Search found 853 matches

by Eric
Tue Mar 26, 2024 10:17 am
Forum: Personal Investments
Topic: Buy OOS Muni Bonds?
Replies: 11
Views: 449

Re: Buy OOS Muni Bonds?

I am solely interested in targeting specific individual muni bonds with very short term maturity dates. I do not want to invest in a fund where prices will fluctuate. I am planning to purchase the bonds to park cash (that won't generate more taxable income ) to pay a a ton of taxes next April for a large Roth conversion (also triggering large LTCG's this year to pay those taxes). I haven't vetted these myself, but iShares has a line of "target maturity" muni bond ETFs you may find interesting. Like individual bonds, they will fluctuate in value prior to maturity, but should have a reasonably predictable end value (absent defaults or other unusual events). Unlike an individual bond, each ETF is diversified among issuers. Here's on...
by Eric
Sat Mar 16, 2024 6:14 pm
Forum: Personal Finance (Not Investing)
Topic: Am I Only One Who Hates Having Left Over Pennies
Replies: 53
Views: 4496

Re: Am I Only One Who Hates Having Left Over Pennies

MishkaWorries wrote: Fri Mar 15, 2024 8:16 pm I'm consolidating my accounts at Fidelity. I transferred one account from Vanguard that was 100% in VTI. Whole shares were transferred and partial shares liquidated to cash. So far so good.

Today, I bought more VTI with the cash. Now I have $0.01 left in my settlement account. :annoyed

Am I crazy for now wanting to sell all my VTI shares and buy the equivalent Fidelity mutual fund? It's tax advantaged account so no tax consequences.
Various Fidelity mutual funds have no investment minimum. So you could continue to invest mostly in VTI, and throw the occasional spare change into a mutual fund like, say, FSKAX (Fidelity Total Market Index Fund).
by Eric
Sat Mar 16, 2024 5:39 pm
Forum: Personal Finance (Not Investing)
Topic: tax brackets etc assuming TCJA sunset no new laws
Replies: 31
Views: 3572

Re: tax brackets etc assuming TCJA sunset no new laws

toddthebod wrote: Sat Mar 16, 2024 5:19 pmThe brackets will revert to CPI-U adjusted levels of the 2016 brackets.
It's a different CPI-U than before, though. Prior law used the traditional CPI-U, while the TCJA replaced that with chained CPI-U (which rises more slowly). And that change doesn't expire. (See discussion here, under the heading "Inflation Indexing.")
by Eric
Fri Mar 08, 2024 5:09 pm
Forum: Personal Consumer Issues
Topic: Drop Homeowner Ins- Self Insure
Replies: 63
Views: 4725

Re: Drop Homeowner Ins- Self Insure

Mr. Potter wrote: Fri Mar 08, 2024 8:51 am I appreciate all the responses but what I haven’t heard is has anyone actually dropped their insurance and self insured their home.
I haven't done that, but did find a policy with an unusually high deductible (5%). Most insurers seem to cap out at 2% (at least in my area, the last time I shopped it a few years ago), but there are a few that will go higher if you ask. (It isn't always listed as an option in the online quote tools.) At that level, I am effectively self-insuring my roof, and self-insuring most other losses short of the house burning down.
by Eric
Fri Mar 08, 2024 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6836

Re: When/Why would you need Trust over Will

I still think words like "inevitably" are too strong. If I quote Murphy's Law in the future, I will be sure to properly qualify it. "Anything that can go wrong, will very probably go wrong." ;-) I appreciate all the lawyer input in these threads as I mentioned earlier. I do wonder, however, if there is some "lawyer-client case" bias in this thread. Multiple lawyers are jumping in and saying things like "the majority of the time" and "mistakes are often made" for their clients. Well - maybe there are many more cases whereby folks don't have to use a lawyer or only use them sparingly because everything is done correctly, simple enough, and there are no mistakes. I think that is the point some...
by Eric
Thu Mar 07, 2024 5:12 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6836

Re: When/Why would you need Trust over Will

I still think words like "inevitably" are too strong. If I quote Murphy's Law in the future, I will be sure to properly qualify it. "Anything that can go wrong, will very probably go wrong." ;-) If probabte is as simple as people make it out to be, why do so many states with "simple" probate, also offer a streamlined small estate process? Someone, presumably not simply interested in selling you trust documents, thought it was onerous enough warrant providing a "simpler" process for small estates. To borrow another poster's phrase, I think you're ascribing too much logic and practical common sense to our laws. Some small estate statutes exist for historical reasons, from a time before probate reform w...
by Eric
Thu Mar 07, 2024 2:57 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6836

