Search found 172 matches
- Wed Jan 11, 2017 2:19 pm
- Forum: Personal Finance (Not Investing)
- Topic: Auto Loan [vs. investing]
- Replies: 41
- Views: 5448
Re: Auto Loan [vs. investing]
Corollary option: accept financing if it can get you a better deal, then pay the loan off in short order (on the order of a couple of months or less). Often you can negotiate a lower sticker price if you accept financing through the dealership/auto maker. If you have the cash on hand, and assuming there is no penalty for early payment, you can accept financing and pay it off quickly to save yourself a few hundred or thousand dollars. I have done this twice where I purchased cars at the end of sales quarters and model years, agreed to financing for the incentives, and took $500 and $1000 off the sticker price for financing. Those purchases were made in July, and the loan was paid off by December, which netted me several hundred dollars in bo...
- Wed Jan 11, 2017 2:11 pm
- Forum: Investing - Theory, News & General
- Topic: "Why 97% of People Don't Use 529 College Savings Plans."
- Replies: 262
- Views: 60411
Re: "Why 97% of People Don't Use 529 College Savings Plans."
Interesting thread; wish I'd found it before opening mine a few months ago after baby girl was born. My thoughts/situation: - We max IRAs and 403(b)s with some left to go into taxable investment accounts each year. - The state in which I file income tax does have deductible 529 contributions. - Only a portion of my earnings are taxable in said state, leading to a relatively small tax burden each year. Thus, it made sense to me to fund the 529 up to the point where I would pay $0 in state taxes each year, or up to the deductible limit, whichever is lower. I doubt I will ever contribute to the 529 up to the maximum annual limit, nor will we approach the overall limit as they are very high relative to our contributions. I viewed the problem as...
- Tue Apr 07, 2015 8:50 am
- Forum: Personal Investments
- Topic: Help me Understand Why I Keep My Bond Allocations
- Replies: 15
- Views: 2115
Re: Help me Understand Why I Keep My Bond Allocations
Some of the responses above seem to suggest that the OP is weighing bonds vs stocks. In fact, he's weighing bonds vs cash. 50% stocks + 50% bonds vs 50% stocks + 50% cash. I think the salient point is, as stated above, people have felt certain that there was no way for rates to go but up for several years now. Globally, we're seeing negative yields on a lot of bonds, so I don't think it's true that there is no way for rates to go lower. If someone is worried about interest rate risk, they can avoid that by moving to cash, but it probably doesn't make sense to do so unless (a) they're OK with permanently living with an allocation of 50% stocks + 50% cash (which should earn less than a portfolio of 50% stocks + 50% bonds over any extended pe...
- Mon Apr 06, 2015 5:57 pm
- Forum: Personal Investments
- Topic: Help me Understand Why I Keep My Bond Allocations
- Replies: 15
- Views: 2115
Re: Help me Understand Why I Keep My Bond Allocations
Yep.Van wrote:2008.
The thing I don't understand when people are citing bond prices... bonds aren't stocks. Over the long haul, if the purpose of your bonds is to provide the stability each individual needs (whether it's 0%, 10% or 60% or higher) to weather the storm, and bonds provide a return via interest which as those yields rise, so do your "returns" from a bond fund, why do we spend so much time discussing bond price over the long term. IMO, as you age, you're probably not selling bonds all that often.
IMO, it's all about understanding the role bonds play in your portfolio: stability. You get your returns from your equity.
- Mon Apr 06, 2015 5:35 pm
- Forum: Personal Investments
- Topic: Help me Understand Why I Keep My Bond Allocations
- Replies: 15
- Views: 2115
Re: Help me Understand Why I Keep My Bond Allocations
Without knowing anything about you (age, investment horizon, risk tolerance, etc.), the best answer I can give you is: the next stock market crash will tell you why. Right now, when things are rosy, yeah, why am I not 100/0? Then you lose 30-50% of your stock value in six months, and you remember why... it's so you don't panic and sell at the wrong time and buy at the wrong time. Let's say you change your mind and time the market right now - which is what you'd be doing. You'd sell your bonds at what you perceive as some market high only to buy more stock.... also at a perceived market high. How is that any better? Then the market crashes on Thursday, and through the month of October your stocks that you just purchased drop 20%. You are bac...
- Fri Apr 03, 2015 4:20 pm
- Forum: Investing - Theory, News & General
- Topic: Have P/E Ratios Affected Your Asset Allocation?
- Replies: 52
- Views: 5156
Re: Have P/E Ratios Affected Your Asset Allocation?
It hasn't affected my target AA. Instead, it's thrown my US allocation a touch high and my international allocation a little low, so I've tilted my periodic (bi-weekly) purchases heavily towards international and reduced my US purchases. I'm buying less US at the high present valuation, and buying the supposed "Value" in international in order to restore my 70/30 US/Int equity allocation.
