Search found 601 matches

by SovereignInvestor
Tue Apr 13, 2021 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Losing Down Payment Money when under Contract
Replies: 3
Views: 727

Losing Down Payment Money when under Contract

A friend is in contract to buy a Co-Op and put 20K down at contract. The co-op purchase price is 250K and they were looking to get a 200K mortgage with 50K down (20K at contract and 30K at closing). The bank pre approved them for a 200K mortgage when they made the offer. After the formal application...
by SovereignInvestor
Wed Mar 03, 2021 8:36 pm
Forum: Personal Finance (Not Investing)
Topic: ROTH IRA 1st Time Home Buyer, Co-Op
Replies: 2
Views: 234

ROTH IRA 1st Time Home Buyer, Co-Op

I am 30 years old, and say I have $50K in my ROTH IRA, and $40K is contributions and $10K is gains. My ROTH is over 5 years old. Can I pull out the entire $50K without tax and penalty...by doing $10K as being towards 1st time home purchase, and then the other $40K as contributions? Would this be don...
by SovereignInvestor
Fri Nov 20, 2020 2:00 am
Forum: Personal Investments
Topic: Any way to exclude FAANG company from S&P index fund?
Replies: 20
Views: 3076

Re: Any way to exclude FAANG company from S&P index fund?

See what you're trying to do but clear way is long SPX index and short the individual stock. But usually stock agreement plans with companies don't allow employees to short to hedge their stock. If MSFT got hammered its likely their profits would go to another SPX component or batch of components......
by SovereignInvestor
Thu Nov 12, 2020 12:33 am
Forum: Personal Finance (Not Investing)
Topic: Umbrella Insurance for business. Needed?
Replies: 4
Views: 313

Re: Umbrella Insurance for business. Needed?

Umbrella insurance is typically secondary insurance to one's primary insurance of homeowner's & auto insurance. It typically extends the liability policy limits to XYZ amount. Commercial policies are not cookie cutter. Therefore, I truly do not understand the idea of "commercial umbrella i...
by SovereignInvestor
Mon Nov 02, 2020 9:02 pm
Forum: Personal Finance (Not Investing)
Topic: What are the financial risks of not owning a house?
Replies: 106
Views: 10689

Re: What are the financial risks of not owning a house?

There are risks especially if one doesn't save the money they are saving by not having to pay PITI and instead only rent. I always laugh when I read comments like that. With my most recent refinance, the PITI on my 1,800 sq ft 3/2.5 townhouse in a Seattle suburb is $1,737. Compare that to the $1,75...
by SovereignInvestor
Mon Nov 02, 2020 9:01 pm
Forum: Investing - Theory, News & General
Topic: How on earth can overweighting US stock over international stock possibly be considered Boglehead?
Replies: 253
Views: 16188

Re: How on earth can overweighting US stock over international stock possibly be considered Boglehead?

If one is a US consumer who spends US dollars then international adds an additional risk of FOREX without any additional return prospect so whats the point? The S&P gets around 40-50% of sales overseas anyway. Counting US stocks as 100% domestic is improper accounting, they are only 60% domestic...
by SovereignInvestor
Sun Oct 25, 2020 6:41 pm
Forum: Personal Finance (Not Investing)
Topic: Can my wife and I afford a $600K + house?
Replies: 134
Views: 15121

Re: Can my wife and I afford a $600K + house?

Yeah its more about old stock of houses. If a roof lasts 30 years and is say 9K to replace (not unheard of in VHCOL) , that's 300/year right there on average. If one of 5 major appliances breaks every 3 years (assume avg. 15 year life) and is 1K installed then that's around 300/year for appliances. ...
by SovereignInvestor
Sat Oct 24, 2020 6:47 pm
Forum: Personal Finance (Not Investing)
Topic: Can my wife and I afford a $600K + house?
Replies: 134
Views: 15121

Re: Can my wife and I afford a $600K + house?

