Search found 795 matches

by Stormbringer
Sat Jul 20, 2019 11:25 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Which is better, mutual funds or CDs?
Replies: 18
Views: 1546

Re: Larry Swedroe: Which is better, mutual funds or CDs?

Larry notes that in 401k and 529 plans, investors must use mutual funds. I own CDs in my Schwab 401(k). How were you able to achieve that? I'm guessing that they're brokered CDs, but it's obviously very unusual for someone to have that option in their 401k. I have a Solo 401(k) which seems to prett...
by Stormbringer
Sat Jul 20, 2019 7:31 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Which is better, mutual funds or CDs?
Replies: 18
Views: 1546

Re: Larry Swedroe: Which is better, mutual funds or CDs?

willthrill81 wrote:
Fri Jul 19, 2019 1:45 pm
Larry notes that in 401k and 529 plans, investors must use mutual funds.
I own CDs in my Schwab 401(k).
by Stormbringer
Sun Jul 14, 2019 2:11 pm
Forum: Investing - Theory, News & General
Topic: Tax cost stopping move to indexing
Replies: 68
Views: 3105

Re: Tax cost stopping move to indexing

This idea of "gift highly appreciated asset to a parent, then receive it back with a stepped up cost basis as an inheritance" idea is floated on the forums every few months. The consensus of the forum subject matter experts is that the IRS would consider this maneuver illegal because it runs afoul ...
by Stormbringer
Sun Jul 14, 2019 11:50 am
Forum: Investing - Theory, News & General
Topic: Tax cost stopping move to indexing
Replies: 68
Views: 3105

Re: Tax cost stopping move to indexing

I have no problem with gifting share away to daughter without any expectation of anything back. Gifting to mom with an expectation of ....? Not so sure. My mom and I are very open with each other about estate planning and finances. I can see how that might be awkward for some. But if you think abou...
by Stormbringer
Sun Jul 14, 2019 11:42 am
Forum: Investing - Theory, News & General
Topic: Tax cost stopping move to indexing
Replies: 68
Views: 3105

Re: Tax cost stopping move to indexing

I have a similar situation, with about $100K in BRK and KO shares that I have held for years. I had thought to gift some of the shares to my adult daughter over the span of a couple years, which she could then sell to help pay for grad school. She is in the 0% bracket. Or maybe I can give them to m...
by Stormbringer
Sun Jul 14, 2019 10:38 am
Forum: Investing - Theory, News & General
Topic: Tax cost stopping move to indexing
Replies: 68
Views: 3105

Re: Tax cost stopping move to indexing

I have a similar situation, with about $100K in BRK and KO shares that I have held for years. I had thought to gift some of the shares to my adult daughter over the span of a couple years, which she could then sell to help pay for grad school. She is in the 0% bracket. Or maybe I can give them to my...
by Stormbringer
Wed Jul 10, 2019 5:14 pm
Forum: Investing - Theory, News & General
Topic: Retiring Early Correlates with Greater Longevity ?
Replies: 47
Views: 4590

Re: Retiring Early Correlates with Greater Longevity ?

mariezzz wrote:
Tue Jul 09, 2019 11:09 pm
Remember: correlation is not causation.
Spurious Correlations
by Stormbringer
Wed Jul 10, 2019 9:26 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 1317
Views: 124831

Re: S&P 500 hit 3,000 today

While 3,000 is indeed just a number, it does make headlines and has a psychological effect on investors, at least in the short run. It wouldn't shock me if there was some resistance at 3,000 since it sounds like the sort of number at which people would have placed sell orders. I haven't really sense...
by Stormbringer
Sun Jul 07, 2019 7:32 am
Forum: Personal Finance (Not Investing)
Topic: 50-60k boat purchase??
Replies: 82
Views: 4601

Re: 50-60k boat purchase??