Re: When/Why would you need Trust over Will

What is the downside to avoiding probate? You keep saying there is very little additional work involved with probate. OK. Let's accept that as a premise. But, i think you would agree it is not zero, right? What benefit does going through probate provide that justifies the (small) additional effort? I'm not the person you're replying to here, but will offer my two cents for what they're worth: Attempting to avoid probate often increases the total cost, if you consider both lifetime and post-mortem expenses. Y ou spend more up front to create, fund, and maintain a revocable trust, and then may still pay for probate if (as is usually the case) something is left out. In my state, at least, probating a will to deal with the one asset you left o...
by Eric
Thu Mar 07, 2024 1:59 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6836

Re: When/Why would you need Trust over Will

What is the downside to avoiding probate? You keep saying there is very little additional work involved with probate. OK. Let's accept that as a premise. But, i think you would agree it is not zero, right? What benefit does going through probate provide that justifies the (small) additional effort? I'm not the person you're replying to here, but will offer my two cents for what they're worth: Attempting to avoid probate often increases the total cost, if you consider both lifetime and post-mortem expenses. You spend more up front to create, fund, and maintain a revocable trust, and then may still pay for probate if (as is usually the case) something is left out. In my state, at least, probating a will to deal with the one asset you left ou...
by Eric
Tue Feb 20, 2024 6:06 pm
Forum: Personal Finance (Not Investing)
Topic: Per stirpes and Vanguard (one more time)
Replies: 83
Views: 5567

Re: Per stirpes and Vanguard (one more time)

Put it in your will. It is generally recommended that you avoid using your estate as the beneficiary for an IRA. There is a long list of issues. I think all the issues boil down to sub-optimal tax avoidance strategies available to the beneficiaries. Those differences are smaller than they used to be. In most cases, it's no longer possible to have an IRA paid over the life expectancy of your beneficiary. Instead, the stretch-out is generally limited to 10 years (vs. 5 years for proceeds payable to an estate). That's not nothing, but it diminishes the impact quite a bit. It's also possible to name a testamentary trust as beneficiary of the IRA. That allows you to build in more complicated contingencies than Vanguard's beneficiary form may ot...
by Eric
Thu Jan 25, 2024 12:20 am
Forum: US Chapters
Topic: Forming Frisco-Mckinney-Plano-Allen Chapter
Replies: 11
Views: 6250

Re: Forming Frisco-Mckinney-Plano-Allen Chapter

Premier wrote: Wed Jan 24, 2024 7:35 pm Does the Dallas chapter no longer exist?
The Dallas (actually DFW) chapter still exists. We have both in-person and virtual meetings. The in-person meetings are in Irving, to balance travel times. We have members from Plano, Lewisville, and Fort Worth, among other places. (I currently live in Plano.)

But I think the OP is seeking a group focused more specifically on the Collin County portion of the Metroplex. As a suggestion, maybe "Collin County Bogleheads" is a more concise name for the proposed group?
by Eric
Fri Dec 01, 2023 10:08 am
Forum: Personal Finance (Not Investing)
Topic: Can/Should I open a Solo Retirement Account?
Replies: 8
Views: 770

Re: Can/Should I open a Solo Retirement Account?

toddthebod wrote: Fri Dec 01, 2023 9:20 amI always suggest the 401(k) due to allowing backdoor Roths. The federal asset protection is an additional benefit.
The federal asset protection for solo 401(k)s is generally the same as for SEP-IRAs. You may be thinking of the additional protections most employer plans enjoy under ERISA, but solo 401(k)s generally aren't covered by ERISA.
by Eric
Fri Nov 17, 2023 5:33 pm
Forum: Personal Consumer Issues
Topic: ChatGPT just wrote me a POA that is better than the attorney's
Replies: 150
Views: 21332

Re: ChatGPT just wrote me a POA that is better than the attorney's

protagonist wrote: Fri Nov 17, 2023 5:23 pm What about this idea?
1. Have ChatGPT write up the legal document, then
2. You review it for obvious errors, then if it looks good,
3. You have an attorney review and edit it (without telling the lawyer that it was AI-generated to avoid prejudice).
4. You do a final review.
It takes more time for an attorney to review someone else's document than to generate their own. The problem is that an attorney can't trust an outside document -- he or she has to review every single line. By contrast, the attorney will already know his or her own form, almost by heart.
by Eric
Sat Oct 21, 2023 10:00 pm
Forum: Personal Consumer Issues
Topic: Denton, Texas Inquiry [about best housing options and livability]
Replies: 21
Views: 2788

Re: Denton, Texas Inquiry [about best housing options and livability]

Check out the Southridge neighborhood near the south end of Denton. Beautiful neighborhood with nice houses on large lots, with plenty of stores and restaurants nearby. We recently purchased one of the last remaining vacant lots there, and plan to build in the next year or two.

