Search found 1260 matches

by bigred77
Wed Jan 04, 2017 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: spousal disagreement over how much house to buy
Replies: 99
Views: 6492

Re: spousal disagreement over how much house to buy

Good location, new construction, top school district, next to a park, PITI less than 25% of gross income and you have 20% to put down. What's the problem? Buy the house and enjoy it! Btw... is 23% of gross assuming a 15yr or 30yr mortgage. It wouldn't change my recommendation to buy it either way bu...
by bigred77
Wed Jan 04, 2017 2:10 pm
Forum: Investing - Theory, News & General
Topic: Whats your number to walk away?
Replies: 245
Views: 27964

Re: Whats your number to walk away?

I'm curious why the preference for taxable investments over IRA's? Because I don't want to withdraw from the IRAs until I'm at least 60 (although converting from Traditional to Roth is fine), and I don't want to spend down the taxable account to nothing, or to near-nothing, before I get to 60. Mayb...
by bigred77
Wed Jan 04, 2017 1:48 pm
Forum: Investing - Help with Personal Investments
Topic: Do you model where you *should* be? And if so *how*?
Replies: 8
Views: 1101

Re: Do you model where you *should* be? And if so *how*?

I still have a very long ways to go so I focus on my savings percentage. I think that gives me a better indication of how I'm doing vs anything else I could look at. I also focus on yearly total debt balance reduction. If the debt balance goes up, I better know why and have a good reason for it. I a...
by bigred77
Wed Jan 04, 2017 1:33 pm
Forum: Investing - Help with Personal Investments
Topic: Investing/Portfolio questions (age 31)
Replies: 7
Views: 988

Re: Investing/Portfolio questions (age 31)

If I were you, I would elect to defer a percentage of my paycheck to the 403b, put it all in the Vanguard Target Retirement 2050 fund (same as your Roth) and then leave everything else constant (keep maxing your Roth like your doing). Maybe start with 10% of salary, or more if you wish, and go from ...
by bigred77
Wed Jan 04, 2017 1:22 pm
Forum: Investing - Theory, News & General
Topic: Whats your number to walk away?
Replies: 245
Views: 27964

Re: Whats your number to walk away?

Most will have a mix of cash, CDs, taxable, 401k/Rollover IRA, Roth IRA and add up the full value. Thanks. If that's the case, then I guess my answer goes something like this: For what I would expect to provide a basic, but reasonably comfortable, retirement : $2.5 million total portfolio, with at ...
by bigred77
Wed Jan 04, 2017 1:13 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with cash gifts?
Replies: 8
Views: 900

Re: What to do with cash gifts?

I absolutely would be maxing out the 457. Next I would try to find a solution for the self employed spouse to get as much money into tax advantaged accounts as possible (I would look into solo 401ks, SIMPLE IRAs, SEP IRAs, I'm less familiar with the self employed retirement options world). The rest ...
by bigred77
Wed Jan 04, 2017 12:24 pm
Forum: Personal Finance (Not Investing)
Topic: You have 5-10 minutes to teach someone about personal finance
Replies: 54
Views: 4032

Re: You have 5-10 minutes to teach someone about personal finance

Bogleheads.org. 5 seconds +1. I have recommend this site to a number of my friends. I have recommended this site numerous times. I only got confirmation from 1 person that they actually came here and read anything. They seemed to be really appreciative and we still have conversations at social func...
by bigred77
Wed Jan 04, 2017 10:40 am
Forum: Investing - Theory, News & General
Topic: What inflation rate do you use for your planning?
Replies: 67
Views: 4185

Re: What inflation rate do you use for your planning?

Umm. Prudently forecasting assets into the future when you are too old to work much is very useful and responsible- even though we know we may be wrong. And. Any forecast of future asset value at least implicitly makes a forecast of inflation. I posted earlier about calculating future real asset su...
by bigred77
Wed Jan 04, 2017 9:45 am
Forum: Personal Finance (Not Investing)
Topic: Thinking of upgrading primary residence, do you recommend?
Replies: 29
Views: 2161

Re: Thinking of upgrading primary residence, do you recommend?

