Search found 22107 matches

by grabiner
Thu Aug 30, 2018 7:42 pm
Forum: Investing - Help with Personal Investments
Topic: Is my math right about switching funds?
Replies: 5
Views: 442

Re: Is my math right about switching funds?

I wouldn't use the historical returns for comparison. Rather, I would assume that the stocks in both funds will earn the market return, but this will be reduced by expenses and taxes. That would be a difference of about 1.5%; the American fund has 0.58% expenses versus 0.04% for a low-cost index fun...
by grabiner
Thu Aug 30, 2018 7:35 pm
Forum: Investing - Help with Personal Investments
Topic: Stock sale in taxable account
Replies: 4
Views: 494

Re: Stock sale in taxable account

Welcome to the forum! How large a percentage of your portfolio is the one stock? If it is significantly more than 5%, you are taking extra risk by holding the stock, and should probably sell down to 5% without tax considerations. Also, what percentage of the stock value is the capital gain? This aff...
by grabiner
Thu Aug 30, 2018 7:30 pm
Forum: Investing - Help with Personal Investments
Topic: Pay off student loan with ROTH contributions
Replies: 16
Views: 1138

Re: Pay off student loan with ROTH contributions

I wouldn't touch the existing $40k in your Roth. Let that grow for 30-40 years. At 6%, I might consider a plan like Dave Ramsey's "Total Money Makeover". Grab the book. See if it calls to you. Essentially, you go "beast mode" on the debt. Drop your Emergency Fund to $1,000. You don't need to drop y...
by grabiner
Thu Aug 30, 2018 7:06 pm
Forum: Investing - Theory, News & General
Topic: "6 Reasons The Rich Should Pay-Off Their Mortgage"
Replies: 192
Views: 34881

Re: "6 Reasons The Rich Should Pay-Off Their Mortgage"

You may not be doing this, but I would urge you to not let the 'tax tail' wag the 'investment dog' too much. Since taxes are my #1 expense by a long shot, I do everything I can to minimize them. I don't think doing that' works against my investments - rather the contrary, since tax laws favors inve...
by grabiner
Thu Aug 30, 2018 6:58 pm
Forum: Investing - Theory, News & General
Topic: Tax consequence of BND really that bad in taxable?
Replies: 24
Views: 2112

Re: Tax consequence of BND really that bad in taxable?

Definitely munis, preferring munis from your state if Vanguard has a fund. Your tax rate on taxable bonds is 40.8% federal, and 6% state if they aren't Treasuries. You pay no federal tax on munis. The OP specified an 80/20 AA. With that high an equity component the main purpose of the FI is to offs...
by grabiner
Wed Aug 29, 2018 9:46 pm
Forum: Investing - Theory, News & General
Topic: Most commonly misused/misunderstood investing terms and concepts (on BH forum)
Replies: 220
Views: 11114

Re: Most commonly misused/misunderstood investing terms and concepts (on BH forum)

Rising interest rates The problem here is that there is more than one interest rate. Many investors expect that bonds will lose value when the federal funds rate increases. Bond traders already know about expected rate increases, so if the Fed increases the federal funds rate by the expected 0.25% ...
by grabiner
Wed Aug 29, 2018 9:39 pm
Forum: Investing - Theory, News & General
Topic: Tax consequence of BND really that bad in taxable?
Replies: 24
Views: 2112

Re: Tax consequence of BND really that bad in taxable?

I apologize. I should have posted more information. But i was trying to ask a general question, rather than a specific one. Federal tax rate - highest State - 6% Assume further that you are going to hold bonds in taxable. The only question is what kind of bonds. Definitely munis, preferring munis f...
by grabiner
Wed Aug 29, 2018 9:31 pm
Forum: Investing - Help with Personal Investments
Topic: Recommendations for small cap emerging markets needed
Replies: 2
Views: 431

Re: Recommendations for small cap emerging markets needed

I would not recommend EWX in a taxable account. I used to hold EWX, but gave up because of poor tax performance: Confirming that EWX was a tax failure It had a lot of non-qualified dividends, and unlike most ETFs, it did distribute capital gains. I don't actually hold any separate fund for small-cap...
by grabiner
Wed Aug 29, 2018 9:21 pm
Forum: Investing - Help with Personal Investments
Topic: 1998 Roth four-year conversion spread; Taxes paid only first year. How to fix this?
Replies: 6
Views: 535

Re: 1998 Roth four-year conversion spread; Taxes paid only first year. How to fix this?