Seems like you could do it but I would add on maintenance and utilities. Maintenance/renovation, in that area can easily be 1K or quite a bit more, a month if the house is not new. Plus utilities. There's numerous polls that show greatest regret of millenial and new homebuyers is the maintenence cos...
by SovereignInvestor
Sat Oct 17, 2020 6:15 am
Forum: Personal Finance (Not Investing)
Topic: What are the financial risks of not owning a house?
Replies: 106
Views: 10689

Re: What are the financial risks of not owning a house?

There are risks especially if one doesn't save the money they are saving by not having to pay PITI and instead only rent. Talk to someone with middle class income l in SF or NYC who rented for 30+ years and didn't save enough money and their rent has skyrocketed. They rent surges may price them out ...
by SovereignInvestor
Fri Oct 02, 2020 10:29 am
Forum: Personal Finance (Not Investing)
Topic: If you have a pension, how do you view it?
Replies: 203
Views: 14932

Re: If you have a pension, how do you view it?

Get a quote for an annuity from an insurance company at the same age as you'd take pension and see the single premium needed to generate the monthly annuity income equal to.amount from pension. That would be the dollar value of the pension. Then it should be treated as fixed income/bond and pretax s...
by SovereignInvestor
Wed Sep 09, 2020 6:39 am
Forum: Personal Finance (Not Investing)
Topic: Share your net worth progression
Replies: 2526
Views: 583008

Re: Share your net worth progression

In case any readers of this thread need a healthy dose of reality/perspective, check out the NY Times net worth ranker: https://www.nytimes.com/interactive/2019/08/12/upshot/are-you-rich-where-does-your-net-worth-rank-wealth.html Many of the responses in this thread are those in the 99th percentile...
by SovereignInvestor
Mon Sep 07, 2020 8:35 am
Forum: Personal Consumer Issues
Topic: advice for light switch timer
Replies: 44
Views: 1888

Re: advice for light switch timer

They make dusk to dawn bulbs on Amazon that have built in light sensor. I have used (via amazon) "Govee LED Dusk to Dawn Lights Bulb 13.5W Sensor Light Bulbs with Photocell" for over 2 years now and they are great. Just buy bulb, put in outdoor socket and permanently leave switch on and th...
by SovereignInvestor
Thu Sep 03, 2020 1:45 pm
Forum: Personal Investments
Topic: Family member has one million in one stock , doesn't want to cash out
Replies: 305
Views: 38505

Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Instead of selling none and being concentrated or selling all and leaving gain in table and taking massive tax hit, perhaps selling N%, where 0 < n < 100% is a good idea.
by SovereignInvestor
Sat Aug 15, 2020 8:10 am
Forum: Personal Finance (Not Investing)
Topic: 10/1 ARM vs 10 year fixed - arbitrage?
Replies: 3
Views: 316

Re: 10/1 ARM vs 10 year fixed - arbitrage?

The problem is the 10/1 ARM has you borrowing at 3.0% and stuffing money in MM at well below that. The savings between the two likely won't be enough to pay off 10/1 balance after 10 years since the 0.5 % interest rate savings is likely much smaller than what you're losing by getting under 1% in MM ...
by SovereignInvestor
Sat Aug 08, 2020 4:09 pm
Forum: Personal Investments
Topic: Margin usage in different ways.
Replies: 13
Views: 1126

Re: Margin usage in different ways.

Why borrow on margin at a premium to risk free rate when you can buy call options that implicitly borrow at risk free rate. Only drawback is taxability when rolling options but this is mitigated by doing lojg equity index call LEAPS in an IRA.
by SovereignInvestor
Thu Jul 30, 2020 4:04 pm
Forum: Investing - Theory, News & General
Topic: Ridiculously Misleading Headline About the Q2 GDP
Replies: 28
Views: 2319