OP is 43. The family has roughly: 850k in retirement savings. 30k in E-Fund 50k in college savings 150k in home equity that they could use as a down payment. They absolutely can afford to upgrade their home if it would make them happier. Their retirement saving is on track (more than on track). They...
by bigred77
Tue Jan 03, 2017 6:03 pm
Forum: Personal Finance (Not Investing)
Topic: Rental Properties and Asset Allocation
Replies: 12
Views: 1366

Re: Rental Properties and Asset Allocation

I consider real estate a separate asset class. I think it falls somewhere between equities and bonds on the risk return spectrum. I'm about 10 years out from an early (semi?) retirement. My issue is that I invested in a property management company 20 years ago, and in the process I acquired a portfo...
by bigred77
Tue Jan 03, 2017 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 6025

Re: Study on SWR rates for Early Retirement

I will note that the original article uses a 100% equities portfolio for its calculations. The study looks at 100% 75% 50% 25% and 0% equities. However, what frequently goes entirely UNEXPLORED by these studies is what amount you end up with in the 90% of SUCCESSFUL outcomes. Indeed, in some not-in...
by bigred77
Tue Jan 03, 2017 12:53 pm
Forum: Investing - Theory, News & General
Topic: Whats your number to walk away?
Replies: 245
Views: 27964

Re: Whats your number to walk away?

I probably would need $6M to retire today in my early 30s. I am nowhere close to that number. With maybe $2M I might make a career change to something much lower stress / more enjoyable. I do wonder at what point financial security might affect my career ambition. I don't have a good handle on what ...
by bigred77
Tue Jan 03, 2017 12:42 pm
Forum: Investing - Theory, News & General
Topic: Are Younger people funding 529 Plans?
Replies: 109
Views: 7474

Re: Are Younger people funding 529 Plans?

They are definitely not prevalent among people in their 20s/30s. Even among people in this age range who are making saving/investing a priority (that's not a large percentage) there are simply too many competing priorities for their dollars. I have a number of highly educated friends who are startin...
by bigred77
Thu Dec 29, 2016 3:15 pm
Forum: Investing - Help with Personal Investments
Topic: Paying myself a salary for investment and tax management?
Replies: 71
Views: 4449

Re: Paying myself a salary for investment and tax management?

You missed the income tax coming out of the second calculation when distributed. They're aftertax 401k contributions. The biggest thing is that in order to get 50k+ into a solo 401k, you are limited to 18k in self deferral. The additional amounts are considered "profit sharing" and is lim...
by bigred77
Thu Dec 29, 2016 2:11 pm
Forum: Investing - Help with Personal Investments
Topic: Paying myself a salary for investment and tax management?
Replies: 71
Views: 4449

Re: Paying myself a salary for investment and tax management?

John, Let's say you pay yourself a $100k salary for doing the work that you would have CPAs do otherwise. Now, you have to pay FICA (about 12.4%) and Medicare (about 2.5%) taxes on that - that's close to $15k. Then, you contribute $54k to the retirement accounts - that you can save income taxes on....
by bigred77
Thu Dec 29, 2016 11:10 am
Forum: Investing - Help with Personal Investments
Topic: Paying myself a salary for investment and tax management?
Replies: 71
Views: 4449

Re: Paying myself a salary for investment and tax management?

John, Let's say you pay yourself a $100k salary for doing the work that you would have CPAs do otherwise. Now, you have to pay FICA (about 12.4%) and Medicare (about 2.5%) taxes on that - that's close to $15k. Then, you contribute $54k to the retirement accounts - that you can save income taxes on....
by bigred77
Thu Dec 29, 2016 9:38 am
Forum: Personal Finance (Not Investing)
Topic: Are there any benefits to achieving "great wealth"?
Replies: 106
Views: 8432

Re: Are there any benefits to achieving "great wealth"?

