Search found 1187 matches

by galeno
Mon Jul 16, 2018 10:52 am
Forum: Personal Finance (Not Investing)
Topic: How to apply safe withdraw rule?
Replies: 5
Views: 695

Re: How to apply safe withdraw rule?

Do not count your home. It generates expenses.

Use the 4% rule. If you want to be conservative subtract your portfolio's ER from the 4%.
by galeno
Mon Jul 16, 2018 10:46 am
Forum: Investing - Theory, News & General
Topic: Any source for: "If markets fall X%, a X/X portfolio will fall X%?
Replies: 10
Views: 784

Re: Any source for: "If markets fall X%, a X/X portfolio will fall X%?

Yes. We expect a bond bounce from the 25% in TIPS and the 33% in Interm US treasuries. The 33% in corporate bonds and the 8% in CASH should stay flat. If the stock market falls by 50% we expect our 40/60 port to fall 15%. Expecting a bond bump in the event of a stock downturn? Maybe, but maybe not. ...
by galeno
Mon Jul 16, 2018 9:57 am
Forum: Investing - Theory, News & General
Topic: Any source for: "If markets fall X%, a X/X portfolio will fall X%?
Replies: 10
Views: 784

Re: Any source for: "If markets fall X%, a X/X portfolio will fall X%?

If the stock market falls by 50% we expect our 40/60 port to fall 15%.
by galeno
Mon Jul 16, 2018 9:52 am
Forum: Personal Finance (Not Investing)
Topic: FireCalc: How big a grain of salt?
Replies: 58
Views: 4246

Re: FireCalc: How big a grain of salt?

Yes. Convert your tax rate into a tax ratio. Add it to your portfolio's ER to get a TER. Does FireCalc take tax implications into account? For example, are the earnings scenarios pre-tax or post-tax? Assuming that the "Spending" calculation is in post-tax dollars, but it really doesn't say (or I mis...
by galeno
Mon Jul 16, 2018 9:44 am
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1767

Re: Thoughts on using an ETF for TIPS investing

We are non-USA domiciles. We use ITPS which is the Ireland domiciled equivalent to iShares TIP. 15% of our 40/60 portfolio is in ONE TIPS ETF. We like it just fine. We use the TIPS ETF to protect 25% of our fixed income allocation from unexpected inflation. That's good to hear. Can I ask which ETF y...
by galeno
Mon Jul 16, 2018 9:39 am
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1767

Re: Thoughts on using an ETF for TIPS investing

No. I'm 55% worried about inflation.
FIREchief wrote:
Mon Jul 16, 2018 1:25 am
galeno wrote:
Fri Jul 13, 2018 7:33 pm
15% of our 40/60 portfolio is in ONE TIPS ETF. We like it just fine.

We use the TIPS ETF to protect 25% of our fixed income allocation from unexpected inflation.
So you are only 25% concerned about inflation?? :confused
by galeno
Sun Jul 15, 2018 1:44 pm
Forum: Investing - Help with Personal Investments
Topic: Should I simplify my portfolio and switch from 3 fund to 2 fund portfolio?
Replies: 45
Views: 2004

Re: Should I simplify my portfolio and switch from 3 fund to 2 fund portfolio?

I like VT better than the VTI + VXUS combo. It eliminates one of the biggest, longest, never ending debates on this board: how much USA vs non-USA equities?

VT lets FTSE solve that problem. It's "self-cleansing".
by galeno
Sun Jul 15, 2018 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: FireCalc: How big a grain of salt?
Replies: 58
Views: 4246

Re: FireCalc: How big a grain of salt?

Exactly. I like both PV and FC. Why not run them every year or five to set your next one to five year AWR? As the term goes down the AWR goes up. In my examples for a term of 35 years our SWR is 3.6%. For a term of 30 yr the SWR goes to 3.8%. The primary purpose of FireCalc is to show you the "grain...
by galeno
Sun Jul 15, 2018 1:30 pm
Forum: Investing - Theory, News & General
Topic: Has the range of expected stock market returns ever been larger than today?
Replies: 15
Views: 1372

Re: Has the range of expected stock market returns ever been larger than today?

I assume a 4% REAL CAGR for the TWSM (total world stock market)

I assume a 0% REAL CAGR for the TBM (total bond market).

So the expected REAL CAGR for our 40/60 port is 1.6%.

The historical REAL CAGR of a 40/60 port is 4.4%.
by galeno
Sun Jul 15, 2018 1:12 pm
Forum: Personal Finance (Not Investing)
Topic: FireCalc: How big a grain of salt?
Replies: 58
Views: 4246

Re: FireCalc: How big a grain of salt?