Re: Ridiculously Misleading Headline About the Q2 GDP

Seasonally adjusted annualized rate or SAAR is not as relevant when the recession is caused by one time shock government imposed lockdowns. Its not realistic to expect that to continue for 4 quarters so annualizing isn't as relevant. For a normal organic recession due to normal business contraction ...
by SovereignInvestor
Mon Jul 27, 2020 10:01 pm
Forum: Personal Finance (Not Investing)
Topic: Using IB margin to pay off mortgage
Replies: 37
Views: 3290

Re: Using IB margin to pay off mortgage

I would recommend against it since broker can call in theory at any time and ruin your life. If one insists then do risk is mitigated with using low leverage maybe 20% max, and maybe buy way OTM index put options out 2 or 3 years and keep rolling. Make the strike a bit higher than where you'd get a ...
by SovereignInvestor
Tue Jul 14, 2020 3:36 pm
Forum: Personal Consumer Issues
Topic: Indoor Plants + Gnats
Replies: 19
Views: 973

Re: Indoor Plants + Gnats

These worked for me with fruit flies.

https://www.amazon.com/dp/B086SLCJDV/re ... dFbFNTZ6DK
by SovereignInvestor
Fri Jul 03, 2020 9:21 am
Forum: Investing - Theory, News & General
Topic: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?
Replies: 747
Views: 40506

Re: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?

US outperformance isn't driven by solely Megacaps. Look at US mid caps and small caps. They put up great returns the last 10 years although S&P large caps have outperformed them because large caps have mega caps. International had major issue of strong dollar. Most of EU finance sector has been ...
by SovereignInvestor
Sat Jun 27, 2020 9:42 am
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance?
Replies: 146
Views: 8152

Re: How much umbrella insurance?

An insurer has a duty to settle below policy limit if they are able to. Otherwise the insurer is forced to pay Loss in excess of policy limit. If someone has $5M of assets and $5M umbrella and the plaintiff was willing to settle at $5M but the insurer wanted to try to defend to get case dismissed a...
by SovereignInvestor
Sat Jun 27, 2020 7:18 am
Forum: Personal Finance (Not Investing)
Topic: How much umbrella insurance?
Replies: 146
Views: 8152

Re: How much umbrella insurance?

An insurer has a duty to settle below policy limit if they are able to. Otherwise the insurer is forced to pay Loss in excess of policy limit. If someonenhas $5M of assets and $5M umbrella and the plaintiff was willing to settle at $5M but the insurer wanted to try to defend to get case dismissed an...
by SovereignInvestor
Thu May 21, 2020 10:49 pm
Forum: Investing - Theory, News & General
Topic: Who's right about the future? Stock or Bond market?
Replies: 51
Views: 5374

Re: Who's right about the future? Stock or Bond market?

My worthless opinion is that the S&P 500 should not be higher than last October, when the unemployment rate was 3.6% and there was no pandemic. Yet here we are. Perhaps people are betting that the government simply won't allow the market to crash. In which case, earnings don't really matter and...
by SovereignInvestor
Wed May 20, 2020 9:42 pm
Forum: Personal Investments
Topic: Hold 50% WFC.PL and 50% in BAC.PL
Replies: 9
Views: 833

Re: Hold 50% WFC.PL and 50% in BAC.PL

Writing off an entire asset class doesn't make sense. At the right prices preferred stocks are attractive. Bank preferred usually have qualified dividends and are non cumulative so they County as equity so they yield less due to favorable tax treatment. REIT and utility preferred are often more dive...
by SovereignInvestor
Thu May 14, 2020 11:51 pm
Forum: Personal Investments
Topic: Should we sell our rental?
Replies: 31
Views: 2337

Re: Should we sell our rental?

It depends how small of net worth it is. It is diversifying. For example theres talk for restrictions on buybacks or increased corporate tax rates. These are reasonable Likely headwinds for returns. 0% interest rated also hurts bond returns. Those two things can make owning stocks bad as the returns...
by SovereignInvestor
Thu May 14, 2020 11:49 pm
Forum: Personal Investments
Topic: Should we sell our rental?
Replies: 31
Views: 2337

Re: Should we sell our rental?