You get security (don't have to worry about food, shelter, or basic comforts) even if you don't have an income. You also get options (can afford the risk to make demands at your job, take a new job, or quit doing any job). You have the opportunity to call yourself a "man/woman of leisure" ...
by bigred77
Thu Dec 29, 2016 9:14 am
Forum: Investing - Help with Personal Investments
Topic: Paying myself a salary for investment and tax management?
Replies: 71
Views: 4449

Re: Paying myself a salary for investment and tax management?

Even if you maxed out a solo 401k you are talking about, at best, maybe 50 basis points of your portfolio being affected. It's not worth your time to worry about this. If I contributed $60,000 to a 401k + IRA each year, the savings over the long run would be meaningful. It would not be "meanin...
by bigred77
Thu Dec 29, 2016 9:01 am
Forum: Investing - Help with Personal Investments
Topic: Paying myself a salary for investment and tax management?
Replies: 71
Views: 4449

Re: Paying myself a salary for investment and tax management?

Even if you maxed out a solo 401k you are talking about, at best, maybe 50 basis points of your portfolio being affected.

It's not worth your time to worry about this.
by bigred77
Wed Dec 28, 2016 11:24 pm
Forum: Investing - Theory, News & General
Topic: Expected returns 2017-2047
Replies: 30
Views: 2928

Re: Expected returns 2017-2047

Bad: -1% real Ok: 0% real Good: 1% real Spectacular: 2% real I am just trying to keep up with inflation in the most tax efficient manner possible. You are aware that your prediction for "spectacular" returns is worse than 95% of observed 30 year periods? That's... pessimistic to say the l...
by bigred77
Wed Dec 28, 2016 3:47 pm
Forum: Personal Consumer Issues
Topic: At what age, income, and NW would you buy a $50k car?
Replies: 174
Views: 11089

Re: At what age, income, and NW would you buy a $50k car?

OP here. Annual expenses for family of 3 are ~$100k. The rest is taxes and savings. After looking at prices, a 2-3 year old off-lease CPO Lexus for $35k may be a better value than a new one at $50k. 2-3 yr old CPO cars w/ about 30k miles on them are the sweet spot for entry level luxury cars (BMW, ...
by bigred77
Wed Dec 28, 2016 2:04 pm
Forum: Personal Finance (Not Investing)
Topic: Save or pay down the mortgage?
Replies: 11
Views: 948

Re: Save or pay down the mortgage?

Wife and I go back and forth whether we want to buy a new house or stay. I want to put an extra $300 towards the mortgage now. She wants to put it into savings. My thinking is if we don't end up moving, I accelerate the mortgage payments. If we do move, we would have more equity towards the house a...
by bigred77
Wed Dec 28, 2016 10:27 am
Forum: Personal Finance (Not Investing)
Topic: Monthly Expenses in line or too much
Replies: 81
Views: 7033

Re: Monthly Expenses in line or too much

People are just going to subconsciously compare their total spending to the number you posted and reply accordingly. If they spend more, they'll tell you it seems right in line. If they spend less, they'll tell you it's too much and you can/should cut the fat. I say pick a reasonable savings rate ta...
by bigred77
Wed Dec 28, 2016 9:32 am
Forum: Personal Finance (Not Investing)
Topic: large purchase [engagement ring]
Replies: 72
Views: 5304

Re: large purchase [engagement ring]

Just curious how old the OP is. 200k is not an entry level salary but it sounds like maybe you are just entering the work force? Are you starting from 0 financially? Do you have student loans or anything already. 14k for an engagement ring is not a big deal at 200k in salary but I might not advise t...
by bigred77
Tue Dec 27, 2016 1:54 pm
Forum: Investing - Theory, News & General
Topic: Remember what it was like before the recession?
Replies: 81
Views: 8269

Re: Remember what it was like before the recession?