That said, in certain unique and flagrant situations, the IRS has been able to apply the lack of ANY SOL for excess IRA contributions as a work around to an expired SOL. The issue there is that the tax needed to be reported on Form 5329, and if you did not file that form, the statute of limitations...
by grabiner
Wed Aug 29, 2018 9:06 pm
Forum: Investing - Help with Personal Investments
Topic: Personal Financial Help for high earner with high student loans
Replies: 8
Views: 1181

Re: Personal Financial Help for high earner with high student loans

Since you aren't covered by an employer plan, you can contribute to a deductible traditional IRA regardless of your income level. You can convert to a Roth IRA if you wish, but since you appear to be in a 35% tax bracket, that isn't likely to be a good deal. (If you move to an employer which does of...
by grabiner
Tue Aug 28, 2018 8:39 pm
Forum: Personal Finance (Not Investing)
Topic: What should I do with my "secured" credit card?
Replies: 9
Views: 709

Re: What should I do with my "secured" credit card?

You could also contact the bank which issued the secured card and ask whether they can convert the account to an unsecured card. If they can, it will appear as the same account on your credit report, and your deposit will be freed up. If the bank offers unsecured cards, it is likely to prefer conver...
by grabiner
Tue Aug 28, 2018 8:04 pm
Forum: Investing - Help with Personal Investments
Topic: Municipal Bond Ladder / Tax Efficient Allocation of New Funds
Replies: 23
Views: 1850

Re: Municipal Bond Ladder / Tax Efficient Allocation of New Funds

I think the real issue with the loans (for me at least) is your fixed income holdings. A mortgage is similar in concept to a negative bond. So you are effectively borrowing funds at 3.75% (slightly less to give effect to the tax deduction) to lend it out at whatever you are getting from your muni l...
by grabiner
Tue Aug 28, 2018 8:00 pm
Forum: Investing - Help with Personal Investments
Topic: Capital Gain tax free
Replies: 8
Views: 1371

Re: Capital Gain tax free

I have accumulated a substantial capital gain in my equity funds (VTI and VXUS) in my after tax account. And I have an almost equal carry over capital losses that I can use. Question: Does it make sense to sell and buy comparable funds to realize the capital gain, tax free. Only if you have some ot...
by grabiner
Tue Aug 28, 2018 7:53 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on paying off debt vs investing
Replies: 32
Views: 2220

Re: Thoughts on paying off debt vs investing

I'm going to ask this question, and I'm almost afraid of getting tomatoes thrown at me for doing it, but I'm curious to hear what you all have to say. My situation in brief: Young, 35 - at the beginning of earning potential. High income earner (second highest tax bracket after deductions, etc.) Mor...
by grabiner
Mon Aug 27, 2018 10:27 pm
Forum: Personal Finance (Not Investing)
Topic: Can't handle being in debt (mentally)
Replies: 34
Views: 3558

Re: Can't handle being in debt (mentally)

Out of curiosity, let’s for hypothetical reasons say this person was not going to get themselves into this situation again. Would raiding the Roth be supported by more? Yes. In fact, it is a possible strategy, discussed on the wiki, to use your Roth IRA as an emergency fund . If you need a $10,000 ...
by grabiner
Sun Aug 26, 2018 10:26 pm
Forum: Personal Finance (Not Investing)
Topic: Can't handle being in debt (mentally)
Replies: 34
Views: 3558

Re: Can't handle being in debt (mentally)

Taking contributions out of a Roth IRA to pay off a debt isn't necessarily a bad deal; it is essentially equivalent to the decision to pay down the debt rather than contributing to the Roth IRA. However, this does erode your retirement savings, so you need to rebuild it. Given that your friend is "n...
by grabiner
Sun Aug 26, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: Placing an ETF trade on the weekend
Replies: 17
Views: 1460

