Search found 1849 matches

by dmcmahon
Thu Dec 26, 2013 7:11 pm
Forum: Personal Finance (Not Investing)
Topic: What you wish you had known entering your late 20's
Replies: 128
Views: 31975

Re: What you wish you had known entering your late 20's

I'd tell myself "find a wife before it's too late".
by dmcmahon
Thu Dec 26, 2013 4:50 pm
Forum: Personal Finance (Not Investing)
Topic: Any tips for avoiding large tax bill?
Replies: 4
Views: 778

Re: Any tips for avoiding large tax bill?

Pay the Cali tax in 2013 so you can deduct it. Pull forward anything deductible from next year, for example pay your full years property tax instead of paying it for 6 months and then paying the next 6 months in early 2014. Consider pulling forward any charitable contributions you'd be making anyway...
by dmcmahon
Thu Dec 26, 2013 4:36 pm
Forum: Investing - Theory, News & General
Topic: 'Play' Money
Replies: 95
Views: 11073

Re: 'Play' Money

I've put some money into new ventures but it's less than 1% of my assets and I'm doing it mainly for social reasons rather than thinking they're likely to produce a better risk adjusted payoff than, say the Russell 2000. Ditto some loans to family members - no expectation of making a profit but the ...
by dmcmahon
Wed Dec 25, 2013 1:02 am
Forum: Personal Finance (Not Investing)
Topic: Executor of will -- dealing with investment portfolio
Replies: 119
Views: 6633

Re: Executor of will -- dealing with investment portfolio

pshonore wrote:This is correct. Capital gains tax paid by the estate would represent change in value from date of death to sale, if any
What if the asset is, say, a family home owned by a living trust established by the decedent?
by dmcmahon
Sun Dec 22, 2013 11:28 am
Forum: Personal Finance (Not Investing)
Topic: Two states, one stock option gain
Replies: 5
Views: 1035

Re: Two states, one stock option gain

A related interesting question is what portion of the stock's rise to allocate. Here is a different hypothetical to the OPs: You are granted rights to 400 shares, vesting 100 shares per year. The stock price and exercise price at that time is $10/share. You work one year in state A, vesting 100 shar...
by dmcmahon
Sun Dec 22, 2013 11:04 am
Forum: Personal Finance (Not Investing)
Topic: Two states, one stock option gain
Replies: 5
Views: 1035

Re: Two states, one stock option gain

Not sure iRS rules are definitive, as each state may have rules that bear on the question. California is particularly aggressive about claiming a share of the option income for options they view as having been earned in the state. I wouldn't be surprised if state B in your example would expect all o...
by dmcmahon
Tue Dec 17, 2013 10:45 am
Forum: Personal Finance (Not Investing)
Topic: Deferred Compensation Plan
Replies: 27
Views: 2970

Re: Deferred Compensation Plan

Reading through the Summary of Plan Provisions, I see that if employment is terminated before normal retirement age, account is paid in a single lump sum, regardless of our payment elections. Seems like a deal-breaker IMO. What are the odds that your relatively young wife will leave them before the...
by dmcmahon
Sun Dec 15, 2013 7:48 pm
Forum: Personal Finance (Not Investing)
Topic: Deferred Compensation Plan
Replies: 27
Views: 2970

Re: Deferred Compensation Plan

Check the details. If you opt for 10 years of quarterly payments there should be no lump sum distribution issue. The date when payments begin may also be flexible, e.g. payments start at age 59.5, or upon retirement if over 60, etc. So hopefully her plan offers very real deferral benefits. The most ...
by dmcmahon
Sat Dec 14, 2013 12:31 am
Forum: Investing - Theory, News & General
Topic: TSP Survey on Self-Directed Mutual Fund Window
Replies: 35
Views: 4957

