Search found 962 matches

by Admiral
Tue Jan 16, 2018 9:32 pm
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

If he needs that 3% withdrawal to pay the bills, what happens in a prolonged (5 year) downturn? You lost me here. Don't people routinely retire with 3% withdrawal rates. Surviving a 5 year downturn with a 3% withdrawal rate should not be that challenging. Especially with a huge guaranteed floor of ...
by Admiral
Tue Jan 16, 2018 8:03 pm
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

Agree with marcpolo -- you are in a far better position than most are suggesting. Putting 20% down on an $800k house, you're left with ~$1M. Withdrawing ~3% per year and with your $14k surplus, your total annual housing costs would need to be less than $44k. Should be doable, though you may have to...
by Admiral
Tue Jan 16, 2018 7:47 pm
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

Agree with marcpolo -- you are in a far better position than most are suggesting. Putting 20% down on an $800k house, you're left with ~$1M. Withdrawing ~3% per year and with your $14k surplus, your total annual housing costs would need to be less than $44k. Should be doable, though you may have to...
by Admiral
Tue Jan 16, 2018 7:20 pm
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

Agree with marcpolo -- you are in a far better position than most are suggesting. Putting 20% down on an $800k house, you're left with ~$1M. Withdrawing ~3% per year and with your $14k surplus, your total annual housing costs would need to be less than $44k. Should be doable, though you may have to...
by Admiral
Tue Jan 16, 2018 2:54 pm
Forum: Personal Finance (Not Investing)
Topic: Term Life Insurance
Replies: 11
Views: 321

Re: Term Life Insurance

When does one decide that they no longer need term life insurance? Here's the basic scenario. Late forties dual income family House paid off No debt Kids nearly out of college (pre-funded) Net worth ~ 10x combined gross salary $800k policy costs about $90/mo (him) $500k policy costs about $40/mo (h...
by Admiral
Tue Jan 16, 2018 12:38 pm
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

Average single house construction cost in Honolulu is $760 per square foot , so for $500,000 you are looking at a 640 square foot house. Doing it yourself will be somewhat less, but permits and materials will, as you know, be quite dear. Also, building to earthquake & hurricane code can be a bit tr...
by Admiral
Tue Jan 16, 2018 11:31 am
Forum: Investing - Theory, News & General
Topic: A 4% move in the Dow and S&P in 12 days? Seems odd
Replies: 76
Views: 4303

Re: A 4% move in the Dow and S&P in 12 days? Seems odd

The problem with facile explanations of changes is that they often don't fit the data. International Stocks are up more than US stocks. How does US corporate tax law changes explain that? The OP didn't ask about intl stocks, and therefore my response did not address their rise. No, but you gave an ...
by Admiral
Tue Jan 16, 2018 11:08 am
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

There's also a distinction to be made between "can we" and "should we."

Can you? Possibly. Should you? Likely not.

Also what are you planning to do all day with retirement at 50? Surf? There are cheaper places to live with decent surf breaks.
by Admiral
Tue Jan 16, 2018 11:04 am
Forum: Investing - Theory, News & General
Topic: A 4% move in the Dow and S&P in 12 days? Seems odd
Replies: 76
Views: 4303

Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Geologist wrote:
Tue Jan 16, 2018 10:59 am
The problem with facile explanations of changes is that they often don't fit the data. International Stocks are up more than US stocks. How does US corporate tax law changes explain that?
The OP didn't ask about intl stocks, and therefore my response did not address their rise.
by Admiral
Tue Jan 16, 2018 10:54 am
Forum: Investing - Theory, News & General
Topic: A 4% move in the Dow and S&P in 12 days? Seems odd
Replies: 76
Views: 4303

Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Here's all you need to know (from the chart that was posted): The average Bull Market period lasted 9.0 years with an average cumulative total return of 480%. The average Bear Market period lasted 1.4 years with an average cumulative loss of -41% Why would you assume that a big corporate tax cut wou...
by Admiral
Tue Jan 16, 2018 7:05 am
Forum: Investing - Help with Personal Investments
Topic: Can We Retire in Hawaii? Please Critique
Replies: 78
Views: 5970

Re: Can We Retire in Hawaii? Please Critique

My take: No. You're not even close. You're talking about going into retirement with either a) a big mortgage or c) a cash payment for a home-plus-land that will deplete ALL your taxable reserves. And...KIDS! Your kids are tiny. Kids are expensive, and so is college. Hawaii, too, is an expensive plac...
by Admiral
Sun Jan 14, 2018 9:45 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

