Search found 1759 matches

by bigred77
Wed Jun 07, 2017 8:48 am
Forum: Investing - Help with Personal Investments
Topic: Financially independent and then market crashes?
Replies: 54
Views: 6218

Re: Financially independent and then market crashes?

Sooooo never retire then? I know everyone likes these things to fit in a precise little formula but that not possible. If the market crashes six months out, the young retiree can cut back spending a little. They could pick up a part time job maybe. They have options. The 4% rule is derived from tes...
by bigred77
Tue Jun 06, 2017 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Home purchase budget advice
Replies: 20
Views: 1613

Re: Home purchase budget advice

You want to know if house you could pay cash for if you sold your taxable investments is reasonable? If 450k gets you what you want in a house then go for it. Then it's just a financing decision. I would put 20% down and finance the rest but that's just my preference. Its a personal decision dependi...
by bigred77
Tue Jun 06, 2017 9:17 pm
Forum: Investing - Help with Personal Investments
Topic: Financially independent and then market crashes?
Replies: 54
Views: 6218

Re: Financially independent and then market crashes?

How about this: Set your annual expenses to equal 2.5% (or less) of your total investment portfolio balance, based on what the balance would be if the value of the equity portion of the portfolio is half of what it is now. I think that if you can do this (and thus keep your expenses relatively low ...
by bigred77
Tue Jun 06, 2017 6:30 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin: The worst investment in 2014
Replies: 83
Views: 11252

Re: Bitcoin: The worst investment in 2014

Exactly! There is no evidence. I searched and couldn't find anything. I did find article that state that Bitcoin Mining is illegal and you can get arrested. What makes you think that people in Venezuela know how to use Bitcoin period? An average American doesn't even know what it is lol! I think yo...
by bigred77
Tue Jun 06, 2017 5:44 pm
Forum: Investing - Help with Personal Investments
Topic: Financially independent and then market crashes?
Replies: 54
Views: 6218

Re: Financially independent and then market crashes?

When you go below a 4% initial withdrawal rate, the tough decision that your most likely to face is not "how will I react if I get 2 decades in and my portfolio looks like it might not survive". It's "At what point do I decide the portfolio has grown so much it's OK for me to increas...
by bigred77
Tue Jun 06, 2017 5:33 pm
Forum: Investing - Help with Personal Investments
Topic: Financially independent and then market crashes?
Replies: 54
Views: 6218

Re: Financially independent and then market crashes?

SWR of 4% (25x) is based on 30 year drawdown. People FI in their 30's and 40's need a lower SWR / more like 33x. What data do you have to base this statement on? The 4% SWR comes from Trinity study for an 80/20 (ish, depending on how you judge "failure") allocation, year 2000 looks like m...
by bigred77
Tue Jun 06, 2017 2:10 pm
Forum: Investing - Help with Personal Investments
Topic: Financially independent and then market crashes?
Replies: 54
Views: 6218

Re: Financially independent and then market crashes?

If I retired before age 50 and my portfolio dropped 25% from it's peak balance that would mean a repeat of 2008 or worse. I would have something along the lines of a 60/40 portfolio so global equities would have dropped by almost half. I would certainly be aware of the doom and gloom talk that is su...
by bigred77
Tue Jun 06, 2017 1:04 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin: The worst investment in 2014
Replies: 83
Views: 11252

Re: Bitcoin: The worst investment in 2014

I actually have similar thoughts, though I remember people saying the same thing last summer when BTC was $600. Considering the inherent deflationary nature of the currency, it's dollar value seems very likely to increase as more people begin using it as a currency. I just think that it's current p...
by bigred77
Tue Jun 06, 2017 12:41 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin: The worst investment in 2014
Replies: 83
Views: 11252

Re: Bitcoin: The worst investment in 2014

I understand the basics of bitcoin but not in depth enough where I would put any money into it. It's purely speculative at this time. That's fine. There are a lot of speculative assets. You can choose to participate or not. I thought fleetingly about buying some over the past number of years but ne...
by bigred77
Tue Jun 06, 2017 12:15 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin: The worst investment in 2014
Replies: 83
Views: 11252

Re: Bitcoin: The worst investment in 2014

I understand the basics of bitcoin but not in depth enough where I would put any money into it. It's purely speculative at this time. That's fine. There are a lot of speculative assets. You can choose to participate or not. I thought fleetingly about buying some over the past number of years but nev...
by bigred77
Tue Jun 06, 2017 12:08 pm
Forum: Investing - Help with Personal Investments
Topic: What really happens in a bear market?
Replies: 37
Views: 4259

Re: What really happens in a bear market?

delamer wrote:There is no one answer to your question, based on historical patterns and even assuming that history repeats (which may not be true).

http://awealthofcommonsense.com/2014/02 ... ket-timer/


I hadn't seen that in a while but that is an excellent article.
by bigred77
Tue Jun 06, 2017 11:54 am
Forum: Investing - Help with Personal Investments
Topic: Looking at purchasing a commercial property, how do these terms look?
Replies: 8
Views: 674

Re: Looking at purchasing a commercial property, how do these terms look?