Re: TSP Survey on Self-Directed Mutual Fund Window

The questions are pretty simple. I won't go into all my answers, but one noteworthy question was: If a mutual fund window interests you, what is the reason? To invest in actively-managed funds To invest in socially responsible funds To invest in real asset funds, e.g., gold, real estate To invest i...
by dmcmahon
Thu Dec 12, 2013 9:22 pm
Forum: Investing - Theory, News & General
Topic: Despite the headline defaults, munis doing okay
Replies: 85
Views: 10280

Re: Despite the headline defaults, munis doing okay

Remember Swedroe"s law, it takes an awful lot of interest to make up for unpaid principal. This is a great way to state what I've thought for a long time. At these low yields it just doesn't seem worth taking any risk. As Leif says, you gotta sleep at night. CA's pension issue hasn't gone away. Som...
by dmcmahon
Thu Dec 05, 2013 10:15 am
Forum: Personal Finance (Not Investing)
Topic: 2013 TurboTax: Which Product? New Rules?
Replies: 302
Views: 44681

Re: 2013 TurboTax: Which Product? New Rules?

I always buy the CD version. I want to have access to the software I used to generate my return if it's ever questioned by the IRS. Me too. Plus I don't like having my personal info uploaded to any web site. This wonderful program is well worth it's price to me on CD. I started getting the deluxe v...
by dmcmahon
Wed Dec 04, 2013 3:28 pm
Forum: Personal Finance (Not Investing)
Topic: Denied SS COLA due to gross income?
Replies: 9
Views: 1250

Denied SS COLA due to gross income?

Got a note from Mom today wherein she says that she won't be getting the 1.5% COLA for 2014 due to her gross income for 2012 being too high. I don't see anything about that on the SS website, but that doesn't seem right to me. Anyone know for sure?
by dmcmahon
Mon Dec 02, 2013 10:03 pm
Forum: Investing - Theory, News & General
Topic: The 'Hold Bonds to Maturity' Problem
Replies: 65
Views: 4866

Re: The 'Hold Bonds to Maturity' Problem

Some funds may internally sell bonds before maturity, at the short end of their internal ladder. This is a source of cap gains when interest rates are falling, but a source of losses on the way back up. Moreover, funds are more likely to be forced to sell bonds to meet redemptions - investors seeing...
by dmcmahon
Sat Nov 30, 2013 9:54 pm
Forum: Investing - Theory, News & General
Topic: Shiller P/E 10 hits 25
Replies: 331
Views: 37017

Re: Shiller P/E 10 hits 25

steve_14 wrote: When interest rates decline, what do you do, all else equal? Where do you shift your bond allocation, now that expected returns are lower per unit of risk?
Speaking for myself, I pulled in my average maturity.
by dmcmahon
Thu Nov 28, 2013 1:15 pm
Forum: Investing - Theory, News & General
Topic: Money Market "Safety"?
Replies: 15
Views: 2986

Re: Money Market "Safety"?

My thought is that the risk is probably low but the returns are even lower. I have a savings account paying 0.85%, and I can buy Vanguard funds with it and get the closing price for that day. Why bother with Money Market? Totally agree. Problem is, some accounts have MM's attached as transactional ...
by dmcmahon
Tue Nov 26, 2013 7:44 pm
Forum: Investing - Theory, News & General
Topic: RTM the ninth wonder of the world
Replies: 15
Views: 2123

Re: RTM the ninth wonder of the world

First, better "value" if you will is in small value stocks, international stocks and emerging market stocks ... Larry Thanks. Yes, I've shifted what little I can towards international equities. I'm not willing to do this in my taxable accounts yet - valuations would have to be much higher. I mean h...
by dmcmahon
Tue Nov 26, 2013 5:33 pm
Forum: Investing - Theory, News & General
Topic: RTM the ninth wonder of the world
Replies: 15
Views: 2123