Southridge is near Interstate 35. From what I've seen traffic in that corridor is OK, though I haven't tried it in rush hour. I agree with others that you wouldn't want to live in a part of town that requires you to drive regularly on 380.

We currently live in Plano (a closer-in Dallas suburb) so we made a conscious choice to buy in Denton. It was one of the few areas with acceptably priced lots in a nice environment.
by Eric
Thu Sep 07, 2023 10:33 pm
Forum: Personal Investments
Topic: Adios, Vanguard
Replies: 465
Views: 96145

Re: Adios, Vanguard

I like vanguard, because we (the customers) own the company, we get the company profits, in the form of much lower expense ratios. I wouldn't want them to spend any more of my money to pretty up the website that I hardly ever visit. Hate to break it to you but you don't own the company. That is marketing bs. I agree with Blogian that Vanguard investors (indirectly) own the company, but I agree with you that it doesn't matter much. The analogy I'd make is to life insurance companies. Many life insurers are "mutual" companies, owned by their policyholders. But that ownership is largely disconnected from control, so the insurers often seem to be operated for the benefit of their agents. To be clear, I think Vanguard has done a much ...
by Eric
Wed Aug 30, 2023 9:11 pm
Forum: Personal Finance (Not Investing)
Topic: Medigap Plan G-HD (And F-HD Too)
Replies: 14
Views: 1937

Re: Medigap Plan G-HD (And F-HD Too)

Regular Plan G, with just the tiny Part B deductible, may reduce the cognitive load on you as you age. When I'm very old, I'd like to be able to follow simple financial rules (like: after my first doctor's bill of the year, I shouldn't have to pay anything the rest of the year). The less I have to keep track of, the better.
by Eric
Mon Jul 31, 2023 10:14 am
Forum: Investing - Theory, News & General
Topic: When Will Vanguard's Solo 401k Start Allowing ETFs?
Replies: 10
Views: 921

Re: When Will Vanguard's Solo 401k Start Allowing ETFs?

Pete12 wrote: Mon Jul 31, 2023 9:45 amIf you set up a self-directed solo 401k using one of the many plan document providers out there, then you can then open non-prototype accounts at Fidelity which offer their entire investment line up.
Sure. And if you're willing to use a third-party doc provider, you can do the same thing at Vanguard (which was OP's concern).

I may be too cheap (I prefer the free plan offerings from Vanguard and Fidelity) or too conservative (I prefer to rely on a deep pocket like Vanguard or Fidelity to handle something tax sensitive, so I have recourse if they screw up). So I'd rather use Vanguard's or Fidelity's in-house plans, but I certainly understand why others use third-party providers given the potential benefits.
by Eric
Sun Jul 30, 2023 6:02 pm
Forum: Investing - Theory, News & General
Topic: When Will Vanguard's Solo 401k Start Allowing ETFs?
Replies: 10
Views: 921

Re: When Will Vanguard's Solo 401k Start Allowing ETFs?

69XR7 wrote: Sun Jul 30, 2023 5:26 pm I just moved my solo 401k from Vanguard to Fidelity. It opens up many more options.
But also eliminates an option: Fidelity's offering does not allow Roth contributions.
by Eric
Sun Jul 30, 2023 5:07 pm
Forum: Investing - Theory, News & General
Topic: When Will Vanguard's Solo 401k Start Allowing ETFs?
Replies: 10
Views: 921

Re: When Will Vanguard's Solo 401k Start Allowing ETFs?

