Search found 1293 matches

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: 4501

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: 4501

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: 2942

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: 11144

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: 959

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: 7069

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: 5442

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: 8301

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: 12931

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: 12931

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: 12931

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: 1983

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: 3660

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: 721

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: 1354

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: 5398

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: 2289

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: 2746

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: 5303

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: 2603

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: 756

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: 5451

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: 191
Views: 22066

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: 191
Views: 22066

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: 15534

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: 191
Views: 22066

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: 4993

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: 23642

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: 4993

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: 4993

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: 2424

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: 3882

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: 951

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...
by bigred77
Wed Dec 14, 2016 6:33 pm
Forum: Investing - Help with Personal Investments
Topic: Save and invest for Down payment of Pay off Student Loan Debt
Replies: 7
Views: 737

Re: Save and invest for Down payment of Pay off Student Loan Debt

To me it's a nobrainer, I would pay off the student loans tomorrow, put $5,500 in a Roth IRA for 2016 (via the backdoor method), do the same for 2017, make sure I was maxing out the 401k. Then I would get rid of the roboadvisor and throw my bonus and all savings back into cash for the next 12 months...
by bigred77
Wed Dec 14, 2016 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: End Of Year Investing Guidance Young Couple
Replies: 7
Views: 1171

Re: End Of Year Investing Guidance Young Couple

Backdoor Roth IRA contributions for your wife. I don't think you are eligible if you have an SEP IRA. $5,500 for 2016 $5,500 for 2017 Start a taxable brokerage account and come up with a plan for tax efficient investing given your income level and lack of tax advantaged space. Maybe come up with a p...
by bigred77
Wed Dec 14, 2016 2:38 pm
Forum: Investing - Theory, News & General
Topic: winning game, sell stocks despite high bond prices?
Replies: 47
Views: 4069

Re: winning game, sell stocks despite high bond prices?

I suggest a small incremental change in AA to something like 57% stocks to go with your age of 40ish. That is 5% shift from your 62% after your donations. IMO anything smaller is meaningless. Anything bigger (like going to 50% right now) is just too conservative versus your age IMO. So 57/43 stocks...
by bigred77
Wed Dec 14, 2016 2:37 pm
Forum: Investing - Theory, News & General
Topic: winning game, sell stocks despite high bond prices?
Replies: 47
Views: 4069

Re: winning game, sell stocks despite high bond prices?

I don't know why anyone would bother shifting their AA by any less than at least 5-10 absolute percentage points. Moving from 58% to 55% stocks will not make a noticeable difference. Its just noise IMO. I would normally suggest someone whose need to take risk has significantly shifted just go ahead ...
by bigred77
Tue Dec 13, 2016 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: sell some stock to purchase more home?
Replies: 19
Views: 1847

Re: sell some stock to purchase more home?

I would not be selling any investments. Your current home equity is more than enough to use as a down payment. You mention the rental helps you at tax time but you seem to have a relatively low percentage of your investments in retirement accounts. If you like depreciating your rental, you'll love m...
by bigred77
Tue Dec 13, 2016 5:35 pm
Forum: Investing - Theory, News & General
Topic: The age old 529 plan vs retirement question
Replies: 14
Views: 1770

Re: The age old 529 plan vs retirement question

I am of the opinion that retirement accounts should be maxed (or nearly maxed) first, before any 529 contributions are made. There just more flexible tools to use over a financial lifetime IMO. There is no state income tax where I live so the main benefit of 529s is tax free investment gains if used...
by bigred77
Tue Dec 13, 2016 11:03 am
Forum: Investing - Theory, News & General
Topic: I fundamentally don't understand bond funds
Replies: 22
Views: 2136

Re: I fundamentally don't understand bond funds

When the bond matures, principal is repaid in full (or at least the par amount is paid, the bond may have actually been bought at a discount or premium). Bond funds can take this principal and buy new bonds. I suspect it doesn't even get to that point though. I assume most bond funds are going to be...
by bigred77
Mon Dec 12, 2016 6:48 pm
Forum: Investing - Help with Personal Investments
Topic: What % of your net income do you save (not including 401k/IRA)
Replies: 59
Views: 4913

