Search found 1911 matches

by bigred77
Thu Sep 07, 2017 8:05 am
Forum: Investing - Theory, News & General
Topic: Fixed Income: Percentage Of Portfolio Or Specific $ Amount?
Replies: 19
Views: 2179

Re: Fixed Income: Percentage Of Portfolio Or Specific $ Amount?

I use a portfolio with a percentage of fixed income because I chose my 75%/25% AA for many reasons. I am comfortable with the level of risk, volatility, historical draw downs, etc. that come with that kind of allocation. If I keep a fixed dollar amount in fixed income then I am always increasing the...
by bigred77
Wed Sep 06, 2017 12:59 pm
Forum: Personal Finance (Not Investing)
Topic: When calculating net worth, how do you value your house?
Replies: 167
Views: 9484

Re: When calculating net worth, how do you value your house?

I live in a bigger city and I can pretty much tell you the value of my home plus or minus 5% at any given time. It's not hard to find real estate transactions from my neighborhood. I take that estimate of market value for my house and include it in my net worth. I'm surprised so many posters don't f...
by bigred77
Wed Sep 06, 2017 8:04 am
Forum: Investing - Help with Personal Investments
Topic: Percentage of Assets Outside of Tax-Deferred Retirement?
Replies: 15
Views: 1516

Re: Percentage of Assets Outside of Tax-Deferred Retirement?

I have never seen a reason to seek out a higher tax bill (even for some ill defined "flexibility"). If your going to invest money, I would always put in any tax advantaged space first, and then taxable accounts only after you have maxed your tax advantaged space. If your going to save money for a sp...
by bigred77
Tue Sep 05, 2017 11:26 am
Forum: Investing - Theory, News & General
Topic: Do retiree BHs actually run down their portfolios?
Replies: 73
Views: 8668

Re: Do retiree BHs actually run down their portfolios?

Any boglehead retiree with a reasonable, diversified portfolio who used the 4% rule is now richer than when they retired unless they retired in and around the year 2000. Those retiree's are in fine shape and are now 17 years into retirement, but they probably don't have a portfolio substantially hig...
by bigred77
Tue Sep 05, 2017 8:56 am
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate -> 2% or lower
Replies: 72
Views: 8499

Re: Safe Withdrawal Rate -> 2% or lower

The only flaw is you could prudently spend a lot more money if you wanted to. If you want to travel more, buy a nicer car, hire out some household tasks, or increase your quality of life in any way, but do not do it for fear of not having enough money later in life, I think that is a mistake. You wo...
by bigred77
Mon Sep 04, 2017 12:48 pm
Forum: Personal Consumer Issues
Topic: Are you a "car guy" or "car gal", how do you fund?
Replies: 41
Views: 3180

Re: Are you a "car guy" or "car gal", how do you fund?

My current strategy is buying German luxury cars CPO at the 3 year mark with roughly 30k miles and keeping that car for 8-10 more years. You can save 40%+ of buying new and it avoids the steepest parts of the depreciation curve. If I was financially independent already, I'd probably just lease. Yes ...
by bigred77
Fri Sep 01, 2017 2:47 pm
Forum: Investing - Theory, News & General
Topic: Do you know your bond portfolio's REAL 12 month total return?
Replies: 61
Views: 4611

Re: Do you know your bond portfolio's REAL 12 month total return?

I've noticed that column before. In the spirit of learning can someone please define and explain the difference between YTD and the "real" 12 month return? Preferable in laymens terms. I know YTD is only from the beginning of the year...so not a full 12 months. Again, I'm only trying to learn. I cu...
by bigred77
Fri Sep 01, 2017 2:28 pm
Forum: Investing - Theory, News & General
Topic: Do you know your bond portfolio's REAL 12 month total return?
Replies: 61
Views: 4611

Re: Do you know your bond portfolio's REAL 12 month total return?