It does seem odd, considering how eager Vanguard is to move other investors off the mutual-fund-only platform. Possibly it could be a legal issue (e.g., Vanguard may have told the IRS it would offer only mutual funds when it requested approval of its prototype plan). Or a software issue, since some aspects of the account are handled through a separate "small business" site.
by Eric
Sat Jul 29, 2023 9:46 pm
Forum: Personal Investments
Topic: Cost basis after ACAT - Roth IRA
Replies: 35
Views: 3197

Re: Cost basis after ACAT - Roth IRA

While quite rare, there are a few unusual circumstances in which basis of assets inside an IRA might matter. For example: if the IRA uses leverage or engages in other activities that generate "unrelated business taxable income" (UBTI). Very few everyday investors will ever see that, so this is mostly academic, just mentioning it as a reason brokerages may still track basis.
by Eric
Mon Jul 24, 2023 10:50 am
Forum: Personal Finance (Not Investing)
Topic: Fidelity Requires POA for Elderly Father
Replies: 27
Views: 3167

Re: Fidelity Requires POA for Elderly Father

crefwatch wrote: Mon Jul 24, 2023 7:01 amMost fin serv firms refuse to accept POAs prepared elsewhere, even when a state law requires them to accept it.
True of many firms, but Fidelity accepted a non-Fidelity power of attorney for me without any fuss. They did require the agent (not the principal) to complete and sign a Fidelity form about the power of attorney, swearing that the power of attorney was valid, etc.

But of course YMMV. If there's something sensitive about the situation (actual or perceived), Fidelity may handle it differently.
by Eric
Sun Jul 23, 2023 10:22 pm
Forum: Personal Finance (Not Investing)
Topic: Fidelity Requires POA for Elderly Father
Replies: 27
Views: 3167

Re: Fidelity Requires POA for Elderly Father

Here's an educated guess as to what may be happening here. Fidelity has a "poor man's power of attorney" arrangement that they call "full authority," which the accountholder can grant just by clicking a few boxes online. You mentioned that's what your dad set up with them. Fidelity makes this option available for their customers' convenience, but it has at least two potential problems. First, the arrangement may not be "durable" under state law, meaning that it automatically terminates if the accountholder becomes incapacitated. Second, because it is not durable, it may not allow Fidelity to invoke the liability protection available under many states' laws for financial institutions that rely on a durable power...
by Eric
Tue Jul 18, 2023 5:49 pm
Forum: Investing - Theory, News & General
Topic: Wall Street Set for New ETF That offers 100% protection- good or too good to be true ?
Replies: 49
Views: 6599

Re: Wall Street Set for New ETF That offers 100% protection- good or too good to be true ?

Note also that the protection (such as it is) applies only if you buy the ETF at the initial price. If you buy later, at a higher price, you may experience a loss all the way down to the initial price (or as others have noted, slightly lower than the initial price after accounting for expenses).
by Eric
Fri Jul 14, 2023 3:58 pm
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc.
Replies: 641
Views: 89175

Re: "Open Social Security" calculator: feature requests, bug reports, etc.

ObliviousInvestor wrote: Fri Jul 14, 2023 3:46 pmYes, that's generally the idea.

You can make up some exception scenarios though.
Those exceptions are also interesting. Thank you for the thoughtful response, and your calculator and book!
by Eric
Fri Jul 14, 2023 3:23 pm
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc.
Replies: 641
Views: 89175

Re: "Open Social Security" calculator: feature requests, bug reports, etc.

If a person is entitled to a retirement benefit and then later becomes entitled to a spousal benefit, they keep getting their retirement benefit and get a spousal benefit added on, calculated as half of the other person's PIA, minus the greater of their own PIA or own monthly retirement benefit. (Emphasis added.) That's very interesting. If I'm understanding the implications of the bolded phrase correctly, when the lower-earning spouse's PIA is less than half of the higher-earning spouse's PIA, it never makes sense for the lower-earning spouse to wait past their own FRA to claim on their own account (because the extra amount paid on their own account for waiting past FRA would be fully offset by a reduced spousal benefit, dollar-for-dollar...
by Eric
Wed Jul 12, 2023 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: T-Mobile, Xfinity, AT&T now requiring bank accounts to retain auto-pay discount
Replies: 177
Views: 21576

Re: T-Mobile cancelling credit card payment asking for banking information instead !

