Bogleheads.org

AnnetteLouisan wrote: ↑Mon Mar 27, 2023 5:41 am Debit (with a credit feature) rewards me for not spending. I can’t afford to pay 18 percent more than the purchase price.

Also I’ve had no need for credit once I started working and paid off my student loans. So other than student loans I’ve probably paid less than $1,000 in interest in my entire life. I try to collect it, not pay it. That makes my life much easier.

I hope you are aware that you don't pay any credit card interest if you pay your bill in full each month

beezlebub wrote: ↑Sat Mar 25, 2023 10:13 am - Fidelity does charge 1% fee on ATM international withdrawals despite many claiming to the contrary. I asked a Fidelity employee directly and was told this, and Fidelity employee's themselves have reported the 1% charge for international ATM withdrawals is true: https://www.reddit.com/r/fidelityinvest ... t_any_atm/

If Fidelity says it charges a fee, but people are not actually being charged a fee, does that mean there is a fee?

rockstar wrote: ↑Mon Mar 20, 2023 12:18 pm

Merionman wrote: ↑Mon Mar 20, 2023 9:31 am It’s important to learn lessons from current events in the financial world.

Just wondering where we as Vanguard investors are at risk in the current state of financial affairs of the banks.

The bond holders got wiped out in the UBS Credit Suisse deal for example.

Are investors in Vanguard high yield/junk bond funds on the hook for a significant loss on the deal?
Was Vanguard invested in those bonds? Will Vanguard come clean and tell shareholders?

Where else might we be at risk and not know it?

First, they were most likely investment grade, not junk. Second, it’s up to the investor to do due diligence. You can look at holdings. Finally, in the long run, this isn’t going to matter.

They were definitely not investment grade

I would let it go and not worry about it

MrJedi wrote: ↑Sat Mar 18, 2023 6:40 pm It should be noted that the inflation/variable component of I bonds only looks back 6 months at a time (March and September readings). I do get the sense that inflation is slowing down compared to 2021-2022. Note that even if prices stay where they are at currently, that is actually considered 0% inflation. Comparing to prices 2+ years ago no longer is a valid reference point moving forward. The reference point is now September 2022. What are prices like now compared to September 2022?

Inflation has been slowing. Prices as of February 2023 were 1.36 percent higher than September 2022 according to the BLS.

QuiGonJohn wrote: ↑Sat Mar 18, 2023 9:12 am If anything, since when I bought iBonds (May 2022) the inflation rate went up high AND prior and after the FED was raising interest rates, that is probably how I got the idea that if interest rates are up, then the iBond rate would also be up.

The inflation rate has been falling since June 2022, which is reflected in the current 6.48% I bond inflation rate and will be the reason that the next rate is even lower. What do you mean it "went up high" since May 2022?

leland wrote: ↑Sat Mar 18, 2023 12:50 am

MrJedi wrote: ↑Fri Mar 17, 2023 6:05 pm 6 total works fine (2 times per each of 3 processors).

Perfect. That should make things a lot easier. Confirmed that's for Form 4868?

Wondering the same. I thought the IRS limit for accepting extension payments was two per year. If they will credit more than two per year via multiple processors that would be great.

That's simply a risk I'm not willing to take since I already have more than my fair share of high fixed rate I Bonds. That's great that you have no need to buy I bonds going forward! You have clearly done well and amassed what you need in paper bonds. However the people that are trying to evaluate the risk of buying electronic bonds now are not similarly situated. It is not possible for them to buy large amounts of paper bonds. This is a thread about buying I bonds, perhaps there should be a separate one to reminisce about the good old days of I bonds when the fixed rates were high, you could buy $30k worth on your credit card, and those large amounts would be delivered to you in paper form. None of those things apply today. As for the ris...

hachiko wrote: ↑Fri Mar 17, 2023 8:08 am

Valuethinker wrote: ↑Fri Mar 17, 2023 7:24 am This is anything but a conclusive bailout.

Deposits will be rushing for the exit.

Likely. It survives. But not certain.

This fun ride ain't over yet.

Do the banks that infused the cash lose to depositors if the bank goes under?

The banks that infused cash are depositors.

