Which boglehead rule do you break--and are ok with

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user5027
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Re: Which boglehead rule do you break--and are ok with

Post by user5027 » Sat Jun 16, 2018 1:37 pm

Two.

1) I cut and pasted a full article along with the link. I always worry the link will die and the content lost.

2) I made a non-actionable post with a news article about carrying mortgages into retirement. It was non-actionable for me (I've no mortgage) but would be beneficial for others to consider. Must have hit a nerve.

I didn't build the sandbox so it is not mine and I am fine with that. Happy to play and share here. :sharebeer

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FIREchief
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Re: Which boglehead rule do you break--and are ok with

Post by FIREchief » Sat Jun 16, 2018 2:25 pm

corn18 wrote:
Sat Jun 16, 2018 6:48 am
I have one share each of a bunch of companies that I like and use all the time. I am also wearing a $6k watch. :sharebeer

Image
Wow!! That looks just like my $60 Timex. 8-)

I'll bet it tells time more accurately though.... :annoyed
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Toons
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Re: Which boglehead rule do you break--and are ok with

Post by Toons » Sat Jun 16, 2018 3:07 pm

I own actively managed mutual funds and
Individual Stocks
Yes I am just fine with it






"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

bhsince87
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Re: Which boglehead rule do you break--and are ok with

Post by bhsince87 » Sat Jun 16, 2018 3:51 pm

About 35% of my portfolio is in individual stocks. And I do time the market with them. And I check on them several times a day, looking for more buying opportunities. After averaging about 16% per year return with them over almost 30 years, I'm not stopping that anytime soon.

On the other hand, that is even lower cost than most Vanguard funds, and can be more tax efficient.

I also enjoy the heck out of it!

I also never owned a bond or bond fund until I turned 47 and could see early retirement approaching.
Retirement: When you reach a point where you have enough. Or when you've had enough.

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Re: Which boglehead rule do you break--and are ok with

Post by bikechuck » Sat Jun 16, 2018 4:36 pm

Horror of horrors, I purchased a fixed annuity approx 35 years ago and over the past few years I have added enough money to it so it now comprises approx 15% of my portfolio.

I like it better than a bond fund because it pays a guaranteed minimum 4.5% return, it is with a highly rated insurance company (so low risk),I can withdraw funds that I used to establish it or funds that I recently added with no penalties at any time. Any fees are taken out before the returns so it is paying 4.5% after any fees. When I get to my 70's I will consider annuitizing some or all of it. Meantime I have been enjoying the 4.5% returns and enjoying the fact that unlike a bond fund it has not lost value in a rising interest rate environment.

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Re: Which boglehead rule do you break--and are ok with

Post by grabiner » Sat Jun 16, 2018 8:37 pm

bikechuck wrote:
Sat Jun 16, 2018 4:36 pm
Horror of horrors, I purchased a fixed annuity approx 35 years ago and over the past few years I have added enough money to it so it now comprises approx 15% of my portfolio.
Note that what you purchased is a traditional fixed annuity, which pays a guaranteed rate without complicating features; this may be a reasonable investment. In particular, many Bogleheads use the TIAA Traditional Annuity, which works the same way, and is a very good fixed-income investment if it is an option in your 403(b).

The annuities that get widely criticized on the forum are "fixed index annuities", where even the term is a misnomer. They are technically fixed annuities because they guarantee a minimum return, but that guarantee is usually zero, and they are linked to the index in a way which will normally cause them to underperform it badly.
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Bodacious
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Re: Which boglehead rule do you break--and are ok with

Post by Bodacious » Sun Jun 17, 2018 10:57 am

My bond fund (Baird Core Plus Bond Fund Class Institutional) is actively managed (ER is 30 bp) and I own one individual stock that is 2.5% of my portfolio.

And, I'm age minus 20 in fixed income....

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Re: Which boglehead rule do you break--and are ok with

Post by Rus In Urbe » Sun Jun 17, 2018 11:01 am

Everyone says rebalance, rebalance, rebalance. Meaning sell high, buy low.

I don't sell. I rebalance by adding new money where I need to shore up my diversification.

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Re: Which boglehead rule do you break--and are ok with

Post by dh » Sun Jun 17, 2018 11:35 am

I don't think I am 0% or 100% on any of the following. Yet, I hope I meet a threshold to still call myself a Boglehead.