That cash back benefit comes from your landlord. I don’t blame them or any other company that charges more if you use a CC. In principle, I agree, but I would expect the extra charge to be roughly in line with what the company pays. I don't think even small businesses pay more than a 3% credit card processing fee, and large businesses typically pay less. T-Mobile's autopay discount is much larger than that. True but they also require you to go paperless. Going paperless saves money as well. I sign up for paperless & autopay when ever i can. So any discount is just a bonus. I don't use T Mobile BTW. I don't think T-Mobile requires going paperless for this discount. See this list of requirements . Have you seen something different elsewh...
by Eric
Wed Jul 12, 2023 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: T-Mobile, Xfinity, AT&T now requiring bank accounts to retain auto-pay discount
Replies: 177
Views: 21576

Re: T-Mobile cancelling credit card payment asking for banking information instead !

prd1982 wrote: Wed Jul 12, 2023 9:13 amThat cash back benefit comes from your landlord. I don’t blame them or any other company that charges more if you use a CC.
In principle, I agree, but I would expect the extra charge to be roughly in line with what the company pays. I don't think even small businesses pay more than a 3% credit card processing fee, and large businesses typically pay less. T-Mobile's autopay discount is much larger than that.
by Eric
Thu Jul 06, 2023 12:28 am
Forum: Personal Finance (Not Investing)
Topic: 10 Most Livable Small & Midsize U.S. Cities by Kiplinger
Replies: 31
Views: 4186

Re: 10 Most Livable Small & Midsize U.S. Cities by Kiplinger

alfaspider wrote: Wed Jul 05, 2023 6:08 pm Those Texas suburbs have high property taxes. Provably not what you are looking for in a retirement spot.
On the other hand, property taxes here are (for the most part) frozen at age 65. So over the course of a 20-year retirement, the tax burden may decline greatly in real terms.
by Eric
Wed Jul 05, 2023 8:40 am
Forum: Personal Finance (Not Investing)
Topic: Fidelity mailed me a random check cannot explain it
Replies: 55
Views: 9798

Re: Fidelity mailed me a random check cannot explain it

JamesSFO wrote: Tue Jul 04, 2023 8:36 amI think it’s frustrating because I *did* call during business hours
On Fidelity's Reddit forum, you mentioned that you called during business hours Pacific time, but not Eastern. I'm not saying they handled this perfectly, but after hours (their time) on the evening before July 4 is a little different than just "business hours" (even if they were technically business hours for you).
by Eric
Tue Jun 27, 2023 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: ChexSystems - Purpose & Benefit?
Replies: 15
Views: 1696

Re: ChexSystems - Purpose & Benefit?

Do you recommend this and personally have a security freeze with ChexSystems? Last year, I was hit with a flurry of identity theft. In addition to opening credit cards in my name, the scammer also opened a bank account in my name. I found out when a welcome kit from the bank arrived in the mail. If the bank hadn't been a bit old-fashioned that way, it might have taken much longer for me to discover. I still don't know why the scammer wanted a bank account in my name. I'm guessing they were going to deposit a fake check, get the bank to make the funds available early based on my record, and then make a withdrawal. Or maybe they wanted to launder funds through the account. After that, I froze my accounts with the credit bureaus and ChexSyste...
by Eric
Sun Jun 18, 2023 5:14 pm
Forum: Investing - Theory, News & General
Topic: Vanguard 10 Year Asset Class Forecast Infographic
Replies: 56
Views: 6954

Re: Vanguard 10 Year Asset Class Forecast Infographic

I'm puzzled by a couple items here:

1. The predicted range for all international stocks exceeds the predicted range for both developed markets and emerging markets. Can the whole be worth more than the sum of its parts?

2. The predicted range for TIPS exceeds the predicted range for inflation by only 0.7%, but the real yield on TIPS is currently well above 0.7%.
by Eric
Sat Jun 10, 2023 10:46 pm
Forum: Personal Investments
Topic: Brokerage Recommendations for Individual Municipal Bonds
Replies: 22
Views: 2298

Re: Brokerage Recommendations for Individual Municipal Bonds

As an alternative to individual bonds, would a target-maturity muni-bond ETF help with your objectives? See, e.g., this one from iShares:

https://www.ishares.com/us/products/331 ... m-muni-etf

I've never invested in this type of ETF myself, but it seems designed to facilitate liability-matching, with potentially greater diversification and lower trading costs than individual muni bonds. At least, that's the concept; I defer to others who may be more familiar with how these products work in practice.
by Eric
Mon Feb 27, 2023 1:36 pm
Forum: Investing - Theory, News & General
Topic: Eschewing Total Bond for Treasuries + Global Credit
Replies: 6
Views: 1597

