Search found 513 matches

by Stormbringer
Sat Jul 21, 2018 4:06 pm
Forum: Personal Finance (Not Investing)
Topic: Best Source for Travel Perks (Cruise)
Replies: 3
Views: 440

Best Source for Travel Perks (Cruise)

Hi, We're going to book a cruise. I was looking at CostcoTravel, as they provide a Costco card as a park which is worth a few hundred dollars in shopping at the warehouse. If I book it through United Airlines, they would award a bunch of airline miles. If I book it directly with the cruise line ther...
by Stormbringer
Fri Jul 20, 2018 12:45 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

I'm curious for all the real estate investors in this thread to tell how you did during 2008-2009 downturn? Well, on paper I lost a bunch for a few years. Leverage magnifies your losses as well as your gains. Fortunately I had sold about half my buildings in the years prior and was sitting on cash ...
by Stormbringer
Fri Jul 20, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

knpstr wrote:
Fri Jul 20, 2018 8:59 am
Did you buy them back? If no, why not? Presumably it must have been a fantastic buying opportunity and you knew the property well.
No, I bought some other foreclosures instead that were better properties in a better neighborhood.
by Stormbringer
Fri Jul 20, 2018 8:32 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

Why not buy 4 houses with 10% down and make $845,715.16. Or 8 houses with 5% down and make, $1,691,430.32? Do you really believe it's as simple as that? That is not say that if you can find a willing, non-recourse lender who is willing to give you all of that upside in exchange for your paltry 3% a...
by Stormbringer
Fri Jul 20, 2018 8:20 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

As far as I understand it IRR is not calculated on your equity. This is why the number I watch over time is return on equity. ROE decays over time as the property deleverages, culminating in an all-cash return once the mortgage is paid off. Once ROE decays below 10%, I start to think about doing a ...
by Stormbringer
Thu Jul 19, 2018 9:39 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

Alright. Well, I'll watch for you on the Forbes 400. Or maybe your late night infomercial.
by Stormbringer
Thu Jul 19, 2018 7:47 pm
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

You just said "its absurd". You didn't even attempt to disprove it but giving a mathematical or even logical reason why you believe what you do. Those are the returns. The principal paydown, appreciation, and inflation hedging are actual returns but they aren't "realized" immediately. But they woul...
by Stormbringer
Thu Jul 19, 2018 9:24 am
Forum: Investing - Theory, News & General
Topic: Direct Real Estate Returns
Replies: 210
Views: 9326

Re: Direct Real Estate Returns

20% + 8% + 4% + 3.75% + 3% = 38.75% annualized return on your $20K down payment. The kicker here is that rental real estate returns very typically grow every year because if your expenses increase at the same level as rents, the way the math works, the difference becomes greater every year (kind of...
by Stormbringer
Wed Jul 18, 2018 8:40 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11217

Re: Why is leveraging property good but leveraging stocks bad?

Maybe it "usually" is, but what is the magnitude of the consequences when it isn't? Well, in my state (a non-recourse state) the consequence could be your entire investment. But that's sort of gets into where real estate should be a looked at as a business, not just an investment. You have to manag...
by Stormbringer
Wed Jul 18, 2018 8:20 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11217

Re: Why is leveraging property good but leveraging stocks bad?

It only works as long as the 'investment' is earning more than the cost to borrow. Owning one apartment building free and clear that is earning nothing is better than two with a loan payment due. Interest rates might change, or even if the debt is at a fixed rate there is no guarantee the apartment...
by Stormbringer
Wed Jul 18, 2018 12:21 pm
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11217

Re: Why is leveraging property good but leveraging stocks bad?

okay, thanks for clarifying. The only downside to this plan is being forced to manage properties late in life (80s, 90s, etc..), which seems like it could be hard to do. But one could always hire a property manager I guess. You can also do a 1031 exchange into an UPREIT if you want to be hands off.
by Stormbringer
Wed Jul 18, 2018 1:17 am
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11217

Re: Why is leveraging property good but leveraging stocks bad?

With a 1031 exchange, I think you will eventually need to pay capital gains tax including the depreciation recapture if the property is ever sold, right? Not if you hold the property until death. Your kids inherit it, and then get a step-up in tax basis, wiping out the capital gain. Plus they get t...
by Stormbringer
Tue Jul 17, 2018 3:58 pm
Forum: Personal Finance (Not Investing)
Topic: Families - What's your total annual credit card spend?
Replies: 88
Views: 5728

Re: Families - What's your total annual credit card spend?

