Search found 520 matches

by Ari
Thu Nov 08, 2018 4:48 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

If you're not counting tax as an expense then are you also not counting sales tax? Gas tax? Liquor Tax? Property tax? Should you count FICA when you will be getting a benefit later because of the tax you paid? Should you really count all of your 401k contributions as "savings" when some of it will ...
by Ari
Thu Nov 08, 2018 4:41 am
Forum: Investing - Theory, News & General
Topic: 426% return if there is a recession in 2019?
Replies: 23
Views: 3959

Re: 426% return if there is a recession in 2019?

That site is really interesting. I like the idea of using markets to make predictions, and I think it's not used enough. That site will let people who are (or see themselves as) good at predicting things within an area make bets. We get an aggregate estimate of the predictions of a lot of people, we...
by Ari
Tue Nov 06, 2018 5:18 am
Forum: Investing - Theory, News & General
Topic: Anyone ever “borrow” against their emergency fund?
Replies: 23
Views: 2478

Re: Anyone ever “borrow” against their emergency fund?

I don't see any problem with it, but it seems like too small a gain to bother. I never care much about a few weeks here or there. It won't make much of a difference in the long run.
by Ari
Tue Nov 06, 2018 1:56 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

I guess I just underestimated how complicated things are in the US. It didn't occurr to me that there could be different ways of calculating net income. To me it's just salary minus taxes, which is equal to what is deposited in my account each month. And of course it doesn't really matter what savin...
by Ari
Mon Nov 05, 2018 12:17 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Huh, it's a bit of an "Aha" moment for me. I've been reading about people's savings rates for years and always assumed they meant net. Talking about it in terms of gross income makes zero sense to me. Two people with the same savings rate may have vastly different times required to retire. My saving...
by Ari
Mon Nov 05, 2018 12:07 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

KlangFool wrote:
Mon Nov 05, 2018 11:46 am
I calculate my saving rate based on my current annual expense. I save 100% of my annual expense every year. It makes zero sense to calculate the saving rate based on income.
Isn't this the exact same thing as saying that you're saving 50% of net income?
by Ari
Mon Nov 05, 2018 11:30 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Do people calculate savings rate on gross income?

In the FIRE thread I saw some people quoting numbers on savings rates and how it's impossible to save 75% if you pay 25% in tax. Is this the general way people express their savings rate? In terms of gross income? I've always assumed people were talking about net income. My savings rate just dropped...
by Ari
Fri Nov 02, 2018 4:50 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

I wonder if a large emergency fund is less necessary in a country with a more extensive social safety net. I'm guessing Sweden has that although I'm not familiar with their specific policies. For example, perhaps huge medical bills or loss of income due to disability or caring for a loved one are p...
by Ari
Fri Nov 02, 2018 4:48 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

I too have some concern regarding your lack of EF. Sure you have an income from a job, but the point of the EF fund is to protect yourself from not having an income, the market in a recession plus needing to replace your car, an expensive medical expense not fully covered by insurance, a family mem...
by Ari
Fri Nov 02, 2018 3:41 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Wow interesting, I figured down the road the US might end up imposing something like that as the economy shifts. Out of curiosity, do they tax your pensions / annuities in a similar fashion by assessing some sort of value to it, or can you skirt the system by annuitizing through an insurance provid...
by Ari
Fri Nov 02, 2018 3:27 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

I find these 100% stock allocation threads hilarious. "Look at how brave I am, aside from my cash allocation and pension, I am absolutely 100% no questions committed to equities. Man, I am brave" Most of these posters have never faced an adverse equity markets and have no idea what their real risk ...
by Ari
Thu Oct 25, 2018 10:17 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Guess I meant is it in a tax deferred plan that has a penalty for early withdrawals or even allowed? Didn't know Sweden has no cap gain tax. Interesting. We do, technically, but there's a specific kind of account which allows you to use a different taxation. Your assets are taxed by about 0.4% per ...
by Ari
Thu Oct 25, 2018 10:00 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Sorry maybe I missed it, but is all of these investments in taxable? If so, yes you could just sell it if you need it. I live in Sweden and don't need to pay capital gains tax, so there could be differences here compared to the US. I'm not convinced this materially changes the equation, though. Rea...
by Ari
Thu Oct 25, 2018 9:58 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Experts/experienced investors: "Please, please believe us when we say that the psychological effect of significant losses in an environment of panic affects many people, and consequently their behavior, in ways they to not anticipate." Young, 100% stockers: "Haha, not me! Broad psychological trends...
by Ari
Thu Oct 25, 2018 9:20 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

