Personal Finance Advice and Education! (9 Viewers)

[wilked]

My wife is very involved with our daily finances (checking acct balance, savings balance) but leaves the retirement planning to me. I review it with her annually

 

[ghostguy123]

My wife knows nothing of money.

Fortunately she isnt a spender.

 

[proteus126]

I tell my wife about significant financial moves. I show her the spreadsheet if she is interested. All I typically do is tweak contribution percentages, and rebalance periodically, so it is not controversial.

She rubber stamps it and is usually not particularly interested. I earn it, and manage our investment approach, and track monthly bills and cash flow. She keeps house and manages renovations. Which I rubber stamp because I find that annoying. Good system.

 

[Otis]

My wife has no idea about the money and couldn't care less. The downside is we are stuck with Otis managing our money. You can imagine what that's like.

 

[Doctor Detroit]

Umbrella insurance.

Yay or nay?

 

[Vincesanity]

What's your net worth?

 

[Doctor Detroit]

What's your net worth?

$1 trillion, give or take a trillion.

 

[KCitons]

I tell my wife about significant financial moves. I show her the spreadsheet if she is interested. All I typically do is tweak contribution percentages, and rebalance periodically, so it is not controversial.

She rubber stamps it and is usually not particularly interested. I earn it, and manage our investment approach, and track monthly bills and cash flow. She keeps house and manages renovations. Which I rubber stamp because I find that annoying. Good system.

Something is wrong with my system. I handle investments, pay bills, and still get stuck doing home repairs/renovations.

 

[wilked]

What's your net worth?

$1 trillion, give or take a trillion.

Play out the scenario of a neighbor kid falling I to your backyard pool and drowning (find a different scenario if no pool, you ran over the same kid driving home after happy hour). Lawyers involved... Figure out if current insurances would cover you. If not price out the umbrella insurance and make a judgment.

I had it before I bought a house (tucked in with renters insurance). Forgot about it... Going to research it now that you reminded me

 

[wilked]

Ok, did some research and I am calling Geico today to get $2MM worth of umbrella. Good looking out DD

I didn't originally consider future wage garnishing, but that would be a reason to insure for more than one is worth

Decent article here

http://www.fa-mag.com/news/article-1930.html

 

[Doctor Detroit]

Ric Edelman says it is a fallacy that only wealthy individuals have or need umbrella insurance and I tend to agree. I drive through seedy neighborhoods when I have to drive to work, and always think about Joe Hoodrat stepping into my car and taking one for the team.

 

[FUBAR]

Ric Edelman says it is a fallacy that only wealthy individuals have or need umbrella insurance and I tend to agree. I drive through seedy neighborhoods when I have to drive to work, and always think about Joe Hoodrat stepping into my car and taking one for the team.

Don't worry, you can hire Saul

 

[ghostguy123]

Anybody have separate disability insurance?? Read it in the Boglehead book.

Something that will pay you out long term (forever) if you are disabled and can't work.

I have it through my work, but it sure as heck wouldn't last long enough if it was truly work-ending injury/illness.

Anyone know anything about this?? Cost? Anything really

 

[Dentist]

Anybody have separate disability insurance?? Read it in the Boglehead book.

Something that will pay you out long term (forever) if you are disabled and can't work.

I have it through my work, but it sure as heck wouldn't last long enough if it was truly work-ending injury/illness.

Anyone know anything about this?? Cost? Anything really

Yes I have disability insurance, most docs and dentites have it.

It's very expensive and can be difficult to navigate through all the options.

Somewhat predatory industry also. Do your homework.

 

[wilked]

Ok, did some research and I am calling Geico today to get $2MM worth of umbrella. Good looking out DD

I didn't originally consider future wage garnishing, but that would be a reason to insure for more than one is worth

Decent article here

http://www.fa-mag.com/news/article-1930.html

Locked it in...

$250/yr for $1MM insurance.

 

[Random]

Appreciate it. A bit confused on something, but maybe I'm just not thinking about this correctly...

You can get turnover rates for ETFs just like funds. This one, MOO, is probably on the higher side, but shows 33%, so check all individually.

http://finance.yahoo.com/q/pr?s=moo&ql=1

I'm on Vanguard's site. The 1-year and 3-year returns before taxes for VOO (S&P 500 ETF) are 13.64% and 20.37%, respectively. Those same returns "after taxes on distributions" are 13.12% and 19.87%.