Re: Eschewing Total Bond for Treasuries + Global Credit

Valuethinker wrote: Mon Feb 27, 2023 6:04 amI believe TBM avoids callable corporate bonds. It can do so because it is an "actively" managed fund, not an index fund.
Per the prospectus for Vanguard's Total Bond Market Index Fund, its "Investment Objective" is "to track the performance of a broad, market-weighted bond index." The prospectus also identifies "call risk" as one of the risks faced by investors in the fund, though it notes that callable bonds comprise only a small portion of the fund's assets.
by Eric
Wed Feb 22, 2023 5:05 pm
Forum: Personal Consumer Issues
Topic: Choosing my next academic job and location
Replies: 64
Views: 6913

Re: Choosing my next academic job and location

bhajipov wrote: Sat Feb 18, 2023 5:37 pmUNT and Cincinnati are urban-serving large universities in big cities.
Yes and no. Or rather, it may depend on which UNT you mean.

-- UNT's best-known campus is in Denton. That's about 40 miles from downtown Dallas. It's fair to say that it's part of the Dallas-Fort Worth metroplex, but it's not as dense as you may be thinking.

-- The UNT Health Science Center is in Fort Worth, which is more urban but still not as dense and populous as Dallas itself.

-- UNT Dallas College of Law is in the most urban location, downtown Dallas.

-- The rest of UNT Dallas is about 10 miles south of downtown Dallas.

Different places, different experiences.
by Eric
Sun Feb 05, 2023 12:41 pm
Forum: Investing - Theory, News & General
Topic: investing in a show horse
Replies: 61
Views: 5463

Re: investing in a show horse

Lee_WSP wrote: Sat Feb 04, 2023 5:44 pm IMO, the reason to invest in such a business is because you love horses and are going to get personal enjoyment out of it and you want a business loss to deduct against your other income.
Not even good for the business loss, in most cases. The passive loss rules will suspend the loss for investors who do not materially participate, and the hobby loss rules will disallow the loss even for many of those who *do* materially participate.
by Eric
Sun Jan 22, 2023 6:25 pm
Forum: Personal Investments
Topic: Total Bond or TIPS in my 401k?
Replies: 7
Views: 847

Re: Total Bond or TIPS in my 401k?

renegade06 wrote: Sun Jan 22, 2023 4:52 pm In my 401k, I have the option for Fidelity Total Bond fund or Fidelity TIPS fund.
Confusingly, Fidelity Total Bond Fund is an actively managed fund that substantially overweights corporate bonds relative to the index. It is not comparable to Vanguard's Total Bond Market Index Fund, which has far more Treasurys. Fidelity's equivalent index fund would be Fidelity U.S. Bond Index Fund.
by Eric
Wed Jan 11, 2023 7:48 pm
Forum: Investing - Theory, News & General
Topic: ETFs and Vanguard Ownership Structure
Replies: 12
Views: 1070

Re: ETFs and Vanguard Ownership Structure

alex_686 wrote: Wed Jan 11, 2023 6:09 pmTaking fat pay packets is not fraud. There is a great deal of economic literature on the "Agency Problem", where management and owner issues do not align. This is a deeply problematic issue which has no clear answer except being ever vigilante. This issue ranges from real estate agents, doctors who profit from the test and prescriptions they order, to the pay packets of CEOs.
Another example, very familiar to Bogleheads: Many life insurance companies have a mutual ownership structure, where policyholders own the company. How many people here would say that that structure protects the policyholders and ensures they are not being overcharged?
by Eric
Sat Dec 31, 2022 4:20 pm
Forum: Investing - Theory, News & General
Topic: Fidelity fund ownership of now-private Twitter
Replies: 17
Views: 1670

Re: Fidelity fund ownership of now-private Twitter

Good comments. I was aware that mutual funds could invest in nonpublic companies, just surprised that some major funds actually are.

In theory, investing in nonpublic companies should increase expected return. There ought to be an illiquidity premium. But it's interesting to see that in practice, active funds don't seem to be benefiting much from these investments. Certainly this particular investment is off to an inauspicious start!
by Eric
Sat Dec 31, 2022 11:13 am
Forum: Investing - Theory, News & General
Topic: Fidelity fund ownership of now-private Twitter
Replies: 17
Views: 1670

Fidelity fund ownership of now-private Twitter

Per this report, Fidelity has written down the value of the Twitter shares in its mutual funds. I was surprised to learn that Fidelity funds held shares of non-public companies. Of course, it's a very small portion of the funds' total holdings.