1 Develop a workable plan (90%)
2 Invest early and often (50% - sadly, I wish I would have started earlier)
3 Never bear too much or too little risk (90%)
4 Diversify (99.9% - I am 50% International; 50% US)
5 Never try to time the market (80%)
6 Use index funds when possible (80% - I am fond of Wellington management)
7 Keep costs low (90%)
8 Minimize taxes (80%)
9 Invest with simplicity (75%)
10 Stay the course (90%)

I am ok with it.

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Re: Which boglehead rule do you break--and are ok with

Post by oldzey » Sun Jun 17, 2018 12:26 pm

dh wrote:
Sun Jun 17, 2018 11:35 am
2 Invest early and often (50% - sadly, I wish I would have started earlier)
+1

I do invest often - just wish I had started 20 years earlier.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Re: Which boglehead rule do you break--and are ok with

Post by johnra » Sun Jun 17, 2018 2:52 pm

I like the BH approach to asset allocation and the long-term view, the deliberate analytics, and the consumer-conscious frugality. I have learned many things here. I don't have a written IPS statement or follow an explicit budget, and I do a number of other things that deviate from what seems common practice, including:

1. I own actively managed funds as well as index funds and ETFs (I have and really like FDGRX, FEMKX, FPBFX, MGGPX, FLVCX);
2. I invest in individual stocks in my wife’s IRA and my Roth (~10%);
3. 25% of bond allocation is in a high yield bond ETF (HYG);
4. ~90% of my liquid assets are in tax-deferred accounts, and a few years ago I stopped contributing to these, and instead I now pay into a after-tax DCP which is a mega-backdoor transfer into a Roth;
5. I really like my whole life insurance--I have 6 policies over 30-50 years old and they pay ~3.9% without fluctuation of cash value and death benefit is about 3X;
6. I moved to HCoL area in 2011, and as a consequence have had to take a large mortgage, but it is at 3% and amortized over 40 years (33 more to go) -- don’t expect to ever be able to pay it off;
7. I really like my work (age 65) and don’t plan on retiring, although preparing for no earned income;

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FIREchief
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Re: Which boglehead rule do you break--and are ok with

Post by FIREchief » Sun Jun 17, 2018 3:21 pm

johnra wrote:
Sun Jun 17, 2018 2:52 pm
5. I really like my whole life insurance--I have 6 policies over 30-50 years old and they pay ~3.9% without fluctuation of cash value and death benefit is about 3X;
If the cash value doesn't fluctuate, does that mean that the 3.9% return fully offsets the cost of insurance each year? At your age, I would expect the cost of insurance to be increasing rapidly.

What does the 3X mean? Three times something?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

johnra
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Re: Which boglehead rule do you break--and are ok with

Post by johnra » Sun Jun 17, 2018 3:24 pm

Cash value grows by 3.9% per year (net). If I die, my heirs receive 3X the current cash value.

LiterallyIronic
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Re: Which boglehead rule do you break--and are ok with

Post by LiterallyIronic » Sun Jun 17, 2018 3:59 pm

Mr.BB wrote:
Sat Jun 16, 2018 4:19 am
LiterallyIronic wrote:
Fri Jun 15, 2018 9:34 am
I pay extra on my mortgage even though I haven't maxed out my 401k. Does that count as breaking a Boglehead rule?

We also don't have life insurance, despite having a one-year-old. It's been on my to-do list, but who has the time?
Do you have time to watch SportsCenter or whatever TV shows you like during the week? Do you have time to read financial books, magazines and bulletin boards, but you DON"T have time to financially protect your spouse and kid in case anything happens to you? :annoyed
Well, reading a book is free.

I called up AAA to see how much life insurance would cost. According to them, a 15-year term of $300,000 would cost $23/month for me (34-year-old male) and $28/month for my wife (29-year-old female). People are saying that life insurance is "dirt cheap", but $51/month is far from insignificant to me.

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Re: Which boglehead rule do you break--and are ok with

Post by Mr.BB » Sun Jun 17, 2018 6:07 pm

How often do you go out to dinner in a month? Depending on where you like to go eat, not going 1-2x a month should cover it.
Last edited by Mr.BB on Sun Jun 17, 2018 6:46 pm, edited 1 time in total.
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Re: Which boglehead rule do you break--and are ok with

Post by Artsdoctor » Sun Jun 17, 2018 6:15 pm

Great question and really good thread! Interesting to read some of the confessions!