In that sense, the very Bogleheadish tactic of rebalancing is taking advantage of the present valuation metrics naturally.
In that sense, the very Bogleheadish tactic of rebalancing is taking advantage of the present valuation metrics naturally.
- Fri Apr 03, 2015 3:43 pm
- Forum: Personal Finance (Not Investing)
- Topic: Earthquake coverage in CA
- Replies: 20
- Views: 2509
Re: Earthquake coverage in CA
~30 yo single-story house in Coronado in a condominium association with no earthquake insurance provided. We do not carry any additional coverage due mostly to the deductible involved. The likelihood of an earthquake causing that much damage is small relative to the cost.
- Wed Apr 01, 2015 3:19 pm
- Forum: Personal Investments
- Topic: Combined Brokerage account with TSP
- Replies: 12
- Views: 1568
Re: Combined Brokerage account with TSP
Brokerage Portfolio & TSP (work) account combined as a whole. My TSP account is around 22% of my whole account if I combine the Brokerage and TSP accounts to be as one. I have the same setup, TSP accounts for ~33% of total investments. ... This totals 70% equities , 30% bonds Totals VTSAX 36% + TSP C fund 12% = 48% Total Market/ Large Caps Total international = VTIAX 12% = 12% Total International Fund Small value index = 6% VSIAX + TSP S fund 4% = 10% small caps Total Bond = EE Bonds 12%+VBTLX 13%+G fund 5% = 30% Bonds Please give any recommendations for my 70/30 portfolio combining the Brokerage and TSP account. I try to maintain tax efficiency, so I use TSP for my bond allocation - mostly G fund. The purpose of the bond allocation, I...
- Tue Mar 24, 2015 5:38 pm
- Forum: Personal Finance (Not Investing)
- Topic: Where do I learn how much one SHOULD spend on a home?
- Replies: 64
- Views: 19642
Re: Where do I learn how much one SHOULD spend on a home?
I agree with the above. There's even more analysis that needs to go into purchasing an investment property. I'd feel pretty confident - having done no analysis whatsoever - that Seattle is probably not a great area to purchase investment property right now solely because the amount of rent you'd need to charge to break even would price you out of the rental market. Remember, it's not just covering your mortgage; you have to cover property taxes, some bills (sewer, HOA if you have one, etc.), maintenance on the house both planned and emergent (lawn care, plumbing, roof...), and you should plan for vacancy where you're not receiving any income. Renting a SFH is not a simple, profitable investment much of the time. Renting a property you inten...
- Tue Mar 24, 2015 3:03 pm
- Forum: Personal Finance (Not Investing)
- Topic: Where do I learn how much one SHOULD spend on a home?
- Replies: 64
- Views: 19642
Re: Where do I learn how much one SHOULD spend on a home?
I'll chime in as a guy who owned two places in his 20s. At 25, I bought a small 3/2 new construction house for right around $150,000 that I thought would be a starter house for me and my long term GF. We broke up 18 months later, and I took work elsewhere, but was able to sell the house for $240,000. Net take home after all was settled was about $60,000. I took that $60,000, saved a little bit, and used the rest as a down payment on a condo in another location. This was in 2005. I bought a 2/2 condo in an area with lots of new construction going up for about $292,000. Two years later, I needed to move again. At 30 years old, I put my condo on the market and was able to move it for $260,000: a $30,000 loss. I saw the writing on the wall and ...
- Mon Mar 16, 2015 6:15 pm
- Forum: Personal Investments
- Topic: International is disappointing
- Replies: 84
- Views: 11008
Re: International is disappointing
I'd suggest the OP stick with point 3 in his signature: 3) Impulse is your enemy.
- Wed Feb 25, 2015 1:57 pm
- Forum: Personal Finance (Not Investing)
- Topic: Is the first 100k really the hardest?
- Replies: 170
- Views: 66051
Re: Is the first 100k really the hardest?
I don't think the first $100K is the hardest. Really, it's the first $383K. Or $567K. Or $1.2M.... totally arbitrary number that matters relative to what your end goal is. The first $100K took me about 6 working years, and now another 100K takes less than a year (depending on the year!), but considering the end goal $100K is a cupful of water in a large bucket. Eventually we transition from worrying about 100s into 1000s into 10000s into 100000s into 1000000s (if we're lucky!). At any point in that adventure, thanks to compounding the first ____________ is the hardest.
- Fri Jan 09, 2015 3:19 pm
- Forum: Personal Investments
- Topic: Getting Married - Want advice merging Portfolio & Taxes
- Replies: 24
- Views: 3522
Re: Getting Married - Want advice merging Portfolio & Taxes
1. Looking at priorities and plan, does anything strike you as dumb? Nope 2. To minimize taxes, what type of Vanguard fund should we use for our non-tax advantaged investments? What would be considered tax efficient for us (PA muni bonds?)? The Vanguard Total Stock Market Index/ETF is probably best held in taxable. Lower yield than international and bonds. Don't let the tax tail wag the dog; in other words, don't load up on munis if that doesn't fit with your target asset allocation just for the tax advantage. Bonds are not poised to have a good decade anyway as rates start to rise. 2a. I'll place the REIT & most aggressive investments in our Roth, then 401K. OK 3. When we roll her old 401K over, is there anything we would consider, or...