UpsetRaptor wrote:
Mon Jul 16, 2018 4:12 pm
Families - What's your total annual credit card spend?
Sadly, about $70-80K.
by Stormbringer
Sun Jul 15, 2018 11:50 am
Forum: Investing - Theory, News & General
Topic: Real Estate Investment: Yay or Nay?
Replies: 27
Views: 2017

Re: Real Estate Investment: Yay or Nay?

Condo associations are usually pretty hostile to investors and tenants. I would steer clear.
by Stormbringer
Sun Jul 15, 2018 11:45 am
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11217

Re: Why is leveraging property good but leveraging stocks bad?

I understand the basic concept and mechanic of leverage and how it acts as a double-edged sword, magnifying both gains and losses. What I don’t understand is why leverage is frowned upon for stocks but not for property where leverage is usually 5x. Investment property comes with favorable tax treat...
by Stormbringer
Sun Jul 15, 2018 11:28 am
Forum: Investing - Theory, News & General
Topic: Why is leveraging property good but leveraging stocks bad?
Replies: 174
Views: 11217

Re: Why is leveraging property good but leveraging stocks bad?

All leverages are bad. Our friends at the Wharton School would disagree with this statement. In finance, it is taught that debt can lower a firm's cost of capital , allowing it to be more profitable. This is the reason why companies such as AAPL issue bonds to buy back shares of stocks. They are bo...
by Stormbringer
Mon Jul 09, 2018 4:32 pm
Forum: Investing - Theory, News & General
Topic: WCI blog post - "This Real Estate Bubble - Likely Isn't a Bubble"
Replies: 58
Views: 6579

Re: WCI blog post - "This Real Estate Bubble - Likely Isn't a Bubble"

I haven't been seeing Carleton Sheets on late night TV, so I'm not too concerned.
by Stormbringer
Sun Jul 01, 2018 12:43 pm
Forum: Personal Finance (Not Investing)
Topic: Smart to transition to rental property?
Replies: 10
Views: 1267

Re: Smart to transition to rental property?

In my experience, people should be a professional landlord and run it as a business, or not be a landlord at all. Most people I know who have merely dabbled in it are ultimately disappointed.
by Stormbringer
Sat Jun 30, 2018 10:26 am
Forum: Investing - Theory, News & General
Topic: Is there a way to avoid bad companies in S&P 500?
Replies: 92
Views: 4582

Re: Is there a way to avoid bad companies in S&P 500?

Most of the S&P 500 companies disappear or change in 50 years. Is there a way to filter out terrible companies? Because if you buy the haystack, there has to be a few bad eggs out there. You mean like AAPL in 1997? When it was so bad that even Steve Jobs sold all but one share that he kept for sent...
by Stormbringer
Sat Jun 30, 2018 10:15 am
Forum: Investing - Theory, News & General
Topic: Is there a way to avoid bad companies in S&P 500?
Replies: 92
Views: 4582

Re: Why would creating an intelligent S&P 475 be so difficult to do?

I get it. The brightest stock analysts cannot beat the market with their actively managed funds… But why can’t those same bright ones at least identify 25 dogs out of 500 large companies? Or 20? Or even 10? What exactly makes something like that so very difficult to accomplish? Great question! Here...
by Stormbringer
Sat Jun 30, 2018 9:42 am
Forum: Investing - Theory, News & General
Topic: Why is warren buffet okay with no owning any bonds?
Replies: 48
Views: 4586

Re: Why is warren buffet okay with no owning any bonds?

Warren buffet calls bonds a very dangerous investments and does not own any bonds. How is he okay with not owning any bonds at his age? Can we own 100% stocks at later years of our lives? If your goal is to maximize your wealth over long periods of time, stocks can be expected to do better than bon...
by Stormbringer
Sun Jun 03, 2018 9:48 am
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1548

Re: Bonds in Roth IRA

aristotelian wrote:
Sun Jun 03, 2018 9:33 am
Are you eligible for Traditional IRA deduction? Does she have a Roth 401k option?
We each contribute the maximum every year to a traditional IRA and roll it over into the Roth (i.e. backdoor). She does not have a Roth 401k option.
by Stormbringer
Sun Jun 03, 2018 8:01 am
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1548