I have bought a lot of individual munis over the years, and I have a TIPS ladder for a "Liability Matching Portfolio." That's not in keeping with the Bogleheads tradition of keeping things simple with index funds, but I'm OK with that. The individual muni experiment taught me a tremendous amount about fixed income, and the TIPS ladder has negated the need for any sleeping pills.

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Re: Which boglehead rule do you break--and are ok with

Post by ncbill » Sun Jun 17, 2018 7:15 pm

I'll be leasing the next several vehicles.

Using leasehackr [sic] dot com forums to research whatever's on sale.

I regret missing out on the $75/month Buick Encores...

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Re: Which boglehead rule do you break--and are ok with

Post by dbr » Sun Jun 17, 2018 8:13 pm

I would say the admonition to use index funds needs to be qualified. The point is there are distinctions. The real point is to operate at low cost, to be diversified, and to not have manager risk. There are certainly funds that are not index funds that do that. For example Vanguard Treasury bond funds are not index funds. Neither is the beloved Wellesley Income Fund. Stable value funds in 401k's can be good funds but are also quite a different animal, maybe even not diversified or low cost, but still useful. On the other hand there are all kinds of crazy indices that can be codged up and sold to investors, but that does not make them good choices.

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Re: Which boglehead rule do you break--and are ok with

Post by Portfolio7 » Sun Jun 17, 2018 9:06 pm

1 Develop a workable plan: 75%? Our current plan is maybe 'good enough', but the big unknowns leave me grasping.
2 Invest early and often: 75% Starting at 27 was good enough, but we could have started earlier.
3 Never bear too much or too little risk: 75%. We consider risk first in AA construction, but we carry too much debt.
4 Diversify: 90% I've long understood the importance of diversification for investing, even if the definition was hazy. I think our portfolio is well balanced now... but it's almost all in traditional tax advantaged, which is a concern until I turn 59.5 because we ate through our emergency fund and are trying to rebuild it, so no, I'm not ok with our falling short in this area.
5 Never try to time the market: 25% This is my big deviation. I don't sell out of fear after a market collapses, but I definitely am always trying to game the system a bit. I'm ok with this.
6 Use index funds when possible: 90% Given our AA, and available funds.
7 Keep costs low: 90% (I usually carry about 35 bpts between funds and plan. A chunk of that is my Stable Value Fund, & some DFA funds)
8 Minimize taxes: It's all tax advantaged.
9 Simplicity: 25% The basic premise of my investment approach is simple enough. The TAA overlay I use now complicates things a bit. I modestly adjust my AA within certain ranges monthly. The main intent is to reduce volatility, and also to systematize my long-run approach to investing, since it seems to work for me. This item and #5 and #10 are all related. I'm ok with this.
10 Stay the course: ?? I've never been a panic seller, but I have been long concerned about another Great Depression style event - not that I think it's imminent, but I'm aware that there are reasonable odds of a repeat at some point. I think it's ok to manage to a variable risk profile, but I have strict limits as to how much change is allowed per month. In a Macro sense I'd say I do stay the course, in a Micro sense not so much.
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Re: Which boglehead rule do you break--and are ok with

Post by primetime5 » Sun Jun 17, 2018 10:18 pm

I am well above the 10% invested in my own company rule. I was all in on this approach, but I bought some shares 2 times in the last 2 years and the investments more than tripled. When I was brought on in January I full-time negotiated for more shares and for the ability to purchase more so I did. I'm still holding on to over 2 years' worth of emergency savings so I didn't feel too bad about it but my portfolio is quite foreign now to the Boglehead mentality. However, knowing what I do about the company's valuations even my new investment as of January will triple in value by next February.

I'm taking a big risk, but I am well aware of it and hopefully don't blow it...