Two best days in a man’s life are the day he buys the boat and the day he sells the boat... +1 A corollary to that is that is the best boat belongs to one of your buddies. When I was younger, I had friends with boats, which of course meant I had to have one too. It was a 24' speed boat with a Ford ...
by Stormbringer
Sat Jul 06, 2019 5:05 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2148

Re: It's All About the Earnings Growth

Who knows how long this torrid pace of earnings growth can last, as it's beginning to feel a bit like a high wire act. But as U.S. stock investors, we've certainly been benefiting from historically great times. Thoughts? Labor's share of income has been declining for a while now, meaning that profi...
by Stormbringer
Sat Jul 06, 2019 4:50 pm
Forum: Personal Finance (Not Investing)
Topic: Preparing my wife for financial life without me.
Replies: 95
Views: 10583

Re: Preparing my wife for financial life without me.

fortunately for me, he had prepared a one page list of instructions that included accounts and phone numbers and steps to take. DH had reviewed the one pager with me several times before he became ill. I plan to do the same thing for my wife at some point (we are currently 50). Our finances are qui...
by Stormbringer
Thu Jul 04, 2019 7:47 am
Forum: Personal Finance (Not Investing)
Topic: Employers asking salaries
Replies: 47
Views: 5806

Re: Employers asking salaries

Years ago, at a job interview, I was asked what other job offers I had received. I truthfully answered $31,000. I was immediately offered $32,000. In retrospect, providing a truthful answer to that question was dumb, because the only purpose was to use it against me and get me to work for them for t...
by Stormbringer
Sat Jun 29, 2019 12:06 pm
Forum: Personal Finance (Not Investing)
Topic: New Landlord Here! Your Top Tips to include in a Lease?
Replies: 52
Views: 4026

Re: New Landlord Here! Your Top Tips to include in a Lease?

Hi all! I am renting out my first property. It's a condo. The renters will be a mother, daughter, and small dog. What are your top tips to include in the lease? (Besides the standard language. I am using the standard association of Realtors form.) The first thing to recognize is that every state ha...
by Stormbringer
Sat Jun 22, 2019 11:47 am
Forum: Investing - Theory, News & General
Topic: Net worth and risk tolerance
Replies: 30
Views: 4764

Re: Net worth and risk tolerance

I think risk tolerance is a personality thing more than a net worth thing. That said, the first dollar in your portfolio funds necessities like food and medical care, whereas the last dollar in your portfolio is the one that tends to fund luxuries. The person with a portfolio that exceeds their basi...
by Stormbringer
Wed Jun 12, 2019 1:29 am
Forum: Personal Finance (Not Investing)
Topic: For those who earn $500k+ per year. How'd you do that?
Replies: 369
Views: 38334

Re: For those who earn $500k+ per year. How'd you do that?

triyoda wrote:
Tue Jun 11, 2019 12:28 am
I'm also interested when engineers say they are making over say about $250K. How much of that is salary and how much of that is bonus or stock options (which can be highly variable)?
I do contract software development. Some of it is hourly, but I do much better with fixed bid work.
by Stormbringer
Thu Jun 06, 2019 1:32 pm
Forum: Investing - Theory, News & General
Topic: REIT yields and real estate cap rates
Replies: 16
Views: 894

Re: REIT yields and real estate cap rates

The cap rate on the property and the yield on the security aren't the same thing.

Say I've got a $1M building that is throwing off 6% in cash ($60,000).
Now if I securitize it into a REIT, and the market bids up those shares to $2M in value, that same $60,000 will only be a 3% yield.
by Stormbringer
Thu Jun 06, 2019 1:15 pm
Forum: Investing - Theory, News & General
Topic: What is the rationale for cash in your portfolio?
Replies: 36
Views: 2679

Re: What is the rationale for cash in your portfolio?