Re: RTM the ninth wonder of the world

Larry, thanks for the article. I sympathize with the feeling that expected returns are lower after a big run up in prices. But...where did you see better value? Bonds also seem to be priced for pathetic returns going forward.
by dmcmahon
Tue Nov 26, 2013 1:11 am
Forum: Investing - Theory, News & General
Topic: 4% stock returns this decade
Replies: 42
Views: 5036

Re: 4% stock returns this decade

StarbuxInvestor wrote: I am not sure optimism, enthusiasm or exhilaration has applied to the current bull market. Unease, denial and pessimism have been better fits so far.
Watch more CNBC - for the past week they've been almost giddy. Not even a token bear while I was listening.
by dmcmahon
Mon Nov 25, 2013 9:51 pm
Forum: Investing - Theory, News & General
Topic: 4% stock returns this decade
Replies: 42
Views: 5036

Re: 4% stock returns this decade

March 24, 2000 the S&P had an intraday high of 1552, on October 11, 2007 it had an intraday high of 1576. Have we really caught up that much from those points or are we focused on where we have come from the index's nearly 13-year low close at 676.53 on March 9, 2009. My observation is while we hav...
by dmcmahon
Wed Nov 20, 2013 3:50 pm
Forum: Investing - Theory, News & General
Topic: Is It TIme to be Nervous About Municipal Bonds?
Replies: 25
Views: 2758

Re: Is It TIme to be Nervous About Municipal Bonds?

Please point out where in my statement I said anything about "attractive yields"? My remarks weren't directed specifically at you. You did say in part: While I agree that muni yields look attractive at the moment relative to treasuries... My point is that to me they don't look attractive relative t...
by dmcmahon
Wed Nov 20, 2013 11:00 am
Forum: Investing - Theory, News & General
Topic: Is It TIme to be Nervous About Municipal Bonds?
Replies: 25
Views: 2758

Re: Is It TIme to be Nervous About Municipal Bonds?

While I agree that muni yields look attractive at the moment relative to treasuries, because muni's do not hold-up as well during stock-market routs, you may be better-off with treasuries from both total-return and risk control standpoints - over time. That has certainly been the case historically....
by dmcmahon
Tue Nov 19, 2013 12:12 am
Forum: Investing - Theory, News & General
Topic: Valuations matter? Your opinion
Replies: 56
Views: 4654

Re: Valuations matter? Your opinion

I have to say that I am shocked that more than 50% of respondents have indicated using valuations to change their behaviors. On the Bogleheads forum I would have expected the vast majority to adhere to a strictly passive approach. I hope respondents will continue to elaborate on how they use valuat...
by dmcmahon
Mon Nov 18, 2013 11:17 am
Forum: Investing - Help with Personal Investments
Topic: windfall in high tax california, what to do
Replies: 20
Views: 2851

Re: windfall in high tax california, what to do

No ISO, just a single buyout check which I believe will be taxed as ordinary income. Thanks for all the responses; sounds like paying something is a good idea. I suspect it'll be most tax-effective for you to pay something to Cali in 2013, and if you don't meet the safe harbor, some sort of estimat...
by dmcmahon
Mon Nov 18, 2013 11:04 am
Forum: Investing - Help with Personal Investments
Topic: windfall in high tax california, what to do
Replies: 20
Views: 2851

Re: windfall in high tax california, what to do

You might actually want to pay some or all of your Cali liability in 2013. Reason: you'll then be able to deduct it from your federal liability for 2013, rather than having a very large deduction for 2014 that may not even be completely usable against your presumably lower income then. Any problems...
by dmcmahon
Sun Nov 17, 2013 8:24 pm
Forum: Investing - Help with Personal Investments
Topic: windfall in high tax california, what to do
Replies: 20
Views: 2851

Re: windfall in high tax california, what to do

With a high 6 figure payout you're looking at marginal rates of approx. 41% federal and 12% state. The blended effective rate will of course be lower. That assumes its ordinary income and not cap gains. I suspect that unless you meet a safe harbor based on paying 110% of the prior years liability, y...
by dmcmahon
Fri Nov 15, 2013 10:36 am
Forum: Investing - Theory, News & General
Topic: How to beat the index
Replies: 26
Views: 2525