Re: Bonds in Roth IRA

Hard to know based on only the information presented. How large a bond portion are you looking for? Could you hold more "good" bonds in your 401k? How much of the Roth space would be used for bonds? Do you have a taxable account? Her Roth-IRA represents about 20% of the total. I'm thinking a 70/30 ...
by Stormbringer
Sun Jun 03, 2018 5:55 am
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1548

Bonds in Roth IRA

My wife has a pretty decent selection of low-cost index funds in her 401(k), but lousy choices of bond funds. Most are actively managed with .75% fees or higher. The only low cost (.1% fee) bond fund is a short-term (~2 year duration) fund. On the other hand, her Roth IRA allows us to invest in anyt...
by Stormbringer
Fri Jun 01, 2018 9:36 am
Forum: Investing - Theory, News & General
Topic: Does my business quality for the 20% pass through deduction?
Replies: 5
Views: 724

Re: Does my business quality for the 20% pass through deduction?

ig77 wrote:
Thu May 31, 2018 7:01 am
software and consulting services
I would stop offering software consulting services, and start offering software engineering services.
by Stormbringer
Tue May 29, 2018 4:54 am
Forum: Personal Finance (Not Investing)
Topic: Why pay cash for a car?
Replies: 248
Views: 30144

Re: Why pay cash for a car?

But if you can pay cash for a car and choose to buy the same car with a loan, then you are not stuck with the payment; you are making the payment, but you have the money available to pay off the loan if you want to (or make the payments if you leave your job), and be in the same situation as if you...
by Stormbringer
Mon May 28, 2018 6:40 pm
Forum: Personal Finance (Not Investing)
Topic: Purchase SPIA through Vanguard?
Replies: 18
Views: 1776

Re: Purchase SPIA through Vanguard?

I think you would be better off to only reduce your pension benefit to near the PBGC limit and use lump sum above that for SPIA. Btw, PBGC limits increase every year. You might want to take a closer look at the heath of PBGC, which is projected to be insolvent within 7 years. https://www.pensions.s...
by Stormbringer
Mon May 28, 2018 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Why pay cash for a car?
Replies: 248
Views: 30144

Re: Why pay cash for a car?

Many (most?) people I know feel trapped in jobs they don't like because they accumulate all these monthly financial obligations: Rent or mortgage payment. Car payments. Student loans. Credit cards. Etc. They need to match a regular paycheck up to all these bills that come every month. Financing a ca...
by Stormbringer
Mon May 28, 2018 6:11 pm
Forum: Personal Finance (Not Investing)
Topic: Career planning in IT/software development when over 40
Replies: 118
Views: 10869

Re: Career planning in IT/software development when over 40

I became a freelance software developer when I was 25. I'm 49 now, so I've had a pretty good 24-year run at it. Here are a few things I learned along the way: Technology changes really fast. You need to retool your skill set every five years or so or you will be obsolete. Early in your career, you c...
by Stormbringer
Sun May 20, 2018 8:19 pm
Forum: Personal Finance (Not Investing)
Topic: Helping Adult Children (but not too much)
Replies: 152
Views: 12689

Re: Helping Adult Children (but not too much)

That's a good answer. So something that would be meaningful in helping her to launch successfully rather than a feel-good gift or something that might encourage bad financial habits or dependence. Does she know much about investing? Maybe a cash gift for that purpose. Help her set investment goals,...
by Stormbringer
Sun May 20, 2018 7:39 am
Forum: Personal Finance (Not Investing)
Topic: Helping Adult Children (but not too much)
Replies: 152
Views: 12689

Re: Helping Adult Children (but not too much)

What do you mean by "too much?" What are your concerns? If you are afraid you will "spoil" her, I doubt that your gift would have that much power. I think I view it like having someone spot you while weight lifting. If you're trying to lift a heavy weight, your goal is to do it yourself, but there ...
by Stormbringer
Sun May 20, 2018 7:08 am
Forum: Investing - Theory, News & General
Topic: Buffett says Bonds are a terrible investment now. What should we invest in besides stocks?
Replies: 150
Views: 22589

Re: Buffett says Bonds are a terrible investment now. What should we invest in besides stocks?