It's up for the week and up YTD

What one can do and what one does can be two different things. And eve when they know about the account, having to deal with TD when an owner dies can be overwhelming for the remaining spouse or heirs. And I also wanted to address the choice of keeping the paper I Bonds folks get with their tax returns or sending them to TD for conversion to electronic bonds. Most of the posts complain that they have to mail them in (as if they didn't have the choice to keep them) and complain about how long it takes to show up in their account. Others ask why the IRS doesn't simply add the return figure to their TD account, rather than issue paper bonds, as if electronic is the only option and the paper bonds are simply a troublesome intermediate step, ra...

theac wrote: ↑Thu Mar 16, 2023 11:38 pm I hold my cash at Schwab in their Value Advantage Money Fund® – Investor Shares (SWVXX) at 4.49%

So would you say it's a good idea to move it to a safer place like Schwab U.S. Treasury Money Fund - Investor Shares at 4.31%

I'm guessing the answer is "yes"?

Edit: Wow,
I skimmed thru the SWVXX holdings and I think I have to change that answer to:
DEFINITELY YES!

I'd still like to hear any views on it tho.

Schwab already saw $8.8B in net outflows from its Value Advantage funds this week. You would be in good company.

That's true that not everyone wants electronic savings bonds. In addition to the joint ownership mentioned by HueyLD above, paper bonds offer additional benefits: 1. You don't have to deal with TD which is a benefit for some folks. 2. Paper bonds can be redeemed at many local banks and the money is available immediately. 3. If paper bonds are lost, stolen, or even fraudulently redeemed, you will be made whole by Treasury. 4. On the other hand, if your online TD account gets hacked and cleaned out, it's on you. TD will not make you whole. That's a huge red flag for me. 5. While your heirs can find paper bonds, they may not know about TD since TD doesn't send any statements like most financial institutions do for your heirs to find. 6. And, ...

No, savings bonds are not the same as marketable bonds and do not lose principal.

I bonds can't be redeemed within the first year. I wouldn't use them for an emergency fund.

exodusing wrote: ↑Wed Mar 15, 2023 10:03 am I've yet to see an example of an FDIC bank takeover in which depositors were not all paid in full, after asking here and elsewhere. If there are example, it would be helpful to see them.

IndyMac?

muffins14 wrote: ↑Mon Mar 13, 2023 7:14 pm

nps wrote: ↑Mon Mar 13, 2023 6:45 pm

muffins14 wrote: ↑Mon Mar 13, 2023 6:25 pm But in this case no one is being bailed out by the taxpayers, so I’m not sure how this analogy works

Who are they being bailed out by? The FDIC has so far failed to find a buyer for SVB.

There isn’t a bailout. SVB assets are going to be sold and depositors paid. Shareholders zero. Thus no bailout

You're right that the shareholders are not being bailed out. The uninsured depositors are. If it wasn't a bailout, the FDIC would not have stated that "any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."

Thanks for weighing in, Patrick. I think many investors are sitting in high cash allocations due to the volatile market. Technically, I'm not in cash, I'm in cash equivalents or Money Market funds, which I now understand are not insured at all. I don't understand why if I buy T bills, those securities are backed by the govt; but if I buy Money Market fund COMPRISED of T bills, etc, the MM fund is not SIPC insured. The government guarantees only the payment of your T bills at maturity. There is no guarantee of what price you will be able to get earlier than that. The money market fund is treated the same. The government guarantees to repay the money market fund at maturity, but not what value the money market fund would get if selling the T...

People want to be outraged but the system is working. Executives and the board are fired, the equity gets nothing, they’ve contained systemic risks. When people said they didn’t think the banks should have been bailed out in 2008, I never thought people meant the depositors should have been left holding the bag. This thread makes me think they thought the banks should truly fail and everyone loses everything. This bank was not bailed out - the bank is done, investors will lose everything. Is that really not enough to say we didn’t bail them out? People talk about big savers. Obviously, people don't want their small savings to disappear, but they are right to point out that large deposits that are not protected by insurance should not be co...

nyc212 wrote: ↑Mon Mar 13, 2023 4:41 pm

brad.clarkston wrote: ↑Mon Mar 13, 2023 2:41 pm
Ether way your brokerage account is safe (it was one bank not a government created financial meltdown) so my opinion still stands your brokerage account and/or treasuries is both good choices.

It is my understanding that investors having funds in brokerage accounts is a PARALLEL situation, or possibly worse, to depositors having funds in bank accounts. Banks have $250K maximum insurance and brokerages had $500K maximum insurance for securities or $250K for cash.