Re: How to beat the index

I don't see much doubt on this board that it's possible to beat the market-cap weighted index with alternate weighting schemes. Critics (including me) contend that the performance of these alternate indexes is fully explained by researched factors such as value, size, quality, or momentum. Thus, equ...
by dmcmahon
Thu Nov 14, 2013 10:00 am
Forum: Investing - Theory, News & General
Topic: Shiller P/E 10 hits 25
Replies: 331
Views: 37017

Re: Shiller P/E 10 hits 25

Where do you put the money you take out of stocks when PE is "too high"? Lack of attractive alternatives will cause me to just sit tight despite the high valuation. I would dare say PE is much higher for bonds right now than it is for stocks. Are you scared of that PE? Yes but less so than for stoc...
by dmcmahon
Mon Nov 11, 2013 10:56 am
Forum: Investing - Theory, News & General
Topic: How many funds do you have in your portfolio?
Replies: 96
Views: 8450

Re: How many funds do you have in your portfolio?

I have 2 funds for equities plus a grab-bag of individual bonds, CDs, and cash. I have one other fund as a kicker. I've used VTI and VXUS as the two funds, totaling 50% of the portfolio. The kicker is VB - I began buying that when TIPS yields turned negative. I will at some point sell out of it and ...
by dmcmahon
Mon Nov 11, 2013 10:37 am
Forum: Investing - Theory, News & General
Topic: We're not in an Equity Bubble
Replies: 61
Views: 9142

Re: We're not in an Equity Bubble

Hoarding 60% of your assets in cash and planning to hoard more is not stereotypical equity bubble behavior. How many investors had 60% of their investable assets in cash at the height of the tech boom? The fact that cash hoarding is so prevalent more than four years into a strong bull market indica...
by dmcmahon
Fri Nov 08, 2013 10:09 am
Forum: Investing - Theory, News & General
Topic: Is the Backdoor Roth legal or not?
Replies: 96
Views: 22844

Re: Is the Backdoor Roth legal or not?

As the end of the year approaches and people may be getting into the tax mindset, it seems like a good time to bring this thread back to life. The last post was in May 2012. Has there been any updates about backdoor Roths since then? Is the fact that the IRS hasn't taken action about this lending g...
by dmcmahon
Thu Nov 07, 2013 3:58 pm
Forum: Investing - Theory, News & General
Topic: Vanguard implements 20 character passwords
Replies: 69
Views: 13410

Re: Vanguard implements 20 character passwords

8 character alphanumeric with a limit on the number of attempts or time between attempts is fine for web login protection. However, if an insider steals the password file from the company server, you would be quickly hacked. The DoD requires a 15 character password with upper/lower/numbers/special ...
by dmcmahon
Thu Nov 07, 2013 11:11 am
Forum: Investing - Theory, News & General
Topic: Vanguard implements 20 character passwords
Replies: 69
Views: 13410

Re: Vanguard implements 20 character passwords

A big win for security theater. I guess they finally decided the cost of implementing this was less than they were spending trying to explain why it doesn't matter. Would care to do so? I for one am glad they've done this. I could never remember a 100-character password. But 8 character alphanumeri...
by dmcmahon
Mon Nov 04, 2013 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Incentive Stock Options Converting To Cash
Replies: 21
Views: 2774

Re: Incentive Stock Options Converting To Cash

Other than that, I expect that it really is just a matter of once having found out how much they're worth, trying to do everything possible to minimize the tax burden. From what I'm hearing, there aren't a lot of ways to do that? The 83b election is what I had in the back of my mind when I wrote my...
by dmcmahon
Mon Nov 04, 2013 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: Incentive Stock Options Converting To Cash
Replies: 21
Views: 2774