He never mentions Treasury inflation-protected securities (TIPS). He never says why. Are his comments supposed to apply to TIPS, too, or only to nominal bonds? I don't know. AFAIK he hasn't said. I've followed Buffett for a long time and don't recall him ever specifically addressing TIPS, but I fee...
by Stormbringer
Sat May 19, 2018 10:49 am
Forum: Personal Finance (Not Investing)
Topic: Good time to buy a house or wait it out
Replies: 21
Views: 2085

Re: Good time to buy a house or wait it out

You’re wrong here. Adjusted for inflation, housing prices have surpassed their 2006 peak: Here is the actual Fed graph of real (inflation-adjusted) home prices, clearly showing that they have not surpassed 2006, adjusting for inflation. They are a good 15-20% below that level: https://i.imgur.com/B...
by Stormbringer
Sat May 19, 2018 9:07 am
Forum: Personal Finance (Not Investing)
Topic: Good time to buy a house or wait it out
Replies: 21
Views: 2085

Re: Good time to buy a house or wait it out

I would like a consensus of would you buy now or rent for a year and wait the market out? I don’t want to wind up buying at the height of the real estate market, and in the past few months, it seems like prices have escalating reminiscent of the prices before the crash in ’07/’08. The problem with ...
by Stormbringer
Sat May 19, 2018 8:37 am
Forum: Personal Finance (Not Investing)
Topic: Helping Adult Children (but not too much)
Replies: 152
Views: 12689

Re: Helping Adult Children (but not too much)

Is she still living at home? No, she's been out of the house and sharing an apartment with a friend near campus for two years. They plan to stay put for one more year to save money. She's worked nearly 30 hours a week throughout college. She has her mom's work ethic (not mine -- I work from home in...
by Stormbringer
Sat May 19, 2018 8:25 am
Forum: Investing - Theory, News & General
Topic: Bogle featured in Barrons cover story
Replies: 38
Views: 3793

Re: Bogle featured in Barrons cover story

I don't get the impression that the author cares for Bogle very much. On Warren Buffett's suggestion that a statue of Bogle be erected: There is, in fact, already a bronze statue of Bogle, striking a confident, commanding pose, outside Vanguard’s headquarters in Malvern, Pa., not far from Valley For...
by Stormbringer
Sat May 19, 2018 7:54 am
Forum: Investing - Theory, News & General
Topic: Buffett says Bonds are a terrible investment now. What should we invest in besides stocks?
Replies: 150
Views: 22589

Re: Buffett says Bonds are a terrible investment now. What should we invest in besides stocks?

During this year's annual Berkshire Hathaway meeting, Buffett said: "Bonds are a terrible investment at anywhere near current yields.” He continued, “The only time bonds were interesting was in the early to mid-1980’s" So what should we invest in besides stocks? Completely agree, but I don't think ...
by Stormbringer
Sat May 19, 2018 7:43 am
Forum: Personal Finance (Not Investing)
Topic: Helping Adult Children (but not too much)
Replies: 152
Views: 12689

Helping Adult Children (but not too much)

Our daughter graduates college this weekend. She's debt free, owns her 3 year-old car outright, has about $3K in a Roth-IRA plus another $1K in savings and an "okay" (money-wise) job lined up. So she off to a decent start. Until now we've subsidized her through car insurance, mobile phone, groceries...
by Stormbringer
Sat May 19, 2018 6:15 am
Forum: Personal Finance (Not Investing)
Topic: Dave Ramsey it or keep low interest debt
Replies: 134
Views: 9443

Re: Dave Ramsey it or keep low interest debt

20k car loan - 0% 38k car loan - 1.9% 226k mortgage - 3.625% Annual income 255k Fully funded emergency fund (6 months) Well, those care loans are at negative real interest rates, so mathematically speaking I wouldn't be in a hurry to pay them off. If you had the cash to pay them off, you could put ...
by Stormbringer
Fri May 18, 2018 3:18 pm
Forum: Personal Finance (Not Investing)
Topic: Would you send your children to private school in my situation?
Replies: 93
Views: 6547

Re: Would you send your children to private school in my situation?

HomerJ wrote:
Fri May 18, 2018 2:57 pm
Seriously, what are the odds that the private school education is ONE MILLION DOLLARS better?
It probably depends on the school. Look at the list of notable alumni from Exeter. I worked for one who made $100M but wasn't notable, so he missed the list.
by Stormbringer
Fri May 18, 2018 2:42 pm
Forum: Personal Finance (Not Investing)
Topic: Would you send your children to private school in my situation?
Replies: 93
Views: 6547

Re: Would you send your children to private school in my situation?

In these forums, we tend to focus on financial capital, and optimizing it to the n-th degree.