As usual, Grabiner, I don't think I'm smart enough to understand the nuances of your response. But as I see it, for this discussion you have two options with an extra $1000 per month: You can pay down a mortgage, earning the fixed mortgage rate pf return; or You can invest the money in an investmen...
by Admiral
Sat Jan 13, 2018 12:36 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Compare the following four options: A: $100K mortgage, $280K stocks, $220K bonds B: No mortgage, $280K stocks, $120K bonds C: $100K mortgage, $350K stocks, $150K bonds D: No mortgage, $350K stocks, $50K bonds Do you prefer C or D? They have the same risk; you will lose $175K either way if the stock...
by Admiral
Sat Jan 13, 2018 9:19 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

I don't follow your logic. Just because I am willing to put SOME money at risk does not mean (and it does not follow logically) that I am willing to put ALL money at risk. That's the point of an investment plan and an asset allocation strategy. The issue is that you are comparing options with diffe...
by Admiral
Fri Jan 12, 2018 6:45 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

But this isn't a fair comparison ... you are comparing the investing in stocks to that of the risk-less investment in what is essentially a bond. Of course if you just look at the average or statistical expectation, the risky asset will come out ahead ... but by doing this you are completely ignori...
by Admiral
Thu Jan 11, 2018 4:18 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Admiral, I think you're now confounding all risk levels no matter how remote e.g another housing crash vs the inherent year by year real risk of stocks (where historically 1/3 of the years we have a loss). If you follow your arguments to their logical conclusion, you will conclude that the only thi...
by Admiral
Thu Jan 11, 2018 10:55 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

There is no rational financial argument for paying down a mortgage over saving that money in tax advantaged space. The former saves you the relatively low interest rate of your loan. The latter saves you 15, 22, 25, 28%....whatever your fed tax rate is. The tax savings is not a return, because you ...
by Admiral
Thu Jan 11, 2018 10:35 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

There is no rational financial argument for paying down a mortgage over saving that money in tax advantaged space. The former saves you the relatively low interest rate of your loan. The latter saves you 15, 22, 25, 28%....whatever your fed tax rate is. The tax savings is not a return, because you ...
by Admiral
Thu Jan 11, 2018 9:52 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Thank you for your comments. You're basically making the liquidity argument again. I'm in total agreement with you that one must have "sufficient" cash emergency funds and/or other liquid assets around to weatherr a crisis. Several people including yourself have alluded to the folly of paying of lo...
by Admiral
Wed Jan 10, 2018 7:10 pm
Forum: Personal Consumer Issues
Topic: House water detection and alert system?
Replies: 38
Views: 2223

Re: House water detection and alert system?

Hi, I live in the northeast where the risk of pipe burst is a real concern. I have seen and heard others who has their whole house flooded. Are there technologies/products out there that will alert me whenever water is detected? I know there are $10 water sensor I can get from HomeDepot, but that d...
by Admiral
Wed Jan 10, 2018 3:23 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4127

Re: Sequence of Return Risk impact on Retirement

I entered your data into cfiresim.com. Retirement start 2022 (age 62), end 2055 (age 95). Portfolio value $1.6M, 60/40. Spending $60k adjusted for inflation. Rebalance until 2022. Then target asset 100% equities start 2022 (at retirement), end 2030 (8 yrs later, to simulate spending down all bonds)...
by Admiral
Wed Jan 10, 2018 3:10 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4127

Re: Sequence of Return Risk impact on Retirement

I entered your data into cfiresim.com. Retirement start 2022 (age 62), end 2055 (age 95). Portfolio value $1.6M, 60/40. Spending $60k adjusted for inflation. Rebalance until 2022. Then target asset 100% equities start 2022 (at retirement), end 2030 (8 yrs later, to simulate spending down all bonds)...
by Admiral
Wed Jan 10, 2018 12:59 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Run the numbers with different tax rates and return expectations. You'll find that for many people, bonds in taxable is best. I don't need to do that. I have the wiki: https://www.bogleheads.org/wiki/Tax-efficient_fund_placement The wiki's advice does not hold in all situations, not by a long shot....
by Admiral
Wed Jan 10, 2018 12:31 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Run the numbers with different tax rates and return expectations. You'll find that for many people, bonds in taxable is best. I don't need to do that. I have the wiki: https://www.bogleheads.org/wiki/Tax-efficient_fund_placement The wiki's advice does not hold in all situations, not by a long shot....
by Admiral
Wed Jan 10, 2018 11:38 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

willthrill81 wrote:
Wed Jan 10, 2018 11:29 am
Run the numbers with different tax rates and return expectations. You'll find that for many people, bonds in taxable is best.
I don't need to do that. I have the wiki:

https://www.bogleheads.org/wiki/Tax-eff ... _placement
by Admiral
Wed Jan 10, 2018 11:25 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

