Search found 1875 matches

by Ketawa
Thu May 18, 2017 12:31 pm
Forum: Personal Finance (Not Investing)
Topic: Annual house maintenance costs
Replies: 30
Views: 3158

Re: Annual house maintenance costs

I own a condo almost 110 years old and individual maintenance costs have been <$1000, or <0.4%, per year on average. Almost all the maintenance has been exclusively for my HVAC system. Condo fees (~1.4% of value per year) take care of the rest of the building maintenance, as well as insurance and so...
by Ketawa
Wed May 17, 2017 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: what is the catch with this 5% APY checking acct?
Replies: 6
Views: 1650

Re: what is the catch with this 5% APY checking acct?

The catch with any of these things is that they sometimes end or become limited. I have had Mango, Union Plus, NetSpend, and Santander checking accounts earning at least 5% FDIC insured over the last 4 years. At one time, I had $25K in various accounts. Now I only have 5 NetSpend accounts limited to...
by Ketawa
Mon May 15, 2017 12:35 pm
Forum: Investing - Theory, News & General
Topic: The Market Only Compensates Non Diversifiable Risk
Replies: 12
Views: 1780

Re: The Market Only Compensates Non Diversifiable Risk

No. The Captial Asset Pricing Model tells us that equities are rewarded as follows: Return = (Market Return-Risk-free Return)*Beta +Risk-free Return. So if you were investing in solely TSM, you get the Market Return because the Beta is one. Investing in other factors pulls us away from this model, ...
by Ketawa
Fri May 12, 2017 5:36 pm
Forum: Investing - Help with Personal Investments
Topic: Old posts regarding VT (VTWSX) and VXUS (VTIAX)
Replies: 2
Views: 600

Re: Old posts regarding VT (VTWSX) and VXUS (VTIAX)

You are overthinking this. If you want 75/25 domestic/international, just hold 75% VTI and 25% VXUS instead of making a strange mixture of funds by holding 50% VTI and 50% VT. You wrote a lot but really didn't give a good reason for preferring the second option. VEU does not have any small caps, whi...
by Ketawa
Sun May 07, 2017 10:22 am
Forum: Investing - Theory, News & General
Topic: Morgan Stanley drops Vanguard funds
Replies: 26
Views: 8103

Re: Morgan Stanley drops Vanguard funds

FWIW, I'm not sure the story about people being able to buy AQR funds with a $5M minimum has the full picture. The funds are often listed as $5M or whatever minimum at most brokerages, but they also are transparently available for low minimums at Fidelity in an IRA. That also used to be true at Scot...
by Ketawa
Wed May 03, 2017 1:08 pm
Forum: Personal Finance (Not Investing)
Topic: Is 401k loan really a bad idea?
Replies: 57
Views: 4383

Re: Is 401k loan really a bad idea?

I have done the math, but if you'd like an example. the interest at 4% on a 5 year $50k loan will cost over $5k total. At a 25% tax rate that's over $1k in taxes paid. Now, for many people that's chump change. For me, I'm not a fan of throwing away a thousand bucks or more, that would be something ...
by Ketawa
Wed May 03, 2017 12:46 pm
Forum: Personal Finance (Not Investing)
Topic: Is 401k loan really a bad idea?
Replies: 57
Views: 4383

Re: Is 401k loan really a bad idea?

Part of the repayment is double taxed, even taking into account the "net zero tax effect on the principal", you understand that right? I find it to be a negative, so I responded to the thread discussing negatives of 401k loans. It was as simple as that. To me, it's "steep". To you it may be fairly ...
by Ketawa
Wed May 03, 2017 12:20 pm
Forum: Personal Finance (Not Investing)
Topic: Is 401k loan really a bad idea?
Replies: 57
Views: 4383

Re: Is 401k loan really a bad idea?

