Search found 5941 matches

by randomguy
Fri Aug 17, 2018 5:03 pm
Forum: Personal Finance (Not Investing)
Topic: PITI 20% to 30% lower than renting
Replies: 17
Views: 736

Re: PITI 20% to 30% lower than renting

3) The point of the post is to buy a house at the right price with a very good safety margin. KlangFool The race to the bottom is endless. A house 20% more than rent would be cash flow even with zero appreciation or rent increases in most cases. Why stop at 30% cheaper. Why not go for 50 or 60%?
by randomguy
Fri Aug 17, 2018 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: PITI 20% to 30% lower than renting
Replies: 17
Views: 736

Re: PITI 20% to 30% lower than renting

The opportunity cost is not static; it compounds. If the other assumptions maintain (flat rent, flat home value, etc), the opportunity cost will eventually eat imputed rent savings. But otherwise I agree this is a good, albeit conservative, approach to the rent v. buy question. AFter 30 years (assu...
by randomguy
Fri Aug 17, 2018 4:40 pm
Forum: Investing - Help with Personal Investments
Topic: Elderly Relative Short on Money
Replies: 58
Views: 3376

Re: Elderly Relative Short on Money

Heck, I'm over 65 and manage assets for some elderly relatives. (80s and 90s is elderly to me.) I would never think of charging them a fee as that would make them run out of assets sooner. :oops: As POA, I would then have a new problem to solve. You also are (probably) not a professional advisor. I...
by randomguy
Fri Aug 17, 2018 1:39 pm
Forum: Personal Finance (Not Investing)
Topic: PITI 20% to 30% lower than renting
Replies: 17
Views: 736

Re: PITI 20% to 30% lower than renting

That is a rough cash flow approach where you ignore the benefits of buying. I optimize for net worth Rent 2300/month*12-3750 opportunity cost= 21600 in payments every year for housing Mortgage (1800/month in PITI) - (800 month in principle payments. You know the money you are not throwing away on re...
by randomguy
Fri Aug 17, 2018 1:10 pm
Forum: Investing - Help with Personal Investments
Topic: Elderly Relative Short on Money
Replies: 58
Views: 3376

Re: Elderly Relative Short on Money

Buy a SPIA if she cannot handle money. It will give close to 18k + 12k SS = 30k/yr. 290k is not going to produce 18k/yr adjusted for inflation. $800/month will be a safe withdrawal. Without SPIA ,she has to live on 1.8k/month if she cannot work or be a dependant. Is your SPIA producing 18k/year inf...
by randomguy
Fri Aug 17, 2018 9:46 am
Forum: Investing - Help with Personal Investments
Topic: Elderly Relative Short on Money
Replies: 58
Views: 3376

Re: Elderly Relative Short on Money

And by the way......65 is far from elderly. Somewhere after about 50 peoples aging really diverges. There are a lot of 65 years that are pretty elderly (i.e. no mobility and tons of health issues) and some 80 years olds that aren't. OP would really need to think about capabilities before pushing th...
by randomguy
Fri Aug 17, 2018 9:33 am
Forum: Personal Finance (Not Investing)
Topic: Do we really need to save 20 % ?
Replies: 28
Views: 2406

Re: Do we really need to save 20 % ?

We are debating if 5k/month of savings should sit in a bank account or in some investment account. It is a difference that is unlikely to matter much. You must be reading a totally different thread. We are discussing nothing of the sort. I suggest you go back and read the thread from beginning to e...
by randomguy
Fri Aug 17, 2018 9:26 am
Forum: Personal Consumer Issues
Topic: Minivan Vs SUV Experience
Replies: 109
Views: 6552

Re: Minivan Vs SUV Experience

As you will tell from my review below, I am firmly on the minivan side. I purchased a 2018 Chrysler Pacifica. Technology, comfort, luxury, safety, responsiveness, passing power. It crushes the SUVs in every category except for ground clearance and towing capacity of larger SUVs. The adaptive cruise...
by randomguy
Fri Aug 17, 2018 8:46 am
Forum: Personal Finance (Not Investing)
Topic: Do we really need to save 20 % ?
Replies: 28
Views: 2406

Re: Do we really need to save 20 % ?