I've noticed that column before. In the spirit of learning can someone please define and explain the difference between YTD and the "real" 12 month return? Preferable in laymens terms. I know YTD is only from the beginning of the year...so not a full 12 months. Again, I'm only trying to learn. I cu...
by bigred77
Tue Aug 29, 2017 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: Evaluating new job offer
Replies: 40
Views: 3285

Re: Evaluating new job offer

I don't know why you'd voluntarily take a pay cut to work for a less stable company but I know Tech companies are different than my area of expertise.

Would you at least get equity in the new company and a chance at a big pay day down the road?
by bigred77
Sat Aug 26, 2017 11:54 pm
Forum: Investing - Theory, News & General
Topic: Switching 100% to Mid-Cap Value? It consistently beats Total Stock Market with lower risk
Replies: 10
Views: 1974

Re: Switching 100% to Mid-Cap Value? It consistently beats Total Stock Market with lower risk

Many people have dug through past data and found asset classes, sectors, trading strategies, individual stocks, etc. that have outperformed. That's data mining. There isn't any fundamental reason for those trends to continue. It's really easy to hurt your portfolio performance going down this path. ...
by bigred77
Sat Aug 26, 2017 9:02 pm
Forum: Investing - Help with Personal Investments
Topic: Physician & Real Estate investor seeks advice
Replies: 82
Views: 8073

Re: Physician & Real Estate investor seeks advice

Getting back to the original request for advice, my advice for a Physician & Real Estate investor would be to not be a Physician & Real Estate investor. At the level you're wanting to be involved in both, and the level that you appear to be able to be successful, that just seems obvious to me. I ha...
by bigred77
Sat Aug 26, 2017 7:36 pm
Forum: Investing - Theory, News & General
Topic: factor based investing
Replies: 43
Views: 3040

Re: factor based investing

Trying to improve your portfolio's efficiency by diversifying across different sources of risk and return.
by bigred77
Fri Aug 25, 2017 12:35 pm
Forum: Investing - Help with Personal Investments
Topic: Taxes and safe swr
Replies: 41
Views: 2276

Re: Taxes and safe swr

Bigred77, I think most people think of their taxes in term of their Marginal Tax bracket --how much of another dollar added to their income would they lose. They can see immediately what tax bracket they are in and how much room is left in that tax bracket. But to follow your use of Effective Tax (...
by bigred77
Fri Aug 25, 2017 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Does it make sense to accelerate paying off mortgage now that I am 57 yrs old?
Replies: 24
Views: 2857

Re: Does it make sense to accelerate paying off mortgage now that I am 57 yrs old?

I think payoff mortgage or invest over the course of a couple of years is probably a marginal decision. Even if you borrow at 3.5% and make 10% with 200k over 5 years that's a benefit of less than 35k. I'm not saying that money is insignificant but does it move the needle on when you can retire or c...
by bigred77
Fri Aug 25, 2017 11:11 am
Forum: Investing - Help with Personal Investments
Topic: Taxes and safe swr
Replies: 41
Views: 2276

Re: Taxes and safe swr

The good thing is your tax bill will be much smaller in retirement. Most married couple would need to have withdrawals, plus pensions, plus SS or other income streams to exceed at least 100k per year before their effective federal tax rate breaks 10%. Are you kidding? If we had that much income our...
by bigred77
Fri Aug 25, 2017 8:42 am
Forum: Investing - Help with Personal Investments
Topic: Taxes and safe swr
Replies: 41
Views: 2276

Re: Taxes and safe swr

I think most, or at least I do, consider taxes to be a part of the withdrawal rate. Think of that withdrawal as "gross income". The good thing is your tax bill will be much smaller in retirement. Most married couple would need to have withdrawals, plus pensions, plus SS or other income streams to ex...
by bigred77
Thu Aug 24, 2017 7:49 pm
Forum: Investing - Theory, News & General
Topic: Long-run Sharpe Ratios in an ideal world
Replies: 43
Views: 5216

Re: Long-run Sharpe Ratios in an ideal world

I have a question about theory that I've been pondering: Assuming that the strong form of the efficient market hypothesis holds, would all diversified investments have identical Sharpe ratios (before expenses) if an investment has an infinite time horizon and no black swan events occur? (I know the...
by bigred77
Thu Aug 24, 2017 7:15 pm
Forum: Investing - Theory, News & General
Topic: Long-run Sharpe Ratios in an ideal world
Replies: 43
Views: 5216

