Search found 3657 matches

by Thesaints
Tue Apr 20, 2021 11:29 pm
Forum: Investing - Theory, News & General
Topic: Any Reason to NOT max out I Bonds and EE Bonds
Replies: 37
Views: 3399

Re: Any Reason to NOT max out I Bonds and EE Bonds

It is 3.5% nominal.
Again, picture someone buying an EE in 1971.
by Thesaints
Tue Apr 20, 2021 5:53 pm
Forum: Investing - Theory, News & General
Topic: Thinking About I-Bonds: Any Pointers on Using Treasury Direct Website?
Replies: 14
Views: 899

Re: Thinking About I-Bonds: Any Pointers on Using Treasury Direct Website?

Stocks and bonds are by definition "passive investments". Not even wanting to take the time to open an on-line account, read an email, or enter a password, seems way too passive, though.
by Thesaints
Tue Apr 20, 2021 5:48 pm
Forum: Investing - Theory, News & General
Topic: Any Reason to NOT max out I Bonds and EE Bonds
Replies: 37
Views: 3399

Re: Any Reason to NOT max out I Bonds and EE Bonds

The only salvation from a rotten investment would be the 3.5% bonus at the stroke of 20-years. 20 years are an extremely long time and 3.5% ain't such a jackpot. What, if 10 years from now interests have considerably risen ? One would have already missed out on the interest differential (about 0.6%...
by Thesaints
Tue Apr 20, 2021 3:50 pm
Forum: Investing - Theory, News & General
Topic: I Bonds variable rate @ 3.54% in May
Replies: 113
Views: 13184

Re: I Bonds variable rate @ 3.54% in May

I know this is completely and utterly market timing and has no place on this site..... but... will this not have detrimental impact on the total stock market funds when everyone sells April 30th, May 1st to buy I bonds? The crash in march represented about 2% of shareholders selling total stock fun...
by Thesaints
Tue Apr 20, 2021 3:48 pm
Forum: Personal Investments
Topic: Synthetic Cash?
Replies: 28
Views: 2302

Re: Synthetic Cash?

allenr wrote: Sat Apr 17, 2021 9:15 am What am I missing?
3-month T-bills yield today: 0.03%.
by Thesaints
Tue Apr 20, 2021 3:46 pm
Forum: Personal Finance (Not Investing)
Topic: How Long Would You Stay in a Boring Government Job?
Replies: 96
Views: 4774

Re: How Long Would You Stay in a Boring Government Job?

I guess I'm just looking for a benchmark. Any advice appreciated. In my opinion, the first thing you need to do is setting your sights. For some 750k NW and 70k/yr. expenses are a fortune. For others they are a pittance. Which is the case for you ? Clearly, by staying in city job your upside is lim...
by Thesaints
Tue Apr 20, 2021 3:38 pm
Forum: Investing - Theory, News & General
Topic: Any Reason to NOT max out I Bonds and EE Bonds
Replies: 37
Views: 3399

Re: Any Reason to NOT max out I Bonds and EE Bonds

Series I are presently the best indexed bond option available. If one wants inflation-indexed bonds in their portfolio, I can't see a reason not to have them on top of the shopping list. On the other hand, Series EE are not such a good option at all. Their running interest is close to zero. One can ...
by Thesaints
Thu Apr 15, 2021 4:30 pm
Forum: Investing - Theory, News & General
Topic: The 4% Rule - Simplified?
Replies: 19
Views: 1548

Re: The 4% Rule - Simplified?

I don't believe it assumes the ending value to be zero; that's not how I understand it. Rather, what I understand is it is the number that safely assumes you will not run out of money at 30 years, i.e. with some degree of certainty. It is less certain at 35 years, 40 years, and so on but I don't be...
by Thesaints
Thu Apr 15, 2021 4:21 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 239
Views: 12499

Re: "Mortage is a negative bond" - please help me understand

Expect that the risks of the bonds are offset by the mirror exposure in the mortgage in the 2nd portfolio. They do not mirror. Your 400k in bonds change in value every day. Your 400k mortgage does not. You till have to repay 400k, whatever market conditions may be. And that portfolio #2 is wealthie...
by Thesaints
Thu Apr 15, 2021 4:07 pm
Forum: Investing - Theory, News & General
Topic: The 4% Rule - Simplified?
Replies: 19
Views: 1548

Re: The 4% Rule - Simplified?