There is always some economic threat. There is always bad news. There are always bear market prognosticators. There is always some reason why "this time is different". There is always a "new normal". All markets (financial, labor, real estate, etc.) continue to ebb and flow. Up a...
by bigred77
Tue Dec 27, 2016 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: I'll never save a 20% down payment. Rent for life?
Replies: 138
Views: 12851

Re: I'll never save a 20% down payment. Rent for life?

My post shows how the numbers would work. Assuming the $59K is their income, the OP can buy a home with an FHA loan for 30 years with as little as 3.5% down and pay no more per month than they'll be paying for rent for a comparable home. They even have more income than necessary to qualify for the ...
by bigred77
Tue Dec 27, 2016 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: I'll never save a 20% down payment. Rent for life?
Replies: 138
Views: 12851

Re: I'll never save a 20% down payment. Rent for life?

OP, I've you plan to live in that area for the next decade plus, I would buy with a FHA mortgage (5% or so down, yes you will have PMI for a while). That's what those programs are there for. It seems drastically cheaper to buy than rent in your city (seriously, if you can buy houses for 130k and re...
by bigred77
Tue Dec 27, 2016 11:14 am
Forum: Personal Finance (Not Investing)
Topic: I'll never save a 20% down payment. Rent for life?
Replies: 138
Views: 12851

Re: I'll never save a 20% down payment. Rent for life?

OP, I've you plan to live in that area for the next decade plus, I would buy with a FHA mortgage (5% or so down, yes you will have PMI for a while). That's what those programs are there for. It seems drastically cheaper to buy than rent in your city (seriously, if you can buy houses for 130k and ren...
by bigred77
Thu Dec 22, 2016 2:05 pm
Forum: Investing - Help with Personal Investments
Topic: Will ETFs make mutual index funds obsolete?
Replies: 28
Views: 1961

Re: Will ETFs make mutual index funds obsolete?

ETFs are the fastest growing asset class of all time. Will ETFs be the future of investing, and will they make index mutual funds obsolete? Or will the buy-and-hold investor always prefer funds? ETFs are not an asset class!!! (Sorry, I've seen this statement before and it makes me irrationally angr...
by bigred77
Thu Dec 22, 2016 1:51 pm
Forum: Investing - Help with Personal Investments
Topic: Pre-pay mortgage vs Taxable?
Replies: 54
Views: 3632

Re: Pre-pay mortgage vs Taxable?

If the balance is 70k I would make just paying it off a priority to increase cashflow, make my life simpler, and get a guaranteed 4.375% If you owed 200k+, my answer might be different. I also echo Klangfool's comment that if you are not also doing backdoor Roth IRA's then that should come first (pr...
by bigred77
Thu Dec 22, 2016 9:38 am
Forum: Personal Finance (Not Investing)
Topic: Financing an MBA - Taking Loans vs Withdrawing from Retirement Accounts
Replies: 8
Views: 719

Re: Financing an MBA - Taking Loans vs Withdrawing from Retirement Accounts

OP, congrats on getting in to a great school. In your shoes, I would treat tax advantaged space as sacred. You will most likely be making a high income over the course of your career and you are going to want all the tax advantaged space you can get. Here's what I would do if I were you: Play with t...
by bigred77
Wed Dec 21, 2016 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: First-Time Home-Buyer Needs Advice
Replies: 19
Views: 1353

Re: First-Time Home-Buyer Needs Advice

Also... for 50k.... you could just take a 50k 401k/457b loan... - pay yourself the interest. How exactly would this work? Would my money stay invested when I take out the loan? How long would I typically have to pay it back? It does not stay invested, but if you have at least 50k in fixed income in...
by bigred77
Wed Dec 21, 2016 1:32 pm
Forum: Investing - Theory, News & General
Topic: What are the REAL reasons to avoid international?
Replies: 71
Views: 5370

Re: What are the REAL reasons to avoid international?