Would you have an easier time understanding the justification for cash if it paid more? People used to talk about cash as an asset class. Now it's fashionable to call that an emergency fund. I have some statements from just before the financial crisis when money market funds were paying 5-6%. It se...
by Stormbringer
Thu Jun 06, 2019 12:27 pm
Forum: Investing - Theory, News & General
Topic: What is the rationale for cash in your portfolio?
Replies: 36
Views: 2679

Re: What is the rationale for cash in your portfolio?

Just to be clear, they are recommending at least 5% cash no matter what. Aggressive or conservative. 25 years old or 65 years old. Here are their model portfolios: http://1.bp.blogspot.com/_oak7mB5IUu0/TKMY4e8uklI/AAAAAAAAASw/lPkd9EYFvnE/s1600/schwab4.jpg I just don't get the rationale for 5% in cas...
by Stormbringer
Thu Jun 06, 2019 8:23 am
Forum: Investing - Theory, News & General
Topic: What is the rationale for cash in your portfolio?
Replies: 36
Views: 2679

What is the rationale for cash in your portfolio?

I received an email from Schwab that included this statement: We believe cash is a key component of an investment portfolio. Based on your risk profile, a portion of your portfolio is placed in an FDIC-insured deposit at Schwab Bank. We're not talking about an emergency fund here. They recommend lea...
by Stormbringer
Mon Jun 03, 2019 5:15 pm
Forum: Personal Finance (Not Investing)
Topic: Buying an investment property while renting an apartment?
Replies: 24
Views: 1775

Re: Buying an investment property while renting an apartment?

I bought my first rental property when I was 24, and my first home (a condo, actually) when I was 29. By that time I had 7 rentals. Nothing wrong with it at all.
by Stormbringer
Fri May 31, 2019 11:22 am
Forum: Investing - Theory, News & General
Topic: Question regarding the phrase "smart money"
Replies: 23
Views: 1636

Re: Question regarding the phrase "smart money"

I think there is definitely "smart money" (e.g. Warren Buffett over the course of his career) and "dumb money" (e.g. my friend's brother who cashed in his 401k in early 2009). But I think the terms are frequently used to pitch financial products of some sort. You don't want to be the dumb money do y...
by Stormbringer
Wed May 29, 2019 8:03 am
Forum: Investing - Theory, News & General
Topic: CAPE with tapered weights
Replies: 10
Views: 665

Re: CAPE with tapered weights

The problem with comparing CAPE ratios over time is that it doesn't account for interest rate differences over time. In order to judge something as expensive, you need to ask the question "compared to what?". Sure, CAPE might be 28 or 29, but last I checked the 10-year treasury was selling for 44x e...
by Stormbringer
Tue May 28, 2019 3:55 pm
Forum: Investing - Theory, News & General
Topic: How can I check my portfolio as little as possible?
Replies: 69
Views: 3280

Re: How can I check my portfolio as little as possible?

In particular, I am interested in avoiding myopic risk aversion ( https://www.bogleheads.org/wiki/Behavioral_pitfalls ) and, perhaps more importantly, the anxiety of seeing my portfolio diminish. I am susceptible to anxiety, as many of us are these days, and I would HATE to lose sleep over irration...
by Stormbringer
Sun May 26, 2019 3:47 pm
Forum: Investing - Theory, News & General
Topic: Can commercial real estate replace fixed income in assest allocation?
Replies: 7
Views: 620

Re: Can commercial real estate replace fixed income in assest allocation?

No. There is nothing about real estate income that is "fixed". It is much more like owning a business, in that you get what may or may not left over after income and expenses.
by Stormbringer
Sat May 25, 2019 1:30 pm
Forum: Investing - Theory, News & General
Topic: just a general comment about "too conservative" investors here
Replies: 151
Views: 14893

Re: just a general comment about "too conservative" investors here

I think there is a perfectly rational reason for becoming more conservative as you get wealthier -- the diminishing marginal return of each additional dollar of wealth. One more dollar made has less utility than an earlier dollar that is lost, so once you've covered your needs, it makes sense to bec...
by Stormbringer
Sat May 25, 2019 12:19 pm
Forum: Investing - Theory, News & General
Topic: Is the housing market starting to collapse?
Replies: 122
Views: 12596

Re: Is the housing market starting to collapse?