Just wanted to add that I can be pretty darn pessimistic when it comes to private business/investment opportunities. I am just more experienced and comfortable with investing in publicly traded securities. But the number one question I would ask myself based on your post right above mine is: "W...
by bigred77
Tue Jun 06, 2017 11:36 am
Forum: Investing - Help with Personal Investments
Topic: What really happens in a bear market?
Replies: 37
Views: 4259

Re: What really happens in a bear market?

No guarantees but usually all of it and then some. Usually a lot more.
by bigred77
Tue Jun 06, 2017 11:32 am
Forum: Investing - Help with Personal Investments
Topic: Pay Mortgage vs. Buy Bonds
Replies: 61
Views: 5324

Re: Pay Mortgage vs. Buy Bonds

Do you itemize on your taxes? Effective Mortgage interest rate (post tax) might be reduced fully by your marginal rate as well.

Have to compare post tax mortgage rate to post tax investment return.
by bigred77
Tue Jun 06, 2017 11:09 am
Forum: Investing - Help with Personal Investments
Topic: Looking at purchasing a commercial property, how do these terms look?
Replies: 8
Views: 674

Re: Looking at purchasing a commercial property, how do these terms look?

Hey, I'm supposed to have a phone call with the lender this morning - I was hoping someone could lend a hand before then. For example, I don't know - Prepayment Program - Assumable - And why they are offering fixed/adjustable instead of just a fixed Thanks guys Prepayment Program - I don't know eit...
by bigred77
Tue Jun 06, 2017 10:05 am
Forum: Investing - Theory, News & General
Topic: The Funded Ratio over the LifeCycle - Part 3 of Funded Ratio series
Replies: 16
Views: 1645

Re: The Funded Ratio over the Life-Cycle -Part 3 Funded Ratio

Covered Calls Another technique for managing risk often used in LDI strategies is to write (sell) covered call options on the equity holdings at strike prices that are slightly out-of- the- money, i.e. the strike price is slightly above the market price. By selling call options on the index stock f...
by bigred77
Tue Jun 06, 2017 8:58 am
Forum: Personal Finance (Not Investing)
Topic: Achieving Balance: Targeting Top of 15%
Replies: 13
Views: 1746

Re: Achieving Balance: Targeting Top of 15%

I do indeed think a 20% gross savings rate dedicated to retirement accounts is more than sufficient for those who will also be eligible for a pension AND SS. The only exception is if you are planning to retire extremely early. Eligible at 58.5, not super early, plus FERS has the SS supplement until...
by bigred77
Tue Jun 06, 2017 8:21 am
Forum: Personal Finance (Not Investing)
Topic: I'm considering buying a house in the $800k range.. can I?
Replies: 67
Views: 6638

Re: I'm considering buying a house in the $800k range.. can I?

You want to go all in on a family home. but you don't have a wife and family? What happens when it turns out to be the wrong home for the family? Or if the family doesn't materialize? I think of my brother and his wife who bought a large house with the intention of filling it with kids, and now the...
by bigred77
Mon Jun 05, 2017 6:04 pm
Forum: Personal Consumer Issues
Topic: Handyman Vendor contract
Replies: 1
Views: 262

Re: Handyman Vendor contract

I just would not have paid him $625. Why would you do that if you agreed to $450?
by bigred77
Mon Jun 05, 2017 5:56 pm
Forum: Investing - Theory, News & General
Topic: I pay off my 3% loan. Is my return 3%?
Replies: 36
Views: 4099

Re: I pay off my 3% loan. Is my return 3%?

The default field is set to 0. I changed it in my spreadsheet to 1. It did change my spreadsheet values, but not enough to account for the discrepancy. Period 119: Interest -$6.61 Principal, $-659.52 Period 120: Interest -$3.31 Principal, $-662.82 1.06 to the 12th root is 1.004867551, the interest ...
by bigred77
Mon Jun 05, 2017 5:18 pm
Forum: Investing - Theory, News & General
Topic: I pay off my 3% loan. Is my return 3%?
Replies: 36
Views: 4099

Re: I pay off my 3% loan. Is my return 3%?