I don't hold bonds in a taxable account, nor should most people, unless they are munis, which have a low yield, nor do I intend to borrow against my home. I also hold Total Bond Index, which is medium duration not long duration. Actually, it can be optimal to hold bonds in taxable accounts. See her...
by Admiral
Wed Jan 10, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Exactly. Those who are choosing between fully funding their retirement plans and paying down a mortgage have something to think about here. There is no rational financial argument for paying down a mortgage over saving that money in tax advantaged space. The former saves you the relatively low inte...
by Admiral
Wed Jan 10, 2018 11:05 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Certainly if one can avoid going into retirement with a mortgage, that is desirable. And if you are referring to your own situation, you'd be wiser to re-fi to a 15 year note than to pay down your current note, so that in 12 years your note will have a MUCH smaller balance remaining. You could then...
by Admiral
Wed Jan 10, 2018 9:56 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Haven't seen it mentioned, and may not be a concern for some. A large mortgage is the most effective form of asset protection available for your personal residence. This is only a benefit if the money which would otherwise be used to pay down the mortgage is itself asset-protected, such as in a 401...
by Admiral
Wed Jan 10, 2018 9:53 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

There is no rational financial argument for paying down a mortgage over saving that money in tax advantaged space. The former saves you the relatively low interest rate of your loan. The latter saves you 15, 22, 25, 28%....whatever your fed tax rate is. Even in scenarios like 2000-2009, assuming yo...
by Admiral
Wed Jan 10, 2018 7:09 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Haven't seen it mentioned, and may not be a concern for some. A large mortgage is the most effective form of asset protection available for your personal residence. This is only a benefit if the money which would otherwise be used to pay down the mortgage is itself asset-protected, such as in a 401...
by Admiral
Tue Jan 09, 2018 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: Tax question and sole proprietorship business
Replies: 5
Views: 378

Re: Tax question and sole proprietorship business

Okay, perfect. I just won’t file since the business did not generate any income. I just wanted to make sure that I am not violating any IRS rules or requirements because I do have a “business license” from SF, California that I actually pay for it annually. As a side note, what would it change whet...
by Admiral
Tue Jan 09, 2018 7:39 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone tired of the stock market going up?
Replies: 290
Views: 25758

Re: Anyone tired of the stock market going up?

I don't understand buying stocks for the long run but then being shocked or even nervous when they go up. Why did people buy stocks in the first place? They are supposed to go up most of the time. This bull run has nothing on 1982 - 2000 and is coming after a prolonged period of near zero returns. ...
by Admiral
Tue Jan 09, 2018 7:37 pm
Forum: Personal Finance (Not Investing)
Topic: Tax question and sole proprietorship business
Replies: 5
Views: 378

Re: Tax question and sole proprietorship business

Okay, perfect. I just won’t file since the business did not generate any income. I just wanted to make sure that I am not violating any IRS rules or requirements because I do have a “business license” from SF, California that I actually pay for it annually. As a side note, what would it change whet...
by Admiral
Tue Jan 09, 2018 7:14 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone tired of the stock market going up?
Replies: 290
Views: 25758

Re: Anyone tired of the stock market going up?

The S&P500 is up 150 points since TimeLord started this thread! Dow up almost 2,000 points! :shock:

Crazy days for sure...
by Admiral
Tue Jan 09, 2018 7:41 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

With your last point, that you could use your investments to make your mortgage payments to avoid defaulting, that is true as long as your investments don't crash at the same time your house loses a lot of value and you lose your job, say, as happened again to many people in 2008. So counting on th...
by Admiral
Mon Jan 08, 2018 7:02 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

In high interest rate environments (which we really have not seen for many years now) early payoff, or carrying no mortgage at all, may be desirable. However, many people with excessive liquidity--millions and millions--may carry a low-rate mortgage because they'd rather put their spare money to use...
by Admiral
Mon Jan 08, 2018 4:17 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

What kinds of events require such large amounts of cash or liquidity? I have yet to run into any situation other than buying a home or car that requires more than $10k or so at a clip. We have great health insurance, home insurance and car insurance. I understand the value of liquidity in order to ...
by Admiral
Sun Jan 07, 2018 2:04 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

If you aren't itemizing, then you should just compare your mortgage interest rate to the current yield of bonds and allocate toward whichever is higher. This is an oversimplification and, in my view, not true in many cases. Aside from the liquidity argument (which we disagree on) you're ignoring th...
by Admiral
Sun Jan 07, 2018 1:51 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 185
Views: 16176

Re: Why Buy Bonds If You Have A Mortgage?