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Re: Which boglehead rule do you break--and are ok with

Post by LiterallyIronic » Sun Jun 17, 2018 11:11 pm

Mr.BB wrote:
Sun Jun 17, 2018 6:07 pm
How often do you go out to dinner in a month? Depending on where you like to go eat, not going 1-2x a month should cover it.
Zero. We only go out to eat when we have restaurant giftcards that we get from watching someone's kids or something. I recently got a giftcard to Olive Garden from work for accomplishing a particular task really quickly - that was the one time we've gone out to eat in 2018. I'm also annoyed that we still have Netflix, even though it's only $8.54/month after tax. We're supposed to cancel it as soon as our baby starts sleeping through the night, but she's still not doing that. :x

I get $20/month of "fun money" (so does my wife) and I've only used $10 so far this year - I bought a movie ticket to Incredibles 2. I also haven't bought any clothes since last year. Whenever my wife goes over $200 for a month of groceries for her, the one-year-old, and me, it upsets me. I'm a miser. Trying to get $51/month out of me will be like pulling teeth.

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Re: Which boglehead rule do you break--and are ok with

Post by limeyx » Sun Jun 17, 2018 11:24 pm

corn18 wrote:
Sat Jun 16, 2018 6:48 am
I have one share each of a bunch of companies that I like and use all the time. I am also wearing a $6k watch. :sharebeer

Image
Does that thing even tell time ??? :) heh heh

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Re: Which boglehead rule do you break--and are ok with

Post by PFInterest » Sun Jun 17, 2018 11:25 pm

jmk wrote:
Fri Jun 15, 2018 9:12 am
I'm a pretty strict boglehead. The one guide I don't do is a written out directive Investment Plan Statement. I have some guiding heuristics I stick to religiously (segregating buckets according to desired risk and timeline, rebalancing) but I personally have never felt the need to write out anything to keep me on track. That just wouldn't motivate me. But I don't feel I'm irrational because the IPS is just a means to an end: essentially one of dozens of ways to manipulate incentives so as to stay the coarse when the going gets rough. In my case I've thoroughly thought (and felt) through my AA so carefully (of what x loss would be like) that I haven't waivered even in e.g. 2008.

You? What boglehead rules do you feel you can break rationally in your particular case?
As stated the premise for your post is incorrect.

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Re: Which boglehead rule do you break--and are ok with

Post by Mr.BB » Sun Jun 17, 2018 11:42 pm

LiterallyIronic wrote:
Sun Jun 17, 2018 11:11 pm
Mr.BB wrote:
Sun Jun 17, 2018 6:07 pm
How often do you go out to dinner in a month? Depending on where you like to go eat, not going 1-2x a month should cover it.
Zero. We only go out to eat when we have restaurant giftcards that we get from watching someone's kids or something. I recently got a giftcard to Olive Garden from work for accomplishing a particular task really quickly - that was the one time we've gone out to eat in 2018. I'm also annoyed that we still have Netflix, even though it's only $8.54/month after tax. We're supposed to cancel it as soon as our baby starts sleeping through the night, but she's still not doing that. :x

I get $20/month of "fun money" (so does my wife) and I've only used $10 so far this year - I bought a movie ticket to Incredibles 2. I also haven't bought any clothes since last year. Whenever my wife goes over $200 for a month of groceries for her, the one-year-old, and me, it upsets me. I'm a miser. Trying to get $51/month out of me will be like pulling teeth.
Hopefully the need for life insurance will not be an issue for you or your wife in the future.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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Re: Which boglehead rule do you break--and are ok with

Post by SGM » Mon Jun 18, 2018 3:53 am

We still hold a significant amount of individual stocks with capital gains, but the total has been decreasing as new money was generally put into index funds over the last 10 years. I like low cost index funds for the simplification and tax efficiency. I do not believe the market is completely efficient, but is difficult to beat.

I was 100% in stocks for many years during the accumulation phase. I have no regrets and welcomed bear markets during accumulation as I had job security and no need to cash out when the markets were low.

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Re: Which boglehead rule do you break--and are ok with

Post by IlliniDave » Mon Jun 18, 2018 5:06 am

I lean a little towards being a tactical asset allocator in that I'll let my stock allocation vary by +/- 10% depending on how I feel. I also have a palette of stuff that's a little messier than is typical for a boglehead.
Don't do something. Just stand there!