Every dollar you apply to a fixed rate loan will give you a "return" on that dollar equal to the fixed rate for the remaining duration of the loan. How could this not be so? Think about it: Every dollar you pay avoids a fixed percentage of interest that would have otherwise been charged o...
by bigred77
Mon Jun 05, 2017 5:10 pm
Forum: Investing - Theory, News & General
Topic: I pay off my 3% loan. Is my return 3%?
Replies: 36
Views: 4099

Re: I pay off my 3% loan. Is my return 3%?

TomCat96, For every dollar of payment that you make on an amortized loan that is applied to interest expense, the return on that dollar is 0. For every dollar of payment that you make on an amortized loan that is applied to principal the return on that dollar is equal to the interest rate of the lo...
by bigred77
Mon Jun 05, 2017 4:54 pm
Forum: Investing - Theory, News & General
Topic: I pay off my 3% loan. Is my return 3%?
Replies: 36
Views: 4099

Re: I pay off my 3% loan. Is my return 3%?

Every dollar you apply to a fixed rate loan will give you a "return" on that dollar equal to the fixed rate for the remaining duration of the loan. How could this not be so? Think about it: Every dollar you pay avoids a fixed percentage of interest that would have otherwise been charged o...
by bigred77
Mon Jun 05, 2017 4:51 pm
Forum: Investing - Theory, News & General
Topic: I pay off my 3% loan. Is my return 3%?
Replies: 36
Views: 4099

Re: I pay off my 3% loan. Is my return 3%?

From the WSJ data page m A Treasury maturing 8/31/2017 with 0.625% coupon has a yield of 0.993%. The interest rate is 0.626% and the yield (return) is 0.993%. These numbers are not the same. You guys are getting lost in the words. Forget the words, do the math. "Coupon" rate and "Int...
by bigred77
Mon Jun 05, 2017 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: Early Retirement Timing – Update
Replies: 9
Views: 1505

Re: Early Retirement Timing – Update

There is no financial reason to ever go into work again. I would retire tomorrow unless you love your job or there is some other non-financial reason to keep working. Insurance is not a non-financial reason to keep working. You can afford to buy your own insurance with no issues. I suspect if you mo...
by bigred77
Mon Jun 05, 2017 4:21 pm
Forum: Personal Finance (Not Investing)
Topic: Achieving Balance: Targeting Top of 15%
Replies: 13
Views: 1746

Re: Achieving Balance: Targeting Top of 15%

Well to me there's nothing that compels me to target the top of the 15% tax bracket. If I make less than that so be it. If I make so much I end up in the 25%+ brackets all the better. In general I'm always looking to maximize my income. I do indeed think a 20% gross savings rate dedicated to retirem...
by bigred77
Mon Jun 05, 2017 3:19 pm
Forum: Investing - Help with Personal Investments
Topic: Discouraged by Starting Late
Replies: 21
Views: 3658

Re: Discouraged by Starting Late

I don't know a whole lot about your rental properties but from your one line of information it looks like a combined 3.3% cap rate on 800k worth of unlevered property. That would not be all that appealing to me unless you have some other reason for holding onto those properties. Also, for someone wh...
by bigred77
Mon Jun 05, 2017 1:10 pm
Forum: Personal Consumer Issues
Topic: Pimp my DW's ride.
Replies: 96
Views: 7008

Re: Pimp my DW's ride.

You can have a bad salesman anywhere. I had this exact experience at a Jeep dealership with an ex-girlfriend years ago. We showed up in her Buick, with her driving, and stated that she was looking to replace it. He actually handed me the keys before the test drive. I wouldn't let that one experienc...
by bigred77
Mon Jun 05, 2017 1:03 pm
Forum: Personal Finance (Not Investing)
Topic: Spouse returning to work. How to keep low stress lifestyle?
Replies: 47
Views: 5030

Re: Spouse returning to work. How to keep low stress lifestyle?

It doesn't look like the "financial" need to go back to work is all that great. Seems like you could easily continue on with your current lifestyle on a single income, all else equal. Does he want to re-enter the workforce or does he think he "needs" to re-enter the workforce? Pr...
by bigred77
Mon Jun 05, 2017 12:18 pm
Forum: Personal Consumer Issues
Topic: Flying first class, business, versus economy.
Replies: 105
Views: 7537

Re: Flying first class, business, versus economy.

Personally, I'd rather spend money on first/business class flights than on fancy hotels (if I had to make a trade-off). To me, the difference between First and Economy in terms of my comfort and enjoyment is FAR greater than the difference between the Ritz and a Hampton Inn. That's interesting. I'm...
by bigred77
Mon Jun 05, 2017 12:09 pm
Forum: Personal Consumer Issues
Topic: Pimp my DW's ride.
Replies: 96
Views: 7008

Re: Pimp my DW's ride.