I understand exactly how you, and many others, are looking at it. In the "common" scenario used for a loan, the "net" tax difference is $0 on the principal of the loan (though there are scenarios where that isn't true, like what if instead of spending that money I decided to not take the loan and p...
by Ketawa
Wed May 03, 2017 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Is 401k loan really a bad idea?
Replies: 57
Views: 4383

Re: Is 401k loan really a bad idea?

To illustrate that 401k loan interest isn't actually interest, consider a Roth 401k with a 100% loan interest rate payable in one year. Would you take a $50K loan and repay $100K in one year, while simultaneously lowering your bond allocation? Absolutely not. You did not somehow find a loophole that...
by Ketawa
Wed May 03, 2017 9:53 am
Forum: Personal Finance (Not Investing)
Topic: Is 401k loan really a bad idea?
Replies: 57
Views: 4383

Re: Is 401k loan really a bad idea?

Maybe one way to negate the possible loss of some growth in your 401k plan whilst you have a loan is to "borrow" from your bond holding IF you have one in the 401k. You will earn your interest via the interest you are paying on the loan, possibly/probably a higher interest rate than your bonds woul...
by Ketawa
Wed May 03, 2017 8:26 am
Forum: Personal Finance (Not Investing)
Topic: Is 401k loan really a bad idea?
Replies: 57
Views: 4383

Re: Is 401k loan really a bad idea?

It is true that you do not pay tax on the funds withdrawn when you take the loan from the 401k. However, to the extent of the "interest paid" on the 401K loan, you are using already taxed funds from your paycheck and putting that in your 401K plan. In the future when funds are withdrawn from the 40...
by Ketawa
Tue May 02, 2017 2:40 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Lifecycle Funds/G Fund Too Conservative?
Replies: 140
Views: 9834

Re: TSP Lifecycle Funds/G Fund Too Conservative?

It appears there are periodic reviews of the Lifecycle fund allocations. Here is the latest analysis. https://www.frtib.gov/pdf/minutes/MM-2016Nov-Att6.pdf After reading this, I hope the TSP isn't paying Mercer very much for their analysis. The fact that TSP is using projections of inflation, econo...
by Ketawa
Tue May 02, 2017 1:56 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Lifecycle Funds/G Fund Too Conservative?
Replies: 140
Views: 9834

Re: TSP Lifecycle Funds/G Fund Too Conservative?

They are absolutely related to an efficient frontier calculation. So, you are saying that Mercer's efficient frontier calculation for the 2050 fund can tell the difference between the C/S ratio goes from 3.1 to 4.0 over the 2020 to 2050 time frame versus a constant ratio of 3.5? And that they can t...
by Ketawa
Tue May 02, 2017 1:12 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Lifecycle Funds/G Fund Too Conservative?
Replies: 140
Views: 9834

Re: TSP Lifecycle Funds/G Fund Too Conservative?

There were some changes in 2014 mainly to increase G Fund and decrease F Fund. Here is a thread: Changes to composition of TSP Lifecycle - More G Fund . There wasn't much of an explanation for the changes, but it was obviously based on the F Fund having similar yield to the G Fund but higher risk. ...
by Ketawa
Tue May 02, 2017 1:08 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Lifecycle Funds/G Fund Too Conservative?
Replies: 140
Views: 9834

Re: TSP Lifecycle Funds/G Fund Too Conservative?

Since this is being used for portfolio rebalancing, it doesn't make any practical difference whether they use 8.53%, 8.5%, or 9%--the mechanics of calculating and implementing the rebalancing is all the same. So why not use 8.53%? It's not a question of using 8.53%. It's using 8.53%, then switching...
by Ketawa
Tue May 02, 2017 12:27 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Lifecycle Funds/G Fund Too Conservative?
Replies: 140
Views: 9834

Re: TSP Lifecycle Funds/G Fund Too Conservative?