I'm with your wife and other posters on this. The 20% has stood the test of time and really doesn't have that much to do with PMI. You didn't mention anything about an emergency/contingency fund. This house purchase is likely going to significantly increase your monthly expenses. Finally, have you ...
by randomguy
Fri Aug 17, 2018 8:35 am
Forum: Investing - Help with Personal Investments
Topic: Elderly Relative Short on Money
Replies: 58
Views: 3376

Re: Elderly Relative Short on Money

Buy a SPIA if she cannot handle money. It will give close to 18k + 12k SS = 30k/yr. 290k is not going to produce 18k/yr adjusted for inflation. $800/month will be a safe withdrawal. Without SPIA ,she has to live on 1.8k/month if she cannot work or be a dependant. Is your SPIA producing 18k/year inf...
by randomguy
Thu Aug 16, 2018 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Elderly Relative Short on Money
Replies: 58
Views: 3376

Re: Elderly Relative Short on Money

Hi guys, I have a ton of respect for the people on this board and have learned a lot from all of you. I would love to hear your take on my mother in law's situation. Long story short, she just got divorced at age 65, and money will be tighter than anticipated. She took Social Security early, and ma...
by randomguy
Thu Aug 16, 2018 2:59 pm
Forum: Investing - Help with Personal Investments
Topic: Octogenarian father in law's idea of balance: AAPL + CASH
Replies: 35
Views: 3234

Re: Octogenarian father in law's idea of balance: AAPL + CASH

Kenkat wrote:
Thu Aug 16, 2018 11:50 am
The other major consideration here is that the Apple stock will receive a stepped up basis on death. That is a very substantial consideration given age and the capital gains he has realized.
It is in an IRA. I don't think he gets a stepped up cost basis.
by randomguy
Thu Aug 16, 2018 2:53 pm
Forum: Personal Finance (Not Investing)
Topic: Using ACA for early retirement years
Replies: 102
Views: 5924

Re: Using ACA for early retirement years

As someone "in the thick of it" what is recommended course of action that provides a more solid plan? If one is committed to retiring before being Medicare eligible (which you are I both did) then I think one needs to set aside a very healthy amount in the budget for health care coverage. You do ha...
by randomguy
Thu Aug 16, 2018 9:47 am
Forum: Personal Consumer Issues
Topic: Sign - Speed checked by Radar
Replies: 40
Views: 2137

Re: Sign - Speed checked by Radar

I like the ones that say "enforced by aircraft". I've always wondered how the aircraft plans to stop a speeding vehicle, rather than simply monitor it? Aircraft tells a cop on the ground about your crime spree and they pull you over and give you a ticket. Call it half the work. I always figure that...
by randomguy
Thu Aug 16, 2018 9:44 am
Forum: Personal Consumer Issues
Topic: Sign - Speed checked by Radar
Replies: 40
Views: 2137

Re: Sign - Speed checked by Radar

Hi, On the freeways, I see this sign "Speed checked by Radar" but I do not see any drones or planes above. How does this work? If someone goes beyond speed limit, the person's car is noticed by some thing which is flying and he gets ticketed by Cop who is waiting ahead.. -JR My guess it's just a he...
by randomguy
Thu Aug 16, 2018 9:30 am
Forum: Investing - Help with Personal Investments
Topic: Octogenarian father in law's idea of balance: AAPL + CASH
Replies: 35
Views: 3234

Re: Octogenarian father in law's idea of balance: AAPL + CASH

One way to hedge against his concentrated position in aapl is to buy long term puts (leaps) on aapl and roll over periodically. You could also do a collar which would essentially be costless while limiting his downside and upside. You would lock in his current gains, or at least over a range. It’s ...
by randomguy
Thu Aug 16, 2018 9:26 am
Forum: Investing - Help with Personal Investments
Topic: High tax bracket - Go 100% Roth in tax advantaged?
Replies: 29
Views: 2142

Re: High tax bracket - Go 100% Roth in tax advantaged?

Thanks in advance. Thank you for reviewing. Yes, I know I have been blessed, but it certainly has taken a lot of hard work including those around me. I spoke to my CPA (fee only fiduciary), but wanted to run the idea passed the greater groupthink here. Emergency funds: ~12 months Debt: None Tax Fil...
by randomguy
Wed Aug 15, 2018 10:45 pm
Forum: Investing - Help with Personal Investments
Topic: Octogenarian father in law's idea of balance: AAPL + CASH
Replies: 35
Views: 3234

Re: Octogenarian father in law's idea of balance: AAPL + CASH

Looks to me like they may be in danger. Yearly expenses are $156k. How much is the RMD that they are taking? You say they are mid-80s and have about $700k in IRAs, so I'm thinking they may be taking $100k in RMDs each year. If that's correct, and AAPL goes down by 50%, their yearly income may go do...
by randomguy
Wed Aug 15, 2018 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Using ACA for early retirement years
Replies: 102
Views: 5924