Yes assuming no appreciation is conservative. But it is biased to assume the home won't appreciate over 10 years but that a balanced stock portfolio will get 7%.

All else equal the environment where RE doesn't appreciate for 10 years is also likely one where stocks and bonds provide poor returns.
by SovereignInvestor
Thu May 14, 2020 6:55 pm
Forum: Personal Investments
Topic: Should we sell our rental?
Replies: 31
Views: 2337

Re: Should we sell our rental?

Rent is 65K Interest, maintenance, and taxes total 21.5K. I would exclude depreciation since it is a not a true expense since the property will appreciate. So net operating income is 43.5K per year. Also add on expected 2%/year appreciation of 19K and total gain is 62.5K. The denominator for ROE is ...
by SovereignInvestor
Wed May 13, 2020 10:17 pm
Forum: Personal Finance (Not Investing)
Topic: 30 vs 15 year mortgages in today's enviroment
Replies: 7
Views: 1172

Re: 30 vs 15 year mortgages in today's enviroment

Hello everyone, I know this question has been asked before, but I think today's low rates and possibly future inflation warrants another look. My wife and I have been thinking of mowing into a larger house. We stopped looking in March for obvious reasons, but we will resume our search once economic...
by SovereignInvestor
Tue May 12, 2020 11:53 am
Forum: Personal Finance (Not Investing)
Topic: Sell Equities and Pay off Mortgage or wait ?
Replies: 59
Views: 3355

Re: Sell Equities and Pay off Mortgage or wait ?

A little of both since no one knows future?

Take 50K to pay down mortgage immediately and invest other 50K and wait until year end or next year.

Hedging the bet and going 50/50 prevents you from making a very bad decision with 100% conviction.
by SovereignInvestor
Sun May 03, 2020 10:57 am
Forum: Investing - Theory, News & General
Topic: Preferred Stock Index Fund as replacement for Bond Index Fund?
Replies: 16
Views: 1793

Re: Preferred Stock Index Fund as replacement for Bond Index Fund?

In Ye Olde Days, almost every company that issued stock issued both common stock and preferred stock.* Preferred stock has gotten weird because of the advent of junk bonds. I forget the regulatory reasons, but companies that are allowed to, prefer to issue junk bonds rather than preferred stock, an...
by SovereignInvestor
Sun May 03, 2020 10:49 am
Forum: Investing - Theory, News & General
Topic: Preferred Stock Index Fund as replacement for Bond Index Fund?
Replies: 16
Views: 1793

Re: Preferred Stock Index Fund as replacement for Bond Index Fund?

Preferred stock are great--the issue is with the ETFs. Many of the underlying securities are not extremely liquid like stocks where one can sell billions in SPY and not tank it, with preferred stock issues, a million likely tanks most issues. So when market tanks and the ETFs drop, they sell individ...
by SovereignInvestor
Sat Apr 25, 2020 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: Can I afford to move out of NYC and buy a house in the suburbs?
Replies: 36
Views: 3317

Re: Can I afford to move out of NYC and buy a house in the suburbs?

1.5M is nearly 3x your highest income in recent years, and we are just going into a likely major recession, etc. 3x is on the upper end of what this board usually suggests - just a few days ago we had someone else in a vhcol area with a very large down payment getting largely rejected to buy a home...
by SovereignInvestor
Thu Apr 23, 2020 10:56 pm
Forum: Personal Investments
Topic: Does anyone sell puts in order to force re-balancing and collect premiums?
Replies: 34
Views: 1972

Re: Does anyone sell puts in order to force re-balancing and collect premiums?

One can also sell calls on bonds too in theory. Like if they have long term treasurys, they can sell TLT out of money calls, to match duration of their risk free bonds. IF they have 20% in LT treasurys and rebalance above 22%, then selling OTM TLT calls 10% OTM would achieve this. But if done with s...
by SovereignInvestor
Sat Apr 18, 2020 3:01 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. simply investing? Is pension even worth it at all?
Replies: 58
Views: 3985

Re: Pension vs. simply investing? Is pension even worth it at all?