It smacks of market timing. In the TSP Lifecycle AA graphs, if you move the sliders back and forth around 2013-2016, there was definitely some changes going on in the Lifecycle funds in regards to F/G and C/S. Perhaps it was some one-time adjustments like Vanguard's move from 30% to 40% for interna...
by Ketawa
Mon May 01, 2017 12:24 pm
Forum: Personal Consumer Issues
Topic: Roomba or competitor?
Replies: 18
Views: 2928

Re: Roomba or competitor?

The Sweethome ended up recommending a Eufy model. http://thesweethome.com/reviews/best-robot-vacuum/ I bought a Neato four years ago when it and Roomba were the only serious competitors. I will probably be replacing it soon because I want something less obnoxiously loud. It also gets stuck in dumb l...
by Ketawa
Mon May 01, 2017 10:40 am
Forum: Personal Finance (Not Investing)
Topic: Refinance advice
Replies: 10
Views: 1005

Re: Refinance advice

Regarding your choice of loans, I would avoid paying any closing costs by increasing your loan balance. Look at AmeriSave for some examples of rate/closing cost combinations. You should be able to do much better on closing costs or be able to find a no-cost refinance that is better than what you lis...
by Ketawa
Mon May 01, 2017 9:38 am
Forum: Personal Finance (Not Investing)
Topic: Refinance advice
Replies: 10
Views: 1005

Re: Refinance advice

Between those 2 options, I would go with the 10 year ARM. To compare apples to apples for the analysis, pretend as if you were paying $688 for either mortgage ($60 monthly extra payment towards principal for the ARM). After 10 years have gone by, you will have the following balances on the mortgages...
by Ketawa
Sat Apr 29, 2017 10:19 am
Forum: Personal Consumer Issues
Topic: [Southwest] Airlines Rapid Rewards Dining
Replies: 11
Views: 1193

Re: SW Airlines Rapid Rewards Dining

My advice is to keep a card you never use on each of the accounts, and then you are free to move around your regularly used card between programs. It can really mess up the system if you only have one card registered to a particular program, then register that card with a different program. It leav...
by Ketawa
Sat Apr 29, 2017 9:46 am
Forum: Personal Consumer Issues
Topic: [Southwest] Airlines Rapid Rewards Dining
Replies: 11
Views: 1193

Re: SW Airlines Rapid Rewards Dining

I use these programs to reset expiration dates. I never actively seek out one of these places to dine, but make a small order for delivery from one of the local restaurants if an expiration date is approaching. It is a lot cheaper and easier than buying points, booking a hotel stay, booking and canc...
by Ketawa
Fri Apr 28, 2017 8:46 am
Forum: Investing - Theory, News & General
Topic: More Rebalancing Benefits from More Asset Classes?
Replies: 7
Views: 996

Re: More Rebalancing Benefits from More Asset Classes?

There is no "benefit" to rebalancing. Rebalancing is for controlling risk and absent transaction costs like taxes, your personal time, or complexity, it can be done daily. Things like the Yale endowment, Vanguard Wellesley, and Vanguard Target Retirement funds rebalance daily. There may be a small b...
by Ketawa
Wed Apr 26, 2017 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: Should I buy points on this mortgage?
Replies: 9
Views: 1224

Re: Should I buy points on this mortgage?

I highly recommend looking at #Cruncher's post in the simultaneously active "Negative points on mortgage" thread. I was able to recreate his spreadsheet and verify his numbers for the example in that thread. Applying it to the OP's situation and considering the high rate, low points option to be -0...
by Ketawa
Wed Apr 26, 2017 2:22 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Lifecycle Funds/G Fund Too Conservative?
Replies: 140
Views: 9834

Re: TSP Lifecycle Funds/G Fund Too Conservative?

Someone at TSP Talk offered this with regards to my post. Just thought I'd share it. http://www.dailywealth.com/3528/this-common-strategy-could-be-quietly-ruining-your-portfolio It doesn't apply to the G Fund. The G Fund has zero correlation with equities because it does not zig or zag, it just goe...
by Ketawa
Wed Apr 26, 2017 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Should I buy points on this mortgage?
Replies: 9
Views: 1224

Re: Should I buy points on this mortgage?