To keep this actionable, let's focus here on whether you see it as an advantage or disadvantage of active funds that they may hold a modest portion of their portfolios in non-public holdings.
by Eric
Fri Dec 02, 2022 10:37 am
Forum: Personal Consumer Issues
Topic: House wired for CAT5, what do I do?
Replies: 56
Views: 16510

Re: House wired for CAT5, what do I do?

Before you make plans on using the Ethernet jacks throughout the home is to verify whether you have Cat 5 (10/100 Mbps) or Cat 5e (1000 Mbps / 1 Gbps). If you truly have Cat 5 you probably don't want to use any of the jacks. OTOH, if Cat 5e then you could make use of them but for the Internet you'll be limited to 100 MB/s so if your internet speed is greater than 100 MB/s, the wiring may be of no use to you. Not sure how easy it would be to replace the wiring with Cat 6a, 7 or 8 and if you were able to replace it you'd probably want to use Cat 7 or Cat 8. Most installers stapled the Ethernet wires to studs so in the end you may not want to even use the jacks if you have high speed (greater than 150 MB/s Internet). When we built our house i...
by Eric
Thu Dec 01, 2022 1:36 pm
Forum: Personal Consumer Issues
Topic: PSA - LastPass breach!
Replies: 718
Views: 65061

Re: PSA - LastPass breach!

samsoes wrote: Thu Aug 25, 2022 8:55 pmI view that as lawyer-induced damage control and don't trust it for a minute.
If anything, a lawyer might advise the company NOT to give an assurance like this. The liability-minimizing path for the company would be to tell its customers to take precautions.

So either (1) the company is very confident that customers are safe or (2) the business side of the company overrode the legal side.
by Eric
Thu Oct 13, 2022 9:05 am
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

TSP specifically says that a will is not controlling. Some 401k accounts may be the same. TSP is clear on the order of precedence for anyone who has not completed their form. It may be law, not sure. It had not changed since TSP began in 1987. The rules for an account with no designated beneficiaries: First - spouse Second - children equally including per stirpes for any deceased children. Child includes adopted children. It does not include stepchild if not adopted. Third - parents Fourth - estate Fifth - laws of the state where you resided when you died That's not uncommon for a qualified retirement plan (in fact, federal law generally requires that your spouse be the beneficiary unless he or she expressly consents to a different designa...
by Eric
Wed Oct 12, 2022 1:11 pm
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

I would assume that state law or a will would control where the assets go. And I don't think that assumption is wrong, since the brokerage is not a custodian in that case. I don't think the law should allow anything different for IRA accounts, I'm surprised to learn that it does. And even though it does, I don't think the custodian should do anything different. The law in my state (and I believe most states) doesn't distinguish between the two types of accounts for this purpose. In principle, if Schwab can do this with an IRA, they can do it with a regular brokerage account too. Schwab could decide, "it's too much hassle to deal with the probate system, we're going to opt all of our clients out of that system and give them beneficiari...
by Eric
Wed Oct 12, 2022 12:25 pm
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

jeffyscott wrote: Wed Oct 12, 2022 12:18 pmnaming your estate qualifies as naming your own beneficiaries. I can't imagine creating a will, wanting that to control where your IRA goes, but then not taking the step to file "estate" as your designated beneficiary with the custodian. Why would anyone just rely on some obscure default for that final step?
I'm curious (and I mean this as a real question, not a rhetorical one). Suppose this were a regular brokerage account, not an IRA, and you wanted it to pass as part of your estate. Would you take the extra step of naming your estate as beneficiary of that regular brokerage account? Or would you rely on the assumption that accounts pass as part of your estate unless you specify otherwise?
by Eric
Wed Oct 12, 2022 10:19 am
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

In many if not most states, IRAs payable to a beneficiary are protected against the IRA owner's creditors. A default beneficiary other than the IRA owner's estate should enjoy the same protection against the IRA owner's creditors as a named beneficiary, but for avoidance of doubt, an IRA owner may want to name beneficiaries for the IRA for that reason. Sure, that's another valid reason to name a beneficiary. And I agree, there are benefits to doing so many situations. It's best practice in most cases. But there are a good number of people for whom those benefits are unimportant. I was responding mainly to the idea that it's unconscionable not to name a beneficiary, that it would be nuts for anyone to fail to do so. IRA owners not concerned...
by Eric
Wed Oct 12, 2022 8:54 am
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

bsteiner wrote: Tue Oct 11, 2022 7:14 pmThe argument for having the estate as the default is
bsteiner wrote: Tue Oct 11, 2022 7:14 pmOn the other hand, the argument for having the spouse as the default is
There are good arguments on both sides of this issue, as to what should be the default for new accounts. My main concern is that Schwab appears to have made this change to existing accounts.
bsteiner wrote: Tue Oct 11, 2022 7:14 pmOf course, anyone who doesn't like the default is free to name the beneficiaries of his/her choice.
Assuming they are still competent to act, at the time Schwab notifies them that Schwab has decided to change the default.
by Eric
Wed Oct 12, 2022 8:50 am
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

