Search found 782 matches

by Stormbringer
Sat Jun 22, 2019 11:47 am
Forum: Investing - Theory, News & General
Topic: Net worth and risk tolerance
Replies: 28
Views: 3975

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: 37378

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: 862

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: 2598

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: 2598

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: 2598

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: 1735

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: 1574

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: 651

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: 3187

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: 606

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: 14673

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: 12410

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: 4191

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: 2238

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: 7351

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: 11612

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: 1968

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: 2451

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: 968

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: 76
Views: 18288

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: 1827

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: 1484

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: 6177

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: 433

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: 6080

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: 1617

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: 1950

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: 1617

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: 1950

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: 17057

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: 9607

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: 11700

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: 781

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: 3172

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: 1350

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: 147

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 ...
by Stormbringer
Sat Apr 06, 2019 6:04 am
Forum: Personal Finance (Not Investing)
Topic: Follow-up on college engineering thread (computational v CS v Berkeley IEOR)
Replies: 77
Views: 3932

Re: Follow-up on college engineering thread (computational v CS v Berkeley IEOR)

Although things in life change rapidly, he is currently leaning towards working in the business/people side of high tech, eg business analytics/management consulting. And therefore the coursework in the Berkeley and Waterloo programs seem to excite him more than straight CS. I have a BS in Computer...
by Stormbringer
Thu Mar 28, 2019 9:48 am
Forum: Investing - Theory, News & General
Topic: Backdoor Roth - Has anything changed in 2019?
Replies: 8
Views: 848

Re: Backdoor Roth - Has anything changed in 2019?

My CPA gives me the deer in the headlights look about every other year. So does the guy at the local Schwab office when I hand him our checks. I suspect that very few people do these.
by Stormbringer
Thu Mar 28, 2019 9:30 am
Forum: Personal Finance (Not Investing)
Topic: Half of American retirees have no savings
Replies: 49
Views: 2050

Re: The Retirement Crisis

There are always some people with a retirement crisis. There always have been, and always will. Maybe there will be more of them in the future, maybe not. I don't know what it means for "America" to have a retirement crisis. What is the threshold? Is 20 million broke retirees a crisis, but 10 millio...
by Stormbringer
Wed Mar 27, 2019 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: Transferring land from parent to child
Replies: 14
Views: 1121

Re: Transferring land from parent to child

One day, unexpectedly, a deed showed up in the mail. My 75 year-old father-in-law gave us some land. We don't really want it, but it's been in the family since the 1800's, and now we're paying $1,000 a year in taxes on it. If we sell, we have to pay capital gains on it, because our tax basis is zer...
by Stormbringer
Tue Mar 26, 2019 11:58 am
Forum: Investing - Theory, News & General
Topic: Does the 4% rule work for a 'world' portfolio?
Replies: 60
Views: 4297

Re: Does the 4% rule work for a 'world' portfolio?

There are doubts that the 4% rule even works in a US portfolio in a low-rate environment, let alone a world portfolio.
by Stormbringer
Mon Mar 25, 2019 6:42 pm
Forum: Personal Finance (Not Investing)
Topic: Transferring land from parent to child
Replies: 14
Views: 1121

Re: Transferring land from parent to child

One day, unexpectedly, a deed showed up in the mail. My 75 year-old father-in-law gave us some land. We don't really want it, but it's been in the family since the 1800's, and now we're paying $1,000 a year in taxes on it. If we sell, we have to pay capital gains on it, because our tax basis is zero...
by Stormbringer
Sun Mar 24, 2019 7:28 pm
Forum: Personal Finance (Not Investing)
Topic: Is a million really the benchmark for retirement
Replies: 153
Views: 23809

Re: Is a million really the benchmark for retirement

am wrote:
Sat Mar 09, 2019 10:48 pm
what should someone do at 44 if they have 1.5 million, payed off house, ss and 20k pension at 62 with health?
Run up the score, of course!
by Stormbringer
Sun Mar 24, 2019 11:10 am
Forum: Investing - Theory, News & General
Topic: Does the 4% rule work for a 'world' portfolio?
Replies: 60
Views: 4297

Re: Does the 4% rule work for a 'world' portfolio?

Forbes ran a piece on this topic a few years go.

In general though, I feel that people place too much faith in the 4% rule. When back tested, It has about a 5% failure rate after 30 years.
by Stormbringer
Thu Mar 21, 2019 5:17 pm
Forum: Investing - Theory, News & General
Topic: The $4,026,858.95 Car or a Worry-Free Retirement?
Replies: 245
Views: 11877

Re: The $4,026,858.95 Car or a Worry-Free Retirement?

Warren Buffett wrote:It's nice to have a lot of money, but you know, you don't want to keep it around forever. I prefer buying things. Otherwise, it's a little like saving sex for your old age.
by Stormbringer
Wed Mar 20, 2019 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: College for average kids
Replies: 72
Views: 4878

Re: College for average kids

Our daughter had pretty terrible grades (plenty of C's and D's) in high school. I was wondering what sports car I was going to buy with the 529 plan. But then she got admitted to a state college, and ended up graduating last year with honors. Now she is considering grad school. Somewhere along the w...
by Stormbringer
Mon Mar 18, 2019 8:38 pm
Forum: Investing - Theory, News & General
Topic: Real Estate Investing Resources?
Replies: 17
Views: 1483

Re: Real Estate Investing Resources?

Most individuals shouldn't own residential real estate where they work. I'll have to disagree with you on that point. I've been investing in my local market for 25 years, and the reason it works is because I know and understand the local market. I can tell which neighborhoods are getting better or ...
by Stormbringer
Mon Mar 18, 2019 8:31 pm
Forum: Investing - Theory, News & General
Topic: Real Estate Investing Resources?
Replies: 17
Views: 1483

Re: Real Estate Investing Resources?

You might want to check out some of the books by John T. Reed. He's a bit of a crank, but he has a bit more of a grounded view on investing in real estate. Much of the other stuff out there is targeting the no money down, get rich quick crowd.
by Stormbringer
Mon Mar 18, 2019 8:28 pm
Forum: Investing - Theory, News & General
Topic: Portfolio during a recession
Replies: 32
Views: 2800

Re: Portfolio during a recession

ericcohen wrote:
Mon Mar 18, 2019 8:20 pm
Treasuries and gold.
Don't forget the ammunition and canned goods. :twisted: