ncole1
Wed May 20, 2015 8:16 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay dow mortg

Walking away from a house loan is not just a financial decision, it is also an ethical one. It is a promise to pay...walking away from a mortgage should include shame and embarrassment even if the place has turned into a slum. Hopefully this thread won't get too far sidetracked or start to turn ugl...
by ncole1
Wed May 20, 2015 8:02 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 407
Views: 106638

Re: Do you think Ric Edelman is correct, never pay down mortgage

I posted this in a recent thread, but am reposting it here (with minor changes), as this topic is of great interest to me and I see that I'm among the minority here... One point that I don't think gets discussed enough when this topic comes up is this: Do you anticipate living, or wanting to live, ...
by ncole1
Wed May 20, 2015 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: another rent vs buy situation
Replies: 7
Views: 1200

Re: another rent vs buy situation

I'm confident I'll find another job in the DC market, but I'll have to rough through a difficult commute (which is common here but not ideal). Am I willing to be a landlord for 2 properties? Not sure. Definitely not if it's long distance, but if I'm still in the DC area, which I likely will be even...
by ncole1
Mon May 18, 2015 4:08 pm
Forum: Personal Investments
Topic: Financially clueless - just starting out/need advice. Military Med Student, Student Loans, and Optimizing Investment
Replies: 5
Views: 1314

Re: Financially clueless - just starting out/need advice. Military Med Student, Student Loans, and Optimizing Investment

I'm going to be a bit contrarian here. In your situation, with the possibility of loan forgiveness, pay down your mortgage even more, not your student loans. In fact, don't put one penny more to the loans than you have to. Let the student loan balance grow, and throw all of it at your mortgage, incl...
by ncole1
Mon May 11, 2015 1:27 pm
Forum: Personal Finance (Not Investing)
Topic: Philosophies of frugality.
Replies: 64
Views: 10443

Re: Philosophies of frugality.

Yes the small things (like coffee) can add up. But I think a better route is to concentrate on the big buckets. The 3 biggest expenditures most people have are taxes, home, and cars, in that order. As for taxes, contribute to tax privileged retirement accounts, get whatever match is offered. There ...
by ncole1
Mon May 11, 2015 1:02 pm
Forum: Personal Finance (Not Investing)
Topic: Lecture me about "too much house"
Replies: 51
Views: 19037

Re: Lecture me about "too much house"

We are at the point where our family has outgrown the apartment. We need a house. Mortgage rates are at least comparable and often very favorable to rents, and we're not relocating anytime in the foreseeable future. We're an RN and a law enforcement officer with solid jobs. We're debt free. Plannin...
by ncole1
Mon May 11, 2015 12:42 pm
Forum: Personal Finance (Not Investing)
Topic: ARM's and a new twist on the mortgage prepayment debate
Replies: 6
Views: 1269

Re: ARM's and a new twist on the mortgage prepayment debate

The population of subset of mortgage takers who utilize a 7/1 ARM product is small in comparison to 15 year and 30 year note holders. Of that population, most do not know what future income will be, therefore from the starting gate most are not going to be making substantial pre-payments to avoid r...
by ncole1
Mon May 11, 2015 12:35 pm
Forum: Personal Finance (Not Investing)
Topic: Any refi at present that would help me?
Replies: 4
Views: 911

Re: Any refi at present that would help me?

Depends on your liquid assets, if you have enough, I'd stay put, if not, get a HELOC woth no closing costs "just in case", and plan on not using it.
by ncole1
Mon May 11, 2015 12:15 pm
Forum: Personal Finance (Not Investing)
Topic: ARM's and a new twist on the mortgage prepayment debate
Replies: 6
Views: 1269

Re: ARM's and a new twist on the mortgage prepayment debate

A few thoughts. since you asked :-) - why don't you have an apples to apples comparison between the fixed rate mortgage and the 7/1 ARM, i.e., have prepayments in both scenarios? It would not impact your conclusion either way! There are four options: #1 - 30 fixed and no prepay; #2 - 7/1 ARM and no...
by ncole1
Mon May 11, 2015 11:41 am
Forum: Personal Finance (Not Investing)
Topic: ARM's and a new twist on the mortgage prepayment debate
Replies: 6
Views: 1269

ARM's and a new twist on the mortgage prepayment debate

After we've beaten to death the "mortgage prepayment vs. investing" issue, I realize that there is a new twist that comes in when one considers adjustable rate mortgages. The twist is that an ARM gives you the option of saving even more interest than you'd expect by making a prepayment and...
by ncole1
Sat May 02, 2015 1:31 pm
Forum: Personal Investments
Topic: Advice on Stock Options - What would you do here?
Replies: 10
Views: 1727

Re: Advice on Stock Options - What would you do here?