The Vanguard Admiral Shares index fund (VFIAX) has 1-year and 3-year pre-tax returns of 13.64% and 20.37%, respectively. After taxes on distributions...13.12% and 19.86%.

So off by a 1 bp on the 3 year, but otherwise the same. Is this just unique to the type of ETF/index fund or am I having a "Josh Baskin during the robot building" moment?

I was just thinking of tax liability generated by portfolio turnover. If there are other differences, hopefully Sand or someone else can comment. VOO and VFIAX are based off the same index, so turnover would be the same.

The way I understand things with ETFs they are allowed to perform stock swaps which don't trigger a sale, so no capital gains. Mutual funds do buy and sell, so there are capital gains distributions which will hit in a taxable account (in an IRA it doesn't matter). So ETFs tend to be a bit more tax efficient. Note that some funds are low turnover and some are shockingly high.

If I bought a Vanguard fund and the corresponding ETF in a sheltered account I'd expect they would be damn near identical in performance. It really just comes down to tax efficiency - that's all I was getting at.

Any reason to hold VFIAX over VOO in a Roth IRA?

 

[Dentist]

Appreciate it. A bit confused on something, but maybe I'm just not thinking about this correctly...

You can get turnover rates for ETFs just like funds. This one, MOO, is probably on the higher side, but shows 33%, so check all individually.

http://finance.yahoo.com/q/pr?s=moo&ql=1

I'm on Vanguard's site. The 1-year and 3-year returns before taxes for VOO (S&P 500 ETF) are 13.64% and 20.37%, respectively. Those same returns "after taxes on distributions" are 13.12% and 19.87%.

The Vanguard Admiral Shares index fund (VFIAX) has 1-year and 3-year pre-tax returns of 13.64% and 20.37%, respectively. After taxes on distributions...13.12% and 19.86%.

So off by a 1 bp on the 3 year, but otherwise the same. Is this just unique to the type of ETF/index fund or am I having a "Josh Baskin during the robot building" moment?

I was just thinking of tax liability generated by portfolio turnover. If there are other differences, hopefully Sand or someone else can comment. VOO and VFIAX are based off the same index, so turnover would be the same.

The way I understand things with ETFs they are allowed to perform stock swaps which don't trigger a sale, so no capital gains. Mutual funds do buy and sell, so there are capital gains distributions which will hit in a taxable account (in an IRA it doesn't matter). So ETFs tend to be a bit more tax efficient. Note that some funds are low turnover and some are shockingly high.

If I bought a Vanguard fund and the corresponding ETF in a sheltered account I'd expect they would be damn near identical in performance. It really just comes down to tax efficiency - that's all I was getting at.

Any reason to hold VFIAX over VOO in a Roth IRA?

yeah, generally speaking i think unless you have commission free trades for VOO (which is relatively common these days) it would be better to be in VFIAX to avoid transaction fees.

if you had commission free trading then VOO would be superior by a hair.. they have the same expense ratio.. but the ETF is cooler

 

[John Bender]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

 

[General Malaise]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

BitGold.

 

[KCitons]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

Same thing I do with a majority of all other extra cash. Dump it into an index fund. Maybe invest 10% in an individual stock.

With no mortgage and no real car payment, and the idea of buying a rental house doesnt appeal to me. Not much else to do with the money that isnt going to be a high risk of losing it.

 

[wilked]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

why not pretend we have $100 million?

 

[John Bender]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

why not pretend we have $100 million?

That's just silly.

 

[Dentist]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

i have no consumer debt, and this particular 100k would be on top of the 100k i already have sitting around that i have trouble figuring out what to do with because we're in such a low yield environment.

IN another thread i debated the merits of paying off my home with the current 100k i have sitting around. I ended up investing instead with good results thus far and it has been the superior choice.

With another 100k i'd definitely pay off the house and use the remaining 15k for some additional home improvements.

if this were my first 100k i had laying around, i'd probably go the index fund route.

If you're the average person i think you follow this formula though:

1) pay off all interest bearing non-mortgage consumer debt (car, CC)

2) make sure all available tax advantaged accounts are fully funded (401k, roth ira, hsa)

3) ensure you are properly insured

4) any children to fund things for? 529? Coverdell?

5) cash management account

6) Teeth whitening

Really as long as the money isn't used to purchase any goods or services that you really don't need which defines over 90% of actual purchases, then you're probably doing the right thing for yourself, although not the best thing for your local economy.

 

[John Bender]

Nice answer Dentist.