I highly recommend looking at #Cruncher's post in the simultaneously active "Negative points on mortgage" thread. I was able to recreate his spreadsheet and verify his numbers for the example in that thread. Applying it to the OP's situation and considering the high rate, low points option to be -0....
by Ketawa
Wed Apr 26, 2017 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: "Negative points" on mortgage
Replies: 47
Views: 3672

Re: "Negative points" on mortgage

You're right, Ketawa, that I didn't solve for the breakeven months with a formula. But I didn't use Excel's Solver either. I used Goal Seek which looks a lot simpler than Solver. Solver works basically the same way for a target cell, target value, and input cell that is varied. It's actually slight...
by Ketawa
Wed Apr 26, 2017 11:58 am
Forum: Personal Finance (Not Investing)
Topic: "Negative points" on mortgage
Replies: 47
Views: 3672

Re: "Negative points" on mortgage

When you pay points to reduce the rate, the lender has received their money, and it's up to you whether it may or may not save you any money in the long run. But when a lender pays you cash back ("negative points") or raises the rate to pay for closing costs or LPMI, they're not going to give you a...
by Ketawa
Wed Apr 26, 2017 11:08 am
Forum: Personal Finance (Not Investing)
Topic: "Negative points" on mortgage
Replies: 47
Views: 3672

Re: "Negative points" on mortgage

I show the "breakeven" to be about 83 months... Thanks for walking through all of this, I had mistakenly been looking only at the P&I payment and calculating how long it would take to make up the difference in points/closing costs. I was able to create a similar spreadsheet in Excel. Unfortunately,...
by Ketawa
Wed Apr 26, 2017 11:03 am
Forum: Personal Finance (Not Investing)
Topic: "Negative points" on mortgage
Replies: 47
Views: 3672

Re: "Negative points" on mortgage

I addressed using the cash back to pay down the higher-rate loan in my table in a previous post in this thread. To reiterate: For the existing loan: If you finance $186,000 at 3.75% for 360 months (30. years) the payment is $861.40 per month for P&I. The total paid will be (360 x 861.4) = $310,102 ...
by Ketawa
Wed Apr 26, 2017 10:05 am
Forum: Personal Finance (Not Investing)
Topic: "Negative points" on mortgage
Replies: 47
Views: 3672

Re: "Negative points" on mortgage

Real question: why does the bank want to make this deal? They have more cash than they need and it looks better on their books for them to be holding mortgages at slightly higher interest rates? It's no different from paying more for a Treasury bond with higher coupon payments vs one with lower pay...
by Ketawa
Wed Apr 26, 2017 9:22 am
Forum: Personal Finance (Not Investing)
Topic: "Negative points" on mortgage
Replies: 47
Views: 3672

Re: "Negative points" on mortgage

Taking their offer as proposed, there will never be a "break even" point because at any point in the payment schedule you will always owe more on the new loan than you did on the old one, and you will pay more interest. Except the money can be immediately applied towards principal on the higher rat...
by Ketawa
Tue Apr 25, 2017 3:12 pm
Forum: Investing - Help with Personal Investments
Topic: Why is Real-Estate so Bad?
Replies: 113
Views: 11143

Re: Why is Real-Estate so Bad?

Lets ignore my current situation (I work full time). Lets hypothetically ignore the time and work involved in maintaining rental properties (because I have lots of spare time and would rather make more money than be lazy and sit and watch my portfolio grow at a slower pace that I could investing mo...
by Ketawa
Tue Apr 25, 2017 12:31 pm
Forum: Investing - Theory, News & General
Topic: Splitting Growth And Value Leads To A Worse Return
Replies: 36
Views: 5402

