Search found 1843 matches

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: 13766

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: 31142

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: 2833

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: 1993

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: 31142

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: 1993

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: 1993

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: 167
Views: 15837

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: 6692

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: 3264

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: 13766

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: 3264

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: 666

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: 3770

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: 2854

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: 999

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: 13766

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: 1841

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: 1134

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: 5762

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: 1175

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: 5762

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: 41
Views: 6180

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: 1221

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: 1134

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: 4221

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: 8048

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: 839

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: 1344

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: 950

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: 452

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: 1061

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...
by bigred77
Mon Aug 21, 2017 12:03 pm
Forum: Investing - Theory, News & General
Topic: I own no international stocks. Can you guess why?
Replies: 167
Views: 13344

Re: "Why" -- The Answer

Bogleheads: I could not believe my eyes when I sat down at my computer this morning to learn that my opening post (OP), made yesterday, had received 125 replies. This old teacher is grateful for each and every one. My question contained a clue " gradually reduced ": I have gradually reduced my inte...
by bigred77
Mon Aug 21, 2017 11:07 am
Forum: Personal Consumer Issues
Topic: Safe car for wife and baby
Replies: 97
Views: 5785

Re: Safe car for wife and baby

Are we really discussing if a 2016 Honda Civic needs to be replaced for safety reasons? My advice would be that the increase in safety is of marginal utility at best. With a new baby on the way I would have far more concerns and paranoias than whether or not a one year old Honda sedan is safe enough...
by bigred77
Fri Aug 18, 2017 11:21 am
Forum: Investing - Theory, News & General
Topic: Study: The Rate of Return on Everything, 1870-2015
Replies: 85
Views: 11363

Re: Study: The Rate of Return on Everything, 1870-2015

Considering the difficulty of obtaining global real estate price levels, rent to price ratios, maintenance costs, transaction costs, etc back into the 1800s, I think it's far more likely that their numbers are off. That's my takeaway but I need to better understand their methodology. Really? We kno...
by bigred77
Thu Aug 17, 2017 3:14 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

I think you meant 20 year periods where it has happened 3% of the time. It has happened 0% of the time for 30 year periods. That's holding with no leverage. Most of the safe bonds that Bogleheads talk about are designed to be held on some form of leverage to produce an adequate return. When we are ...
by bigred77
Thu Aug 17, 2017 3:04 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

Bonds have beaten equities over 30 years on occasion. We all admit it's an extremely unlikely event to occur, but it's absolutely possible. I think you meant 20 year periods where it has happened 3% of the time. It has happened 0% of the time for 30 year periods. That's holding with no leverage. Mo...
by bigred77
Thu Aug 17, 2017 1:14 pm
Forum: Personal Consumer Issues
Topic: Other people's perception of your finances
Replies: 73
Views: 4005

Re: Other people's perception of your finances

Welcome to the club. We are far from wealthy, but the fact that we are able to buy cars in cash, cashflow my wife's education, and save makes us fabulously wealthy in the eyes of our family members, especially on my wife's side. Her parent's lived with us for most of 2016, never contributed a penny...
by bigred77
Thu Aug 17, 2017 12:30 pm
Forum: Personal Consumer Issues
Topic: Is it worth it? [demanding jobs vs time with family]
Replies: 182
Views: 11885

Re: Is it worth it? [demanding jobs vs time with family]

The majority of our friends and peer group already have kids (early 30s). We live in a major city. I know of only 1 couple out of 10+ with kids that has a stay at home spouse. That couple had family money to utilize. It's primarily financially driven. For most, it's rare to even have the choice. I a...
by bigred77
Thu Aug 17, 2017 9:24 am
Forum: Personal Consumer Issues
Topic: Best place to find jobs and how to know the pay/benefits before applying?
Replies: 22
Views: 1570

Re: Best place to find jobs and how to know the pay/benefits before applying?