Re: Long-run Sharpe Ratios in an ideal world

I'm very interested to read this thread. I think it's an excellent question. I would say no, even if markets were perfectly efficient sharp ratios would not be equal, because there are still other real world constraints. Investors don't have free access to leverage at the risk free rate to get an ef...
by bigred77
Thu Aug 24, 2017 4:27 pm
Forum: Personal Finance (Not Investing)
Topic: "I'm Bill Bengen, and I first proposed the 4% safe withdrawal rate in 1994. Ask me anything!"
Replies: 119
Views: 14723

Re: "I'm Bill Bengen, and I first proposed the 4% safe withdrawal rate in 1994. Ask me anything!"

I was mainly just trying to stress that there was another well respected researcher who implied sub 3% withdrawal rates, regardless of age, are overkill (which for some reason I get irrationally riled up about whenever I see them discussed here). I think that it is reasonably easy to talk about liv...
by bigred77
Thu Aug 24, 2017 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: What to do when a parent's money runs out?
Replies: 218
Views: 32173

Re: What to do when a parent's money runs out?

My first step would be to find out if the house is truly underwater with the mortgages. If it is I would simply tell your mother to mail the keys to the primary mortgage holder, pack her personal belongings, and you'll look online for the cheapest acceptable apartment wherever it makes sense for he...
by bigred77
Thu Aug 24, 2017 1:48 pm
Forum: Investing - Help with Personal Investments
Topic: What is the portfolio role of a leveraged bond fund like PONDX?
Replies: 55
Views: 3520

Re: What is the portfolio role of a leveraged bond fund like PONDX?

When you buy PONDX you are essentially saying "Here PIMCO, I'm going to give you some money. I want you to make money for me with whatever active strategy you think will work best but confine yourself to basically fixed income assets and derivatives. Feel free to change strategies whenever you choos...
by bigred77
Thu Aug 24, 2017 12:55 pm
Forum: Personal Finance (Not Investing)
Topic: 78% Americans are living from paycheck to paycheck?
Replies: 15
Views: 2154

Re: 78% Americans are living from paycheck to paycheck?

I don't know why it's so hard to believe. I absolutely believe it. It also states "Having a higher salary doesn't necessarily mean money woes are behind you, with nearly one in 10 workers making $100,000 or more (9 percent) saying they usually or always live paycheck-to-paycheck". People have less ...
by bigred77
Thu Aug 24, 2017 12:52 pm
Forum: Personal Finance (Not Investing)
Topic: What to do when a parent's money runs out?
Replies: 218
Views: 32173

Re: What to do when a parent's money runs out?

My first step would be to find out if the house is truly underwater with the mortgages. If it is I would simply tell your mother to mail the keys to the primary mortgage holder, pack her personal belongings, and you'll look online for the cheapest acceptable apartment wherever it makes sense for her...
by bigred77
Thu Aug 24, 2017 12:43 pm
Forum: Personal Finance (Not Investing)
Topic: 78% Americans are living from paycheck to paycheck?
Replies: 15
Views: 2154

Re: 78% Americans are living from paycheck to paycheck?

new2bogle wrote:
Thu Aug 24, 2017 12:40 pm
bigred77 wrote:
Thu Aug 24, 2017 12:36 pm
This is reality. Bogleheads are NOT the norm in this country.
Fixed that for you
Thank you... That was a pretty monumental mistake :mrgreen:
by bigred77
Thu Aug 24, 2017 12:36 pm
Forum: Personal Finance (Not Investing)
Topic: 78% Americans are living from paycheck to paycheck?
Replies: 15
Views: 2154

Re: 78% Americans are living from paycheck to paycheck?