SIPC insurance likely does not cover what you think it does

I'm not happy about uninsured deposits being protected but I guess, do that now. I don't understand why people feel this way. If SVB had enough assets to pay more than the insured amount, why should depositors not receive their deposits in excess of 250k? What should be done with the assets that exist beyond the amount required to pay each entity 250k? If a bank has $1 less than the amount to be declared solvent per accounting practices, they entire thing gets liquidated and everyone loses all their money except 250k, and the rest goes to... who? If the uninsured deposits had not been guaranteed of course they would not have been worth nothing. That's absurd. However it's very possible that they would have been worth less than 100 percent.

"Wall Street — not taxpayers — will pay for the SVB and Signature deposit relief plans" - CNBC https://www.cnbc.com/2023/03/13/wall-street-not-taxpayers-will-pay-for-the-svb-and-signature-deposit-relief-plans-.html Same as last time, but people didn’t understand that then… all the debt got paid back and then some. Yes it only required a decade of zero bound rates. The real question is whether the return the government received was sufficient to compensate for the risks it took, not whether the return was positive. If you invest in a Treasury note and get a positive return, is that really equivalent to investing in a "troubled asset" and getting an identical return? Or should it be higher, if it's a fair deal?

bowtie wrote: ↑Sun Mar 12, 2023 8:08 pm Yes, I just saw that news … only for that ONE bank, SVB. There was another one that went down too, that I’d never heard of (never heard of SVB either) - Signature Bank. But, no word on guaranteeing that one.

Yes, that one too

BINO2025 wrote: ↑Sun Mar 12, 2023 8:03 pm Are the top 4 biggest banks safe investments? (Too big to fail like 2008-2009)

1. JPMorgan Chase $3.20 trillion 1
2 Bank of America $2.41 trillion 2
3 Citigroup $1.77 trillion 3
4 Wells Fargo $1.72 trillion 4
5 U.S. Bancorp $585.14 billion 5
6 PNC Financial Services $552.31 billion 6
7 Truist Bank $546.23 billion 7
8 Goldman Sachs $486.97 billion 8
9 Capital One Financial $453.31 billion 10
10 TD Group US Holdings $386.80 billion 9
11 Bank of New York Mellon $324.65 billion 11
12 State Street $298.02 billion 12
13 Citizens Financial $226.40 billion 13
14 First Republic Bank $212.64 billion 15
15 Morgan Stanley Private Bank $209.67 billion

"Too big to fail" does not mean "safe" for equity holders

Rudedog wrote: ↑Sun Mar 12, 2023 7:37 pm Just read on the news that the govt. has decided to guarantee all depositors accounts, even if they exceed the $ 250k. All funds will be available Monday.

You are only guaranteed excess coverage if you banked at one of the failed banks (for now, anyway)

Government to the rescue again... this is the new normal. People are really conflating a bailout of the banks investors (stock, bonds of SVB), which is NOT happening, with FIDC intervention to protect customer deposits, which is happening, and I support. Do you want no FDIC, no SIPC? That’s how the Great Depression happened. I want FDIC to do what their law state, insurance up to 250k per account. If they want to insurance up to infinity, they should change the law first. If the bank has enough to cover up to 90% of deposits, say 5M per depositor, but FDIC is 250k, who should get the extra 4.75M per depositor? Should it go to investors in the failed bank? I prefer it to go to the depositors Of course it wouldn't go to the investors. If the...

The notion that folks don't think depositors and business payroll should be protected is mind boggling. If you don't, it puts every regional bank in danger. Then what are we left with ? Bank of America, Wells Fargo, JP Morgan, and Citibank. Why say the insurance limit is 250K when you really mean infinity. The epitome of moral hazard, they just lost more credibility. It's because $250K is what they will commit to. The limit doesn't mean that any deposit over the limit is gone. There are assets backing the liabilities, just maybe not enough. We don't how where that stands. If the govt covers this without spending the minimum required to meet the guarantee, then we have a scenario of taxpayers covering uninsured deposits. Without a deep dive...

quattro73 wrote: ↑Sun Mar 12, 2023 5:56 pm

nps wrote: ↑Sun Mar 12, 2023 5:50 pm Maybe you did not see this part: "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."