It is a lot easier to have a very aggressive investment portfolio if you don't have to rely on it currently for support. If your other income is not sufficient or if you are retired with no human capital a very aggressive allocation is often problematic. The part I quoted from the Estrada paper see...
by Ari
Thu Oct 25, 2018 9:16 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

I can expect my pension to be somewhere close to my salary if I were to work until 65 That's got to be the key point, buried in the middle of the long post. If you've been living on your salary, and your pension can entirely replace it, then of course a 100% stock allocation is okay. Like I said ju...
by Ari
Thu Oct 25, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Being 100% stocks is not what concerns me in your post. Having no EF does concern me. I have said before those who are 100% equities should have an AMPLE EF (my opinion 1-2 years worth). That, of course, leads to the usual discussion of mental accounting and that one is NOT 100% stocks then. I woul...
by Ari
Thu Oct 25, 2018 7:42 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Is there really a significant difference between 99% stock and 100% stock versus 100% stock and 101% stock? There's a kink in the curve, so to speak. The marginal benefit is lower. It's like hitting a new tax bracket. Even if there's no great difference between being a dollar below or a dollar abov...
by Ari
Thu Oct 25, 2018 7:38 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

my net worth is such that i don't feel i need to take a ton of risk. That's a reasonable argument, if it's for psychological reasons. Personally, I feel that the more my net worth grows, the more I can afford taking risks, since I'll be ok even with a large decline. i like having bonds because it a...
by Ari
Thu Oct 25, 2018 7:16 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Re: Why I'm 100% stocks

Why did you choose the number "100%?" Why are you convinced that a little leverage, 120% stocks, say, would not be better yet? What parts of your argument do not apply to the situation of 120% stocks? 1: Leverage adds costs. Thus adding more equities beyond 100% diminishes the marginal utility. My ...
by Ari
Thu Oct 25, 2018 4:27 am
Forum: Investing - Theory, News & General
Topic: Why I'm 100% stocks
Replies: 149
Views: 17203

Why I'm 100% stocks

So whenever the subject of 100% stocks comes up, there are always comments that "you only hear this when the market is doing well", and recently in a thread I saw a comment that there have been a conspicuous absence of 100% stocks threads recently, so I thought I'd start one! I've been waiting for a...
by Ari
Thu Oct 25, 2018 1:21 am
Forum: Investing - Theory, News & General
Topic: How do you define how/when you make or lose money?
Replies: 17
Views: 1397

Re: How do you define how/when you make or lose money?

If you had a net worth of $X following a day of an all time market high and X - $5000 the following day, did you “lose” $5000 in one day? Yup. Did you “make” $5000 the day before? Yup. If you withdraw $50,000 and buy a car did you “lose” $50,000? (Do you subtract all your expenses from your net wor...
by Ari
Fri Oct 19, 2018 3:40 am
Forum: Investing - Theory, News & General
Topic: How does one emotionally keep it together during market swings?
Replies: 118
Views: 11228

Re: How does one emotionally keep it together during market swings?