Re: What % of your net income do you save (not including 401k/IRA)

We save roughly 25% of our pretax household income into retirement accounts. We save basically nothing in non-tax advantaged accounts. We do prepay debt at an accelerated pace though. Probably 20% of our after tax, take home income gets spent on debt principal repayments, over and above any minimum ...
by bigred77
Wed Dec 07, 2016 3:50 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement with $8M in investments
Replies: 164
Views: 19437

Re: Retirement with $8M in investments

I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in fl...
by bigred77
Wed Dec 07, 2016 1:13 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring in a Decade after Graduation
Replies: 131
Views: 15534

Re: Retiring in a Decade after Graduation

I don't have a hard time with that assertion the OP made. I'm still young by the standards of many on this forum, but in my 25 years of being employed I have yet to find any such mythical unicorn job. I have resigned myself to taking a job that many don't want because I get paid low six-figures, se...
by bigred77
Wed Dec 07, 2016 12:43 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring in a Decade after Graduation
Replies: 131
Views: 15534

Re: Retiring in a Decade after Graduation

My only advice would be to make a large salary, live on maybe 20% of your salary, invest the rest in as tax efficient a manner as possible (which usually means maxing out 401ks, Roth IRAs, and saving a healthy chunk in a taxable brokerage account), and pray for an extended bull market. It takes a sp...
by bigred77
Wed Dec 07, 2016 12:33 pm
Forum: Personal Finance (Not Investing)
Topic: HELP: salary negotiation
Replies: 17
Views: 2329

Re: HELP: salary negotiation

I would tell them that you're excited for the opportunity and are sure you will exceed their expectations but because you are taking on more responsibility, are increasing your book of business by 33%, and foregoing certain retirement benefits (401k match) you think a raise in base salary is both ju...
by bigred77
Wed Dec 07, 2016 10:59 am
Forum: Personal Consumer Issues
Topic: What to get a 13 Y/O who's interested in money?
Replies: 32
Views: 1705

Re: What to get a 13 Y/O who's interested in money?

There's a board game someone gave me as a joke ("Mogul: the game of Real Estate acquisition, finance, and management") that i actually REALLY got a kick out of. The only problem is I have never in my life been able to convince a group of people to actually play with me. The rule book is a ...
by bigred77
Tue Dec 06, 2016 6:44 pm
Forum: Investing - Theory, News & General
Topic: Sequence of returns risk. Using puts to hedge.
Replies: 26
Views: 1830

Re: Sequence of returns risk. Using puts to hedge.

Dan: One data point. Using historic performance since 1926, the portfolio yield difference between a 100% stock portfolio and a 50/50 stock/bond portfolio is 1.9% (10.2% versus 8.3%), less than the 2.1% cost of your strategy. The worst year for a 50/50 portfolio was 1931, with a return of -22.5% , ...
by bigred77
Tue Dec 06, 2016 6:17 pm
Forum: Personal Finance (Not Investing)
Topic: simulating wealth building effects of home ownership
Replies: 39
Views: 2715

Re: simulating wealth building effects of home ownership

Hi. Family is moving to a HCOL area shortly. Turning 40 shortly. Home ownership is not in the cards for us in the near future. We'd like to stay flexible and don't want a high percentage of net worth tied up in a personal home. How could we simulate the wealth building effects of home ownership wit...
by bigred77
Tue Dec 06, 2016 1:27 pm
Forum: Investing - Theory, News & General
Topic: Should traders only BUY regardless of their TA ?
Replies: 12
Views: 1245

Re: Should traders only BUY regardless of their TA ?

Your parameters will make them execute 4-5 trades each and every trading day.

I suspect, given equal skill levels, they will average roughly the same outcome.
by bigred77
Tue Dec 06, 2016 1:23 pm
Forum: Personal Finance (Not Investing)
Topic: Feel like I'm spending more even though I'm saving more
Replies: 39
Views: 3903

Re: Feel like I'm spending more even though I'm saving more

OP is doing great. The "pay yourself first and then spend the rest" approach is a pretty good method. Revisit the numbers once your income breaches 6 figures to make sure your on target to reach your goals. Maxing all tax advantaged space is great until your income rises to the point where...

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