This money has to come from somewhere, either shareholders or bank customers (aka taxpayers)

Consumers bear the ultimate cost of everything, no matter the industry. This is why you invest in equities, no?

I don't agree with that. If the uninsured depositors had not been guaranteed to be made whole based on an industrywide special assessment, then those depositors would have ultimately borne the cost.

Ed 2 wrote: ↑Sun Mar 12, 2023 5:56 pm

nps wrote: ↑Sun Mar 12, 2023 5:10 pm

Ed 2 wrote: ↑Sun Mar 12, 2023 2:48 pm

456M wrote: ↑Sun Mar 12, 2023 2:39 pm U.S. officials weigh protecting all deposits at Silicon Valley Bank

Source: https://www.washingtonpost.com/us-polic ... -deposits/

So far I’ve heard nothing that will comedown the market’s next week. Hang on

Futures up

Making investing decisions according Sunday night futures?

Of course not. But the markets have clearly calmed down.

New update 6:15pm ET Sunday from the Fed: https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm "creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par." "to enable the FDIC to complete its resolution of Silicon Valley Bank in a manner that fully protects all depositors, both insured and uninsured" :sharebeer BUT it’s not a bailout…. ??? I don’t understand Government. The Fed lending against treasuries, etc. is not quite th...

trirunner wrote: ↑Sun Mar 12, 2023 5:35 pm "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

are they saying there are no loss, SVB is solvent, or any gap is filled by the Fed printing money?

They said exactly none of those things

Ed 2 wrote: ↑Sun Mar 12, 2023 2:48 pm

456M wrote: ↑Sun Mar 12, 2023 2:39 pm U.S. officials weigh protecting all deposits at Silicon Valley Bank

Source: https://www.washingtonpost.com/us-polic ... -deposits/

So far I’ve heard nothing that will comedown the market’s next week. Hang on

Futures up

Faisal wrote: ↑Sun Mar 12, 2023 8:12 am Socialism at its best. The government bails out a bank due to bad decisions. I do appreciate the timing of the government decision. Whoever decided to take over SVB on Friday was experienced. The fact that they have the weekend to stop the contagion from spreading is responsible and effective. It ensures that everyone gets breathing space. Kudos to him/her/they/them.

Most bank closures take place after hours on Fridays. In this case it was Friday morning. Their "experience" did not help them foresee the problems in a way that could have provided for a less hectic shutdown.

brad.clarkston wrote: ↑Fri Mar 10, 2023 5:00 pm But to answer the question VMFXX is perfectly fine it's underpinned by a bunch of aggregated banks to safely store your money.

What banks?

This should be a non-issue. Setup a 2nd Brokerage account for your "Investments". This will not be linked to your Checking account. The Brokerage Account that is your "overdraft" doesn't have to be sitting in cash. Only cash (e.g. sweep) will be used for overdraft. If Schwab tries to cover an overdraft from your linked Brokerage account, it will NOT liquidate a mutual fund. Mine has a muni-money market purchase fund. Schwab will warn me and give me a 24 hour period to liquidate enough funds to cover the overdraft, or it will cancel the payment. Great checking account, great customer service. This post is a few years old, wondering if there are any recent experiences with Schwab checking and automatic overdraft protectio...

brad.clarkston wrote: ↑Thu Feb 23, 2023 11:11 am Generally the GS and military workers get there bond funds raided when the government really gets desperate for money, that's the last resort to look for and we are not close to that happening yet.

It already happened

https://www.tsp.gov/plan-news/2023-01-2 ... ebt-limit/

wenchleaf wrote: ↑Thu Feb 23, 2023 5:16 pm CMA's core position is only FCASH, while a Brokerage can choose between two higher yielding ones, one of which is SPAXX, and can also use margin and options.

Is it? Fidelity has stated that FCASH is a free credit balance and not FDIC insured. CMA's core position is FDIC insured.

muffins14 wrote: ↑Mon Feb 20, 2023 8:30 am You do not need to use the separate CMA at fidelity. You can use your normal brokerage for checking, bill pay, wire transfer, auto-pay bills online, and the debit card gets free ATM refunds too

Not all normal brokerage accounts at Fidelity get free ATM refunds, but all cash management accounts do

If you sell one of those mutual funds, Vanguard will restrict you from buying back into the same fund for 30 days unless using automated investment. This includes using the proceeds from your partial sale of the REIT fund which you presumably want to be returned to the original mutual fund.