Three reasons to hold a mortgage AND bonds: 1. Liquidity 2. Liquidity 3. Liquidity Short of a loan backed by your equity, you cannot eat your house. You cannot put a new roof on your house using your house. You cannot pay for schooling with your house. Et cetera. And if your answer to this problem i...
by Admiral
Sun Jan 07, 2018 11:51 am
Forum: Investing - Help with Personal Investments
Topic: A Tale of Two 529 Plans or Don't Worry It Will All Work Out
Replies: 14
Views: 4341

Re: A Tale of Two 529 Plans or Don't Worry It Will All Work Out

If the plan was to fully fund the college education from a 529, then I would think it makes sense to put into the 529 what it costs today for 4 years of college. The fund will grow at the rate of inflation of college tuition and expenses. If you’re putting in less money than it costs today, It’s ki...
by Admiral
Sat Dec 30, 2017 7:59 am
Forum: Investing - Theory, News & General
Topic: ATTENTION: Vanguard 529s? - Better Check Your Balance(s)
Replies: 44
Views: 2820

Re: ATTENTION: Vanguard 529s? - Better Check Your Balance(s)

Yep, same, I was in panic mode briefly when I compared yesterday's balance to today's!

Didn't recall a 20% market drop! :annoyed
by Admiral
Fri Dec 29, 2017 4:00 pm
Forum: Personal Finance (Not Investing)
Topic: Stopped Check 2018 Property Tax - Etiquette to County?
Replies: 38
Views: 3254

Re: Stopped Check 2018 Property Tax - Etiquette to County?

For others just note (see below) that if your mort holder reports escrow payment for taxes to the IRS (not all do) that you're opening yourself up to possible scrutiny (read: audit) if their records and yours do not match. I really don't think it's worth it. My. $.02 https://www.nytimes.com/2017/12/...
by Admiral
Thu Dec 28, 2017 4:53 pm
Forum: Personal Finance (Not Investing)
Topic: AMT: is it black and white like being pregnant or not?
Replies: 15
Views: 1381

Re: AMT: is it black and white like being pregnant or not?

First, regarding pre-paying, the IRS just issued guidelines that 2018 pre-payments will ONLY be accepted (that is, able to be applied for 2017 TY) if the county has already done its 2018 assessments; not all have. See here: https://www.nytimes.com/2017/12/27/business/prepaying-your-property-taxes-ir...
by Admiral
Wed Dec 27, 2017 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: Can someone explain how AMT works?
Replies: 12
Views: 1900

Re: Can someone explain how AMT works?

Thanks all, very helpful. Yes, we paid (small) AMT in 2016. Looks like we will be well under the new 2018 AMT levels so hopefully this will be our last year.

Of course, our large itemization will also probably disappear except those for my sole proprietorship.
by Admiral
Wed Dec 27, 2017 11:53 am
Forum: Personal Finance (Not Investing)
Topic: Can someone explain how AMT works?
Replies: 12
Views: 1900

Can someone explain how AMT works?

I was going to pre-pay my 2018 property taxes but my accountant said not to due to AMT (we are subject to it). I have a hazy understanding of how it works/is applied but I didn't realize that it limited itemized deductions (we itemize).

AGI is around $212k.

Thanks.
by Admiral
Tue Dec 26, 2017 12:20 pm
Forum: Personal Finance (Not Investing)
Topic: Charitable Deduction Question
Replies: 21
Views: 1743

Re: Charitable Deduction Question

It's based on when it's given/sent, not when it's received, for your reporting purposes. If it wasn't, you could have a situation where you sent a check in July and the charity sat on it and reported it in January of the following year. We just put everything on a credit card so the charge shows up ...
by Admiral
Sun Dec 24, 2017 8:55 pm
Forum: Personal Finance (Not Investing)
Topic: Is mid-Jan 2018 too early to count on new 529 laws?
Replies: 7
Views: 1147

Re: Is mid-Jan 2018 too early to count on new 529 laws?

With 529 plans you don't have to pay the school directly from the plan. E.g. you can pay your bills yourself, and then at some point before the end of the year you withdraw an amount from the plan to cover your expenses (or in this case, 10k max). (I wonder if these schools will now also need to se...
by Admiral
Sun Dec 24, 2017 3:28 pm
Forum: Personal Finance (Not Investing)
Topic: Is mid-Jan 2018 too early to count on new 529 laws?
Replies: 7
Views: 1147

Is mid-Jan 2018 too early to count on new 529 laws?

We have significant private school bills due in three weeks. Typically we would pay these from checking. But... Now with the new law taking effect, is it wise to take the money from two existing 529 plans, and then use the cash as (deductible) contributions for 2018 to replace what was taken out? My...
by Admiral
Thu Dec 21, 2017 9:44 am
Forum: Personal Finance (Not Investing)
Topic: Home Insurance - Personal Property/etc - why?
Replies: 22
Views: 1284

Re: Home Insurance - Personal Property/etc - why?

I very much dislike paying for insurances... The more I can self-insure, the better. Looking at my home insurance (section I), there is a big chunk of it for the dwelling (ok, that's the point), but then there is half of the dwelling amount for 'personal properties', 10% of it for 'other structures...