It's interesting that we're already 11 replies deep and nobody's yet mentioned the obvious: Read the Bogleheads forum! On the other hand, if it wasn't for this forum, I'd have no idea about any swings in the market. But there are constantly threads on this forum talking about what the market is doi...
by Ari
Wed Oct 17, 2018 12:36 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Prepare For The Bear
Replies: 74
Views: 9983

Re: Larry Swedroe: Prepare For The Bear

As assets grow, the need to take risk decreases, but the ability increases. So it's a wash, really. Just up to your personal preference (willingness). To me, the "need" part always seemed strange to count as part of "risk tolerance". The fact that I need to take risks doesn't mean my tolerance is hi...
by Ari
Fri Oct 12, 2018 2:09 am
Forum: Investing - Theory, News & General
Topic: Is your risk tolerance to dollars or percentages?
Replies: 17
Views: 1245

Re: Is your risk tolerance to dollars or percentages?

Are you immediately fearful of losing a percentage of the new $2M portfolio and invest the $2M again at 50-50, or is the additional million gravy, that can all be invested in equities, since the risk of losing the amount in dollars from the initial million would remain unchanged? My risk tolerance ...
by Ari
Thu Oct 11, 2018 3:10 am
Forum: Investing - Theory, News & General
Topic: When will you backup the truck on stocks
Replies: 102
Views: 9871

Re: When will you backup the truck on stocks

Yeah, I don't have any money to buy more stocks for if they go on sale. If I did, I'd buy more stocks today!
by Ari
Wed Oct 10, 2018 6:26 am
Forum: Investing - Theory, News & General
Topic: The benefits of international diversification - NOT: Hulbert
Replies: 80
Views: 5380

Re: The benefits of international diversification - NOT: Hulbert

Culbretd wrote:
Wed Oct 10, 2018 6:17 am
While looking in my 401(k) one share of S&P 500 is roughly $160 a share and in my wifes 403(b) one share of S&P 500 (VIIIX) was $250 a share. Meanwhile my international fund (MSCI EAFE) is $16 a share.
I'm confused. How is the share price of the funds you invest in relevant?
by Ari
Wed Oct 10, 2018 5:44 am
Forum: Investing - Theory, News & General
Topic: The benefits of international diversification - NOT: Hulbert
Replies: 80
Views: 5380

Re: The benefits of international diversification - NOT: Hulbert

What's your rationale for such a large EM weighting? I find market weight to be a great thing in individual funds, since it limits transactions and thus costs. For the world portfolio, I'm not as convinced market weight is necessarily the most diversified, for a variety of definitions of the word. ...
by Ari
Wed Oct 10, 2018 4:14 am
Forum: Investing - Theory, News & General
Topic: Paul Romer & William Nordhaus share Nobel Prize in Economics
Replies: 16
Views: 1566

Re: Paul Romer & William Nordhaus share Nobel Prize in Economics

Bogle applied economic science to a practical problem and created huge human value out of it. He wasn't Salk or Sabin to invent the polio vaccine, he was the guy who took the vaccination programme out to Africa, if you will. We won't remember that man, woman or collective group, but they have profo...
by Ari
Wed Oct 10, 2018 4:09 am
Forum: Investing - Theory, News & General
Topic: The benefits of international diversification - NOT: Hulbert
Replies: 80
Views: 5380

Re: The benefits of international diversification - NOT: Hulbert

A common misconception is that you should hold non-US equities to protect you against a crash. What it's for is rather to protect you against a slow decline. Personally, I'm at 20% US, the same as my EM allocation, but then the US is part of my international allocation. :D US-only investors cite a h...
by Ari
Tue Oct 09, 2018 9:15 am
Forum: Investing - Theory, News & General
Topic: Paul Romer & William Nordhaus share Nobel Prize in Economics
Replies: 16
Views: 1566

Re: Paul Romer & William Nordhaus share Nobel Prize in Economics

But what do Swedes know of low cost Index funds which have caused a revolution in how people can retire? This made me laugh out loud. It recalls the recent hullabaloo on these forums about Fidelity's zero ER funds. I, being a Swede, have been investing in a zero ER fund for over a decade. And as fa...
by Ari
Tue Oct 09, 2018 1:21 am
Forum: Investing - Theory, News & General
Topic: Should we stay in Crazytown because there's no where to run?
Replies: 129
Views: 14992

Re: Should we stay in Crazytown because there's no where to run?