- Tue Dec 16, 2014 2:22 pm
- Forum: Personal Consumer Issues
- Topic: WHY is retirement enjoyable / something to look forward to?
- Replies: 237
- Views: 29067
Re: WHY is retirement enjoyable / something to look forward
What is it that changes to when in people's 40s and 50s they can't wait to retire? I'm only 37, but what changed for me is pretty simple: I realized my life was finite, and thus the amount of time that was my own was as well. The more of it I can have, the better. My father wanted to retire forever, but was only finally able to when he was 77. At 78.5 he was diagnosed with a disease that in all probability would kill him within one year. He's been living day to day for the last two years, and his prognosis is very good. Seeing that happen motivated me to get serious about saving and investing (I was already doing pretty well). Simply put: I want a few decades - rather than just a few years - beholden only to myself and my family. I think m...
- Fri Nov 07, 2014 11:31 am
- Forum: Personal Investments
- Topic: Retirement, Mortgage, & Savings Help
- Replies: 7
- Views: 1480
Re: Retirement, Mortgage, & Savings Help
1. Are you tied to buying? SoCal, as you mentioned, is expensive and you don't get a lot for your money. Are you planning to stay forever? If not, consider either renting and stashing that downpayment to let it grow (either for retirement or a future home purchase), or consider something like a PenFed 5/5 ARM. I re-fi'ed to the 5/5 last year for the house my wife and I probably won't be in by the end of the first 5 year term. Unlike some of the 5/1s of the past its: (1) not interest only, we're paying more principal than we were on our 30-year fixed; (2) only allowed to go up by 2% each increment, no more than 5% over the life of the loan, and only adjusts every 5 years. If you must buy, but are thinking you won't be there for 15 years, th...
- Fri Nov 07, 2014 11:16 am
- Forum: Personal Investments
- Topic: Retirement, Mortgage, & Savings Help
- Replies: 7
- Views: 1480
Re: Retirement, Mortgage, & Savings Help
If it's something you're going to do anyway, then yes, I'd agree with selling at the loss for TLH. At the amount you're discussing ($250 I think it was...), it seems like a relatively small consideration, that's all.TimesAWastin wrote: Thank you for your response. I'm still digesting the rest but I wanted to clarify something. I'm not talking about selling, exactly. My AA is where it should be and would remain the same afterward. What I'm talking about is tax loss harvesting. I'd pick up the slack by buying another international fund to avoid the wash sale. I'm asking about whether it's a worthwhile move in a year where we do have some capital gains to offset* but otherwise will only be claiming the standard deduction on our tax return.
- Thu Nov 06, 2014 2:47 pm
- Forum: Personal Finance (Not Investing)
- Topic: Tough spot, decided to lease a car
- Replies: 209
- Views: 23144
Re: Tough spot, decided to lease a car
This thread is like watching a Jets game: just when you think it can't get any worse, he forgot he paid for the platinum 7yr/100K warranty on the 2009 Toyota with 70k miles on it. There's the butt fumble... Seriously, I commend the OP for trying to focus on the future rather than rehashing mistakes from the past. Conversely, it doesn't seem as if he's learned from any of those past mistakes, whether personal or financial, which is troubling. My advice to the OP is to slow down, get organized, and put some real thought into everything. You make an awful lot of decisions (marriages, home purchases, car leasing) without apparently thinking them through. Your wives aren't the problem here. Your impulse is the issue. An idea forms, and you act o...
- Thu Nov 06, 2014 1:44 pm
- Forum: Personal Investments
- Topic: Retirement, Mortgage, & Savings Help
- Replies: 7
- Views: 1480
Re: Retirement, Mortgage, & Savings Help
1. We want to buy a place to live, be it condo or house, and want to do it as soon as possible as we also want to start a family and raise that family in a place we own (or co-own with the bank anyway ;-)). Meanwhile, her biological clock is ticking. SoCal is expensive and we're looking at $400k for something not already owned by cockroaches, which means we're aiming for $80-$100k for a down payment. As it stands though, there isn't much room to increase our savings rate. A loan from our families is an option to make it a reality sooner than later but that doesn't change the need to pay that loan back on top of whatever we get in a mortgage. What are our options here? We could technically afford the monthly payment on a 15-year mortgage gi...
- Tue Nov 04, 2014 3:33 pm
- Forum: Personal Investments
- Topic: AA...any other crazy 80/20 folks out there?
- Replies: 57
- Views: 9821
Re: AA...any other crazy 80/20 folks out there?