When you pick a term both PV and FC assume the WORST term in the database history. So unless the FUTURE term you pick is worse than the worst PAST term in history, all three: the 4% rule, PV, and FC give a PESSIMISTIC answer. Expected returns are low, particularly for domestic stocks. So I think fir...
by galeno
Sun Jul 15, 2018 12:59 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 73
Views: 4581

Re: Looking for EUR holy grail bond strategy

15% of our 40/60 port (25% of FI) is in one USD TIPS ETF (ITPS).

We use it to protect 1/4th of our FI allocation against UNEXPECTED inflation.

No TIPS necessary with equity allocations greater than 50%.

It's a good idea to keep all or most of your bonds in the major currency of your region.
by galeno
Sun Jul 15, 2018 12:21 pm
Forum: Personal Finance (Not Investing)
Topic: FireCalc: How big a grain of salt?
Replies: 58
Views: 4246

Re: FireCalc: How big a grain of salt?

It's uncanny. Using a term of 30 yr both PV and FC recommend a 96% SWR of EXACLY 4.0%. When we include our TER of 0.4% our 96% SWR goes to 3.8%. All three: 4% rule, PV, and FC give CONSERVATIVE forecasts. Term: 30 yr. Success rate: 96%. Monte Carlo simulation on Portfoliovisualizer (PV) and Firecalc...
by galeno
Sun Jul 15, 2018 10:17 am
Forum: Personal Finance (Not Investing)
Topic: FireCalc: How big a grain of salt?
Replies: 58
Views: 4246

Re: FireCalc: How big a grain of salt?

Monte Carlo simulation on Portfoliovisualizer (PV) and Firecalc (FC). Portfolio: 40% TSM + 60% Interm US Treasuries. Term: 35 yr. ER: 0.01. Success rate: 94%. SWR (PV) = 3.9%. SWR (FC) = 3.8%. When I use our portfolio's TER* of 0.40% in FC the SWR goes to 3.6%. *TER (total expense ratio) is ER + TR ...
by galeno
Fri Jul 13, 2018 7:33 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1767

Re: Thoughts on using an ETF for TIPS investing

15% of our 40/60 portfolio is in ONE TIPS ETF. We like it just fine.

We use the TIPS ETF to protect 25% of our fixed income allocation from unexpected inflation.
by galeno
Tue Jul 10, 2018 7:43 pm
Forum: Investing - Theory, News & General
Topic: Investing for Income Vs. Taking Withdrawals?
Replies: 6
Views: 655

Re: Investing for Income Vs. Taking Withdrawals?

I agree. The proposed portfolio is ridiculous.
averagedude wrote:
Tue Jul 10, 2018 7:25 pm
I would classify this article as fake financial news.
by galeno
Tue Jul 10, 2018 7:26 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for portfolio advice [Hungary]
Replies: 12
Views: 719

Re: Looking for portfolio advice [Hungary]

Why don't you keep it simple?

X% VWRL + Y% AGGH. Capitalization weighted for both global equities and global investment grade bonds in 2 ETFs. All denominated in EUROs.

Put "your age in AGGH" and the rest in VWRL. Check your port and rebalance it once every year or every several years.
by galeno
Thu Jul 05, 2018 3:13 pm
Forum: Investing - Theory, News & General
Topic: Vanguard - What will the real return be for stocks and bonds over the next ten years?
Replies: 46
Views: 5074

Re: Vanguard - What will the real return be for stocks and bonds over the next ten years?

15% of port (25% of FI) is in a TIP ETF with a duration of 8.2 years. I'm thinking of substituting it for a shorter duration TIP ETF (2.6 years).
by galeno
Thu Jul 05, 2018 3:04 pm
Forum: Investing - Theory, News & General
Topic: What are equivalent total market index funds for foreigners?
Replies: 7
Views: 703

Re: What are equivalent total market index funds for foreigners?

Mexico and the Dominican Republic do not have an INHERITANCE tax treaties with the USA. Avoid USA domicled ETFs.
by galeno
Thu Jul 05, 2018 2:39 pm
Forum: Investing - Theory, News & General
Topic: Vanguard - What will the real return be for stocks and bonds over the next ten years?
Replies: 46
Views: 5074

Re: Vanguard - What will the real return be for stocks and bonds over the next ten years?

We expect a REAL NET CAGR of 1.2% from our 40/60 port. Our AWR is about 3.5%.

For a 60/40 port I'd expect a real net CAGR of 1.6%.
by galeno
Wed Jun 27, 2018 3:00 pm
Forum: Investing - Help with Personal Investments
Topic: 60/40 or 40/60?
Replies: 42
Views: 4555

Re: 60/40 or 40/60?