Re: Splitting Growth And Value Leads To A Worse Return

Do you include rebalancing? I just ran a portfolio of 50/50 US large cap value/growth vs US large cap with annual rebalancing and the CAGR was 10.69 vs 10.17 for the time period 1972-Mar 2017. (portfoliovisualizer) You would expect some rebalancing bonus if you rebalanced between two asset classes ...
by Ketawa
Mon Apr 24, 2017 6:35 pm
Forum: Personal Consumer Issues
Topic: Issue With Real Estate Agent (Seller)
Replies: 58
Views: 6640

Re: Issue With Real Estate Agent (Seller)

You can negotiate the commission, but I would stick to offering full commission to the buyer's agent and only negotiating on the listing agent's commission. I am a first time home seller and I just listed my home, so take this with a grain of salt, but I was able to negotiate a 1.5% commission to th...
by Ketawa
Sun Apr 23, 2017 11:08 pm
Forum: Investing - Theory, News & General
Topic: Larry Portfolio Equities: What % Each Market?
Replies: 50
Views: 4538

Re: Larry Portfolio Equities: What % Each Market?

Brief INTROD to the Larry Portfolio (LP) for those not familiar with it. The LP is: 1. Equities: USA Small Value + Developed Markets Small Value + Emergent Markets Value although my portfolio is tilted, I agree with those who diversify across the Globe market cap, in order to diversify risk, so eve...
by Ketawa
Sun Apr 23, 2017 8:46 am
Forum: Investing - Theory, News & General
Topic: Larry Portfolio Equities: What % Each Market?
Replies: 50
Views: 4538

Re: Larry Portfolio Equities: What % Each Market?

Regarding geographically diversification of the Small-Vallue equities in the LP , earlier this year 1/2 US, 3/8 developed non US and 1/8 EM, or something not too far from that as that is how roughly the world market cap is . I asked how come the World market cap applies when holding only Small Valu...
by Ketawa
Sat Apr 22, 2017 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: Differential aggressiveness for ROTH vs 401K
Replies: 31
Views: 2879

Re: Differential aggressiveness for ROTH vs 401K

tadamsmar wrote:My question is:

Are there any scenarios where putting the Roth in an investment with a lower return would be a good idea?
If the only good fund in a 401k was an S&P 500 index fund, and a Roth IRA had to be used for the bond allocation.
by Ketawa
Sat Apr 22, 2017 11:55 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage recast or higher down payment ?
Replies: 2
Views: 393

Re: Mortgage recast or higher down payment ?

Some lenders don't allow you to recast just because you want to. If this particular lender does allow you to recast at will without any fees and you can verify it in writing somewhere, then there is no difference between: 1. Putting down a small down payment, making an immediate extra payment toward...
by Ketawa
Sat Apr 22, 2017 11:30 am
Forum: Personal Consumer Issues
Topic: Six pack for barbecue?
Replies: 77
Views: 6590

Re: Six pack for barbecue?

It's pretty clear you're not much of a beer drinker. A 6-pack means bottled beers. I would not bring something like Bud or Bud Light. Bring a nice summertime beer like a Sierra Nevada Kellerweis Hefeweizen. Sierra Nevada has wide distribution and should be available just about anywhere for a standar...
by Ketawa
Sat Apr 22, 2017 11:04 am
Forum: Personal Finance (Not Investing)
Topic: Why are pensions revered, but annuities reviled?
Replies: 113
Views: 12082

Re: Why are pensions revered, but annuities reviled?

FInally even with SPIAs we are still in a low interest rate environment. The federal Thrift Savings Plan assumes a lifetime 2.375% annual interest rate on annuities purchased today. If you buy that annuity today you are locking in that rate for the rest of your life. Would have been great to lock i...
by Ketawa
Fri Apr 21, 2017 8:03 pm
Forum: Investing - Help with Personal Investments
Topic: Differential aggressiveness for ROTH vs 401K
Replies: 31
Views: 2879