In this case, I think the difference is social capital. Kids who attend private schools -- the right private schools -- tend to have more of it.
by Stormbringer
Thu May 17, 2018 9:49 am
Forum: Personal Finance (Not Investing)
Topic: Property and Casualty Insurance - Best Strategy?
Replies: 2
Views: 214

Property and Casualty Insurance - Best Strategy?

We had American Family Insurance for a number of years for home+auto+umbrella and I noticed that our rates were going up double digit percentages every year. It seemed like every time a tornado touched down within a 200 mile radius, our rates would jump 15%. In 2012 we switched to Progressive and sa...
by Stormbringer
Thu May 17, 2018 5:52 am
Forum: Investing - Theory, News & General
Topic: 2018 401k limit is $55K - do you max it out? Why/why not?
Replies: 110
Views: 10800

Re: 2018 401k limit is $55K - do you max it out? Why/why not?

Since the employer portion is limited to 25% of compensation, it forces me to take a higher salary than I otherwise would, so there are some additional payroll taxes. Overall though it really brings down my tax bill and puts me in a good position for retirement. I suppose the math on this depends o...
by Stormbringer
Tue May 15, 2018 11:19 am
Forum: Investing - Theory, News & General
Topic: 2018 401k limit is $55K - do you max it out? Why/why not?
Replies: 110
Views: 10800

Re: 2018 401k limit is $55K - do you max it out? Why/why not?

2018 401k limit is $55K - do you max it out? Why/why not? I do! I started in 2012, and it has really supercharged my retirement portfolio. Being self-employed with adequate income makes it pretty straight-forward. Since the employer portion is limited to 25% of compensation, it forces me to take a ...
by Stormbringer
Tue May 08, 2018 6:08 am
Forum: Investing - Theory, News & General
Topic: Why do so many Americans not own stocks?
Replies: 44
Views: 3774

Re: Why do so many Americans not own stocks?

1) Behavioral problems.
2) Financial illiteracy.
3) Bad luck.
by Stormbringer
Mon May 07, 2018 9:00 pm
Forum: Investing - Theory, News & General
Topic: AAPL - Great Investment or Value Trap
Replies: 62
Views: 8486

Re: AAPL - Great Investment or Value Trap

The S&P 500 has a 24 P/E ratio. AAPL is 17.

Apple's performance as a company is simply mind boggling. They turn a $400,000 per year profit on each of their 123,000 employees. 488/500 companies in the S&P have a market cap less than the $267 billion in cash that Apple has.
by Stormbringer
Sat May 05, 2018 2:22 pm
Forum: Investing - Theory, News & General
Topic: Berkshire Hathaway Annual Meeting Today 5/5 - Yahoo Livestream
Replies: 23
Views: 2543

Re: Berkshire Hathaway Annual Meeting Today 5/5 - Yahoo Livestream

I thought it was interesting that while Buffett encourages people to invest in index funds, not all Berkshire companies offer them in their 401(k). I found his comment -- that they let the managers of the businesses make these decisions without interference from HQ -- to be a little disappointing.
by Stormbringer
Sat May 05, 2018 8:08 am
Forum: Investing - Theory, News & General
Topic: Paying down your mortgage as a way to balance your portfolio?
Replies: 72
Views: 4178

Re: Paying down your mortgage as a way to balance your portfolio?

Paying down your mortgage as a way to balance your portfolio? I think of it in a very different way. Often we think of our portfolios from the perspective of a balance sheet (e.g. "what's my net worth?", "how much do I have in retirement savings?", etc.). However, most people experience life from t...
by Stormbringer
Sat May 05, 2018 7:19 am
Forum: Investing - Theory, News & General
Topic: Berkshire Hathaway Annual Meeting Today 5/5 - Yahoo Livestream
Replies: 23
Views: 2543

Berkshire Hathaway Annual Meeting Today 5/5 - Yahoo Livestream

For those interested in hearing what Warren and Charlie have to say, Yahoo will be live-streaming the event today starting at 9:45 ET:

https://finance.yahoo.com/brklivestream/
by Stormbringer
Fri Apr 27, 2018 3:33 pm
Forum: Personal Finance (Not Investing)
Topic: Tax on Gifted Land
Replies: 3
Views: 296

Tax on Gifted Land

Two years ago we unexpectedly received a warranty deed in the mail for some vacant land several hours from our home. My father-in-law subdivided his land and gave a parcel each to my wife and her sister. We didn't really want it because of the holding cost, but the larger tract of land from which it...