With an equity collapse of 50% your 40/60 port will lose about 15%. Add in the 4% annual withdrawal and you'll lose 19%. A hard blow. With an equity collapse of 50% your 60/40 port will lose about 25%. Add in the 4% annual withdrawal and you'll lose 29%. A VERY hard blow. With an equity colapse of 5...
by galeno
Wed Jun 27, 2018 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: How many months of living expenses would you keep in your bank.
Replies: 61
Views: 3929

Re: How many months of living expenses would you keep in your bank.

We start the year with 5% of port in CASH. That's 1.25 years of living expenses.
by galeno
Wed Jun 27, 2018 2:24 pm
Forum: Personal Finance (Not Investing)
Topic: Need help: non-resident alien and taxes -- maybe recommend a tax consultant [Canada, Germany]
Replies: 21
Views: 1146

Re: Need help: non-resident alien and taxes -- maybe recommend a tax consultant [Canada, Germany]

For fun I read the wiki link TedSwippet posted regarding the Ex-Patriot Act. All I have to say is WOW!

Everyone knows how tough and complicated it is to get into the USA legally. I had no idea how tough and complicated it is to get out legally.
by galeno
Wed Jun 27, 2018 12:28 am
Forum: Personal Finance (Not Investing)
Topic: Need help: non-resident alien and taxes -- maybe recommend a tax consultant [Canada, Germany]
Replies: 21
Views: 1146

Re: Need help: non-resident alien and taxes -- maybe recommend a tax consultant [Canada, Germany]

Wouldn't it be easier to open a regular after tax brokerage account instead of battling with the 401K or the IRA?

Sometimes the tax deductibility or deferability of these special accounts isn't worth the restrictions.
by galeno
Tue Jun 26, 2018 1:25 pm
Forum: Investing - Help with Personal Investments
Topic: 60/40 or 40/60?
Replies: 42
Views: 4555

Re: 60/40 or 40/60?

For a severe equity bear market you are looking at a max portfolio loss of about 15% with 40/60. Add in your 4% AWR and it's a 19% decline. With 60/40 you'll lose about 25%. 29% including the 4% annual withdrawal. With the present uncertainty at our ages (61 this year) I like 40/60. At almost 70 you...
by galeno
Tue Jun 26, 2018 10:30 am
Forum: Investing - Help with Personal Investments
Topic: 60/40 or 40/60?
Replies: 42
Views: 4555

Re: 60/40 or 40/60?

We held a 60/40 port from 2006-2016. We switched to 40/60 in Jan 2017.

Look at Vanguard's target retirement funds.
by galeno
Mon Jun 18, 2018 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: [NON-US (Ireland) ETFs - Deemed disposal rule?]
Replies: 8
Views: 574

Re: [NON-US (Ireland) ETFs - Deemed disposal rule?]

I have nothing to add other than the title scared me a little. I'd never heard of any type of "disposal rule".
by galeno
Wed Jun 13, 2018 6:23 pm
Forum: Personal Finance (Not Investing)
Topic: Are you including SS in your planning model? Are the benefits really that high?
Replies: 148
Views: 11662

Re: Are you including SS in your planning model? Are the benefits really that high?

In Costa Rica it's almost impossible to find or keep a legitimate job if over 50 years old unless you have a professional degree.
by galeno
Wed Jun 13, 2018 3:05 pm
Forum: Personal Finance (Not Investing)
Topic: Are you including SS in your planning model? Are the benefits really that high?
Replies: 148
Views: 11662

Re: Are you including SS in your planning model? Are the benefits really that high?

Social security taxes can be raised. The roof can be lifted or eliminated. COLAs can be adjusted down. Retirement age can be raised. There are so many ways the SS system in the USA can be fixed.
by galeno
Wed Jun 13, 2018 12:21 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review & high-level questions
Replies: 5
Views: 866

Re: Portfolio review & high-level questions

1. Given I already have a significant nest egg, and I'd like to perhaps semi-retire early, am I overexposed to stocks at this point? No. A conservative investor keeps his age in bonds. You should have at least 70% equity. I suggest keeping 80%. The 2 most important things you can do right now is to ...
by galeno
Tue Jun 12, 2018 11:37 pm
Forum: Investing - Theory, News & General
Topic: The Deep History of Stock & Bond Returns
Replies: 75
Views: 5344

Re: The Deep History of Stock & Bond Returns

I'm happy if my investment grade bonds deliver a positive real after tax return.
by galeno
Tue Jun 12, 2018 9:23 am
Forum: Investing - Theory, News & General
Topic: Non-USA Domicles: Simplicity More Important
Replies: 0
Views: 172