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Re: Which boglehead rule do you break--and are ok with

Post by bonglehead » Mon Jun 18, 2018 5:21 am

While all my investments are aligned with boglehead principles (low cost, broad based market index funds with tax efficient placement), almost everything else in my life is un-bogleheadish e.g. frequent eating out, expensive clothing, cars, vacations etc. I have tried to be more frugal, reduce/eliminate wasteful expenditures but I have been over-ruled (and derided) by my wife and daughter who espouse a YOLO philosophy. I have now accepted this un-bogleheadish aspect of my life and moved on.

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Re: Which boglehead rule do you break--and are ok with

Post by SagaciousTraveler » Mon Jun 18, 2018 5:39 am

gmaynardkrebs wrote:
Fri Jun 15, 2018 4:54 pm
I check my Vanguard portfolio almost every day, breaking John Bogle's sage "get a life" advice. Can't help it.
I absolutely see nothing wrong with this. Its a different time.

With companies being hacked, why not always make sure nothing erroneous is going on with your accounts? I check everything, everyday. Its our money, you work hard for it, so make sure its all there.

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Re: Which boglehead rule do you break--and are ok with

Post by gd » Mon Jun 18, 2018 6:05 am

I have no formal investment plan. I haven't rebalanced in a decade. As stocks increase, my risk tolerance increases, so it's fine. In any case, I weight accuracy with meaningfulness- AAs are based on mostly arbitrary goals, so don't require precision. I have assumed responsibility for someone else's income-producing investments with a full-service broker who does the usual stuff of his profession, and have concluded that within my ability to measure, he's doing as well as I could so continue without concern.

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Re: Which boglehead rule do you break--and are ok with

Post by FIBoston » Mon Jun 18, 2018 6:34 am

100% equities. yolo.

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Re: Which boglehead rule do you break--and are ok with

Post by gmaynardkrebs » Mon Jun 18, 2018 6:38 am

SagaciousTraveler wrote:
Mon Jun 18, 2018 5:39 am
gmaynardkrebs wrote:
Fri Jun 15, 2018 4:54 pm
I check my Vanguard portfolio almost every day, breaking John Bogle's sage "get a life" advice. Can't help it.
I absolutely see nothing wrong with this. Its a different time.
With companies being hacked, why not always make sure nothing erroneous is going on with your accounts? I check everything, everyday. Its our money, you work hard for it, so make sure its all there.
Good point. I think that's part of the reason I do it.

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Re: Which boglehead rule do you break--and are ok with

Post by msk » Mon Jun 18, 2018 6:41 am

FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
+1

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Re: Which boglehead rule do you break--and are ok with

Post by gmaynardkrebs » Mon Jun 18, 2018 6:46 am

FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
Maybe you are an infant? (100-age)? :D

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Re: Which boglehead rule do you break--and are ok with

Post by BogleMelon » Mon Jun 18, 2018 7:28 am

I have more than a year of expenses in cash, MM fund, and I bonds.
The reason i have that much of cash is that I use a bucket budgeting system (YNAB). When every dollar get assigned to only one job, you end up with too many dollars. But I am happy with that system. It allows me to spend guilt free and sleep well at night knowing that my next expensive purchase is 100% affordable
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Which boglehead rule do you break--and are ok with

Post by MnD » Mon Jun 18, 2018 9:03 am

We have 25% or so of our investment net worth in four Dodge and Cox funds.
We own 2 individual stocks.
We avoid bond index funds due to the biggest debtor approach to portfolio construction and instead opt for a mix of stable value in 401-K and active domestic and global bond in IRA's.
We are not frugal and do not "max out everything" with regards to tax-preferenced accounts.
I buy my lunch at work most days.
We count on my pension and our Social Security as safe income and they influence our asset allocation because we can afford to take more risk.
We do not view 4% SWR as "too risky" and will allow ourselves to spend 5% of annual portfolio balance with a 3% inflation-adjusted floor.

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Re: Which boglehead rule do you break--and are ok with

Post by delamer » Mon Jun 18, 2018 9:09 am

bonglehead wrote:
Mon Jun 18, 2018 5:21 am
While all my investments are aligned with boglehead principles (low cost, broad based market index funds with tax efficient placement), almost everything else in my life is un-bogleheadish e.g. frequent eating out, expensive clothing, cars, vacations etc. I have tried to be more frugal, reduce/eliminate wasteful expenditures but I have been over-ruled (and derided) by my wife and daughter who espouse a YOLO philosophy. I have now accepted this un-bogleheadish aspect of my life and moved on.
As has been noted before in this thread, while clearly people need to save some money in order to be able to invest (#2) there is nothing in the Boglehead investing principles that address eating out or expensive clothes and vacations.