Re: Differential aggressiveness for ROTH vs 401K

I'm not Kevin, but regardless... Same misunderstanding. If you disagree, read the Wiki article I linked to, and come back with an argument defending your position against what it explains. Kevin Kevin, I think I disagree with you for the following reason. When you talk about risk you need to include...
by Ketawa
Fri Apr 21, 2017 3:56 pm
Forum: Investing - Help with Personal Investments
Topic: Differential aggressiveness for ROTH vs 401K
Replies: 31
Views: 2879

Re: Differential aggressiveness for ROTH vs 401K

Hi Kevin, thanks for that link, because I was reading https://www.bogleheads.org/wiki/Tax-efficient_fund_placement If all else is equal (and it often isn't, because you may have different options in your 401(k) and your Roth IRA), it is slightly better to have the fund with the highest expected ret...
by Ketawa
Fri Apr 21, 2017 3:13 pm
Forum: Investing - Help with Personal Investments
Topic: The Value of Debt in Retirement
Replies: 16
Views: 1662

Re: The Value of Debt in Retirement

In retirement, you probably have plenty of fixed income investments. I don't see how borrowing money to invest it for a guaranteed lower return makes much sense unless you can figure out a way to arbitrage interest rates. That might be possible with a long term deductible mortgage and shorter durati...
by Ketawa
Wed Apr 19, 2017 6:59 pm
Forum: Investing - Theory, News & General
Topic: A test for when risk factors have positive expected returns
Replies: 61
Views: 5118

Re: A test for when risk factors have positive expected returns

Your hypothesis/test says that you believe value and small premiums, if they exist, are a result of behavioral errors. Can you name anything that would pass your test other than stocks as a whole? Otherwise, it sounds like you are merely making an argument for why you do not believe in value and sma...
by Ketawa
Wed Apr 19, 2017 11:25 am
Forum: Investing - Help with Personal Investments
Topic: Exchanging the S&P 500 for the TSM
Replies: 16
Views: 2419

Re: Exchanging the S&P 500 for the TSM

Just a note that one potential tax implication would be that IRA's can cause wash sales if you have TSM or S&P500 in a taxable account. You didn't mention if you have a taxable account but I just wanted to throw this detail out there. Wash sale would only apply if S&P500 was in a taxable account, t...
by Ketawa
Wed Apr 19, 2017 8:46 am
Forum: Personal Consumer Issues
Topic: Tips on Uber
Replies: 77
Views: 7378

Re: Tips on Uber

I have taken 155 rides and have a passenger rating of 4.76. My average trip costs around $10-11.

What would my rating be over the next 150 rides if I tipped $2-$3, 4.95 or so? I would boost my rating to around 4.85 and spend $300-$450. I'll keep the money.
by Ketawa
Mon Apr 17, 2017 11:18 pm
Forum: Investing - Theory, News & General
Topic: Those that hold international equities at market-cap weight: what is your method?
Replies: 24
Views: 3113

Re: Those that hold international equities at market-cap weight: what is your method?

The split between regions for my international equities (Domestic/Intl Developed/Emerging) are set at market weights. I have a heavily tilted portfolio, so I'm definitely not holding market weight funds. But regardless of the specific funds I own, I would be forced to figure out an appropriate split...
by Ketawa
Sat Apr 15, 2017 11:11 am
Forum: Personal Finance (Not Investing)
Topic: Should I refinance my home?
Replies: 6
Views: 804

Re: Should I refinance my home?

Thank you for the response Ketawa... it is greatly appreciated and you brought up some points I didn't think about. We purchased the house for $470,000 and it appraised for $499,900. The seller and her agent didn't have a great relationship so the seller wanted to get out of the home which left us ...
by Ketawa
Sat Apr 15, 2017 11:03 am
Forum: Personal Consumer Issues
Topic: Same branded components for home theater?
Replies: 35
Views: 2517

Re: Same branded components for home theater?

Having matching brands is only important for the regular satellite speakers, e.g. the "5" in a 5.1 setup. You can mix and match brands between the receiver, television, subwoofer, Blu-ray player, etc.