Re: Placing an ETF trade on the weekend

You'll get whatever the price is when your order is processed. If a bunch of other people decided to buy or sell SCHF and got their orders in before you, their orders will be processed first. And that could affect the price you will get. The NYSE on which SCHF trades does an opening cross auction, ...
by grabiner
Sun Aug 26, 2018 10:09 pm
Forum: Investing - Theory, News & General
Topic: Would prefer target date funds, but three custodians make it messy: advice?
Replies: 8
Views: 881

Re: Would prefer target date funds, but three custodians make it messy: advice?

With three different providers, it may be better to select the best funds from each provider, consistent with your overall allocation. The TSP G fund is better than any bond fund you can get at retail, so you might hold all your bonds there. And the Mutual of America 403(b) might have better US than...
by grabiner
Sun Aug 26, 2018 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: picking the right basis in taxable
Replies: 8
Views: 848

Re: picking the right basis in taxable

sorry I meant to say that if i collect the dividends i can do what I want with them.the maximum is only 5500 a year. if i moved the dividends to my bank account. couldn't i just contribute that money on Dec 1st as part of my roth contribution? This is a good strategy, as it allows you to contribute...
by grabiner
Sun Aug 26, 2018 9:58 pm
Forum: Investing - Help with Personal Investments
Topic: Best timing for capital gain/loss
Replies: 5
Views: 637

Re: Best timing for capital gain/loss

Welcome to the forum! If you take both the gains and the losses, you will have a $10,000 net capital loss. You can take $3000 against your income this year, and $3000, $3000, and $1000 in the following three years. If you take only the gains, you will have a $5500 capital gain this year. If the mar...
by grabiner
Sun Aug 26, 2018 7:53 pm
Forum: Investing - Help with Personal Investments
Topic: Best timing for capital gain/loss
Replies: 5
Views: 637

Re: Best timing for capital gain/loss

Welcome to the forum! If you take both the gains and the losses, you will have a $10,000 net capital loss. You can take $3000 against your income this year, and $3000, $3000, and $1000 in the following three years. If you take only the gains, you will have a $5500 capital gain this year. If the mark...
by grabiner
Sun Aug 26, 2018 7:47 pm
Forum: Investing - Help with Personal Investments
Topic: Mortgage and asset allocation
Replies: 8
Views: 605

Re: Mortgage and asset allocation

See Paying down loans versus investing on the wiki. You have two independent decisions: how much risk to take, and how much to pay down the mortgage. If you want to hold $100K less in stock, you can do this by selling $100K in stock to pay down the mortgage, or by selling $100K in stock to buy bonds...
by grabiner
Sun Aug 26, 2018 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: Unexpected Tax Underpayment - When and how should I pay?
Replies: 23
Views: 1614

Re: Unexpected Tax Underpayment - When and how should I pay?

Thanks for the advice and info everyone. The safe harbor rules won't apply to me this year because I had over 3x income last year thus way more taxes paid. Since I sold the stocks this month (August), it seems that I should just pay the taxes before the end of the quarter. Can I just pay via direct...
by grabiner
Sun Aug 26, 2018 12:15 pm
Forum: Personal Finance (Not Investing)
Topic: Hard Credit Inquiry from Credco
Replies: 10
Views: 1274

Re: Hard Credit Inquiry from Credco

It's possible that there was identity theft involved. If you didn't apply for a mortgage, someone else might have applied in your name, and possibly socially engineered his way around the credit freeze. Therefore, you might want to check who actually made the inquiry.
by grabiner
Sun Aug 26, 2018 12:12 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage Payoff?
Replies: 27
Views: 2591

Re: Mortgage Payoff?

I'm mid-30's with wife and children. We purchased our house about a year ago for about $750,000 and used a $425,000 mortgage. Mortgage is 5 year ARM with interest fixed at 3% for the next 4 years. If you pay this mortgage down (or off), you will earn 3% for those four years, and then will have redu...
by grabiner
Sun Aug 26, 2018 8:38 am
Forum: Investing - Theory, News & General
Topic: Which bond index fund best in taxable acct?
Replies: 22
Views: 2250

Re: Which bond index fund best in taxable acct?