COLA'ed pension + aggressive savings through LBOM.WalterMitty wrote:Retire at 42? Do tell.nash031 wrote:Between 80-85/20-15 here, 37 intending to retire at 42. May never change my AA.
- Tue Nov 04, 2014 3:00 pm
- Forum: Personal Investments
- Topic: AA...any other crazy 80/20 folks out there?
- Replies: 57
- Views: 9821
Re: AA...any other crazy 80/20 folks out there?
Between 80-85/20-15 here, 37 intending to retire at 42. May never change my AA.
- Wed Oct 29, 2014 6:55 pm
- Forum: Personal Investments
- Topic: How are you supposed to move a 401k
- Replies: 19
- Views: 2442
Re: How are you supposed to move a 401k
Hi! I just moved a 401k from an old employer to a new employer. Essentially, the process of moving the 401k I lost about 5-10% of the value of the 401k. I moved it from roughly the same investment to the same investment. I now own 5-10% less than I started with thanks to my time out of the market. 1) Call Fidelity have them send check addressed to Vanguard to me since they claim they are unable to send it directly to Vanguard for accounting reasons. 2) Wait three days for sell to occur <-Market gives out about this point 3) Receive check in mail 4) Discover check is made out to me not Vanguard 5) Have angry phone call with Fidelity 6) Receive check 7) Mail to Vanguard 8) Market has a great day 9) Vanguard executes purchase In this case it ...
- Thu Oct 16, 2014 2:02 pm
- Forum: Personal Finance (Not Investing)
- Topic: How did you get from $1M to $10M
- Replies: 46
- Views: 8488
Re: How did you get from $1M to $10M
"Why run up the score when you've already won the game?"surfstar wrote:I will echo the "why" question. Figure out what is "enough", and aim for that. Winning is winning, no need to overshoot by some crazy amount, just because.
- Thu Oct 16, 2014 2:01 pm
- Forum: Personal Investments
- Topic: Any active duty military familiar with TSP?
- Replies: 19
- Views: 2082
Re: Any active duty military familiar with TSP?
Right, no match, but "free money" in the senses that: (1) you get to invest pre-tax money that otherwise wouldn't be yours (Traditional); (2) it reduces your tax burden today (Traditional); (or 2(b)) your money grows tax-free, reducing your future tax burden (Roth); (3) investing in similar funds (S&P 500 Index, Russell... etc.) is going to cost you anywhere from 0.05% (VG) up to 0.5% or more at other investment companies, vs. the 0.023% (2013 ER) in TSP.neutics wrote:Unfortunately there is no match for military, but otherwise it is an awesome benefit.nash031 wrote: In short, if someone is AD and not using TSP, they're giving away free money every year.
- Thu Oct 16, 2014 1:54 pm
- Forum: Personal Finance (Not Investing)
- Topic: How did you get from $1M to $10M
- Replies: 46
- Views: 8488
Re: How did you get from $1M to $10M
It'd take 28 years to get from where we are today (mid six-figures) to $10MM if we kept our present strategy of saving ~40% of our gross and assuming 6% return (historical for our 85/15 AA is more than 8%). That would put me at age 65. Thus, it's doable with a reasonable savings/investment strategy assuming you have a high savings rate. That said, I plan on retiring well before reaching either milestone... don't need that much money; don't want to work that long.
- Thu Oct 16, 2014 1:45 pm
- Forum: Personal Investments
- Topic: Any active duty military familiar with TSP?
- Replies: 19
- Views: 2082
Re: Any active duty military familiar with TSP?
Active duty here, TSP accounts for roughly 30% of my invested assets. It is essentially a 403(b) (401(k) for a non-profit) account. You're right on with your description of the funds. The expense ratio for 2013 was something like 0.023, less than half of Vanguard's Admiral shares. That's benefit #1. Benefit number 2 is this nice thing called the G fund. Many describe it as the closest thing to a free lunch as you can get in investing, and it's only available in TSP. Many use the G fund as their bond allocation, many others use some combination of F and G (this is what I do, though heavily tilted toward G). If capital preservation is the purpose of your bond allocation, G fund is perfect, always outpacing inflation with no risk to principal....
- Fri Oct 03, 2014 10:37 am
- Forum: Investing - Theory, News & General
- Topic: Roth or Traditional if you have a pension?
- Replies: 28
- Views: 4114
Re: Roth or Traditional if you have a pension?
Depending on the size of your pension, your expected income from investments, and current tax bracket, Roth makes some sense. Your pension will be there, driving your income up every year, making it more difficult to play tax games to pay less tax. Thus, you're more likely to be in a higher tax bracket with a pension than you would necessarily have to be without it (assuming your expenses and needs are the same in both cases) - you can't manage your withdrawals one year and avoid taxes altogether. I will have a pension that makes up about half of my expected expenses in retirement. My wife and I have both Roth and Traditional accounts (Roth IRAs, Traditional 403bs) because we just don't know what our tax situation will be. We figure doing i...