No they are not talking about people who live "paycheck to paycheck after maxing retirement accounts". They have 3 classifications for living paycheck to paycheck "sometimes", "usually", and "always". From a related article referring to the survey: "Thirty-eight percent of employees said they someti...
by bigred77
Thu Aug 24, 2017 10:58 am
Forum: Personal Finance (Not Investing)
Topic: What should the savings be for an average professional
Replies: 168
Views: 17756

Re: What should the savings be for an average professional

So the, it could be true that there are many people with such income levels with only 150-200K of savings after 18-20 yrs. That is kind of little to show for 20 yrs of work. I would be willing to wager well over half of the population of average earning professionals has less than 200k outside of h...
by bigred77
Thu Aug 24, 2017 8:07 am
Forum: Personal Finance (Not Investing)
Topic: Retirement anxiety- emotionally and financially
Replies: 55
Views: 7126

Re: Retirement anxiety- emotionally and financially

If you had paid your house debt, you'd have $2.7m net assets. At a conservative 3% withdrawal rate you'd have $80k/year until you started collecting the Social Security. How would that compare to your current annual expenses? I hesitate to comment on this since there are so many people here that ha...
by bigred77
Thu Aug 24, 2017 7:52 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Alternative Lending Has Many Benefits
Replies: 28
Views: 3501

Re: Larry Swedroe: Alternative Lending Has Many Benefits

The main issue I have with alternative lending & re-insurance is the aspect of timing. One of the best investors in re-insurance is Buffett. He makes his money not by being exposed to re-insurance risk all the time like the re-insurance funds are but by varying his exposure based upon the price bei...
by bigred77
Wed Aug 23, 2017 1:20 pm
Forum: Personal Finance (Not Investing)
Topic: "I'm Bill Bengen, and I first proposed the 4% safe withdrawal rate in 1994. Ask me anything!"
Replies: 119
Views: 14723

Re: "I'm Bill Bengen, and I first proposed the 4% safe withdrawal rate in 1994. Ask me anything!"

I'm not saying that I disagree with Mr. Bengen (in reference to the underlined text above), but my own spreadsheet output using data from 1928 to present (SP 500 for equities and 10-yr Treasuries for bonds, both adjusted for CPI) would suggest SWRs of 4.15% for a 25 year period, 3.81% for a 30 year...
by bigred77
Wed Aug 23, 2017 1:06 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Alternative Lending Has Many Benefits
Replies: 28
Views: 3501

Re: Larry Swedroe: Alternative Lending Has Many Benefits

I believe in Factor investing; improving portfolio efficiency by diversifying across independent sources of return. I see alternatives like reinsurance and alternative lending as going one step further. Dave +1 to the bolded. "Alternatives" as an asset class are often IMO an attempt to find non-cor...
by bigred77
Wed Aug 23, 2017 12:51 pm
Forum: Investing - Help with Personal Investments
Topic: Retiree portfolio - Should I move more $ into bonds?
Replies: 3
Views: 728

Re: Retiree portfolio - Should I move more $ into bonds?

No, I don't think you should attempt to the time the market. A perfectly plausible scenario is the market goes up another 20% over the next 18 months, then drops 10% so you finally move back into equities, then drops ANOTHER 20%. That's how investors get themselves in trouble. Thats what this board ...
by bigred77
Wed Aug 23, 2017 11:44 am
Forum: Personal Finance (Not Investing)
Topic: Overextended in Bay Area housing?
Replies: 37
Views: 4080

Re: Overextended in Bay Area housing?

I think OP is in great shape. They have 2 pensions. They are saving 30k+/- per year. They are paying down debt at a good rate. They have a long term solution to their living situation that enables them to raise their family in comfort. They are in the public sector which in general has better job se...
by bigred77
Wed Aug 23, 2017 9:34 am
Forum: Personal Consumer Issues
Topic: Would you hire an obese nanny?
Replies: 81
Views: 3418

Re: Would you hire an obese nanny?

I did not know we had so many Adonis like physiques around this board.