Any thoughts on the allegedly upcoming BMW X7? Supposed to have 3 rows of seating, so maybe too big?

For a "performance" SUV, especially if size isn't that big a factor, I would want to check out the Porsche Macan (although you said no Porsches in the OP)?
by bigred77
Mon Jun 05, 2017 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: Received inheritance, feel paralyzed as to what to do next
Replies: 16
Views: 2194

Re: Received inheritance, feel paralyzed as to what to do next

I agree there is no rush and you should do as much research as possible to feel comfortable making a decision. One suggestion I would bring up now: If you don't make enough to max out all tax advantaged space (401k/457/403b/Roth IRA/Traditional IRA/etc.) and still pay your bills, it might be benefic...
by bigred77
Mon Jun 05, 2017 11:57 am
Forum: Personal Finance (Not Investing)
Topic: Power percentage: A more effective metric of financial performance than savings rate?
Replies: 47
Views: 3581

Re: Power percentage: A more effective metric of financial performance than savings rate?

"Power Percentage" seems like a decent metric to me. Savings rate plus debt reduction is fairly imperative to ones financial health. Probably don't want to tip too decisively to debt reduction for any extended periods of time but it does a good job of showing the percentage of one's income...
by bigred77
Mon Jun 05, 2017 11:36 am
Forum: Investing - Help with Personal Investments
Topic: VCLT Long Term Corp v. VTEB Municipal
Replies: 9
Views: 806

Re: VCLT Long Term Corp v. VTEB Municipal

Well to start the credit risk of both funds is going to be different. You'd have to research yourself exactly just how different but I'm comfortable saying long term corporate bonds probably have higher default risk than intermediate term municipal bonds. Second, your muni bond fund is going to be t...
by bigred77
Mon Jun 05, 2017 11:09 am
Forum: Personal Consumer Issues
Topic: Article: Compare ROI of college education vs S&P500
Replies: 52
Views: 2964

Re: Article: Compare ROI of college education vs S&P500

That article is..... incredibly flawed. I want to use stronger language but I will try to be nice. It compares the "returns" from the S&P 500 from 1993 to 2017 (without accounting for dividend reinvestment or inflation, just price level of the index) to the "ROI" from attendi...
by bigred77
Mon Jun 05, 2017 9:46 am
Forum: Personal Consumer Issues
Topic: Estimated Expense while Selling home
Replies: 7
Views: 575

Re: Estimated Expense while Selling home

All that matters is selling price, balance of any liens against the property, and closing expenses paid for by the seller (typically realtor commissions on both sides, in my area title insurance is usually paid by the seller, and concessions you may have given to the buyer, etc.) So for you it would...
by bigred77
Mon Jun 05, 2017 9:20 am
Forum: Personal Finance (Not Investing)
Topic: Hire a lawyer to file for SSD?
Replies: 13
Views: 1168

Re: Hire a lawyer to file for SSD?

My brother and I handled the SSDI application process on our mothers behalf without any help from an attorney. Her case was very straightforward. She did have to go to a doctor that SSDI picked for her to have some medical tests done to prove her disability. The paperwork was a pain but I didn't con...
by bigred77
Sun Jun 04, 2017 11:54 am
Forum: Investing - Help with Personal Investments
Topic: Is it possible to make 75k with 100K in x years ?
Replies: 55
Views: 4949

Re: Is it possible to make 75k with 100K in x years ?

1. Advisor is fee-only, only cost me $600 fixed, he will not get any AUM or anything. Only thing i dont like about my advisor is he suggests Vanguard index funds which are expensive vs Schwab indexes 2. Looks like I dont have to make 4.2 CGAR on my 3 Fund 60:40 to beat Loan's 4.2 APY Amortized, lik...
by bigred77
Fri Jun 02, 2017 12:41 pm
Forum: Personal Finance (Not Investing)
Topic: First time home buyer in HCOL area
Replies: 10
Views: 1590

Re: First time home buyer in HCOL area

I think it's completely fine financially. I would want to be sure I was comfortable living there for the next 10 years though. Are you positive you'll be fine living in a town home and not get the itch to "trade up" to a single family home in a few years? Are you positive the schools meet ...
by bigred77
Fri Jun 02, 2017 11:09 am
Forum: Investing - Help with Personal Investments
Topic: IRA vs. 401k
Replies: 9
Views: 687