I own quite a few rental properties, and my market (a Midwestern rust belt city) is pretty crazy right now. In the past 3 weeks I've lost four deals where I was making full price or slightly above cash offers. One of my employees submitted an offer for $15K over asking price on a house last week and...
by Stormbringer
Sat May 18, 2019 6:42 am
Forum: Investing - Theory, News & General
Topic: Why does the stock market grow faster than the economy?
Replies: 28
Views: 4235

Re: Why does the stock market grow faster than the economy?

This question relates to what is often referred to as the "Buffett Indicator", which he talked about in this 1999 article in Fortune magazine : Let's say that GDP grows at an average 5% a year--3% real growth, which is pretty darn good, plus 2% inflation. If GDP grows at 5%, and you don't have some ...
by Stormbringer
Thu May 16, 2019 8:01 am
Forum: Investing - Theory, News & General
Topic: Can future returns for the next 10 years really be predicted with CAPE?
Replies: 36
Views: 2272

Re: Can future returns for the next 10 years really be predicted with CAPE?

My hypothesis as to why CAPE has underestimated returns comes down to one thing: interest rates.

Rates have been falling for decades, and especially since 2008-2009. That has put sustained upward pressure on asset prices that CAPE does not adjust for.
by Stormbringer
Thu May 16, 2019 7:40 am
Forum: Investing - Theory, News & General
Topic: Dividends almost Doubled between 2013 and now
Replies: 96
Views: 7425

Re: Dividends almost Doubled between 2013 and now

Dividends and buybacks are tricky things. Companies that pay continuous and growing dividends sometimes find themselves caught in a trap where the dividend becomes sacrosanct, and can never be cut for any reason without sending a dreadful signal to the market that the company is in trouble, followed...
by Stormbringer
Thu May 16, 2019 6:27 am
Forum: Personal Investments
Topic: If you are already wealthy, what keeps you motivated?
Replies: 101
Views: 12022

Re: If you are already wealthy, what keeps you motivated?

tomtoms wrote:
Wed May 15, 2019 11:57 am
If you are already wealthy, what keeps you motivated?
I enjoy my work, but I'd also be lying if I said that other people I know having a higher score wasn't a motivating factor.
by Stormbringer
Tue May 14, 2019 2:10 pm
Forum: Investing - Theory, News & General
Topic: Should one diversify into annuities and not bonds?
Replies: 18
Views: 2007

Re: Should one diversify into annuities and not bonds?

It depends on your situation. If you aren't worried about leaving excess money to anyone when you die, you can generally obtain a higher income stream with an annuity than you can with bonds while eliminating longevity risk.
by Stormbringer
Mon May 13, 2019 5:06 pm
Forum: Personal Finance (Not Investing)
Topic: Leaving My CPA
Replies: 22
Views: 2473

Re: Leaving My CPA

I'm on my 3rd CPA in 25 years and in my experience most of them don't know half of what is commonly discussed on this forum. I find that I have to explain backdoor Roth's almost every year. My current CPA asked how I manage to put so much into my 401k every year (a solo 401k). Every year I comb thro...
by Stormbringer
Sun May 12, 2019 9:44 am
Forum: Personal Finance (Not Investing)
Topic: Retirement Pension-Annuity or Lump dilemma
Replies: 12
Views: 995

Re: Retirement Pension-Annuity or Lump dilemma

If it were me, I would take the annuity. The reason is that my wife doesn't know (or care) much about investing and was never that great with money. I would like to know that she has guaranteed income for life if I complete my retirement before she does.
by Stormbringer
Mon May 06, 2019 7:30 pm
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 98
Views: 19895