I don't know, I think the worse and even more unconscionable idea would be not designating beneficiaries for your accounts and leaving it to the defaults. Let's unpack that. People name beneficiaries for two reasons: 1. To avoid probate . I don't want to revisit the endless debates on that topic, but probate is a trivial process in some (not all) states. If you live in one of those states, you might prefer to maintain your estate plan in a single place (your will) rather than in multiple places (the beneficiary designation for each account). Is it hard to maintain beneficiary designations? No, but it's not hard to rebalance either, and many Bogleheads still prefer the simplicity of investing in a Target Retirement fund. Certainly that's no...
by Eric
Tue Oct 11, 2022 5:46 pm
Forum: Investing - Theory, News & General
Topic: Schwab revises default beneficiaries for Traditional and Roth IRA accounts
Replies: 16
Views: 1821

Re: Schwab revises default beneficiaries for Traditional and Roth IRA accounts

If they're applying this change to existing (not just new) accounts, ugh. Vanguard did something similar about 15 years ago. See this old Forbes article for why it was a bad idea:

"If you don't read your mail carefully, or were on vacation or in the hospital when the letter came, and you die without contacting Vanguard, one of your kids could be done out of his IRA inheritance. When FORBES showed Vanguard's letter to IRA experts, they were outraged. 'This borders on the unconscionable,' fumed Green Bay, Wis. CPA Robert Keebler. 'It's crazy. I don't see how they can change the beneficiaries on your accounts without your consent,' said Boston lawyer Natalie Choate."
by Eric
Tue Oct 11, 2022 5:34 pm
Forum: Personal Finance (Not Investing)
Topic: Official HELOC (Home Equity Line of Credit) thread
Replies: 180
Views: 29287

Re: Official HELOC (Home Equity Line of Credit) thread

Econberkeley wrote: Mon Oct 03, 2022 11:53 am I just talked to RBFCU in TX for HELOC
Econberkeley wrote: Mon Oct 03, 2022 12:10 pm Just talked to Credit union of TX
In the DFW area, you may also want to check with EECU. No closing costs on HELOCs up to $199,999, 2.99% intro rate for 6 months, prime rate after that. We just took out a HELOC with them and closed in about a month.
by Eric
Sun Oct 02, 2022 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Original Medicare vs. Medicare Advantage
Replies: 481
Views: 44406

Re: Original Medicare vs. Medicare Advantage

The MA plans swear they are paid the same amount by the federal government as traditional Medicare. Yet MA plans promise more benefits at a significantly lower cost. I cannot find any explanation as to how they do it. The federal government pays more per person enrolled in Medicare Advantage than it does per person enrolled in traditional Medicare. If I recall correctly, at the beginning that disparity was intentional: Legislators wanted to create a Medicare Advantage market so they subsidized it. More recently, insurers may have found other ways to maximize their compensation from Medicare. See discussion from the Kaiser Family Foundation below. Bottom line: "Medicare spent $321 more per person for Medicare Advantage enrollees than i...
by Eric
Tue Aug 09, 2022 6:52 pm
Forum: Investing - Theory, News & General
Topic: New fee for Vanguard mutual [and brokerage accounts - July 2023 updates]
Replies: 2094
Views: 217718

Re: New fee for Vanguard mutual accounts

I don't understand the fascination some of y'all have with the deprecated form of account. I converted most of my accounts, but keep one in the "deprecated" form because (1) I like having cumulative / full-year statements for that particular account, and (2) I use the directed-dividends feature so that dividends from one fund are automatically invested in another fund. (Specifically, I am directing the dividends from the Total Stock Market Index Fund to the Total International Stock Index Fund, to gradually increase my international holdings over time.) I keep another in the deprecated form because it is a solo 401(k) account, and Vanguard does not yet offer the newer account type for those accounts. I'm not sure why they haven't...