AnnetteLouisan wrote: ↑Sat Feb 18, 2023 4:45 pm Didn’t they recently resort to extraordinary measures with the G Fund in light of the debt ceiling? Maybe that is reflected in the return somehow?

They did but it doesn't affect the G fund interest rate which is set by statute. It's more an accounting manuever. As other have stated, the relatively lower return is due to the inverted yield curve.

Sure. It is slightly riskier than FDIC insured deposits.

sc9182 wrote: ↑Fri Feb 17, 2023 9:19 pm In mid-August Go check on IRS Transcripts web-site -- various Transcript (including income transcript) -- and cross-check any/all Reported Transactions on it Vs. what we may have collected/gathered/documented thus far. If necessary, request corrections from institutions (rare., but happened)

I am surprised that you can see current tax year income reports like W2 and 1099 before you have even filed a return.

anon_investor wrote: ↑Thu Feb 16, 2023 9:28 pm

nps wrote: ↑Thu Feb 16, 2023 7:47 pm Sure you can. Go to profile then messages. Type "exchange" or "exchange funds" in the search box. Tap the first result that comes up to find the link to the exchange funds screen.

Lol that takes you to a mobile version of the website, didn't know that option existed within the app.

Yeah it is clunky and a workaround but it's there and I presume it works. Hopefully the app will better integrate this capability one day.

How did you go from $1.25M to $1.55M from Jan 2022 - Jan 2023 on a $250k income and a balanced portfolio?

Sure you can. Go to profile then messages. Type "exchange" or "exchange funds" in the search box. Tap the first result that comes up to find the link to the exchange funds screen.

H-Town wrote: ↑Tue Feb 14, 2023 5:16 pm

Tom_T wrote: ↑Tue Feb 14, 2023 8:47 am Based on today's CPI report, Tipswatch now thinks that the new variable rate will be at least 2% and possibly around 3%. And, they add that we still have two more CPI reports which will likely show positive inflation.

I think they would raise the fixed rate to make it somewhat attractive, but who knows... can they even issue new ibond when we already hit the debt ceiling? I don't know the answer to that.

Yes

jplee3 wrote: ↑Mon Feb 13, 2023 5:25 pm So I purchased $10k last year (Oct 2022) as a gift for my wife and was thinking about gifting in this year (2023). A couple questions on that:

1) Is there any compelling reason why I might want to wait to gift it until later?
2) If I gift her the full amount today, will she continue to earn the same amount of interest on it that I originally locked into

1. No
2. Yes

Go for it!

HeelaMonster wrote: ↑Tue Feb 07, 2023 3:00 pm Link below with additional details, but yes... that should be correct calculation (unless you end up getting credits that push you over 20 years, in which case you get a 10% raise and the multiplier in formula increases from 1% to 1.1%).

OPM cites the 1.1% multiplier as applying to "age 62 or above at separation" so I don't think it would ever apply to a deferred retirement. Strange though that it is included in the deferred retirement part of their website.

Check your policy to understand any mandatory reporting requirements

VictorStarr wrote: ↑Wed Feb 08, 2023 10:47 pm

nps wrote: ↑Wed Feb 08, 2023 4:42 pm

BoglesBeagle wrote: ↑Tue Feb 07, 2023 11:37 pm

VictorStarr wrote: ↑Tue Feb 07, 2023 10:31 pm
After you establish the Standing Transfer Instructions you can transfer either once or do recurring transfers. Money becomes available instantaneously. My transfer limit to third-party accounts is $100K but it may be personalized.

This is great, not sure how I’d missed it before. Once established, can it be done online or do you still have to call?

That's my question also

Once established, transfers may be done either online or in a mobile app.
One can transfer funds by calling Fidelity without establishing a transfer order.

Thanks! Can the transactions be initiated online by the other person, or only by the owner?

BoglesBeagle wrote: ↑Tue Feb 07, 2023 11:37 pm

VictorStarr wrote: ↑Tue Feb 07, 2023 10:31 pm
After you establish the Standing Transfer Instructions you can transfer either once or do recurring transfers. Money becomes available instantaneously. My transfer limit to third-party accounts is $100K but it may be personalized.

This is great, not sure how I’d missed it before. Once established, can it be done online or do you still have to call?

That's my question also