- Thu Oct 02, 2014 10:45 am
- Forum: Personal Finance (Not Investing)
- Topic: Would you buy a house in cash if you had enough?
- Replies: 59
- Views: 9682
Re: Would you buy a house in cash if you had enough?
I expect to be in a similar position in about five years when I retire from active duty. I'll have enough in current home equity to purchase a home where we might move in cash. That being the case, I suspect we will pay cash for our home (if we indeed move). That said, the cost of the home purchase will notionally be less than 15% of our total savings at that point, and we would still have enough to live off of for the rest of our lives (including my pension). The peace of mind associated with that will be worth quite a bit to us. Of course, interest rates and other life changes over the next five years may change that answer, but as of right now, our plan would be to pay cash. Four years ago, paying cash wasn't an option due to COL in SoCa...
- Wed Oct 01, 2014 2:07 pm
- Forum: Personal Investments
- Topic: Question about Govt. TSP: G vs. F Funds
- Replies: 97
- Views: 17931
Re: Question about Govt. TSP: G vs. F Funds
If the purpose of a bond allocation is to reduce overall risk in a portfolio, the G fund is the best option. For the 15% of my portfolio that is bonds, 10 or more is G fund, because it does exactly what I want the bond allocation to do. I care not about the return. If I want more return, I increase my stock allocation.
- Thu Sep 04, 2014 11:43 am
- Forum: Investing - Theory, News & General
- Topic: How exactly would you define market timing?
- Replies: 67
- Views: 4423
Re: How exactly would you define market timing?
Any investment decision made based solely on either of two premises, (or both): (1) present market conditions; (2) predictions of future market behavior. To me, this covers the, "The stock market is at an all-time high, so I am selling to realize some gains," (not based on asset allocation, and not considering tax implications, or any other part of a personal investment strategy) crowd. And it covers the "The stock market is at an all-time high, which means a crash is imminent. Sell!" crowd. (Of course this applies to bonds, gold, or whatever else you dabble in as well.) I don't care what others do one way or the other, but IMO "sell high" is great if "sell high" is defined as "my 85/15 AA is now...
- Tue Aug 05, 2014 1:30 pm
- Forum: Personal Investments
- Topic: Where to put the extra - More Vanguard?
- Replies: 4
- Views: 969
Re: Where to put the extra - More Vanguard?
Cost of living in Melbourne is likely to be significantly higher. I would also guess you will pay something to the ever growing collector that is the Australian government. Just things to think about before socking away a whole bunch of money where you can't get to it.
- Wed Jun 18, 2014 4:04 pm
- Forum: Personal Finance (Not Investing)
- Topic: Experience with PenFed refinance
- Replies: 75
- Views: 11447
Re: Experience with PenFed refinance
It's funny, because I've banked, insured, and invested with USAA for going on 15 years now and won't ever say anything good about their mortgage department. I have $5.00 in a PenFed savings account and not one bad thing to say about my re-fi experience. Go figure!Working2notWork wrote:How much did PenFed pay you for this advertnash031 wrote:... I had no issues and nothing but good things to say about the refi with PenFed.
I've heard that USAA went through a very rough time in early 2011 with expansion and changeover of their mortgage dept. Perhaps the explosion of interest in PenFed financing has caused the same thing to happen there recently? Hopefully,PenFed is also able to resolve it as I've heard USAA has recently (anecdotally from only a few people).
- Wed Jun 18, 2014 2:39 pm
- Forum: Personal Finance (Not Investing)
- Topic: Experience with PenFed refinance
- Replies: 75
- Views: 11447
Re: Experience with PenFed refinance
I financed my home in 2011 through USAA and refinanced it in 2013 through PenFed. The experiences were night and day. USAA was horrible. We almost did not close on time but for some really strong legwork and help by our title company and real estate agent. Unresponsive, and more importantly, did not seem to care that their inaction was going to cause my wife and I to find a hotel and live out of trunks for four days even though they "guaranteed" closing on the date in question. PenFed was very easy, very strong and professional customer service, with little complication and an on-time closing. Of course, it was less stressful because it was a refi and we had a home, but the experience was painless. Sorry to hear others are having ...
- Wed May 21, 2014 4:06 pm
- Forum: Personal Investments
- Topic: 31 yr old w/ $500k @ EdwardJones
- Replies: 52
- Views: 13977
Re: 31 yr old w/ $500k @ EdwardJones
Beating a dead horse, I'd like to throw in a graph to drive the point home. That's a great graphic, and it tells an important story. But that graphic introduces another horse worth beating. That graphic has a story to it that the OP might find illuminating: That graphic was produced by the fund company AllianceBernstein in 2005 as part of a report they submitted to a federal government hearing on Target Date Funds. Specifically, the graphic was designed to highlight the importance having your Target Date Fund utilize skilled active management to generate an extra 1% return. That you would be silly to accept the lower passive returns of the blue shaded area. http://i.imgur.com/ni0Z9bv.png AllianceBernstein was very confident that even with ...