Re: Using ACA for early retirement years

I am planning to use the ACA for early retirement (in late 40s). Of course, if things change that can radically alter my expenses. Without getting into politics, I think if there are any changes, they will probably be on the margins. Obviously the big deal killer would be adding asset tests to the ...
by randomguy
Wed Aug 15, 2018 9:16 pm
Forum: Personal Finance (Not Investing)
Topic: Using ACA for early retirement years
Replies: 102
Views: 5924

Re: Using ACA for early retirement years

Being in our 60s, there is no chance of us needing maternity coverage...for either of us. This isn't like coverage for say...cancer...where we may get it or we may not. It is a biological impossibility. Same with child dental. I am just saying...if we were unsubsidized and could decline these worth...
by randomguy
Wed Aug 15, 2018 8:29 pm
Forum: Personal Finance (Not Investing)
Topic: Housing affordability - what is your take?
Replies: 73
Views: 6573

Re: Housing affordability - what is your take?

Yep and that makes it an insanely great reason to buy. Run the math on how much more money the person who chose to buy that house in 1999 has versus the one who chose to rent that house and invest in the S&P 500 has. At a high level you are basically ignoring the dividend of the house (i.e. a place...
by randomguy
Wed Aug 15, 2018 1:12 pm
Forum: Personal Finance (Not Investing)
Topic: Housing affordability - what is your take?
Replies: 73
Views: 6573

Re: Housing affordability - what is your take?

Single, no kids, good apartment in a good neighborhood with surprisingly low rent and good management, why bother even considering buying something? Some thoughts: https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ A good friend of mine bought in the same area for $265,000 ...
by randomguy
Wed Aug 15, 2018 9:14 am
Forum: Personal Finance (Not Investing)
Topic: Housing affordability - what is your take?
Replies: 73
Views: 6573

Re: Housing affordability - what is your take?

Single, no kids, good apartment in a good neighborhood with surprisingly low rent and good management, why bother even considering buying something? Some thoughts: https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/ A good friend of mine bought in the same area for $265,000 ...
by randomguy
Wed Aug 15, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

David Zolt has previously proposed something very similar to the above. When using Bengen's SWR method, to avoid Sequence of Return Risk, permanently skip the next annual inflation boost after any year when the portfolio value has fallen. I wonder if that solution will only work on a high inflation...
by randomguy
Tue Aug 14, 2018 11:22 pm
Forum: Personal Consumer Issues
Topic: Is the price of a new car a good proxy for the expense of owning it?
Replies: 38
Views: 2228

Re: Is the price of a new car a good proxy for the expense of owning it?

That means, over the first five years of ownership, you can expect the annual expense of an automobile to be approximately $1,622 + 20% of the initial purchase price. I bet this calculation is dominated by depreciation. Repairs and maintenance are about as large as factor Honda Civic TCO 34k.4k dep...
by randomguy
Tue Aug 14, 2018 10:33 pm
Forum: Investing - Help with Personal Investments
Topic: How do OMYs affect your bond tent?
Replies: 1
Views: 293

Re: How do OMYs affect your bond tent?

Suppose I could retire (today, age 54) with financial independence (based on the 4% rule or something else not to be discussed). In order to mitigate the effect of sequence of return risks, I had built a bond tent. Let us assume that my intended long-term allocation would be 70/30 stock/bond. My bo...
by randomguy
Tue Aug 14, 2018 8:28 pm
Forum: Personal Finance (Not Investing)
Topic: Housing affordability - what is your take?
Replies: 73
Views: 6573

Re: Housing affordability - what is your take?

Mortgage 2x gross annual income. -The Millionaire Next Door what an insanely stupid rule. In 1996 a person making 100k and buying a 200k (20% down) house had a 1200 mortgage payment. In 2018 a person making 100k and bying 200k house (20% down) had a 763/month mortgage payment And the rule thinks bo...
by randomguy
Tue Aug 14, 2018 7:44 pm
Forum: Investing - Help with Personal Investments
Topic: Another Roth vs Traditional Debate
Replies: 21
Views: 1734

Re: Another Roth vs Traditional Debate

I've never understood the argument that Roths may be banned and taxed retroactively (which would be extraordinary) but tax rates won't go up (which has happened frequently historically) Not to be too political but VATs, national sales taxations and variations regularly make appearance as candidates...
by randomguy
Tue Aug 14, 2018 7:31 pm
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