At the moment the after tax yields (with 32% federal, 9.3% CA) of CA intermediate and national munis (thus not CA tax exempt) is basically the same. So IMHO no need to buy CA munis since national is more diversified. Haven't compared long term bonds. That is a reflection of the risks as perceived b...
by grabiner
Sat Aug 25, 2018 11:27 pm
Forum: Investing - Theory, News & General
Topic: Which bond index fund best in taxable acct?
Replies: 22
Views: 2250

Re: Which bond index fund best in taxable acct?

It took me a while to do this, but I would put my allocation of bonds completely in your tax deferred accounts and only have stocks in your taxable account. TSM willthrow off about 2% qualified dividends every year and an inconsequential amount of other income. This site taught me this and it is de...
by grabiner
Sat Aug 25, 2018 4:33 pm
Forum: Personal Finance (Not Investing)
Topic: Which health insurance plan?
Replies: 2
Views: 265

Re: Which health insurance plan?

Does the base plan qualify as a high-deductible health plan? If so, you can contribute to an HSA, which will let you contribute $6900 and get a tax deduction, then spend it on the health care you use. You can thus add the tax savings on the $6900 to any cost difference. Similarly, if you pay the ins...
by grabiner
Sat Aug 25, 2018 4:16 pm
Forum: Investing - Help with Personal Investments
Topic: 100% in Tech index funds or ETFs?
Replies: 10
Views: 814

Re: 100% in Tech index funds or ETFs?

I have some cash that's 100% in a materials stock that looking to sell soon. I had thought about putting 100% into a tech ETF or mutual fund (i.e. VITAX, VGT, FDN) for a few years. I'm fine with taking extra risk here. Or is this buying too much at the top of the bubble? You don't take risk for its...
by grabiner
Fri Aug 24, 2018 10:47 pm
Forum: Personal Finance (Not Investing)
Topic: Recasting Mortgage Options
Replies: 8
Views: 1183

Re: Recasting Mortgage Options

Our mortgage balance is $541k at a rate of 3.625% on a 30 year and our tax rate is 24%. We will itemize with the mortgage this big, but with a big pay down we will probably end up with the standard deduction in 2019 going forward. If your paydown is against deductible interest, you earn only 2.76% ...
by grabiner
Fri Aug 24, 2018 10:28 pm
Forum: Investing - Help with Personal Investments
Topic: Buying Vanguard fund via bank account instead of settlement fund
Replies: 8
Views: 763

Re: Buying Vanguard fund via bank account instead of settlement fund

This is one advantage of mutual funds over ETFs. To buy an ETF, you have to two-step. However, Vanguard does allow you to buy an ETF with the money from an incoming transfer, even if the transfer hasn't posted; it will post by the settlement date of the ETF purchase, which is when the money needs to...
by grabiner
Fri Aug 24, 2018 10:22 pm
Forum: Investing - Theory, News & General
Topic: What non-Vanguard ETFs will you be looking to buy?
Replies: 62
Views: 6462

Re: What non-Vanguard ETFs will you be looking to buy?

I am looking at IVLU (iShares MSCI Value Factor ETF), as Vanguard doesn't have anything for international value. However, commission-free isn't that important to me; I buy ETFs in blocks of about $10,000 at a time, so the $2 commission is less than the $7 I would expect to lose to the bid-ask spread...
by grabiner
Fri Aug 24, 2018 10:13 pm
Forum: Investing - Theory, News & General
Topic: Question About Health Savings Account
Replies: 5
Views: 600

Re: Question About Health Savings Account

But is it a wise financial decision to choose a high deductible plan if you know that your healthcare expenses will exceed the deductible? Does it ever make sense to buy a more expensive plan, even if you can afford to pay the deductible? How does one determine the cutoff? It depends on the cost of...
by grabiner
Fri Aug 24, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: Which bond index fund best in taxable acct?
Replies: 22
Views: 2250

Re: Which bond index fund best in taxable acct?