Re: TIPS Ladder Spreadsheets in General & Two in Particular

By the way, I've just updated my Ladder Builder spreadsheet. This spreadsheet is great. I'm curious what you've observed in terms of interest rate sensitivity over the years, and how it affects the cost of the ladder. For example, using the latest spreadsheet a $40K annual income would cost $1,068,...
by Stormbringer
Sat Apr 27, 2019 10:49 am
Forum: Investing - Theory, News & General
Topic: A good retirement
Replies: 4
Views: 1843

Re: A good retirement

Merton is worth a listen. I think he has some important things to say regarding income vs. wealth in retirement.
by Stormbringer
Sat Apr 27, 2019 10:24 am
Forum: Personal Finance (Not Investing)
Topic: Condo costs
Replies: 16
Views: 1500

Re: Condo costs

Check the reserve fund balance, and history of major repairs and possible special assessments. That is, are they budgeting correctly? And do they seem to be doing maintenance properly, vs. lots of higher cost emergency "fixes". RM This. Many condo associations have dreadful finances, which eventual...
by Stormbringer
Sat Apr 27, 2019 10:06 am
Forum: Personal Finance (Not Investing)
Topic: Colleague salary comparison
Replies: 54
Views: 6214

Re: Colleague salary comparison

I worked at a company where the owner kept everyone's pay history in a spreadsheet on his computer. Of course, a help desk guy eventually got hold of it and before long it was all over the company. It led to a great deal of angst when people discovered other people making more than they did, especia...
by Stormbringer
Sat Apr 27, 2019 9:58 am
Forum: Investing - Theory, News & General
Topic: How to sell home remotely
Replies: 2
Views: 443

Re: How to sell home remotely

This happens frequently. The title company can FedEx a packet of paperwork to the you (the seller) to sign and ship back to them. The buyer usually has far more paperwork to sign at closing. I sold a property yesterday and the title company said that 100% electronic closings over Skype are coming so...
by Stormbringer
Sat Apr 27, 2019 9:48 am
Forum: Investing - Theory, News & General
Topic: Housing market bubble
Replies: 27
Views: 6137

Re: Housing market bubble

https://www.bloomberg.com/opinion/articles/2019-04-25/young-people-can-t-buy-homes-until-baby-boomer-homeowners-move-on?srnd=premium I made this same exact argument months ago and the topic was closed for whatever reason. I argue, again, population changes make real estate a dangerous investment fo...
by Stormbringer
Sat Apr 27, 2019 9:11 am
Forum: Personal Finance (Not Investing)
Topic: Want to Make Millions and Pay No Taxes? Try Real Estate
Replies: 6
Views: 1632

Re: Want to Make Millions and Pay No Taxes? Try Real Estate

HEDGEFUNDIE wrote:
Sat Apr 27, 2019 9:09 am
Net operating losses.
Thirty plus years of them? And still carving up hundreds of millions of dollars in a divorce? I have to believe that at some point sustained losses would come to roost.
by Stormbringer
Sat Apr 27, 2019 9:09 am
Forum: Personal Finance (Not Investing)
Topic: Taxes
Replies: 37
Views: 1959

Re: Taxes

This is federal plus FICA taxes. No state income is included. My back of the envelope math suggests that your accountant is not taking advantage of the Qualified Business Income (QBI) deduction for your non-salary income. If, say, a million of that could be characterized as QBI then you would shave...
by Stormbringer
Sat Apr 27, 2019 9:00 am
Forum: Personal Finance (Not Investing)
Topic: Want to Make Millions and Pay No Taxes? Try Real Estate
Replies: 6
Views: 1632

Want to Make Millions and Pay No Taxes? Try Real Estate

I came across this article on Bloomberg: Want to Make Millions and Pay No Taxes? Try Real Estate Take Harry Macklowe, a New York City developer. Macklowe, 81, hasn’t paid income tax since the 1980s, according to a court opinion in his divorce proceedings issued in December. The ruling, which also di...
by Stormbringer
Sat Apr 27, 2019 8:51 am
Forum: Personal Finance (Not Investing)
Topic: Taxes
Replies: 37
Views: 1959