David Zolt has previously proposed something very similar to the above. When using Bengen's SWR method, to avoid Sequence of Return Risk, permanently skip the next annual inflation boost after any year when the portfolio value has fallen. I wonder if that solution will only work on a high inflation...
by randomguy
Tue Aug 14, 2018 3:10 pm
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

If you want to take a look at increasing your withdrawal rate to 5% you should read the following: Note that the link on the Wiki no longer works: Jonathan Guyton, Withdrawal Rules: Squeezing More From Your Retirement Portfolio "...most [SWR] research has centered on withdrawal rules that are quite...
by randomguy
Tue Aug 14, 2018 1:52 pm
Forum: Personal Consumer Issues
Topic: What's the reason you would buy reading glasses at...
Replies: 42
Views: 2311

Re: What's the reason you would buy reading glasses at...

Easier said than done. Finding an inexpensive option if you need readers with different corrections for each eye is problematic. I have a thread or two here about my search for an inexpensive option for glasses with different corrections for reading distance in each eye. The only option I (actually...
by randomguy
Tue Aug 14, 2018 1:37 pm
Forum: Personal Finance (Not Investing)
Topic: Using ACA for early retirement years
Replies: 102
Views: 5924

Re: Using ACA for early retirement years

Not for everyone. HIPAA provided some protection from pre-existing condition exclusions in the group market, i.e., employer-sponsored plans. But in the individual-plan market, many states permitted insurance companies to include pre-existing condition exclusions and annual or lifetime caps on cover...
by randomguy
Tue Aug 14, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

I would love to see some portfolio magic that ups SWR to say 5% by messing around with AA and the like over time. I just haven't seen anything that I believe enough in. You rapidly are playing the market timing and back testing curve fitting game over a pretty small set of data. https://earlyretire...
by randomguy
Tue Aug 14, 2018 1:03 pm
Forum: Personal Consumer Issues
Topic: What's the reason you would buy reading glasses at...
Replies: 42
Views: 2311

Re: What's the reason you would buy reading glasses at...

The question is why are you buying dollar store glasses that don't match your needs exactly versus buying 10 dollar glasses that do? The eye doctor is giving you an exam so you have the prescription. Sure it is probably only a slight difference (i.e. prescriptions glasses will have the correct pres...
by randomguy
Tue Aug 14, 2018 10:05 am
Forum: Investing - Help with Personal Investments
Topic: Another Roth vs Traditional Debate
Replies: 21
Views: 1734

Re: Another Roth vs Traditional Debate

I'm just not sure I buy the argument for using a Roth for just about anyone in the accumulation phase unless you are at the bottom of the tax bracket and expect your income to go up in the near future. Even for someone with a Federal + State tax rate of 19%, I still think go traditional and here is...
by randomguy
Tue Aug 14, 2018 9:54 am
Forum: Investing - Help with Personal Investments
Topic: Inflation adjusted annuity
Replies: 26
Views: 1514

Re: Inflation adjusted annuity

Regardless of BobK's recommendation, I would avoid true inflation adjusted annuities. An insurance company takes a LOT of risk with a product like that and the price to the annuitant will be unreasonably high. Whenever I've checked, the price for a CPI-linked annuity has been a tad less than the pr...
by randomguy
Tue Aug 14, 2018 2:10 am
Forum: Personal Consumer Issues
Topic: Is the price of a new car a good proxy for the expense of owning it?
Replies: 38
Views: 2228

Re: Is the price of a new car a good proxy for the expense of owning it?

...but i do think some things can be interesting without being earth shattering. +1. It would be fun to look at the whole data set, and maybe color- or symbol-code by manufacturer to get a sense where each tends to fall relative to "the line." I'm sure there are a few like Infiniti, maybe, that are...
by randomguy
Tue Aug 14, 2018 2:01 am
Forum: Investing - Help with Personal Investments
Topic: Inflation adjusted annuity
Replies: 26
Views: 1514

Re: Inflation adjusted annuity

Regardless of BobK's recommendation, I would avoid true inflation adjusted annuities. An insurance company takes a LOT of risk with a product like that and the price to the annuitant will be unreasonably high. Whenever I've checked, the price for a CPI-linked annuity has been a tad less than the pr...
by randomguy
Tue Aug 14, 2018 1:50 am
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