To be more accurate, it assumes that the chance of running out of funds before 30 years have elapsed is small. Ending with a zero balance after exactly N>1 years by withdrawing a fixed amount (in real terms) is extremely difficult to achieve. It is also probably not desirable since one has no way to...
by Thesaints
Thu Apr 15, 2021 2:23 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 239
Views: 12499

Re: "Mortage is a negative bond" - please help me understand

I don't think using the term dictates anything regarding AA. There is a disagreement. You view your mortgage as something other than debt. I don't own any bonds. I would strongly disagree. A asset and a liability are the opposite side of the same coin. A bond and a loan are the opposite side of the...
by Thesaints
Thu Apr 15, 2021 2:18 pm
Forum: Personal Consumer Issues
Topic: Why leasing a new car is always the best option even if you intend to keep it forever
Replies: 126
Views: 11675

Re: Why leasing a new car is always the best option even if you intend to keep it forever

7-year old BMW for 11k from a private party (no sales tax).
I drive it for 10 years and I'm driving a BMW, not a Honda.
by Thesaints
Wed Apr 14, 2021 8:15 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 239
Views: 12499

Re: "Mortage is a negative bond" - please help me understand

How do you figure? The fancy bond calculator that I have argues otherwise. :twisted: In fairness, this is kind of my day job. So your bank does not mark-to-market you mortgage like your brokerage mark-to-markets your bonds. That does not change the reality of the situation. Your mortgage isn't liqu...
by Thesaints
Wed Apr 14, 2021 8:11 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Total returns from bonds are as likely to be lower than that starting yield as to be higher. There you go assuming a normal distribution again. Even at the extremes. There are many distributions with zero expected value, which would give an equal cumulative probability of rates to be lower, or high...
by Thesaints
Wed Apr 14, 2021 6:51 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

I don't think the bond market is efficient. Last year in March, I could get 1% for cash, 1% for a 2 year CD, or .39% for a 5 year treasury. So, I could get 2% returns in 2 years with a CD or 2% returns in 5 years with a Treasury and have the option to reinvest after 2 years at a potentially higher ...
by Thesaints
Wed Apr 14, 2021 6:37 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

I don't think the bond market is efficient. Last year in March, I could get 1% for cash, 1% for a 2 year CD, or .39% for a 5 year treasury. So, I could get 2% returns in 2 years with a CD or 2% returns in 5 years with a Treasury and have the option to reinvest after 2 years at a potentially higher ...
by Thesaints
Wed Apr 14, 2021 6:01 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 239
Views: 12499

Re: "Mortage is a negative bond" - please help me understand

alex_686 wrote: Wed Apr 14, 2021 3:31 pm From a pragmatic view point it is true. Bonds and mortgages act inversely the same way, driven by the same factors of interest rates and inflation.
Well, no. Generally your bonds change price depending on market conditions, while your mortgage does not.
by Thesaints
Wed Apr 14, 2021 5:57 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

A flexible spending plan consisting in withdrawing X% of the current assets value never fails for any value of X<100... Maybe, but many people would view a 70%+ drop in retirement income a "failure" even though the portfolio balance never technically drops to $0. Indeed! Therefore "e...
by Thesaints
Wed Apr 14, 2021 3:30 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

A flexible spending plan consisting in withdrawing X% of the current assets value never fails for any value of X<100...
by Thesaints
Wed Apr 14, 2021 3:24 pm
Forum: Investing - Theory, News & General
Topic: "Mortgage is a negative bond" - please help me understand
Replies: 239
Views: 12499