People worry so much about the crashes that they tend to forget about all the money you make leading up to them. Being in a market that goes crazy high and then crashes is likely to make you more money than staying out of it. Personally, I just hakuna my matatas and hope for the best. It's ironic th...
by Ari
Mon Oct 08, 2018 1:46 am
Forum: Investing - Theory, News & General
Topic: “It’s probably wise to sell to the sleeping point.” - Jack Bogle
Replies: 83
Views: 11734

Re: “It’s probably wise to sell to the sleeping point.” - Jack Bogle

So adjust your asset allocation based on the outlook of the market going forward? It's not market timing if it's Bogle!
by Ari
Fri Sep 14, 2018 5:05 am
Forum: Investing - Theory, News & General
Topic: Slight fear of investing in general now
Replies: 20
Views: 2219

Re: Slight fear of investing in general now

I wonder if there's someone like the OP, who instead wakes up in the middle of the night in a cold sweat - "I wonder if things are much, much more resiliently on an upward trend than anyone realizes?" I don't wake up in the middle of the night, but I have a feeling that just never really goes away ...
by Ari
Wed Sep 05, 2018 1:04 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1247
Views: 105851

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

Remember adherents of investing internationally, on this website at least, invest by world cap. If a company is being propped up, as long as it is being traded on the public markets, it cannot possibly have a market cap of zero. Let's say company B really ought to be eliminated by Company A in an e...
by Ari
Mon Sep 03, 2018 4:49 am
Forum: Investing - Theory, News & General
Topic: Doomsayers and market prophets
Replies: 1
Views: 511

Doomsayers and market prophets

I really enjoyed this article listing doomsday prophesies from the last three years. It's good to remember how ubiquitous they are when someone claims authority on the basis of having predicted the 2008 crash. 2015 [1 Mar 2015] Stock-market crash of 2016: The countdown begins [17 May 2015] Countdown...
by Ari
Mon Sep 03, 2018 1:37 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1247
Views: 105851

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

So perhaps the better argument is to say when WOULD I invest in international. I would invest in international when those internal barriers are gone, when the international zone is a monolithic entity, and when International starts posting 10% a year CAGR nominal. This is an incredibly odd way of l...
by Ari
Tue Aug 28, 2018 1:13 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1247
Views: 105851

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

http://shiller.barclays.com/SM/12/en/indices/static/historic-ratios.app Really cool link. Thanks for sharing. Agreed; that's very interesting. According to this, my home market of Sweden briefly reached Japanese levels of CAPE, at over 79 in February 2000. I wasn't investing back then, but still, I...
by Ari
Fri Aug 17, 2018 4:13 pm
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1247
Views: 105851

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

20+ years of inferior International performance... At what point does our own script change about International? If it lags for 30 years, 40 years? Never...? Looking at Portfoliovisualizer of a graph of the last 20 years of US vs. World Ex US, What I can see is that World Ex US takes the lead, then...
by Ari
Thu Jul 26, 2018 12:52 am
Forum: Investing - Theory, News & General
Topic: Heresy: is using a SP500 index still a valid strategy ?
Replies: 28
Views: 4772

Re: Heresy: is using a SP500 index still a valid strategy ?

As has already been pointed out: 1. It's not an atypical situation, just business as usual. It's pretty much mathematically certain that in a cap-weighted index where some companies are much larger than others, and some companies are doing much better than others, then the section "large companies t...
by Ari
Wed Jul 11, 2018 2:54 am
Forum: Investing - Theory, News & General
Topic: Six stocks make up 98% of S&P 500 gains in 2018
Replies: 100
Views: 15785

Re: Six stocks make up 98% of S&P 500 gains in 2018

It seems to me that if we have an index of stocks with two characteristics: 1. The stocks have very varying size, with some very large and many very small. 2. The stocks have very varying results, with some going very well and others very badly. ... then the above result would necessarily be the cas...
by Ari
Sun Jun 24, 2018 4:22 am
Forum: Investing - Theory, News & General
Topic: Heavy in equities?
Replies: 46
Views: 5099

Re: Heavy in equities?