Re: Taxes

So I paid about 400K in taxes in 2018 off of an income of about $1.3 million. I feel like I'm paying too much taxes; should I seek the second opinion of another accountant or the ballpark numbers look correct? That isn't enough information to make a useful analysis. We would need to more about how ...
by Stormbringer
Fri Apr 26, 2019 6:39 pm
Forum: Personal Finance (Not Investing)
Topic: Whats the Point of Climbing the Corporate Ladder?
Replies: 164
Views: 17196

Re: Whats the Point of Climbing the Corporate Ladder?

It always seemed like a fool's errand to me: The higher you get, it becomes like Game of Thrones, with everyone competing and backstabbing for the positions above them. The vast majority of the people I know who have tried get stuck in horrible middle-management jobs and never move any higher. Many ...
by Stormbringer
Thu Apr 25, 2019 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: Taxes: marginal rate now vs effective rate in retirement
Replies: 198
Views: 9790

Re: Taxes: marginal rate now vs effective rate in retirement

If your planning is based on the assumption that federal tax rates over the next few decades will look anything like they do today, you might want to stare at this for a while and contemplate that assumption: https://www.usdebtclock.org/
by Stormbringer
Wed Apr 24, 2019 5:06 am
Forum: Personal Finance (Not Investing)
Topic: If FIRECalc shows 100% success rate, what holds you back from retiring?
Replies: 126
Views: 11792

Re: If FIRECalc shows 100% success rate, what holds you back from retiring?

Implicit in tools like FIRECalc is the assumption that the past performance of the markets can be used to forecast future outcomes. I'm not 100% on board with that assumption, because I'm not sure that the 20th century in America (which comprises the bulk of the data set) wasn't an anomaly.
by Stormbringer
Mon Apr 22, 2019 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: One big end of year tax payment instead of quarterly payments for S-corp?
Replies: 9
Views: 789

Re: One big end of year tax payment instead of quarterly payments for S-corp?

I gotten stuck paying penalties on numerous occasions by underestimating my income and paying too little in a quarter. The IRS makes it very clear that we are a "pay as you go system".

https://www.irs.gov/taxtopics/tc306
by Stormbringer
Thu Apr 18, 2019 12:40 pm
Forum: Investing - Theory, News & General
Topic: Hedging against hyperinflation scenario
Replies: 47
Views: 3224

Re: Hedging against hyperinflation scenario

US TIPS hedge against US inflation (in a tax exempt account). Also US ibonds. These are a hedge against inflation, but begin to fail under Venezuelan levels of inflation. The problem is with the lag between the time inflation is measured and the time when the interest rate is adjusted. If there a l...
by Stormbringer
Sun Apr 07, 2019 7:33 pm
Forum: Investing - Theory, News & General
Topic: real estate vs commodities as inflation hedge
Replies: 22
Views: 1371

Re: real estate vs commodities as inflation hedge

nisiprius wrote:
Sun Apr 07, 2019 10:43 am
--CPI-linked income annuities (perhaps there is currently only one insurer offering them)
Both AIG and The Principal offer them. I suspect NML might as well, since I was able to get CPI-adjusted disability insurance by asking, even though they didn't advertise the option.
by Stormbringer
Sat Apr 06, 2019 7:08 am
Forum: Personal Investments
Topic: Taxes for Complex Real Estate Transaction
Replies: 0
Views: 157

Taxes for Complex Real Estate Transaction

I'm in the midst of a fairly complex real estate transaction, and I would like to optimize it for taxes best I can. Basically, I'm doing a 1031 exchange of an LLC-owned apartment building for an office building that one of my businesses (an S-Corp) will reside in and rent from the LLC. Here are the ...