Re: "Mortage is a negative bond" - please help me understand

If you are only counting liquid assets, then yes. But there is also a house on the balance sheet. I'd say it is the opposite. In the OP example, he has a 60/40 portfolio worth a million. When he purchases a 300k home (for simplicity I'm assuming a no money down mortgage), he continues to own a 1M 6...
by Thesaints
Tue Apr 13, 2021 4:26 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Can we have the final, definitive thread on safe withdrawal rates for the 2020's? If you ignore inflation and assume no returns the 30-year SWR is trivial and mathematically exact: 3.33%. Only if you ALSO ignore portfolio variance. There is no way to generate a guaranteed 0% real return for 30 year...
by Thesaints
Tue Apr 13, 2021 4:14 pm
Forum: Personal Investments
Topic: I Bonds [Can we buy in our kids' names?]
Replies: 22
Views: 5831

Re: I Bonds [Can we buy in our kids' names?]

Not sure I understand. Money is gifted to child. Legal guardian administers child money, until of legal age. I don't see a gift being revoked. Once you gift it in an offical capacity you can't (or at least shouldn't) then mingle it with the guardian's assets. He will pay for his auto insurance... w...
by Thesaints
Tue Apr 13, 2021 4:09 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

You can't reconcile "ignoring inflation" with the concept of an SWR. The latter is always an inflation-adjusted withdrawal rate. I'm only pushing back because there are some folks (not you, but other active participants) who seem to think that 3.33% amounts to some magical floor on SWR wh...
by Thesaints
Tue Apr 13, 2021 12:07 pm
Forum: Personal Investments
Topic: I Bonds [Can we buy in our kids' names?]
Replies: 22
Views: 5831

Re: I Bonds [Can we buy in our kids' names?]

Not sure I understand. Money is gifted to child. Legal guardian administers child money, until of legal age. I don't see a gift being revoked.
by Thesaints
Tue Apr 13, 2021 12:03 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Can we have the final, definitive thread on safe withdrawal rates for the 2020's? If you ignore inflation and assume no returns the 30-year SWR is trivial and mathematically exact: 3.33%. Only if you ALSO ignore portfolio variance. There is no way to generate a guaranteed 0% real return for 30 year...
by Thesaints
Tue Apr 13, 2021 11:46 am
Forum: Personal Investments
Topic: I Bonds [Can we buy in our kids' names?]
Replies: 22
Views: 5831

Re: I Bonds [Can we buy in our kids' names?]

Buying for an infant would still leave the parent with almost 18 years before eventually redeeming the bond, pay taxes at the child rate, and pocket the money ? Only disadvantage would be using part of the 15k annual gift exemption, which could otherwise be used to contribute to a 529 plan. Who is ...
by Thesaints
Tue Apr 13, 2021 11:44 am
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

We should let the California Earthquake Authority know. They are estimating chances of something that has never happened in order to calculate premiums.
by Thesaints
Tue Apr 13, 2021 11:27 am
Forum: Investing - Theory, News & General
Topic: Watch out for inflation numbers
Replies: 49
Views: 5104

Re: Watch out for inflation numbers

stocknoob4111 wrote: Tue Apr 13, 2021 8:31 am the CPI is fake anyways so the numbers are of little practical use
Well, a first practical use that comes to mind is determining Series I Savings Bonds yield (in advance!). There are many other uses too.
Also, I would agree much more to "misunderstood", than to "fake".
by Thesaints
Tue Apr 13, 2021 11:20 am
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

The weakness in your argument is Ignoring the statistical certainty of forward estimates while lauding the conclusions. I'm saying I won't believe you without some effort to do this, and I will leave it to everyone to decide if they think the certainty of your estimates is precise enough to believe...
by Thesaints
Tue Apr 13, 2021 11:09 am
Forum: Investing - Theory, News & General
Topic: 2021 I Bonds: what's your plan?
Replies: 204
Views: 24551

Re: 2021 I Bonds: what's your plan?