Re: Incentive Stock Options Converting To Cash

You might also ask about "accelerated vesting". A lot of companies have provisions that in the event of a takeover or buyout, some/all unvested options are immediately vested. Thus, your 40,000 shares of unvested options may be yours as part of the deal. If not, then you might want to know what you'...
by dmcmahon
Sun Nov 03, 2013 8:47 pm
Forum: Personal Finance (Not Investing)
Topic: Incentive Stock Options Converting To Cash
Replies: 21
Views: 2774

Re: Incentive Stock Options Converting To Cash

There isn't enough detail about the transaction to comment. In general, when you exercise an ISO, you must then hold the actual shares for 1 year to get LT cap gains treatment on the stock. The benefit of ISO options is that your cost basis in the acquired shares is the exercise strike price, not th...
by dmcmahon
Sat Nov 02, 2013 3:30 pm
Forum: Investing - Theory, News & General
Topic: The Savings Rate
Replies: 75
Views: 28471

Re:

LH wrote:The latte factor owns me : )

I eat out and go out a lot with my wife kids and such.
Me too, but what's life without a few indulgences? All things in moderation...
by dmcmahon
Sun Oct 20, 2013 5:25 pm
Forum: Investing - Theory, News & General
Topic: HFT - a peek behind the curtain for engineers
Replies: 8
Views: 1913

HFT - a peek behind the curtain for engineers

For the engineers on this board, This month's ACM Communications contains an interesting pair of articles on how HFT works.

http://queue.acm.org/detail.cfm?id=2536492

http://queue.acm.org/detail.cfm?id=2534976
by dmcmahon
Wed Oct 02, 2013 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Creating more tax-advantaged space for "HNW" TIPS...ideas..
Replies: 44
Views: 4032

Re: Creating more TAX-ADVANTAGED space for "HNW" TIPS...idea

I sense you are worrying too much about paying tax? I've made many terrible investment decisions in retrospect because of tax. I worry too, but it's about the combination of taxes and inflation w.r.t. TIPS. The worry is that high inflation will produce taxable "gains" that are, in reality, just inf...
by dmcmahon
Tue Oct 01, 2013 10:45 pm
Forum: Investing - Help with Personal Investments
Topic: Creating more tax-advantaged space for "HNW" TIPS...ideas..
Replies: 44
Views: 4032

Re: Creating more TAX-ADVANTAGED space for "HNW" TIPS...idea

Longview, I have wondered exactly the same thing as you. I worry primarily about inflation, and a bout of high inflation would do enormous damage to a portfolio of munis in taxable. The only defense appears to be TIPS in tax advantaged space. My best thought is a VA that invests 100% in TIPS, with l...
by dmcmahon
Mon Sep 30, 2013 11:43 pm
Forum: Personal Finance (Not Investing)
Topic: How do dividend tax rates work at break points?
Replies: 3
Views: 556

Re: How do dividend tax rates work at break points?

After much googling finally seem to have the answer:

http://www.forbes.com/sites/anthonynitt ... s-it-work/

Thank you 22! Wondered about this after looking at another tax-related thread.
by dmcmahon
Mon Sep 30, 2013 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: How do dividend tax rates work at break points?
Replies: 3
Views: 556

How do dividend tax rates work at break points?

Hypothetical 1: person has a high income due entirely to dividends. Suppose the person is single and has $500k in dividend income. Is all 500k taxed at the 20% rate? What if the person has $401k of income - is that extra $1k triggering a tax rate in excess of 100% because it causes all of the prior ...
by dmcmahon
Mon Sep 30, 2013 6:39 pm
Forum: Investing - Theory, News & General
Topic: Taxable Investing eats away 60% of Potential Growth!?!?
Replies: 25
Views: 3747

Re: Taxable Investing eats away 60% of Potential Growth!?!?