Maybe the single posters should reconsider heading out to the annual conference :wink:
by bigred77
Wed Aug 23, 2017 9:14 am
Forum: Personal Finance (Not Investing)
Topic: Paying for college with 529 money
Replies: 14
Views: 1098

Re: Paying for college with 529 money

I'm not anywhere close to having to make the decision yet but I plan to encourage my kids to apply broadly to all schools they want to attend plus a couple of State flagship public schools and then we'll all sit down together and make the decision after we have admission decisions and financial aid ...
by bigred77
Wed Aug 23, 2017 8:46 am
Forum: Personal Finance (Not Investing)
Topic: "I'm Bill Bengen, and I first proposed the 4% safe withdrawal rate in 1994. Ask me anything!"
Replies: 119
Views: 14723

Re: "I'm Bill Bengen, and I first proposed the 4% safe withdrawal rate in 1994. Ask me anything!"

4.5% rule? I didn't know this. Thanks for your question. Before I answer it specifically, why don't we dispense with some preliminaries, so we are all on the same page? The "4% rule" is actually the "4.5% rule"- I modified it some years ago on the basis of new research. The 4.5% is the percentage y...
by bigred77
Wed Aug 23, 2017 8:04 am
Forum: Investing - Theory, News & General
Topic: Tilt away from one's home country slightly
Replies: 18
Views: 2004

Re: Tilt away from one's home country slightly

I see the benefit of avoiding having too much of your money in your company stock. Your income, potential future income, and job security is directly tied to the health of that company/sector/industry/profession/etc. Where it breaks down for me is any one individual US company is a small fraction of...
by bigred77
Tue Aug 22, 2017 1:33 pm
Forum: Personal Finance (Not Investing)
Topic: Requesting thoughts on the current "plan"
Replies: 14
Views: 1243

Re: Requesting thoughts on the current "plan"

I believe you are WAY overestimating how hard it is to get funds out of tax advantaged accounts. That space is your best friend, not your enemy. You already have substantial funds already in taxable. Every dollar you contribute to a Roth IRA can be withdrawn and spent tax and penalty free at any tim...
by bigred77
Tue Aug 22, 2017 12:04 pm
Forum: Personal Finance (Not Investing)
Topic: Why do we consider cash flow from rentals but not our own homes?
Replies: 89
Views: 6266

Re: Why do we consider cash flow from rentals but not our own homes?

Just to be clear, I do consider a personal residence a asset, part of one's net worth and all that, but I don't place any value on imputed rent considerations. How do you then distinguish between these cases in a consistent way? a) John occupies his entire house b) John occupies part of his house a...
by bigred77
Tue Aug 22, 2017 11:58 am
Forum: Investing - Theory, News & General
Topic: Managing Sequence of Return Risk - Ben Carlson
Replies: 5
Views: 1283

Re: Managing Sequence of Return Risk - Ben Carlson

General rule of thumb: While accumulating, you want the best returns at the end of this phase. While in retirement, you want the best returns at the beginning of this phase. Sequence of returns matters to anyone whose portfolio is subject to cash flows. If I'm contributing over time, sequence of ret...
by bigred77
Tue Aug 22, 2017 11:52 am
Forum: Personal Finance (Not Investing)
Topic: Why do we consider cash flow from rentals but not our own homes?
Replies: 89
Views: 6266

Re: Why do we consider cash flow from rentals but not our own homes?

I don't consider potential cash flow from rentals as income, I only consider ACTUAL cash flows. If I have a rental property that I can't get rented out for 4 months, that's a problem and I don't derive any benefit from the "imputed rent" of that property. Potential cash flows may justify a rental pr...
by bigred77
Tue Aug 22, 2017 11:44 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans To Launch Total Corporate Bond ETF
Replies: 42
Views: 7256

Re: Vanguard Announces Plans To Launch Total Corporate Bond ETF

I'm excited for the multitude of discussions (I'm being genuine, I plan to participate in these myself, it keeps me busy :mrgreen: ) where we all debate which is better: "100% Vanguard Total Corporate Bond vs. 100% Vanguard Intermediate-Term Corporate Bond" We all know the end result will be a coupl...
by bigred77
Tue Aug 22, 2017 11:31 am
Forum: Personal Finance (Not Investing)
Topic: Refinance or Stay As Is
Replies: 13
Views: 1356