The pension funds also assume 7-8% returns generally. So if the 50/50 or whatever portfolio stated have doesn't generate that high a number unless they raise taxes, the benefits would be cut. This happened in some states. It is not 100% guaranteed either. Getting 7-8% returns from a portfolio with n...
by SovereignInvestor
Thu Apr 09, 2020 7:14 am
Forum: Investing - Theory, News & General
Topic: Prospects for S&P 500 Share Buybacks
Replies: 16
Views: 1162

Re: Prospects for S&P 500 Share Buybacks

Of course they will be down, corporations only buy back their own stock when the price is already high. When price is high, they want it to go even higher so that execs can cash in their options at the highest possible price. OTOH, when the price is low, they are not going to cash in even if buy ba...
by SovereignInvestor
Wed Apr 08, 2020 6:51 am
Forum: Investing - Theory, News & General
Topic: Prospects for S&P 500 Company Dividends
Replies: 29
Views: 2079

Re: Prospects for S&P 500 Company Dividends

Just like market pricing for SPX Index call options has them using a risky discount rate since they have the same systematic risk as S&P. It uses the risk free rate, or something pretty darn close. The price is based on a no-arbitrage price. See the put-call parity. If it used a risky rate than...
by SovereignInvestor
Tue Apr 07, 2020 11:04 pm
Forum: Investing - Theory, News & General
Topic: Prospects for S&P 500 Company Dividends
Replies: 29
Views: 2079

Re: Prospects for S&P 500 Company Dividends

Just like market pricing for SPX Index call options has them using a risky discount rate since they have the same systematic risk as S&P. It uses the risk free rate, or something pretty darn close. The price is based on a no-arbitrage price. See the put-call parity. If it used a risky rate than...
by SovereignInvestor
Tue Apr 07, 2020 9:07 pm
Forum: Investing - Theory, News & General
Topic: Prospects for S&P 500 Company Dividends
Replies: 29
Views: 2079

Re: Prospects for S&P 500 Company Dividends

To prove my point. Since 1960s average annualized increase in EPS and dividends has been about 6-7%. But before this Pandemic crisis hit and market expectations were bullish (see consensus EPS growth for 2021-2022) yet the future dividend index only implied about 2% annual growth...well below histor...
by SovereignInvestor
Tue Apr 07, 2020 9:00 pm
Forum: Investing - Theory, News & General
Topic: Prospects for S&P 500 Company Dividends
Replies: 29
Views: 2079

Re: Prospects for S&P 500 Company Dividends

Dividends are correlated with the S&P and systematic risk so there is likely a risk premium in the futures that makes it so the estimate is biased low. Those future dividends are likely not discounted at a risk free rate but at a risky rate reflecting market risk premium so the interpretation th...
by SovereignInvestor
Thu Apr 02, 2020 8:51 pm
Forum: Investing - Theory, News & General
Topic: Buy call options for locking in current low prices for future monthly contributions?
Replies: 23
Views: 1750

Re: Buy call options for locking in current low prices for future monthly contributions?

Borrowing at risk free rate then buying 100 shares of SPY and a 330 Put is the same as buying a 330 Call
by SovereignInvestor
Tue Mar 31, 2020 7:01 am
Forum: Investing - Theory, News & General
Topic: Buy call options for locking in current low prices for future monthly contributions?
Replies: 23
Views: 1750

Re: Buy call options for locking in current low prices for future monthly contributions?

Buying a call is the same as being long the index and also long put. Puts are so expensive right now (see VIX), So implied downside protection that a call offers versus basically being long in margin, that protection is basically a put, and it is super expensive right now. What do you mean a long c...
by SovereignInvestor
Sat Mar 28, 2020 10:38 pm
Forum: Investing - Theory, News & General
Topic: Buy call options for locking in current low prices for future monthly contributions?
Replies: 23
Views: 1750

Re: Buy call options for locking in current low prices for future monthly contributions?