Non-USA Domicles: Simplicity More Important

I feel really well regarding our 12 year quest as non-USA domiciles to invest like our USA-domicile Boglehead counterparts. As far as portfolio costs go we are closing the gap. Equities are equities. VT costs about 0.75%/yr. LSE:VWRD costs 0.49%/yr. For a USA-domicle VT costs abour 0.17%. I'd love t...
by galeno
Tue Jun 12, 2018 8:54 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 73
Views: 4581

Re: Looking for EUR holy grail bond strategy

"If you're not comfortable with the aggregate index shifting away from treasuries, you should invest directly in treasuries and then possibly add corporate bonds/MBS for a fixed percentage or not." Last year we swapped SUAG (Barclay USA bond index. ER = 0.25%) for two new cheaper Ireland Vanguard bo...
by galeno
Mon Jun 11, 2018 9:56 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 73
Views: 4581

Re: Looking for EUR holy grail bond strategy

Splitting hairs. KISS. The only useful thing a back test on bonds is good for is to determine past volatility. Period. Use one investment grade bond ETF. Use CASH to shorten the duration of FI allocation to whatever you prefer. I like intermediate term. You hold bonds for ballast. Lower yield = high...
by galeno
Mon Jun 11, 2018 9:38 am
Forum: Investing - Theory, News & General
Topic: Don’t cheat yourself with the 4% rule
Replies: 159
Views: 18365

Re: Don’t cheat yourself with the 4% rule

Houseblend is correct regarding the taxes.

E.g. the listed ER of VT is 0.10%. But after factoring in the hidden dividend withholding taxes of 7.5% (non-USA developed equities) and 11.2% (EM equities) the true cost of VT is 0.17% at the current SEC yield.
by galeno
Mon Jun 11, 2018 8:58 am
Forum: Investing - Theory, News & General
Topic: Non-USA Domicile: Avoiding / Minimizing USA-NRA Withholding Taxes
Replies: 0
Views: 145

Non-USA Domicile: Avoiding / Minimizing USA-NRA Withholding Taxes

Are you using a USA domiciled broker with no access to Ireland domiciled ETFs? An easy Boglehead-like way of doing this: Ladder of brokered (USA FDIC insured) CDs a/o INDIVIDUAL USA treasuries as your bond holdings. BRKB as your only equity holding. If you decided to hold VT your TER (ER + TR) is ab...
by galeno
Mon Jun 11, 2018 8:40 am
Forum: Investing - Help with Personal Investments
Topic: What platform for a non-American
Replies: 6
Views: 625

Re: What platform for a non-American

It's possible to avoid all USA-NRA withholding taxes using any USA domiciled brokerage.

BRKB as your only equity holding

5yr CD ladder of brokered CDs as your bond holding
by galeno
Sun Jun 10, 2018 4:52 pm
Forum: Investing - Theory, News & General
Topic: Non-USA Domicle Question Re Interest Income Withholding Taxes
Replies: 18
Views: 1153

Re: Non-USA Domicle Question Re Interest Income Withholding Taxes

This thread has been very informative. I was told MANY times that because we have NO relationship with the USA other than using a USA domicled broker (i.e. no income, properties, bank accounts etc in the USA) we have NO recourse to get any of the 30% USA-NRA withholding taxes back. I'm going to pay ...
by galeno
Sun Jun 10, 2018 4:31 pm
Forum: Investing - Theory, News & General
Topic: Non-USA Domicile: Thank You IB, Vanguard, and Ishares
Replies: 25
Views: 2685

Re: Non-USA Domicile: Thank You IB, Vanguard, and Ishares

Thank you. I will watch this group and consider it. I've only used Ireland Vanguard and iShares ETFs. So far my favorite equity ETF is VWRD (Vanguard) ER = 0.25%. My favorite bond ETF is AGGU (iShares) ER = 0.10%. Lyxor also lowered their fees for some ETFs: https://i.imgur.com/PHCsxnM.png Source: h...
by galeno
Sun Jun 10, 2018 4:09 pm
Forum: Investing - Help with Personal Investments
Topic: US OTC market for Irish ETFs (NRA question)
Replies: 13
Views: 632

Re: US OTC market for Irish ETFs (NRA question)

IB charges 0.05% commission to trade an Ireland domicled ETF on the LSE. No roof. I believe a floor of $6 GBP ($8 USD). Citi's commissions via the OTC for the same bag of stocks or bonds is TWENTY times that! Since your trading costs are high you should strive for a 2 ETF port. One for stocks and on...
by galeno
Sun Jun 10, 2018 3:38 pm
Forum: Investing - Help with Personal Investments
Topic: US OTC market for Irish ETFs (NRA question)
Replies: 13
Views: 632