Re: IRA vs. 401k

Your MAGI will be reduced by your 401k contributions so if you make 75k and contribute 18k to the 401k you should be under the income threshold for a deductible IRA unless you get a bonus big enough to push you back up over it. Assuming a decent 401k plan with acceptable investment options, I would ...
by bigred77
Fri Jun 02, 2017 10:01 am
Forum: Investing - Theory, News & General
Topic: RMD on Declining Balance
Replies: 53
Views: 3649

Re: RMD on Declining Balance

...Note the "all households" data (green bars). Sorry, I really don't believe that $12,000 median for people around age 60. This must exclude $$ in taxable account or be including people outside the US. Something like that. Or perhaps it's ignoring people with pensions or $500,000 worth o...
by bigred77
Fri Jun 02, 2017 9:58 am
Forum: Personal Finance (Not Investing)
Topic: Early Retirement Plan Check, 2 Years out.
Replies: 25
Views: 3712

Re: Early Retirement Plan Check, 2 Years out.

The plan is as bulletproof as you can get. The only thing I would be concerned about is making sure I bought the right health insurance plan at the right price until medicare kicks in. I would also loosen the purse strings a little if there's anything at all you wanted to spend money on that you hav...
by bigred77
Fri Jun 02, 2017 9:25 am
Forum: Investing - Theory, News & General
Topic: RMD on Declining Balance
Replies: 53
Views: 3649

Re: RMD on Declining Balance

...Note the "all households" data (green bars). Sorry, I really don't believe that $12,000 median for people around age 60. This must exclude $$ in taxable account or be including people outside the US. Something like that. Or perhaps it's ignoring people with pensions or $500,000 worth o...
by bigred77
Thu Jun 01, 2017 6:53 pm
Forum: Investing - Help with Personal Investments
Topic: Financial advisor in Houston
Replies: 11
Views: 1527

Re: Financial advisor in Houston

I think the best think for you to do is research target date funds as much as you can. That's the easiest and cheapest solution. Step 1: Pick low cost fund from Vanguard or Fidelity or whoever you have access to that uses index funds and has the date closest to your targeted retirement date. Step 2:...
by bigred77
Thu Jun 01, 2017 5:37 pm
Forum: Investing - Theory, News & General
Topic: What makes a Conservative BHer? for retirement purposes
Replies: 16
Views: 1495

Re: What makes a Conservative BHer? for retirement purposes

- Any suggestion that the "true" SWR is 3% or less, at any age for any early retiree, is too conservative (IMO). - Suggestions that one should only buy a house if they have 20% down, plus 6 months of expenses, and the PITI payment on a 15 yr mortgage needs to be less than 25% of your take...
by bigred77
Thu Jun 01, 2017 4:30 pm
Forum: Investing - Help with Personal Investments
Topic: Objectively assess my situation
Replies: 20
Views: 1602

Re: Objectively assess my situation

Your being a worry wart for no reason whatsoever.
by bigred77
Thu Jun 01, 2017 2:45 pm
Forum: Investing - Theory, News & General
Topic: What makes a Conservative BHer? for retirement purposes
Replies: 16
Views: 1495

Re: What makes a Conservative BHer? for retirement purposes

I think Bogleheads by nature (and the commonly accepted "rules of thumb" around here) are very conservative. That's not a dig. It's good to be conservative financially. It's prudent. It keeps your life much lower risk. It keeps you out of trouble. There's nothing wrong with being conservat...
by bigred77
Thu Jun 01, 2017 1:51 pm
Forum: Investing - Theory, News & General
Topic: RMD on Declining Balance
Replies: 53
Views: 3649

Re: RMD on Declining Balance

I really enjoy Dr. Pfau's work, I read the majority of what he publishes, but I consider him EXTREMELY conservative. I don't know that I can point anything written about him that specifically states he's considered conservative by his peers ,but I think the majority of Bogleheads would find his con...
by bigred77
Thu Jun 01, 2017 12:07 pm
Forum: Personal Consumer Issues
Topic: Used 2013 Audi A5 or New Honda Accord Sport
Replies: 71
Views: 5800

Re: Use 2013 Audi A5 or New Honda Accord Sport

My preference would be the Audi. Many others would prefer the Honda. It's a personal decision on what you want to drive.
by bigred77
Thu Jun 01, 2017 12:05 pm
Forum: Investing - Theory, News & General
Topic: RMD on Declining Balance
Replies: 53
Views: 3649

Re: RMD on Declining Balance

Wade Pfau, known widely as a very conservative financial researcher... I think we need some facts here. Other than making this bald assertion what facts can you produce that support your claim that Pfau is "known widely as a very conservative financial researcher"? I've met Wade, I've cor...