The poster was assuming a high income bracket, at least high enough to pay the 20% rate on dividends and cap gains. So I believe it's likely that every dollar of such income will incur 20 cents of income tax and 3.8 cents of medicare tax, for a total of almost 24 cents. This link may be helpful: htt...
by dmcmahon
Mon Sep 30, 2013 3:50 pm
Forum: Investing - Theory, News & General
Topic: Taxable Investing eats away 60% of Potential Growth!?!?
Replies: 25
Views: 3747

Re: Taxable Investing eats away 60% of Potential Growth!?!?

1. LTCG is 20% for high income and not 28% 20% + 3.8% for the ACA tax. Plus it may push more wage income into the 0.9% ACA surtax range. Figure approximately 24%, and that doesn't include any state income tax. In California, where I live, throw in an extra 10-12% (13% if you're making CEO or sports...
by dmcmahon
Sun Sep 22, 2013 10:29 am
Forum: Investing - Theory, News & General
Topic: Shiller PE10 nearing nosebleed territory?
Replies: 322
Views: 43740

Re: Shiller PE10 nearing nosebleed territory?

Peak PE is very close to actual PE. It's at 17.5 now. Not low, but not high either given low interest rates and inflation. Rick Ferri I worry more about E than P/E - many observers have pointed out that corporate margins are at abnormal highs, as are corporate earnings relative to GDP. "New normal"...
by dmcmahon
Fri Sep 20, 2013 10:02 am
Forum: Investing - Theory, News & General
Topic: How Does QE Cause Equities to Rise ?
Replies: 60
Views: 4610

Re: How Does QE Cause Equities to Rise ?

You might find this piece by John Hussman of interest re. QE and security prices: http://www.hussmanfunds.com/wmc/wmc110307.htm All securities have to be held by someone. This is why on this board people often groan when they hear that money is "flowing out of" [bonds/stocks/whatever]. Hussman's the...
by dmcmahon
Tue Sep 10, 2013 12:07 pm
Forum: Investing - Theory, News & General
Topic: The Incredible Importance of Social Security
Replies: 97
Views: 14239

Re: The Incredible Importance of Social Security

The non working (old, sick, young, unable, etc) will always live off the working. Most of what we consume cannot be stored and has to be produced relatively close in time to when it is used. It is just a question of distribution. We could all save up a billion dollars, but we won't collectively be ...
by dmcmahon
Thu Aug 08, 2013 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: POLL: Your Salary vs Inflation
Replies: 24
Views: 2770

Re: POLL: Your Salary vs Inflation

The way the poll question is worded may give misleading results. Those who started their current job many years ago and have had very modest increases may nevertheless end up voting 20%+. BTW as an alternative to the CPI calculator, you could compare versus the SS wage base max, e.g if you were maki...
by dmcmahon
Tue Aug 06, 2013 8:57 pm
Forum: Personal Finance (Not Investing)
Topic: Negative Mortgage Points Taxable?
Replies: 2
Views: 1336

Re: Negative Mortgage Points Taxable?

Reviving this thread because a friend is facing the same trade-off, the opposite of the classic question: should she pay points for a lower rate or not? In her case the amount is a lot more than the fees the bank is charging. It's true that the amount is still a lot less than total cosing costs incl...
by dmcmahon
Mon Aug 05, 2013 10:00 am
Forum: Investing - Theory, News & General
Topic: What is the Role of TIPS in Your Portfolio?
Replies: 71
Views: 6153

Re: What is the Role of TIPS in Your Portfolio?

OP: In my case, my TIPS allocation is capped by the limited room in my tax-deferred space. It's about 10% of my total portfolio. I view it as one of only two defenses against a financial meltdown (the other is owning my home). While the rates paid on TIPS might not match my personal rate of inflatio...
by dmcmahon
Wed Jul 31, 2013 10:21 am
Forum: Investing - Theory, News & General
Topic: Fantasy Versus Factors
Replies: 24
Views: 2440

Re: Fantasy Versus Factors

I'm still trying to figure put why I wouldn't want a free 2% higher return from High Quality stocks per the chart on the last page?