The principles provide a guide to the way to reach your goals via investing, but the principles don’t determine your goals.

Crisium
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Re: Which boglehead rule do you break--and are ok with

Post by Crisium » Mon Jun 18, 2018 9:11 am

I prefer actively managed bond funds.

I could also do better with keeping things simple, though there are much more complex people out there. 6 fund portfolio.

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Re: Which boglehead rule do you break--and are ok with

Post by FIBoston » Mon Jun 18, 2018 9:13 am

gmaynardkrebs wrote:
Mon Jun 18, 2018 6:46 am
FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
Maybe you are an infant? (100-age)? :D
"Boss Baby" is actually a biopic about my life thus far

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Re: Which boglehead rule do you break--and are ok with

Post by Hukedonfonix4me » Mon Jun 18, 2018 4:21 pm

msk wrote:
Mon Jun 18, 2018 6:41 am
FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
+1
+2
"While some mutual fund founders chose to make billions, he chose to make a difference." | -The Bogleheads' Guide to Investing

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Re: Which boglehead rule do you break--and are ok with

Post by TheTimeLord » Mon Jun 18, 2018 4:44 pm

Hukedonfonix4me wrote:
Mon Jun 18, 2018 4:21 pm
msk wrote:
Mon Jun 18, 2018 6:41 am
FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
+1
+2
The reason they make chocolate and vanilla.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Re: Which boglehead rule do you break--and are ok with

Post by guyesmith » Mon Jun 18, 2018 8:14 pm

msk wrote:
Mon Jun 18, 2018 6:41 am
FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
+1
+2

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Re: Which boglehead rule do you break--and are ok with

Post by 3funder » Mon Jun 18, 2018 8:19 pm

jmk wrote:
Fri Jun 15, 2018 9:12 am
I'm a pretty strict boglehead. The one guide I don't do is a written out directive Investment Plan Statement. I have some guiding heuristics I stick to religiously (segregating buckets according to desired risk and timeline, rebalancing) but I personally have never felt the need to write out anything to keep me on track. That just wouldn't motivate me. But I don't feel I'm irrational because the IPS is just a means to an end: essentially one of dozens of ways to manipulate incentives so as to stay the coarse when the going gets rough. In my case I've thoroughly thought (and felt) through my AA so carefully (of what x loss would be like) that I haven't waivered even in e.g. 2008.

You? What boglehead rules do you feel you can break rationally in your particular case?
+1. My AA changes infrequently and modestly, mostly based on age.

Hiwatter
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Re: Which boglehead rule do you break--and are ok with

Post by Hiwatter » Tue Jun 19, 2018 2:05 pm

I hold too much cash... but I sleep well at night.

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siamond
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Re: Which boglehead rule do you break--and are ok with

Post by siamond » Tue Jun 19, 2018 3:18 pm

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep costs low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course
I am in agreement with all of those.

Where I might have been deviating a tad since I became a passive investor is #9 and #10. For the most part, I did stay the course for my top-level AA (US equities, Int'l stocks, bonds). But I meandered for the lower-level breakdown (tilts), tinkering and changing things over the years. My excuse is that I refined my AA as I learned, for solid reasons, I did simplify, and I think I am now *finally* comfortable enough with my choices that I might stop tinkering. But knowing myself, I am not so sure I will, and it's been bugging me.

Besides those principles, a few things that could make many on this forum cringe:
* I have a significantly higher equity exposure than most people here would suggest. I have my reasons, and don't harbor doubts for now. I am clinically curious on how I'll react during the next crisis though, my first in retirement, a live experiment!
* My IPS is in Excel, more words than numbers, and quite possibly too complicated (#9?). I find it very useful though. It is HARD to be disciplined when the latest & greatest idea hits you. Dare I acknowledge that I held 5% gold for a month, then back-pedaled... Lucky me, I made a small profit and swore to never do it again!
* I do believe that valuations provide blunt yet useful information, but not for market timing, mind you. I use such information for coarse financial planning and for my withdrawal method.
* I've been known to post a picture of myself on this forum with a big fish every now and then. Ah, the horror.
* oh, and I probably do a little too much backtesting for my own sake... I learned to take the outcome with a big grain of salt though.