 

[Random]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

I'm paying off the last of my rentals, and putting the rest toward my mortgage.

 

[KCitons]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

why not pretend we have $100 million?

Id give 25% to friends, family and charity. 25% invested. Then buy a log cabin in the middle of 2000 acres somewhere in Colorado, Wyoming or Idaho.

 

[ghostguy123]

100 grr extra? Pay off house.

Then what do i do with my extra income due to no house payment??? Max 403b contributions and buy my wife something pretty.

Like a ####### minivan......

 

[Random]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

why not pretend we have $100 million?

That's just silly.

I'll play because my answer is totally different.

I'd sell all my rentals and travel the rest of my life. The money would be in a very low risk investment. Game over.

 

[ghostguy123]

Dentist is a methodical boring SOB.

I am trying to get to that point.

Is teeth whitening code name for something?

 

[matttyl]

Didn't know where to post this, but this seemed like a good enough place. Am I reading this chart correctly? Is it saying that in order to be in the top 10% of US tax filers for 2010 (and thus I assume US citizens in general), you only have to have an income of ~$116k? That seems very, very low to me, especially if it's joint income.

 

[NutterButter]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

 

[matttyl]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

I'm planning ~95. The number may depend on your current age, though. I'm in my mid 30's. At 65ish (my father's age), he may only want to plan for a maximum age of 90.

 

[PinkydaPimp]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

Here is a good rule of thumb

 

[Gawain]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

101 for me/98 for the wife if we retire at 68/65 respectively. I'll die off well before that (former smoker and overweight). That puts us at 2.5M, assuming a 100K a year draw on investments earning 2%.

If either of us needs a tremendously expensive nursing home (different than retirement home), we're boned.

However, there's no real way for us to get to the god awful sum that planning for 300K a year would take.

 

[Random]

No one plans on spending less than their investment income?

 

[FUBAR]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

i have no consumer debt, and this particular 100k would be on top of the 100k i already have sitting around that i have trouble figuring out what to do with because we're in such a low yield environment.

IN another thread i debated the merits of paying off my home with the current 100k i have sitting around. I ended up investing instead with good results thus far and it has been the superior choice.

With another 100k i'd definitely pay off the house and use the remaining 15k for some additional home improvements.

if this were my first 100k i had laying around, i'd probably go the index fund route.

If you're the average person i think you follow this formula though:

1) pay off all interest bearing non-mortgage consumer debt (car, CC)

2) make sure all available tax advantaged accounts are fully funded (401k, roth ira, hsa)

3) ensure you are properly insured

4) any children to fund things for? 529? Coverdell?

5) cash management account

6) Teeth whitening

Really as long as the money isn't used to purchase any goods or services that you really don't need which defines over 90% of actual purchases, then you're probably doing the right thing for yourself, although not the best thing for your local economy.

I think we've done this before.

A good generic answer would follow Dave Ramsey's baby steps. With an extra $100k you could probably make it at least partly into step 6. FWIW, I wouldn't pay off my home (I don't happen to own one at the moment) but that's debatable.

Baby Step 1 $1,000 to start an Emergency Fund

Baby Step 2 Pay off all debt using the Debt Snowball
Baby Step 3 3 to 6 months of expenses in savingsBaby Step 4 Invest 15% of household income into Roth IRAs and pre-tax retirement
Baby Step 5 College funding for children
Baby Step 6 Pay off home early
Baby Step 7 Build wealth and give!

More specifically, I'd take a couple nice vacations (one with kids, one without), put more into the kids' college funds, and invest the rest.

 

[FUBAR]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

I wouldn't run out of money. Pension will cover the neccessary expenses and we'll have long-term insurance for a nice nursing home.

 

[Dentist]

Dentist is a methodical boring SOB.

I am trying to get to that point.

Is teeth whitening code name for something?

no that was my joke. Don't spend on anything fun... but of course spending some unnecessary money at your local dentist.. now that's value!

 

[Tiger Fan]

Anybody have separate disability insurance?? Read it in the Boglehead book.

Something that will pay you out long term (forever) if you are disabled and can't work.

I have it through my work, but it sure as heck wouldn't last long enough if it was truly work-ending injury/illness.

Anyone know anything about this?? Cost? Anything really

I do. Luckily my work has a really good plan. Would get like 80% of my salary for life IIRC

 

[Tiger Fan]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

I'm paying off the last of my rentals, and putting the rest toward my mortgage.