Re: Refinance or Stay As Is

My vote is C. Lock your total debt load in at 2.75% (tax deductible) and pay it off on schedule over the next 15 years (age 53). Take the cash you get at closing and don't put it in a CD, just pay off the student loans. Then save 50k for your renovation over the next 3-5 years. You should have plent...
by bigred77
Tue Aug 22, 2017 10:45 am
Forum: Personal Finance (Not Investing)
Topic: Requesting thoughts on the current "plan"
Replies: 14
Views: 1243

Re: Requesting thoughts on the current "plan"

I think you are on track to reach all of your goals. Why don't you do a backdoor Roth IRA every year for both your wife and you? I don't see any reason that would prevent you from doing so. Why don't you take some of that taxable money and just "superfund" the 529 accounts now instead of doing it mo...
by bigred77
Tue Aug 22, 2017 9:19 am
Forum: Personal Finance (Not Investing)
Topic: When have you achieved financial independence?
Replies: 27
Views: 4448

Re: When have you achieved financial independence?

I am a big believer that it's almost always the correct choice to fill up tax advantaged space prior to investing in a taxable account (speaking strictly about retirement funds or funds without a specific purpose as of yet). Tax advantaged accounts are actually much more flexible than people tend to...
by bigred77
Tue Aug 22, 2017 8:07 am
Forum: Investing - Help with Personal Investments
Topic: 33 years old, how am I doing ?
Replies: 54
Views: 8565

Re: 33 years old, how am I doing ?

I can't tell from the post what exactly your spending is? You make 450k but only save 61k per year? Is the rest spent (I know your tax burden would be high)? How did you amass such a huge net worth at 33 while going to med school/residency? Was there an inheritence? Why do you feel burnout at such a...
by bigred77
Mon Aug 21, 2017 5:54 pm
Forum: Investing - Help with Personal Investments
Topic: Contribute to 403(b) or taxable account?
Replies: 7
Views: 930

Re: Contribute to 403(b) or taxable account?

My wife is a school teacher for a public school district. She has a salary of $48,500 (importantly, we file taxes as married filing separately in order to allow her to take advantage of Public Service Student Loan Forgiveness). We are fortunate that we do not need her salary to help with expenses b...
by bigred77
Mon Aug 21, 2017 5:41 pm
Forum: Investing - Help with Personal Investments
Topic: Which loan to pay off?
Replies: 17
Views: 1480

Re: Which loan to pay off?

You should pay off loan B first because it's higher interest. Pay off Loan A on schedule by using a 2% cash back credit card and then send your actual funds immediately to the credit card company to get your bonus. As a general rule of thumb, 2 physician households really probably should worry to mu...
by bigred77
Mon Aug 21, 2017 5:24 pm
Forum: Investing - Help with Personal Investments
Topic: 529 contribution and AA
Replies: 7
Views: 1025

Re: 529 contribution and AA

What I would do is lump sum as much as you can into those 529 plans tomorrow (which i think is 140k per kid) and then consider college funding finished. You have 8 and 12 years of tax free investing. If there's money leftover, they can use it for grad/professional school or leave it alone to pay for...
by bigred77
Mon Aug 21, 2017 5:03 pm
Forum: Personal Finance (Not Investing)
Topic: which mortgage to take?
Replies: 8
Views: 516

Re: which mortgage to take?

You consider the intended holding period (or at least the financing period) If less than (or around) 5 years, you go with option 2. If you intend it to be a long term holding (over 10 years) then I'd go with option 1 (personally, 52.5 basis points wouldn't get me to take the interest rate risk). If ...
by bigred77
Mon Aug 21, 2017 2:19 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable account recommendation
Replies: 8
Views: 1161

Re: Taxable account recommendation

I would look at your taxable and tax advantaged space as one single portfolio and only buy equities in the taxable space. You can add more fixed income in the tax advantaged space to keep your overall asset allocation where you want it. It's much more tax efficient. In terms of investing more vs mor...