I haven't found any reason to avoid international equities. 47% of my equity allocation is in international equities. I have made the decision to forego international bonds. I think US treasuries (and a smattering of US corporate debt) sufficiently meets my needs from the fixed income portion of my ...
by bigred77
Wed Dec 21, 2016 1:20 pm
Forum: Personal Finance (Not Investing)
Topic: housing options-- stretch for schools?
Replies: 37
Views: 2280

Re: housing options-- stretch for schools?

We went with option A (house was 3.2X income, very good elementary and middle schools, horrible high school) but the main reason is because option B was about 5X-6X income unless we wanted a 45 minute commute each way. I figure if my career takes off we can always do private school for high school. ...
by bigred77
Wed Dec 21, 2016 1:06 pm
Forum: Personal Consumer Issues
Topic: Best time/method of buying a new car.
Replies: 34
Views: 2722

Re: Best time/method of buying a new car.

I will just note that sometimes you can get a better deal on the price of a car if you agree to finance through the dealer. When we helped my mom buy a Ford Focus they would not agree to the price I wanted unless we agreed to finance through them (I believe the dealership got a kickback incentive fo...
by bigred77
Wed Dec 21, 2016 11:24 am
Forum: Personal Consumer Issues
Topic: Is it rude to dispose of unwanted gifts?
Replies: 60
Views: 5278

Re: Is it rude to dispose of unwanted gifts?

White Coat Investor wrote:Regiftables.

It could be worse. For about two years there as my in-laws downsized they would show up with literally a minivan FULL of stuff every time they came to visit.



This would have given me so much anxiety I would have developed a nervous twitch...
by bigred77
Tue Dec 20, 2016 5:51 pm
Forum: Investing - Help with Personal Investments
Topic: Borrow money to invest?
Replies: 33
Views: 2581

Re: Borrow money to invest?

If a bank offered me a 1% 5yr loan and I knew there was a 3% 7 year CD available CD rates here are all lower than 0.5%, so that's not an option for me. Also, I wouldn't say that I need the loan - I just feel like it might be a good way to get to retirement faster than I would otherwise. You can get...
by bigred77
Tue Dec 20, 2016 1:26 pm
Forum: Investing - Theory, News & General
Topic: Price Earnings ratio of Total International Stock Market?
Replies: 5
Views: 750

Re: Price Earnings ratio of Total International Stock Market?

The return to US investors who invest in International Equities IS affected by currency swings (unless the fund your using is currency hedged, but I believe all the usual equity funds recommended from Vanguard, Fidelity, Schwab, etc are not hedged). The strengthening of the US dollar has certainly p...
by bigred77
Mon Dec 19, 2016 2:15 pm
Forum: Personal Finance (Not Investing)
Topic: What kind of person buys a franchise?
Replies: 49
Views: 5422

Re: What kind of person buys a franchise?

I liken it a little bit to owning rental properties. It doesn't look like an attractive option to me (at least with current prices/rents in my city) but some people want to own them. Some people will fail. Some will make some money on them. Some will be wildly successful with them. I suspect those t...
by bigred77
Mon Dec 19, 2016 1:53 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21484

Re: Your Retirement Number, or, calculating the funding ratio

The biggest problem I have with this outline of the funding ratio is how I have calculated the PV of future streams of income that don't begin today, but instead several years in the future. I think the two step process I have used is an appropriate method for calculating these PVs, but my confiden...
by bigred77
Mon Dec 19, 2016 1:45 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21484

Re: Your Retirement Number, or, calculating the funding ratio

bobcat2, Am I understanding correctly in your original post you are not factoring in any more retirement contributions over the following 12 years of working until the planned retirement date? Also, that real discount rate is going to be incredibly powerful, especially when performing calculations ...
by bigred77
Mon Dec 19, 2016 12:47 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring in a Decade after Graduation
Replies: 131
Views: 15482