I am planning to buy at the end of May. Although I take the risk that the variable rate will be lower than 1.68% in November, missing out on a whole 6 months of 1.68% if I had bought at the end of this month. Any thoughts on whether to buy in April or May? When in doubt, split. Anyway, if you plan ...
by Thesaints
Tue Apr 13, 2021 11:01 am
Forum: Investing - Theory, News & General
Topic: 2021 I Bonds: what's your plan?
Replies: 204
Views: 24551

Re: 2021 I Bonds: what's your plan?

HueyLD wrote: Tue Apr 13, 2021 10:42 am File an extension and pay $6k with the extension. Then get $5k back in I bonds when you actually file.
Cool. Thanks!
by Thesaints
Tue Apr 13, 2021 10:45 am
Forum: Personal Investments
Topic: I Bonds [Can we buy in our kids' names?]
Replies: 22
Views: 5831

Re: I Bonds [Can we buy in our kids' names?]

Buying for an infant would still leave the parent with almost 18 years before eventually redeeming the bond, pay taxes at the child rate, and pocket the money ?
Only disadvantage would be using part of the 15k annual gift exemption, which could otherwise be used to contribute to a 529 plan.
by Thesaints
Tue Apr 13, 2021 10:34 am
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

2pedals wrote: Mon Apr 12, 2021 7:24 pm Can we have the final, definitive thread on safe withdrawal rates for the 2020's?
If you ignore inflation and assume no returns the 30-year SWR is trivial and mathematically exact: 3.33%.
by Thesaints
Tue Apr 13, 2021 10:27 am
Forum: Investing - Theory, News & General
Topic: 2021 I Bonds: what's your plan?
Replies: 204
Views: 24551

Re: 2021 I Bonds: what's your plan?

I personally don't see any reason to wait until May; I'm planning on buying my annual limit on April 30. There is a 0% chance that Treasury will increase the fixed rate in May. If you buy on April 30, hold for 14 months + 1 day, and sell on July 1, 2022, you're guaranteed minimum return is roughly ...
by Thesaints
Mon Apr 12, 2021 4:03 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Any depletion of one's portfolio after 30 years of '4% fixed real dollar' withdrawals was not a common historical occurrence, as the graph below from Kitces shows. I believe it only happened in about 11 out of 117 periods. And in most of those 11 instances, more than 50% of the starting balance was...
by Thesaints
Mon Apr 12, 2021 3:59 pm
Forum: Personal Investments
Topic: Bonds
Replies: 3
Views: 504

Re: Bonds

You should start with defining objectives for your portfolio and then one could see if and how to include bonds. VBTLX is probably not an optimal choice for you, but chances are it is not the worst choice either.
by Thesaints
Mon Apr 12, 2021 3:54 pm
Forum: Personal Investments
Topic: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing
Replies: 55
Views: 4320

Re: Effective tax rate 40%+ Sanity check on strategy for tax efficient investing

With over 1.2M taxable income it is time to invest in a tax advisor. Someone with experience, who can tailor a plan to your particular situation.
by Thesaints
Mon Apr 12, 2021 3:11 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Can you tell us why it has worked and why it would be lucky to work in the future? You are the one making the claim. Are you saying you have a grasp of economic variables to an extent that it allows you to understand the probabilities of future outcomes enough to make claims about the potential suc...
by Thesaints
Mon Apr 12, 2021 3:01 pm
Forum: Personal Investments
Topic: Investing strategy with known future expense
Replies: 26
Views: 1333

Re: Investing strategy with known future expense

By HY do you mean high yield savings accounts? I had considered it but right now interest rates seem very low. HY bonds. In fact, you could lower the stocks to 40% and add 30% HY bonds, with lower risk than 2/3 stocks. Anyway, all these considerations are subject to your flexibility on the downpaym...
by Thesaints
Mon Apr 12, 2021 2:18 pm
Forum: Personal Investments
Topic: Investing strategy with known future expense
Replies: 26
Views: 1333