Overall, I think it is crucial to be disciplined while following those principles. I also believe the actual implementation is a very personal thing, and one shouldn't act in a zealot manner when commenting on others' choices (and past mistakes).

Cruise
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Re: Which boglehead rule do you break--and are ok with

Post by Cruise » Wed Jun 20, 2018 2:26 am

This is an interesting thread. Thanks for starting it.

Some of my deviations:

1. Hold too much cash because a few years ago I was convinced that there was going to be a crash when Israel invaded Iran. I was going to market time and make big bucks. LOL.

2. I'm slowly getting that bucket back in the market, rather than put it all in now. Why? I think the market is going to crash. :)

3. Don't own any bonds. Everything is in mutual funds, Index Funds, ETFs, except for Berkshire. I have winnowed the high ER holding out of my porftolio, unless they are overperforming.

4. I still live below my means, but am creeping up as I age, buying some expensive things I would have never purchased when younger.

Nowizard
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Re: Which boglehead rule do you break--and are ok with

Post by Nowizard » Wed Jun 20, 2018 7:40 am

Difficult question since "Boglehead Rules" and general rules of investing often intersect. For example, is the general belief of paying off a mortgage prior to retirement a Boglehead or more generally accepted approach (Or both)? Who establishes what is or is not a Boglehead rule? Seems to me that the primary concept is to not market time and evaluate risk in terms of individual circumstances while minimizing expenses. We follow those guidelines but frequently do not follow all suggestions made by posters who comment from the perspective of their interpretation of the Boglehead approach. After all, perhaps the most respected Boglehead of all states that there are many roads to Dublin.

Tim

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Re: Which boglehead rule do you break--and are ok with

Post by dbr » Wed Jun 20, 2018 8:26 am

Nowizard wrote:
Wed Jun 20, 2018 7:40 am
Difficult question since "Boglehead Rules" and general rules of investing often intersect. For example, is the general belief of paying off a mortgage prior to retirement a Boglehead or more generally accepted approach (Or both)? Who establishes what is or is not a Boglehead rule? Seems to me that the primary concept is to not market time and evaluate risk in terms of individual circumstances while minimizing expenses. We follow those guidelines but frequently do not follow all suggestions made by posters who comment from the perspective of their interpretation of the Boglehead approach. After all, perhaps the most respected Boglehead of all states that there are many roads to Dublin.

Tim
There are no Boglehead rules as such, certainly nothing about paying off mortgages one way or another. Gleaning different opinions from posters on the forum does not constitute creating a rule book. The OP that started this was about having or not having a written IPS. That isn't even a Boglehead rule either. A couple of people have posted the written statement of Boglehead Philosophy, which is the following:

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep costs low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course

Even these 10 ideals might be subject to variation at times. There have been some posts from people that do "violate" one or another of these principles. For the rest, it is a discussion. Those discussions happen all the time and usually have points on both sides with the addition of other sides as well. All of that should be helpful to everyone, but the result is most definitely not rules.

I think discussion is healthy and helpful. I think trying to invest by gleaning a rule is almost always bad thinking and should be discouraged.

Afty
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Re: Which boglehead rule do you break--and are ok with

Post by Afty » Wed Jun 20, 2018 9:23 am

I have a financial advisor. But at least he's through Vanguard PAS.

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TheTimeLord
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Re: Which boglehead rule do you break--and are ok with

Post by TheTimeLord » Wed Jun 20, 2018 9:25 am

removed
Last edited by TheTimeLord on Wed Jun 20, 2018 9:39 am, edited 1 time in total.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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stemikger
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Re: Which boglehead rule do you break--and are ok with

Post by stemikger » Wed Jun 20, 2018 9:35 am

guyesmith wrote:
Mon Jun 18, 2018 8:14 pm
msk wrote:
Mon Jun 18, 2018 6:41 am
FIBoston wrote:
Mon Jun 18, 2018 6:34 am
100% equities. yolo.
+1
+2
Actually, you might not be breaking any rule according to Jack. Go to 27:44 to hear his take on 100% equities.

https://www.youtube.com/watch?v=byNIu6e7Sbs&t=2480s
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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