Re: Retiring in a Decade after Graduation

Maybe this should be elaborated on as I don't get why this thread is sad or funny...Although, i will admit I may have missed a few posts that you are referring too. Sure. My comment was on the kind of exuberance that only someone under 30 can have. I recognize it because it was something I had. My ...
by bigred77
Mon Dec 19, 2016 12:44 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21484

Re: Your Retirement Number, or, calculating the funding ratio

bobcat2, Am I understanding correctly in your original post you are not factoring in any more retirement contributions over the following 12 years of working until the planned retirement date? Also, that real discount rate is going to be incredibly powerful, especially when performing calculations f...
by bigred77
Mon Dec 19, 2016 11:16 am
Forum: Investing - Theory, News & General
Topic: Concept of Bogleheads needing to "Save more"
Replies: 61
Views: 4960

Re: Concept of Bogleheads needing to "Save more"

I also want to point out that these SAFEMIN savings rates represent the rates that would have worked in the absolute worst of times (from the past) . From the article: "Using the SAFEMIN savings rate was always sufficient to finance desired retirement expenditures regardless of the actual weal...
by bigred77
Mon Dec 19, 2016 10:34 am
Forum: Investing - Theory, News & General
Topic: Retreat to cash
Replies: 223
Views: 23518

Re: Retreat to cash

"Retreat to Cash" sounds too similar to the infamous "Prevent Defense" in football. And seeing how that almost cost the game in the 4th quarter for my beloved Packers yesterday against the Bears, I can't recommend. :oops: IMHO, the best defense is a good offense, both in footbal...
by bigred77
Mon Dec 19, 2016 10:28 am
Forum: Investing - Theory, News & General
Topic: Concept of Bogleheads needing to "Save more"
Replies: 61
Views: 4960

Re: Concept of Bogleheads needing to "Save more"

I also want to point out that these SAFEMIN savings rates represent the rates that would have worked in the absolute worst of times (from the past) . From the article: "Using the SAFEMIN savings rate was always sufficient to finance desired retirement expenditures regardless of the actual wealt...
by bigred77
Mon Dec 19, 2016 10:06 am
Forum: Investing - Theory, News & General
Topic: Concept of Bogleheads needing to "Save more"
Replies: 61
Views: 4960

Re: Concept of Bogleheads needing to "Save more"

As others have said, the advice is "save enough." What's enough? Wade Pfau has put a lot research into this area and the answer is shockingly high: http://resource.fpanet.org/resource/981547A8-1D09-67A1-ACAC12B70A5C0D51/0511-Pfau-Table-1.jpg Additional reading (a bit dense): Safe Savings ...
by bigred77
Thu Dec 15, 2016 2:44 pm
Forum: Personal Finance (Not Investing)
Topic: Student Loan with low interest, keep or pay off early?
Replies: 26
Views: 2406

Re: Student Loan with low interest, keep or pay off early?

I wouldn't touch paying off student loans at 2.65% interest. You get some tax benefits from the interest and should be able to invest money you would be paying towards the student loans to generate a higher return. Only reason to payoff is if you are uncomfortable with holding debt. If the OP and h...
by bigred77
Thu Dec 15, 2016 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: House Mortgage Rate
Replies: 18
Views: 3875

Re: House Mortgage Rate

Yeah don't sweat it. You can always refi later of rates go down. If they go up you'll be happy with what you have. You did fine. When i bought my house about 3 and half years ago I paid almost a full point to buy the rate down to 4.25% (I think, maybe it was 4.125%). I was convinced I would never r...
by bigred77
Thu Dec 15, 2016 1:19 pm
Forum: Personal Finance (Not Investing)
Topic: Advice on how to fund my first house
Replies: 6
Views: 938

Re: Advice on how to fund my first house

I'm sure there are loan types available specific to building a new house (and probably lenders who specialize with these) but I'm unfamiliar with them. I would shop it around to get an idea of rates, repayment schedules, draw schedule, etc. I would try to find the most flexible of the above loan pro...

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