Re: US OTC market for Irish ETFs (NRA question)

OK. If you're stuck with Citi you're stuck with Citi. Changing brokers or even simple bank accounts in CR is always complicated. I feel your pain. In 33 years we've been with 4 different brokers. The first two were non-USA brokers. The last two USA brokers. We've changed banks 5 times. Each time was...
by galeno
Sun Jun 10, 2018 3:31 pm
Forum: Investing - Theory, News & General
Topic: When I thought I was smarter than the market
Replies: 22
Views: 3757

Re: When I thought I was smarter than the market

Before we became Bogleheads in 2006 we used a 80/20 port. Our equity port consisted of 12-16 stocks. Over the 11 year period I beat the Wilshire 5000 (AKA the TSM) by 6% per year. Turns out that the returns were completely in agreement with the risk we were taking. We got lucky that we didn't UNDERP...
by galeno
Sun Jun 10, 2018 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Are you including SS in your planning model? Are the benefits really that high?
Replies: 148
Views: 11662

Re: Are you including SS in your planning model? Are the benefits really that high?

Then I should discount our future pensions by 50%. I live in a country that is dead last on the "developed counties" list. Costa Rica. A country firmly in the "middle income country" trap. Our economy is smaller than the Oklahoma City metropolitan area. I believe it's #100 in the USA. We have our ow...
by galeno
Sun Jun 10, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Don’t cheat yourself with the 4% rule
Replies: 159
Views: 18365

Re: Don’t cheat yourself with the 4% rule

NPV of our pension = 11% of port.

Firecalc (35 yr term. ER = 0.4%. 40/60 port. 95% success) says:

No pension SWR = 3.6%

Take pension at 62 SWR = 4.4%

Take pension at 70 SWR = 4.6%.
by galeno
Sun Jun 10, 2018 12:42 pm
Forum: Investing - Help with Personal Investments
Topic: Fixed Income investments too conservative?
Replies: 59
Views: 3852

Re: Fixed Income investments too conservative?

I agree. Without this explanation the portfolio makes no sense at all. I don't have to use Morningstar USA's portfolio x-ray to see that there's duplicates and overlaps galore. How much are you paying your financial advisor? If it's the standard 1-2% yearly AUM fee, then your current 2.4% return on ...
by galeno
Sun Jun 10, 2018 12:14 pm
Forum: Investing - Theory, News & General
Topic: Non-USA Domicile: Thank You IB, Vanguard, and Ishares
Replies: 25
Views: 2685

Re: Non-USA Domicile: Thank You IB, Vanguard, and Ishares

That is correct. Using IB. I like to look at it like this. I double the commission to 0.1% and add it to the bid/ask spread. That's my cost for buying an Ireland domicled ETF on the LSE. The cost for selling is FREE. IIRC, the bid/ask spread on VWRD in Jan was 0.3%. You can try to "shave" the spread...
by galeno
Sun Jun 10, 2018 10:03 am
Forum: Investing - Help with Personal Investments
Topic: US OTC market for Irish ETFs (NRA question)
Replies: 13
Views: 632

Re: US OTC market for Irish ETFs (NRA question)

I'm lost. Why would ANYBODY want to trade Ireland domicled ETFs on the USA OTC when one could trade them directly on the LSE? I BELIEVE that the most popular Ireland domicled ETFs can also be traded directly on other stock exchanges. I'm not sure. I can't speak for USA domiciles. There may be restri...
by galeno
Sun Jun 10, 2018 9:13 am
Forum: Personal Finance (Not Investing)
Topic: Are you including SS in your planning model? Are the benefits really that high?
Replies: 148
Views: 11662

Re: Are you including SS in your planning model? Are the benefits really that high?

Including doom and gloom scenarios in retirement assumptions completely destroys the concept of "higher SWR = more retirement happiness". What SWR should I use if a pandemic wipes out 80% of the global population? An asteroid strike? Nuclear holocaust? With this mindset. Assuming I'd want to be one ...
by galeno
Sat Jun 09, 2018 3:37 pm
Forum: Personal Finance (Not Investing)
Topic: Are you including SS in your planning model? Are the benefits really that high?
Replies: 148
Views: 11662

Re: Are you including SS in your planning model? Are the benefits really that high?

We are not USA-domiciles. But we will have a state pension from our country. The NPV of our government pensions is 11% of port. We could have taken our pensions at 60. We will take it at age 70. Under our new pension laws max pension payments will max out at age 70. We are retired using the 4% rule....