- Wed May 21, 2014 10:55 am
- Forum: Personal Investments
- Topic: Traditional IRA to Roth Conversion Question
- Replies: 20
- Views: 2042
Re: Traditional IRA to Roth Conversion Question
I have a medium six figure Traditional IRA account that was funded several years ago with after-tax contributions. The conventional wisdom here is to convert it to a Roth (or roll it into an existing Roth?) as soon as possible and yet also, to wait to convert until retirement (or a timeframe when income is expected to drop) in order to minimize taxation on the earnings in the account. How does one decide the timing on this? look at your tax liability versus how much more you think you can earn by having it in the Roth? If the original traditional contributions were non-deductible, you can (and should) convert those right away without being taxed. IRS form to do precisely that has to be filed for that tax year. Otherwise, you more or less n...
- Thu May 15, 2014 10:20 am
- Forum: Personal Investments
- Topic: Personal Portfolio Analysis Requested [Military]
- Replies: 21
- Views: 2430
Re: Personal Portfolio Analysis Requested [Military]
Similar situation, O4 (Navy) with similar savings and intentions except the whole Expat thing. I went with Vanguard and rolled my USAA IRA over to Vanguard. While USAA's Index fund ER at 0.2% is pretty good, Vanguard admiral's shares (assuming you have enough to qualify) are 0.05%. .................................Annual Fee .................0.10%.......0.25%.....0.50%.....1.00%.....2.00%.....3.00% 3 years.....-0.3%......-0.7%......-1.5%.....-2.9%......-5.8%.....-8.5% 5 years.....-0.5%......-1.2%......-2.5%.....-4.9%......-9.4%....-13.7% 10 years...-1.0%.......-2.5%.....-4.9%.....-9.5%.....-18.0%....-25.6% 20 years...-2.0%.......-4.9%.....-9.5%....-18.0%.....-32.7%....-44.6% 30 years...-3.0%.......-7.2%....-13.9%....-25.8%.....-44.8%....-58...
- Wed May 14, 2014 2:28 pm
- Forum: Personal Finance (Not Investing)
- Topic: Share your net worth progression
- Replies: 4273
- Views: 1072504
Re: Share your networth progression
Net worth, not invested assets...
Age 22 (college grad): -$20,000
$100k at 26 (bought a new construction house that appreciated rapidly, realized ~$60k over two years)
$250k at 32 (not as lucky in the RE market, lost some of previous gain, but savings marched on)
$500k at 34 (savings and marriage!)
$1MM at 36 (current age - about 40% of NW is equity in current primary residence)
Savings rate started at 10% of gross at my first paycheck (<$30k/yr) now up to 40% of (our) much larger gross. Big bump came when I married at 34 and DW brought about $100k NW with her.
Age 22 (college grad): -$20,000
$100k at 26 (bought a new construction house that appreciated rapidly, realized ~$60k over two years)
$250k at 32 (not as lucky in the RE market, lost some of previous gain, but savings marched on)
$500k at 34 (savings and marriage!)
$1MM at 36 (current age - about 40% of NW is equity in current primary residence)
Savings rate started at 10% of gross at my first paycheck (<$30k/yr) now up to 40% of (our) much larger gross. Big bump came when I married at 34 and DW brought about $100k NW with her.
- Wed May 14, 2014 2:14 pm
- Forum: Investing - Theory, News & General
- Topic: Stock Market to Plunge? What a friend said.
- Replies: 78
- Views: 8708
Re: Stock Market to Plunge? What a friend said.
mpt follower, you have it exactly right. Assuming that the primary mission of the Bogleheads forum is to help and to educate investors of all stripes, it's clear that we've missed the mark with our response to OP on this one, and rather badly. The quality of Bogleheads.com is diminished by this kind of response to a fair question, however uneducated or misguided an OP. Truth is, we owe this OP an apology. I would say a mission of the Bogleheads is to teach people to ignore the noise and not to add to the noise. I suppose another mission would be to teach people to recognize noise, too. "What a friend said" is clearly noise and is not a fair question. This +1. Someone who becomes concerned about the markets because of what a co-wo...
- Wed May 14, 2014 2:01 pm
- Forum: Personal Finance (Not Investing)
- Topic: what had biggest impact on your financial success?
- Replies: 57
- Views: 7110
Re: what had biggest impact on your financial success?
I said military service in that it has provided my pay for the last 14.5 years, and will eventually fund my pension which will allow a lot more financial freedom and aid in lifetime financial independence. It is the single largest factor, though: - my education as an aerospace engineer/nuclear engineer/engineering manager has allowed me to get paid quite a bit more than others in my same grade; - my wife is frugal so I haven't had to battle excess spending and thus we do well at LBOM; - we have no kids (yet) and my wife works, so we're DINKs, which really helps the savings rate. - my family impacted it in that my dad retired for 18 months (and at age 77 because they didn't save enough early on) before being diagnosed with something that sho...