Buying a call is the same as being long the index and also long put.

Puts are so expensive right now (see VIX), So implied downside protection that a call offers versus basically being long in margin, that protection is basically a put, and it is super expensive right now.
by SovereignInvestor
Mon Mar 23, 2020 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: Receiving dividend and feeling good
Replies: 33
Views: 2725

Re: Receiving dividend and feeling good

I agree, not sure why many are against them Because you could just as easily sell 1% of your shares each quarter and it would be exactly the same as a utility yielding 4%, but for people that didn't want to + they could choose not to take the tax hit. That's pretty much all it comes down to. This i...
by SovereignInvestor
Sun Mar 15, 2020 9:55 am
Forum: US Chapters
Topic: [Archived] Bogleheads community discussion - Coronavirus
Replies: 4963
Views: 200417

Re: Bogleheads community discussion - Coronavirus

Does any one remember a Swine Flu panic ? I don't recall. Do you know how many Americans were infected in 2009-2010 with the Swine flu? I didn't know but it turns out to be 60 million people. How many were hospitalized? The answer is 274,305(range: 195,086-402,719) and nobody on any these coronavir...
by SovereignInvestor
Sun Mar 15, 2020 9:40 am
Forum: Personal Investments
Topic: Who is staying course and how are you dealing with net worth going down?
Replies: 359
Views: 27252

Re: Who is staying course and how are you dealing with net worth going down?

The stock market values discounted all futures earnings. Obviously this crisis dings 2020 EPS and maybe 2021, but does it really affected 2023, 2024,....2030, etc? Market is always very myopic. I'm pretty sure 2025 EPS will be 0% affected by this crisis, and if it is then we have more issues to worr...
by SovereignInvestor
Wed Mar 11, 2020 5:38 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 8898
Views: 873530

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Much of the astronomical rise in long bonds was panic hedging for banks for mortgages. Ton of refinance going on so the institutions need to go long Treasurys to hedge mortgage risk. Refinance likely peaked in terms of expectations...then there's those who rebalance who have too much bonds and not e...
by SovereignInvestor
Sun Mar 08, 2020 1:17 pm
Forum: Investing - Theory, News & General
Topic: Coronavirus and the market
Replies: 4089
Views: 325338

Re: Coronavirus and the market

https://www.ig.com/en/indices/markets-i ... all-street

dow futures showing down 2.6%, which is a tad below fridays low and 1.5% above the 2/28 low.
by SovereignInvestor
Sun Mar 08, 2020 1:15 pm
Forum: Investing - Theory, News & General
Topic: Coronavirus and the market
Replies: 4089
Views: 325338

Re: Coronavirus and the market

In january, many predicted that this was going to be a crisis. The market did not react, but some very wise people got out, before the market fully understood what was going on. (airline flights etc. were leaving china still). However in 16 -18 days in Iran and Italy, look what happened. it is hard...
by SovereignInvestor
Sun Mar 08, 2020 1:11 pm
Forum: Investing - Theory, News & General
Topic: Coronavirus and the market
Replies: 4089
Views: 325338

Re: Coronavirus and the market

It is good to have people take meaningful actions that will reduce the spread. It is not good for people to panic. The fact is many have the virus and don't have meaningful symptoms so its untracked yet they spread it. The fatality rates are overstated because of this. The 0.85% fatality rate on di...
by SovereignInvestor
Sun Mar 08, 2020 12:12 pm
Forum: US Chapters
Topic: [Archived] Bogleheads community discussion - Coronavirus
Replies: 4963
Views: 200417

Re: Coronavirus and the market

People are not panicking. A run on bottled waters and toilet papers -- no cost, common sense precautions that provide great upside should you have to stay at home for a couple of weeks -- is not panic. Governments around the world are panicking. But people in the U.S. are still, on average, pretty ...