I'm with AlohaJoe and Estrada on this one. I hold 100% equities because I don't think volatility is a good measure for risk, in my personal situation. I believe that the best downside protection is having a lot of money. Crashes do decimate stocks, but in general, they are preceded by a large runup....
by Ari
Mon Jun 04, 2018 12:24 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Financial Illiteracy’s High Cost
Replies: 30
Views: 4101

Re: Larry Swedroe: Financial Illiteracy’s High Cost

Regarding the study, I found it interesting that the more financially literate were more active in their investments, changing their allocations more, and also got better returns, than the less financially literate, who generally stayed put in their investments. And the more literate did not have mo...
by Ari
Mon Jun 04, 2018 12:21 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Financial Illiteracy’s High Cost
Replies: 30
Views: 4101

Re: Larry Swedroe: Financial Illiteracy’s High Cost

Here are the questions that gauge literacy: == Financial Literacy The variable Financial Literacy equals the number of correct answers to the following questions: 1) Suppose that you have 1000 Euro in a savings account that offers a return of 2% per year. After five years, assuming that you have no...
by Ari
Sat Jun 02, 2018 8:18 am
Forum: Personal Finance (Not Investing)
Topic: Milestones on the way to FI [Financial Independence]
Replies: 33
Views: 4605

Re: Milestones on the way to FI

Normal but big expenses like a repair/purchase of home appliances or automobiles do not make you worry about how to pay for them. That could be a good one, though a bit vague. Personally, I've never had to do repairs (I'm a renter), bought home appliances (minimalist renter!) or bought a car (never...
by Ari
Sat Jun 02, 2018 8:13 am
Forum: Personal Finance (Not Investing)
Topic: Milestones on the way to FI [Financial Independence]
Replies: 33
Views: 4605

Re: Milestones on the way to FI

Ari....You might want to consider using your 'Funding Ratio' as your yardstick. I have found that metric very helpful, and humbling. Bobcat2 has written about this a lot, and it has significantly influenced my thinking. And saving habits. I'm looking more for discreet milestones than yardsticks. I ...
by Ari
Sat Jun 02, 2018 1:37 am
Forum: Personal Finance (Not Investing)
Topic: Milestones on the way to FI [Financial Independence]
Replies: 33
Views: 4605

Re: Milestones on the way to FI

Some good milestones here! I remembered two more: * First time my passive income (calculated with 4% rule) exceeded my rent. I'm now living "rent free" so to speak. * This hasn't happened yet, but almost: I check my portfolio balance each month after having invested a large part of my salary. In the...
by Ari
Fri Jun 01, 2018 3:51 pm
Forum: Personal Finance (Not Investing)
Topic: Milestones on the way to FI [Financial Independence]
Replies: 33
Views: 4605

Re: Milestones on the way to FI

youngpleb wrote:
Fri Jun 01, 2018 3:07 pm
My current targeted FI milestone is getting my total portfolio to $100,000 because, as Charlie Munger says, "The first 100k is a b*tch."
It's true! Since I don't count in USD, I never really noticed when I had reached 100k USD, but looking back, yes, it was a … pain. :)
by Ari
Fri Jun 01, 2018 3:49 pm
Forum: Personal Finance (Not Investing)
Topic: Milestones on the way to FI [Financial Independence]
Replies: 33
Views: 4605

Re: Milestones on the way to FI

If you are a homeowner: When your net worth (including equity in home) goes positive. I made a chart that showed me the progress to that crossover point. Not sure I understood this (but then I've never been a homeowner). If you borrow 100k and buy a house worth 100k, surely this doesn't bring your ...
by Ari
Fri Jun 01, 2018 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Milestones on the way to FI [Financial Independence]
Replies: 33
Views: 4605

Milestones on the way to FI [Financial Independence]

The road to becoming financially independent (FI) is usually quite long. I find it helpful to have small milestones to look forward to. Some milestones are quite simple. My first million (SEK. I'm far from a million USD) was a pretty big milestone for me. Another one was when I looked back and saw t...