- Tue May 13, 2014 5:55 pm
- Forum: Investing - Theory, News & General
- Topic: Stock Market to Plunge? What a friend said.
- Replies: 78
- Views: 8708
Re: Stock Market to Plunge? What a friend said.
You lost me riiiiiiiiiiiiiiiiiiight
THERE.StevenNJ1 wrote:...my co-worker said...
- Fri May 09, 2014 2:08 pm
- Forum: Investing - Theory, News & General
- Topic: Golfers vs Investors
- Replies: 18
- Views: 2494
Re: Golfers vs Investors
Yeah, I mean if someone told me I could shoot 72 forever, no matter where I played, I would take that over being able to shoot 69 on the local muni but 102 at Bethpage Black.riskreward wrote:Matching the market is like shooting par. Par is good. By straying from market matching index funds , you may occasionally shoot under par but more likely over par.
- Fri May 09, 2014 1:54 pm
- Forum: Investing - Theory, News & General
- Topic: Home Ownership a Financial Threat to Seniors
- Replies: 11
- Views: 2258
Re: Home Ownership a Financial Threat to Seniors
Home equity is not liquid; you still need a place to live. Count it as part of your net worth if you must, but not as part of your retirement assets unless you plan to (and can) sell prior to retirement. It's a "trap" for seniors because many, including my parents, are misled in thinking that home values always and only go up. My $0.02.lawman3966 wrote:While the article omits some useful data (such as the wealth of owners vs renters), this still seems like substantial evidence that over-reliance on home equity as a form of retirement wealth is a dangerous gamble.
Some of the commenters on the Yahoo site felt the article was misleading. Input here would be appreciated.
- Fri May 09, 2014 11:02 am
- Forum: Personal Finance (Not Investing)
- Topic: I like the investment strategy , not really the lifestyle
- Replies: 67
- Views: 9591
Re: I like the investment strategy , not really the lifestyl
My wife and I have our family plan for saving and investing. We do it automatically, every two weeks, right out of our paychecks. We have a "loose" budget we follow to ensure we're able to maintain our (relatively high) savings rate. If we come in under that budget for a few months, we look at what travel we have coming up, what home improvement projects we want, and other bigger purchases (appliances, etc.) we have on the horizon and decide if we want those things or if we want to save a little bit more. Fortunately, with a conservative budget, we've found ourselves with "extra money" on a couple of occasions, and have usually split it in half: buy a few modest luxuries, save the rest. But we always, always pay ourselve...
- Thu May 08, 2014 2:58 pm
- Forum: Investing - Theory, News & General
- Topic: Golfers vs Investors
- Replies: 18
- Views: 2494
Re: Golfers vs Investors
I've noticed a lot of amatures put a lot of emphasis on long drives even tho a short drive in the fairway is far superior to a long drive in the rough or worse the trees. Could be an analogy for taking big bets on high risk investments instead of slowly accruing real wealth via safe, steady investments. Old golf saying is drive for show but putt for dough. I think this is a good analogy, but I would alter how it's used: - The long drive equates to the high-risk, high-reward play. The harder you swing, the more off line you're likely to end up, even though you might squeeze out a few extra yards every so often. It's often better to hit the long iron or fairway metal straight down the center. - The fact that many amateurs spend their range t...
- Wed May 07, 2014 10:47 am
- Forum: Personal Investments
- Topic: Age 30/36 - What Should Our Target AA Be?
- Replies: 14
- Views: 1964
Re: Age 30/36 - What Should Our Target AA Be?
36/33 for me and my wife. We are 85-15 with a shorter retirement horizon, but a significant pension starting in ~6 years. I doubt we'll shift much from this AA given the pension and long duration of our planned retirement. I was 100-0 for a long time, but see the need for bonds these days even though I didn't sell in two market dips. If you have a 30 year timeline, I'd be 20% bonds at most, but that totally depends on your risk tolerance and behavior in, say, 2008-09. If you sold or were very tempted to, you might want more. If you sat in stocks with no issues and recognize that volatility happens, you could easily be 90-10 at this stage. Having read more closely some of the responses, I think 80-20 is fine for you guys if you plan to retir...
- Wed May 07, 2014 10:36 am
- Forum: Personal Finance (Not Investing)
- Topic: What our company's 401k Advisor said about 1.5% Fees
- Replies: 115
- Views: 28982
Re: What our company's 401k Advisor said about 1.5% Fees
So it appears that adviser is an "INDEPENDENT" adviser we hired to help us manage and he is NOT from American Funds. Our CFO's response is ... you're still getting a great deal here ... we match 4% and that's almost unheard of ... if you go for average of just 1-2% company match, then those extra $0.5 in fees are nothing. The keyword of conversation was ... we give you 4% match ... be happy. That's more important than the 1.5% vs 0.5% fees. whadaya think? :-) My wife works for a non-profit that gives 12% of salary (once vested, and on top of negotiated salary) to their retirement regardless of if you're contributing to the 403(b) or not. Granted, it's a large non-profit, but it's a non-profit nonetheless. 4% isn't "unheard o...