Not sure if this is the right thread or not, but how did you get started in rental property? Are you generally handy? Would you do it again?

 

[urbanhack]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

i have no consumer debt, and this particular 100k would be on top of the 100k i already have sitting around that i have trouble figuring out what to do with because we're in such a low yield environment.

IN another thread i debated the merits of paying off my home with the current 100k i have sitting around. I ended up investing instead with good results thus far and it has been the superior choice.

With another 100k i'd definitely pay off the house and use the remaining 15k for some additional home improvements.

if this were my first 100k i had laying around, i'd probably go the index fund route.

If you're the average person i think you follow this formula though:

1) pay off all interest bearing non-mortgage consumer debt (car, CC)

2) make sure all available tax advantaged accounts are fully funded (401k, roth ira, hsa)

3) ensure you are properly insured

4) any children to fund things for? 529? Coverdell?

5) cash management account

6) Teeth whitening

Really as long as the money isn't used to purchase any goods or services that you really don't need which defines over 90% of actual purchases, then you're probably doing the right thing for yourself, although not the best thing for your local economy.

you wouldn't do anything fun?

 

[NutterButter]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

I wouldn't run out of money. Pension will cover the neccessary expenses and we'll have long-term insurance for a nice nursing home.

good for you

 

[ZenMaster]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

Our initial estimates were assuming we lived 35 years after retirement, and we feel comfortable that we could extend that to 45 years without running out of money. I'm reasonably certain there's no way I'm going to live that long, though. My wife's family has a history of long lives so it's quite possible she'll make it into her late 90s.

Regarding your 2nd question, we both have long-term care insurance for assisted living should we need it.

 

[Gawain]

No one plans on spending less than their investment income?

Did you read the horror stories of greed thread?

We'd be doing our kids a favor by spending our last dollar on the funeral.

 

[ghostguy123]

Dentist is a methodical boring SOB.

I am trying to get to that point.

Is teeth whitening code name for something?

no that was my joke. Don't spend on anything fun... but of course spending some unnecessary money at your local dentist.. now that's value!

Nah, I am an anti-dentite.

Rather put aside about 5 grand for golf and massages. Invest the rest

 

[FUBAR]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

I wouldn't run out of money. Pension will cover the neccessary expenses and we'll have long-term insurance for a nice nursing home.

good for you

Meant to answer random with that post.

But doesn't long term heath insurance make more sense than life insurance once your kids are grown?

 

[Sand]

General-ish question

Let's say you had $100,000 dollars today.

Obviously it depends on your circumstances in life, so just speak to your situation

What would you do with it, today?

Be as detailed as you'd like.

why not pretend we have $100 million?

Because what I'd do with 100mil is completely different than what I'd do with 100k.

100mil - you could make it rain for like, forever, and never run out.

 

[Steve Tasker]

So with my ROTH IRA @ Vanguard. I have it in VSMGX with a .16% E/R This mutual fund is a moderate growth that holds four of vanguards ETF index funds.

I am a more passive investor, so this works easiest for me right now.

Once I max out my ROTH, and if I have extra money to invest, what do you suggest for my style of investing?

Is your 401k fully maxed?

 

[NutterButter]

For those of you that have done a reasonably comprehensive retirement analysis to figure out how much you'll need to retire, what's the maximum death age you're planning for? So at what age if you'd live beyond would you run out of money?

Second question, are you taking into account the substantial cost of a private retirement home or is your philosophy more along the lines of just depleting your retirement savings and once that happens going into any home that medicaid will pay for?

Our initial estimates were assuming we lived 35 years after retirement, and we feel comfortable that we could extend that to 45 years without running out of money. I'm reasonably certain there's no way I'm going to live that long, though. My wife's family has a history of long lives so it's quite possible she'll make it into her late 90s.

Regarding your 2nd question, we both have long-term care insurance for assisted living should we need it.

Ah yes, I've heard about long term care but haven't looked into it. How much does that cover? Its not like they're going to cover the cadillac of retirement homes are they not that I'm planning for that either?

 

[NutterButter]

Anybody have separate disability insurance?? Read it in the Boglehead book.

Something that will pay you out long term (forever) if you are disabled and can't work.

I have it through my work, but it sure as heck wouldn't last long enough if it was truly work-ending injury/illness.

Anyone know anything about this?? Cost? Anything really

I do. Luckily my work has a really good plan. Would get like 80% of my salary for life IIRC

Good god. I might be tempted to hurt myself with that much coverage.