I agree that the marginal benefit of a bond tent seems pretty small. Regarding bond performance, don't forget that the 1919 investor didn't have access to TIPS. Didn't have access to index funds either;) You can change up the portfolios (Bergan believes the 4.5% rule these days since he realized if...
by randomguy
Tue Aug 14, 2018 1:42 am
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3585

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

CAPE was below it's mean and median for about 6 weeks in 2009. Maybe 8 weeks. That's a bit of an exaggeration. Looking at Shiller's spreadsheet, CAPE10 was below 16.5 from October 2008 to July 2009 and it was below 15.5 from November 2008 to April 2009. So anywhere from 6-10 months depending on whe...
by randomguy
Tue Aug 14, 2018 1:30 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 473
Views: 25939

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=2000&endYear=2009&initialAmount=2000000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&portfolio1=Custom&portfolio2=Custom&portfolio3=Custom&TotalSto...
by randomguy
Mon Aug 13, 2018 11:20 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3585

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

I am new to this forum, but what I'm gathering in my first few days, is there has been a rash of criticism of PE10, market timing, etc, etc. So now if anyone even mentions these terms, they are summarily taken to the wood shed... But as a guy who hasn't been through these battles, here's how I very...
by randomguy
Mon Aug 13, 2018 9:41 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3585

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

William Bengen (who did much of the work to coin the 4% rule we hear about today) really did nothing more than a "least common denominator" analysis. In other words, based on all the retirement start dates available within his data range, he simply wanted to know who ran out of money first -- for a...
by randomguy
Mon Aug 13, 2018 9:13 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3585

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

I largely agree, but the issues surrounding sequence of returns risk are not 'common sense' as evidenced by the many folks who said back in the 1990s that 7% withdrawals were reasonable; Dave Ramsay still espouses 8% withdrawals. [/quote] That 7% was pretty reasonable. You have to remember this is p...
by randomguy
Mon Aug 13, 2018 8:56 pm
Forum: Personal Finance (Not Investing)
Topic: how much car can we afford?
Replies: 128
Views: 5588

Re: how much car can we afford?

wander, Being smart and having a high income has no relationship with whether a person is smart about personal finance. Lawyers and doctors are among the worst in term of personal finance literacy. KlangFool Pretty much every study I have seen suggest doctors and lawyers are above average with fina...
by randomguy
Mon Aug 13, 2018 8:52 pm
Forum: Personal Finance (Not Investing)
Topic: how much car can we afford?
Replies: 128
Views: 5588

Re: how much car can we afford?

Whatever you can pay with cash. +1 -1. Today I can write a check for 1 million+ dollars. There is no way any reasonable person can justify paying that much at my network. When I was 22, I could pay like 1.5k in cash. I could afford 15k car with no problems. Certainly the point was not to spend all ...
by randomguy
Mon Aug 13, 2018 5:01 pm
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

Looking at this strategy from a more recent historic instance may be beneficial. Year 2000 retirees had the worst sequence of returns of any cohort since the 1970s. The 'bond tent' approach would have served them very well, far better than a static or declining equity glide path. Granted, this was ...
by randomguy
Mon Aug 13, 2018 4:31 pm
Forum: Investing - Theory, News & General
Topic: How can I use the Rising Equity Glide Path?
Replies: 61
Views: 3576

Re: How can I use the Rising Equity Glide Path?

Almost on topic: McClung suggests starting with very near 50% in bond funds, then spending from only those bond funds, rebalancing when the equities have grown to 120% real (inflation adjusted) from retirement day, while 110% or 100% are only slightly less optimal rebalancing points. It is bond dep...
by randomguy
Mon Aug 13, 2018 4:01 pm
Forum: Personal Consumer Issues
Topic: What's the reason you would buy reading glasses at...
Replies: 42
Views: 2311

Re: What's the reason you would buy reading glasses at...

WHY would you buy reading glasses ? My eye doctor says I do not need prescription eye glasses. In order to use the computer and read printed material, I need to use reading glasses. It is not about economy. I would buy them if they cost $500. Fortunately they are only a couple dollars at Wal*Mart o...
by randomguy
Mon Aug 13, 2018 3:54 pm
Forum: Investing - Help with Personal Investments
Topic: Inflation adjusted annuity
Replies: 26
Views: 1514

Re: Inflation adjusted annuity

Regardless of BobK's recommendation, I would avoid true inflation adjusted annuities. An insurance company takes a LOT of risk with a product like that and the price to the annuitant will be unreasonably high. Something like the Fidelity 2% annual increment or the TIAA graded payment avoids risk of...