In CA, in the 32% federal tax bracket, any bonds you hold in your taxable account should be munis. My preference for CA investors is to split evenly between Vanguard Limited-Term Tax-Exempt and CA Long-Term Tax-Exempt, so that only half your bonds are in CA, but more than half your bond interest is ...
by grabiner
Fri Aug 24, 2018 9:59 pm
Forum: Investing - Theory, News & General
Topic: Pay off mortgage with 5.12% interest rate?
Replies: 12
Views: 863

Re: Pay off mortgage with 5.12% interest rate?

I have an ARM (Adjustable Rate Mortgage) on a loan of an outstanding balance of $177,926 that will increase from 4% to 5.12% in Oct. 2018. If I have the available cash on hand to pay off the mortgage is it feasible to do so? I currently only have 1 child for tax deduction with no other properties. ...
by grabiner
Fri Aug 24, 2018 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation across Multiple Accounts - HELP! [Israel]
Replies: 3
Views: 379

Re: Asset Allocation across Multiple Accounts - HELP! [Israel]

Viewing everything as one portfolio makes sense, since it is all money you will be using for retirement; if you lose $1000 (or the equivalent in shekels) in one account and gain $1000 in another account, you break even. What goes in which account might be determined by tax laws. I don't know how Isr...
by grabiner
Fri Aug 24, 2018 9:31 pm
Forum: Investing - Help with Personal Investments
Topic: A bond to buy?
Replies: 14
Views: 748

Re: A bond to buy?

Good point, thanks. The state is Massachusetts, so I have a state income tax of 5%, and my income bracket is probably 15%. The 15% tax bracket has become a 12% bracket now. At a 17% combined tax rate, I would expect a muni to yield less after tax than a taxable bond of comparable risk. And while in...
by grabiner
Fri Aug 24, 2018 9:16 pm
Forum: Investing - Help with Personal Investments
Topic: Include Bonds in Portfolio?
Replies: 19
Views: 1926

Re: Include Bonds in Portfolio?

I notice ages 32, 33 and 35 (likely no significant amount in investments in 2008) so no actual experience in a major stock market down turn. Thinking about how brave you would be in a crash is very different from how you would actually feel and react in a crash. You are 30 with investable assets of...
by grabiner
Fri Aug 24, 2018 9:09 pm
Forum: Investing - Help with Personal Investments
Topic: HSABANK self directed account at TDA - availability of stable value fund?
Replies: 5
Views: 356

Re: HSABANK self directed account at TDA - availability of stable value fund?

You might reconsider the use of the hsa. With its triple tax benefits, you might think of it as a stealth ira, leave the money to grow for many years and put it in stock funds. If you can't afford your health care expenses and need the money to fund them, then that is not an option. If you plan on ...
by grabiner
Thu Aug 23, 2018 8:21 pm
Forum: Investing - Help with Personal Investments
Topic: Bond funds in taxable accounts?
Replies: 43
Views: 7073

Re: Bond funds in taxable accounts?

Another interesting consideration on muni bonds vs. CDs... inflation, I didn't really think about this factor. https://www.putnam.com/literature/pdf/II914.pdf Munis and CDs are equally affected by inflation. A five-year muni and a five-year CD might both give you $10,000 after-tax in five years. If...
by grabiner
Wed Aug 22, 2018 10:32 pm
Forum: Investing - Help with Personal Investments
Topic: Target funds for both taxable and tax advantage account?
Replies: 24
Views: 2001

Re: Target funds for both taxable and tax advantage account?