- Tue May 06, 2014 11:46 am
- Forum: Personal Finance (Not Investing)
- Topic: Should I be worried about my girlfriend's debt?
- Replies: 57
- Views: 8260
Re: Should I be worried about my girlfriend's debt?
My quick thoughts: - What is the interest rate on the student loans? I "inherited" about $15,000 in student loans from my wife's college when we married a few years ago, but at less than 1% interest, we continue to make the minimum payment and carry on smartly. - You should absolutely NOT consider paying anything on her behalf until you are married, in my opinion. Things don't always work out, even when you're sure they're going to. - Does she also carry a lot of revolving (credit card) debt? Other high interest debt like a car loan? What are her spending habits? If it is limited only to student loans to help her get a graduate degree, I would not be terribly concerned by it. If she carries a lot of other debt or has expensive tas...
- Mon May 05, 2014 1:05 pm
- Forum: Personal Investments
- Topic: Expense Ratios
- Replies: 22
- Views: 2654
Re: Expense Ratios
In looking at managing costs, do you look at the weighted average of your total portfolio or do you decide on each individual fund? Also, what is an acceptable range? For example is 1.0-1.5 expense ratio considered high? Is 0.5-0.20 considered low? I look at individual funds, and by keeping everything under .2 or lower, my overall is maintained low. I presently have one fund with an ER just above 0.5. I would move the money into a less expensive account, but it would be a taxable transaction, so I am not moving it until I have some room to do so. Otherwise, everything is .1 or lower, most are 0.05 or lower (TSP and Vanguard Admiral shares). My overall ER is just above 0.1. I consider anything above 0.2 "expensive" but that's just...
- Thu May 01, 2014 11:40 am
- Forum: Personal Investments
- Topic: Portfolio advice with TSP and Vanguard Roth IRA
- Replies: 11
- Views: 2512
Re: Portfolio advice with TSP and Vanguard Roth IRA
Ah, just wrote a long reply, but my login timed out and apparently that makes you lose what you wrote. So in brief, thanks to all for your advice. I find it interesting to make my portfolio a little more complex, even if it won't differ substantially from just using target funds. I'll probably go with DSInvestor's first "complex" scenario. TimeRunner and MichDad, I've always thought the same thing about bonds, but everyone in the mainstream camp is so loud about having 10 to 30% in bonds for my age. I'm still waffling a bit on this, but I'll settle on 0 to 10% bonds. At 31 and single, I had 0 bonds. I have 15% now, married at 36. Keep all of that in TSP in the G and F funds, mostly G. G is unique and very valueable, perfectly fil...
- Thu May 01, 2014 10:58 am
- Forum: Personal Investments
- Topic: Portfolio advice with TSP and Vanguard Roth IRA
- Replies: 11
- Views: 2512
Re: Portfolio advice with TSP and Vanguard Roth IRA
Thanks for the reply, DSInvestor. I'm sorry that I didn't read your comment about taxable accounts, but you're right on. While OP doesn't have taxable now, I'm guessing he will be able to do so soon, in which case fund placement becomes a little bit more important. My general question was just that: general. In fact, I have a portfolio similar to your complex scenario where I use TSP for my international and bond holdings, the rest allocated to simulate TSM. I hold TSM in my Vanguard accounts. Eventually, I will have to hold TIM in Vanguard as well and allocate more of TSP over to bonds alone. To me, this little bit of complexity makes a bit of a difference over time simply by saving the 0.13% on ERs in the Vanguard funds. As an expense/tax...
- Wed Apr 30, 2014 12:49 pm
- Forum: Personal Investments
- Topic: Portfolio advice with TSP and Vanguard Roth IRA
- Replies: 11
- Views: 2512
Re: Portfolio advice with TSP and Vanguard Roth IRA
How do Bogleheads justify the use of Target Retirement Funds, in particular at Vanguard? If you have access to the Admiral's shares, you reduce your expense ratio to 1/3rd of that in the target funds. It doesn't make a difference in TSP, but I guess the rationale at Vanguard is that 0.18 is "good enough?" In addition, if you have taxable accounts, shifting to a simple Target Retirement Fund at Vanguard could weight your taxable portfolio higher in bonds than would be considered maximally tax-efficient. (i.e. I keep my Bonds only in TSP right now). I ask because I am kicking around the idea of shifting my TSP and Vanguard to Target retirement funds (L2040/Target 2035) to achieve my overall 85/15 AA with the appropriate weights wher...