Dump this as fast as you can without losing too much to taxes or lost vesting, as you are over-concentrated and relying on the same company for your assets AND income. Don't drag it out over more than 3 tax years. I don't think you should have ANY company stock at all, not 20% but zero*. In fact the...
by ncole1
Mon Apr 27, 2015 5:09 pm
Forum: Personal Finance (Not Investing)
Topic: Does a home mortgage use Simple or Compund Interest?
Replies: 148
Views: 32269

Re: Does a home mortgage use Simple or Compund Interest?

Or the simpler case of a $100,000 loan at 10% interest and there is a payment of $10,000 each year, where is the interest on interest? Is that an illusion too? Use the fact that the limit as r approaches 1 of [(r^n-1)/(r-1)] equals n. So how much interest has been paid on interest? The answer is ze...
by ncole1
Mon Apr 27, 2015 4:59 pm
Forum: Personal Finance (Not Investing)
Topic: Does a home mortgage use Simple or Compund Interest?
Replies: 148
Views: 32269

Re: Does a home mortgage use Simple or Compund Interest?

gwrvmd wrote:Mortgages are simple interest, however, if you miss a few payments you will find out how compound interest works..Gordon
Though the costs of foreclosing will surely swamp a few months of interest.
by ncole1
Mon Apr 27, 2015 4:36 pm
Forum: Personal Investments
Topic: Taxable vs Prepaying Debt - 3 things to consider
Replies: 17
Views: 2340

Re: Taxable vs Prepaying Debt - 3 things to consider

Actually the proper comparison is paying down debt versus investing in BONDS. This is due to the fact that the cash flows associated with paying down debt are known in advance, much like a fixed income security. If you have a mortgage costing 3.75% and you are 80/20 in taxable, you might think it ma...
by ncole1
Sun Apr 26, 2015 7:35 pm
Forum: Personal Investments
Topic: 30 Years Old/Backward Earnings Advice
Replies: 6
Views: 1234

Re: 30 Years Old/Backward Earnings Advice

I'm a bit surprised no one has mentioned this, but it depends on your spending level as well. Do you have a written budget? Do you know what you spend each year?
by ncole1
Sun Apr 26, 2015 7:22 pm
Forum: Personal Finance (Not Investing)
Topic: Can we afford, and how to finance
Replies: 11
Views: 2115

Re: Can we afford, and how to finance

Is the taxable account low-cost-basis assets such that you would incur a large tax bill to sell it?
by ncole1
Sun Apr 26, 2015 6:43 pm
Forum: Investing - Theory, News & General
Topic: 140% Stocks (or why the Kelly criterion is cool)
Replies: 98
Views: 14692

Re: 140% Stocks (or why the Kelly criterion is cool)

Suppose you have $1,000. I offer you a bet on a fair coin. Heads you double your money. Tails I keep whatever you bet. You can make one bet a day for as long as you want. How much should you bet each day? You could bet everything every chance you get. That would maximize your expected returns . It ...
by ncole1
Sun Apr 26, 2015 6:36 pm
Forum: Personal Finance (Not Investing)
Topic: Buying condo in commercial building
Replies: 10
Views: 2334

Re: Buying condo in commercial building

IMO, you should be concerned with resale unless you plan on living there for 10+ years. Being a landlord is not necessarily easy especially if you move to another city.
by ncole1
Sun Apr 19, 2015 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Payoff Mortgage or Fund Taxable Account
Replies: 16
Views: 2940

Re: Payoff Mortgage or Fund Taxable Account

I have a good problem. I recently got a raise at work and am struggling to know what to do with it. Should I overpay on my mortgage or open a taxable account? Personal finance situation: I am 31 years old and a recent Boglehead convert. I am maxing out my 403b w/ employer match as well as my person...
by ncole1
Wed Apr 15, 2015 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: Should I sell our rental house, reinvest profits elsewhere?
Replies: 36
Views: 3919

Re: Should I sell our rental house, reinvest profits elsewhe

I think I posted this question on a similiar thread. If you bought the house at it's current price and interest rate today would it be profitable to rent out? If not then you should sell it. This criterion doesn't make sense because it assumes the cost of equity capital should be considered the sam...
by ncole1
Wed Apr 15, 2015 9:18 pm
Forum: Personal Finance (Not Investing)
Topic: Refinance or Pay Off Mortgage
Replies: 2
Views: 615

Re: Refinance or Pay Off Mortgage

I bought a primary house in 2012 for 580K with 20% down. Interest rate at 3.62% for 30 years fixed. Since they I paid off bigger chunk on the mortgage. My current loan amount on the house is only 265K. In the mean time between 2012 and now, my house value increase. It is currently appraised at 711K...
by ncole1
Wed Apr 15, 2015 9:13 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off rental with Heloc to move schedule e to schedule
Replies: 26
Views: 2730

Re: Paying off rental with Heloc to move schedule e to sched

If you took $50k of your cash to pay off a rental, how long would it take to replenish it?