1. Reducing your equity holdings on a regular basis is not the same as rebalancing , not even close. Target funds change your asset allocation every year regardless of your risk tolerance or how your mix of stock and bonds have changed. Agreed. These are two separate issues. You rebalance when you ...
by grabiner
Wed Aug 22, 2018 10:18 pm
Forum: Investing - Help with Personal Investments
Topic: Customer Service with Vanguard
Replies: 97
Views: 6078

Re: Vanguard Customer Service

I echo the comments about poor customer service but this is also a plea for assistance: Has anybody tried to send a message to their Flagship Rep (or to anyone else at Vanguard) using the Vanguard message center? In the past I've managed it but lately no matter what I put in the message I get the e...
by grabiner
Wed Aug 22, 2018 10:14 pm
Forum: Investing - Theory, News & General
Topic: 60/40 vs 100% with Trailing Stop Loss
Replies: 36
Views: 2271

Re: 60/40 vs 100% with Trailing Stop Loss

Even if a stop-loss works as intended, it doesn't limit your losses, unless you sell and never go back into the market . If you invest $10,000, the market might drop by 20%, leaving you with $8000. If you don't sell, the market might drop another 20%, leaving you with $6400. If you do sell (via a st...
by grabiner
Wed Aug 22, 2018 10:08 pm
Forum: Investing - Help with Personal Investments
Topic: Looking to move out of VBIAX in taxable account
Replies: 10
Views: 833

Re: Looking to move out of VBIAX in taxable account

The problem with Balanced Index in a taxable account is not primarily the fact that it has bonds, but the fact that it is a balanced fund. It would be better to use separate bond and stock funds. You mention that you may need to tap into this fund in 3-5 years. If you do this, you might prefer to se...
by grabiner
Wed Aug 22, 2018 10:05 pm
Forum: Investing - Help with Personal Investments
Topic: Invest or Pay off Student Loans
Replies: 40
Views: 2106

Re: Invest or Pay off Student Loans

Here's an example for the difference between your 6% and maxing your 401(k), and using a relatively conservative estimated earnings rate of 7% ... when the long term averages for typical funds and portfolios have actually been somewhat higher over long periods. And this is not a fair comparison, be...
by grabiner
Wed Aug 22, 2018 9:54 pm
Forum: Personal Consumer Issues
Topic: Test your cognitive biases
Replies: 89
Views: 5258

Re: Test your cognitive biases

Was this a test of personal preferences (such as $100 sure thing vs the probability of a higher result)? Or was it based on probability alone. I will take the $100 sure thing all the time, even tho the risk is higher for the other. Personal preference completely, even tho the odds were in the other...
by grabiner
Wed Aug 22, 2018 7:31 pm
Forum: Personal Consumer Issues
Topic: Test your cognitive biases
Replies: 89
Views: 5258

Re: Test your cognitive biases

I also got the top score. As a mathematician, I understand how probabilites work, and I know about the cognitive biases in the risk questions. (At the level of money in these questions, I am close to risk-neutral, so I can go by expected value.)
by grabiner
Wed Aug 22, 2018 6:22 pm
Forum: Investing - Help with Personal Investments
Topic: Invest or Pay off Student Loans
Replies: 40
Views: 2106

Re: Invest or Pay off Student Loans

Paying down the 5% loans is a risk-free, tax-free 5% return. This is better than any investment except contributing enough to your employer plan to get the full match.

When the loans are gone, you will have more money available to contribute to your IRA and 403(b).
by grabiner
Tue Aug 21, 2018 7:25 am
Forum: Investing - Theory, News & General
Topic: The problem with 'saving receipts' for future qualified HSA withdrawals
Replies: 24
Views: 2716

Re: The problem with 'saving receipts' for future qualified HSA withdrawals

if you don't need to spend all the money, your heirs inherit the HSA tax-free. This is only true for a spouse heir. Any other heir, if they are a taxable entity, must take the entire lump sum into a taxable account and pay income tax on the full balance in that year. This is why my secondary benefi...
by grabiner
Mon Aug 20, 2018 8:41 pm
Forum: Investing - Theory, News & General
Topic: The problem with 'saving receipts' for future qualified HSA withdrawals
Replies: 24
Views: 2716

Re: The problem with 'saving receipts' for future qualified HSA withdrawals

Waiting to take reimbursements only produces a tax drag in your HSA if your HSA is larger than your total medical expenses. This is not common, as you must stop contributing to your HSA when you start Medicare, but you will usually have large medical bills after age 65. Even if you don't save receip...