Why would employers not post salary and benefits and waste time interviewing people that may not accept in the end? Do most people interview at multiple jobs and wait for all job offers before accepting or do they just accept the first one? I have a Bachelor's from top 10 university and looking for...
by bigred77
Thu Aug 17, 2017 8:27 am
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

I was comparing the standard deviation of the annualized returns of US equities and government T bonds over the past 200 years. As Professor Jeremy Siegel showed in his book, "Stocks for the Long Run", the standard deviation of annualized returns for equities drops from 18% for one year periods to ...
by bigred77
Wed Aug 16, 2017 10:25 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

I disagree that a 100/0 portfolio represents an increased risk over a 60/40 portfolio - for the buy and hold investor with a 25 to 30 year horizon. That's pretty much demonstrably wrong if we're using anything remotely resembling the commonly accepted definition of "risk". I wouldn't necessarily sa...
by bigred77
Wed Aug 16, 2017 8:40 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

I disagree that a 100/0 portfolio represents an increased risk over a 60/40 portfolio - for the buy and hold investor with a 25 to 30 year horizon. That's pretty much demonstrably wrong if we're using anything remotely resembling the commonly accepted definition of "risk". I assume in your statemen...
by bigred77
Wed Aug 16, 2017 8:33 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

Well we know the efficient frontier typically curves, correct (or at least do most of us accept that)? At the extreme end, going from 100/0 to 90/10 in AA typically sees a greater jump in sharp ratio than going from 60/40 to 50/50. The more equity heavy my portfolio is the more volatility I can cut...
by bigred77
Wed Aug 16, 2017 7:16 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

Well we know the efficient frontier typically curves, correct (or at least do most of us accept that)? At the extreme end, going from 100/0 to 90/10 in AA typically sees a greater jump in sharp ratio than going from 60/40 to 50/50. The more equity heavy my portfolio is the more volatility I can cut...
by bigred77
Wed Aug 16, 2017 7:07 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

I guess maybe we just won't find common ground here but I can't reconcile your desire for liquidity (keeping an emergency fund), concerns about long term job security, and being such a staunch proponent of 100% equities and focusing on absolute returns. Given the choice between the two, if I sudden...
by bigred77
Wed Aug 16, 2017 6:15 pm
Forum: Investing - Theory, News & General
Topic: The Mathematics of Retirement Investing
Replies: 123
Views: 14275

Re: The Mathematics of Retirement Investing

In my situation, if my returns were 5.5% instead of 6.9%, over a not too long-term period of 16 years, I would need to increase my gross savings rate from 50% to 63% in order to reach the same ending ending amount. That would require a lot of additional sacrifice for us, especially since all of our...
by bigred77
Wed Aug 16, 2017 5:56 pm
Forum: Investing - Help with Personal Investments
Topic: Buy + hold to avoid being priced out in the Bay Area?
Replies: 20
Views: 1889

Re: Buy + hold to avoid being priced out in the Bay Area?

You have 900k in current home equity and cash. You don't have to worry about being priced out. If you think you can make 500k there, then property prices would have to essentially triple over the next 3 years for you to be priced out. If you buy a property there like you propose it's an investment i...
by bigred77
Wed Aug 16, 2017 5:11 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Home Bias vs whatever else
Replies: 5
Views: 551

Re: Bond Home Bias vs whatever else

If I'm reading you right you are buying bonds from the Argentinian government denominated in US dollars. So if you plan to eventually spend your capital in US dollars you don't have any currency risk. However, since the promise to pay interest and repay principal at maturity is made by Argentina, yo...
by bigred77
Wed Aug 16, 2017 4:38 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: World Isn't Flat-Invest Accordingly
Replies: 71
Views: 6800

Re: Larry Swedroe: World Isn't Flat-Invest Accordingly

WARNING! For those of you who are staunch TSMers, if you find this article convincing and start considering delving more into international and EM, international small, international small value, emerging small and value, you are actually taking your first dip into the world of Factor investing. Su...