Re: Investing strategy with known future expense

If you are flexible with the princip[al you want to put down, why not. Otherwise, it is probably on the risky side. Also, you may like to evaluate other bond solutions; how about half cash, half HY, for instance ?
by Thesaints
Mon Apr 12, 2021 2:14 pm
Forum: Personal Investments
Topic: H1B visa holder with Green card is in process. How should I plan for my retirement
Replies: 20
Views: 1736

Re: H1B visa holder with Green card is in process. How should I plan for my retirement

One thing I don't understand is, let's assume the OP is unlucky and at some point has to leave the US, his 403b balance will still be there, easily accessible, even from overseas. What is the problem ? The problem is that when you leave the US, you transition from US resident to US nonresident alie...
by Thesaints
Mon Apr 12, 2021 2:06 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Can you tell us why it has worked and why it would be lucky to work in the future? You are the one making the claim. Are you saying you have a grasp of economic variables to an extent that it allows you to understand the probabilities of future outcomes enough to make claims about the potential suc...
by Thesaints
Mon Apr 12, 2021 1:20 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Portfolio Watch has a new look
Replies: 102
Views: 8572

Re: Vanguard Portfolio Watch has a new look

Savings bonds are difficult to classify, in some respects. What would the interest rate sensitivity be? Are they a long-term bond, intermediate-term bond, or a short-term bond? The owner can consider them whatever duration they desire, 1-30 years. Not sure what a good proxy for savings bonds might ...
by Thesaints
Mon Apr 12, 2021 1:17 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

If something has worked 99% of the time for 150 years, how would it be luck if it worked again? Sounds like an excellent planning baseline for traditional retirement windows. One thing "rocket scientists" do is trying to understand why something has worked in the past 150 years, instead o...
by Thesaints
Mon Apr 12, 2021 1:11 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Genuinely curious, what is your suggested EWR/RWR or SWR for FIRE folks? 3% or 2%? Currently leader is financial samurai at 0.5% but I think that's too conservative, only Japan retirees at1937 (start of WWII for them) have lower SWR. I don't have a number. My advice to them is that most of them see...
by Thesaints
Mon Apr 12, 2021 1:06 pm
Forum: Personal Investments
Topic: H1B visa holder with Green card is in process. How should I plan for my retirement
Replies: 20
Views: 1736

Re: H1B visa holder with Green card is in process. How should I plan for my retirement

One thing I don't understand is, let's assume the OP is unlucky and at some point has to leave the US, his 403b balance will still be there, easily accessible, even from overseas.
What is the problem ?
by Thesaints
Mon Apr 12, 2021 1:02 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

Frankly, it's harder or completely different than rocket science, because economics is not science. This shows your naivety. You (and everyone who things they can predict the future based on a couple variables) understand a lot less than you think you do. If I had $5 for every person on this forum ...
by Thesaints
Mon Apr 12, 2021 1:00 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

I don't know that 4% is safe. I think 4% is a reasonable planning number. And this is a much more reasonable starting point ! One expects to be able to withdraw about 4% from his/hers portfolio, with the knowledge that going forward one has to be flexible enough to be able to lower that figure (rai...
by Thesaints
Mon Apr 12, 2021 12:51 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

The other thing is our definition of failure. This is talking about picking a withdrawal rate in year 1 of retirement, then never adjusting it based on the state of the portfolio. If real life, that doesn’t happen. If someone is in a situation where they saved enough for a 4% SWR, but they’re in an...
by Thesaints
Mon Apr 12, 2021 12:44 pm
Forum: Investing - Theory, News & General
Topic: Another 2.8% SWR Article Quoting Wade Pfau
Replies: 252
Views: 13968

Re: Another 2.8% SWR Article Quoting Wade Pfau

What? Why? For how many years? Where did you come with up with this idea? https://fred.stlouisfed.org/series/GFDEBTN https://www.usgovernmentspending.com/us_fed_spending_pie_chart Debt to GDP has been this high before... You are making a huge assumption that interest rates cannot possibly go up eve...