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whyme

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  1. whyme

    John Bogle has passed away

    Very few people go into financial services with the goal of improving society. Fewer still are such lucid and effective teachers as Jack Bogle.
  2. whyme

    Question about 403b transfer/rollover

    One more note on this 403b situation: if your friend is over 59 1/2 years old, or if he is no longer working for the same employer that set up the AXA 403b, he can roll the money into a traditional IRA account at Vanguard (or another provider of his choice). I'm guessing that neither of those requirements pertain in this case, but when they do, the rollover IRA is usually a better option than a 403b: lower cost, more flexibility in investment choices. (The IRA creates no conflict with the ability to continue to contribute to 403b and/or 457 accounts with one's current employer).
  3. whyme

    2018 was suboptimal.

    Approx 75/25 here. According to the aggregator Personal Capital, my portfolio performance was minus 5.6%. Suboptimal for sure, but well within the expected range of annual returns.
  4. whyme

    Potential crash?

    My portfolio is also not strictly market cap weighted, and I have a few outlying investments in there (some Berkshire Hathaway shares, a REIT fund and Vanguard's junk bond fund) so I'm sure my results are a little different from a Bogleheads three fund portfolio. Most of the "Lazy Portfolios" that marketwatch monitors seem to be down between 8 and 10.5%, though I'm not sure whether those figures are updated through yesterday. https://www.marketwatch.com/lazyportfolio
  5. whyme

    Potential crash?

    Sadly, it's hard to see sanity anywhere on the horizon these days. But when it comes to markets, what historical moment would we return to when sanity prevailed? Curious swings in price seem to occur in pretty much every period, don't they?
  6. whyme

    Potential crash?

    While nobody knows what comes next, at this point anybody who is struggling emotionally with the decline should seriously consider increasing their long-term allocation to short-term bonds, CDs or something similar. My (roughly 75/25) portfolio is down 9.5% for the year as of 12/24. I presume Steve Schullo's conservative (30/70?) portfolio is down less than that, if at all.
  7. whyme

    Nationwide are they on my side?

    I have a Nationwide-only 457 as well; I put a bit of "overflow" retirement money in there, once my Fidelity 403b is maxed out. Nationwide isn't good, but in my case there are some more fund options through the "Nationwide fund window," including funds from Vanguard and Dimensional Fund Advisors. Nationwide gets their add-on costs included in every case, and sometimes it is hard to even determine what the costs are. If this is a 403b account, I'd look carefully at your 457 options or vice versa. You should also see whether you can invest in a traditional IRA (there are some income restrictions, assuming you are in another retirement plan) at Vanguard or another low-cost provider. I've made my peace with the cost/benefit calculation of a little extra deferred savings for a relatively short holding period (I expect to retire within five years) in Nationwide, but I'd hate to think Nationwide is your primary option for the long term. If that's true, and you have decades ahead, you may want to become an activist in getting that changed.
  8. whyme

    Big Change At Vanguard

    Hi, Ed. While you are most likely correct that DCA was coined to refer specifically to a lump-sum investing strategy, I can't see how the ubiquitous application of the term to include periodic investments from earnings is "destroying the meaning" of DCA. The concept of periodic investment purchases of (at least roughly) the same size holds true for both applications, and takes nothing away from the meaning for a lump-sum investor who considers that strategy. (This contrasts strikingly with the mis-use of "literally," where the word is used to mean something flatly contradictory to its primary definition.) You are correct that portfolio asset allocation is the proper source of risk mitigation. Still, should someone with a life changing lump sum sleep easier by splitting up their investment buying across a short period of time in order to minimize their chance of a worst-case market timing event, even with the knowledge that immediately investing the full sum gets a better result about two thirds of the time, I don't think that's unreasonable. It's a trade-off. While we're fussing over definitions, I wonder whether it is really accurate to label DCA as "market timing." Since there is no attempt to identify a top or bottom or optimal time to buy the market, it seems more of a mechanical strategy to minimize the effects of market fluctuation on one's purchase price, almost anti-timing. (Of course, if someone is averaging in because they think the market is overpriced at this time, that would be market timing, so maybe timing depends on the belief system, not the averaging technique.)
  9. whyme

    Big Change At Vanguard

    Ed, I think DCA means averaging the cost of shares bought via periodic purchases of a more-or-less equal amount. It's DCA whether you are doling out a lump sum or whether you are investing a regular amount from a biweekly or monthly salary payment. I don't believe that "regular investing" is a meaningful category: I guess the alternatives would be lump-sum buy and hold investing or some approach based on market timing and trading. I also think the the question of averaging a lump sum vs just investing it all immediately is less straightforward than you make out; while it is true that statistically you are most likely to do better the longer you have the money invested in equities, there is also some risk reduction to be gained by the DCA approach. Let's say that you got an inheritance. There is a small but statistically significant chance that after investing it all today, in the next few weeks the market dives 30% and it takes a long while for it to recover. If one chose to DCA over a year or two, that person would give up a bit of expected return, but would also mitigate the risk of their inheritance being diminished by a dramatic bear market or crash; risk mitigation is worth something.
  10. whyme

    Big Change At Vanguard

    Anybody know why the Admiral threshold for the Prime Money Market fund is $5,000,000? Other managed bond funds get the Admiral rate with $50,000.
  11. whyme

    How To Be Richer Than A Millionaire

    Wandering off from the main topic, but one bit of optimistic behavior that one might include at these relative low salary levels: put the money in traditional IRA or (401k, 403b, etc if available) instead of a Roth. If I understand correctly, this would reduce the adjusted gross such that it would not only lower taxes, but could trigger eligibility for the "saver credit," which can be as high as $1000 and is an additional tax credit, i.e., it can reduce federal taxes due by the amount of the credit. In general, I think traditional IRAs are an encouraging way to go for those who are struggling to save, as they see an immediate tax benefit.
  12. whyme

    How To Be Richer Than A Millionaire

    Yes, I originally saw the 30k starting salary, but by the time I looked at the portfolio column, the assumptions had changed and I didn't realize that. I see your note about the all-workers basis for that salary figure: no doubt about it, there are large numbers of hardworking folks who make less (much less, if benefits and pension are figured in) than full-time teachers.
  13. whyme

    How To Be Richer Than A Millionaire

    I agree with Steve that the salary assumption seems low--is that consistent with k-12 teacher pay in Florida? 3% real return (i.e., after adjusting for inflation) seems reasonable to me, it could easily be lower than that for long periods. So much depends on where you are. You don't calculate state tax, which matters here in California. Living comfortably on 26k, if you don't own and don't have a spouse or roommate, would be very difficult to pull off here (in Los Angeles) given prevailing rents (you could find a modest apt for less that 2k/month, but maybe not that much less). Ed, I am confused by your claim that your hypothetical teacher needs to work 48 years--doesn't your spreadsheet show a 1 mill investment portfolio as of year 35?
  14. whyme

    Fanning The Flames Of The FIRE movement

    Steve, this thread has taken a strange turn. First off, this isn't even MY argument--I just stepped in hoping (and failing, evidently) to clarify what I understood as the point that Dustin and Ed were making. I simply don't recognize what I said or what they wrote in your characterization: no one here has suggested that the FIRE folks (or anyone else) should not pursue happiness. Nor is there any attack on the idea of frugality or smart financial planning and investing. Nor is anyone saying these are bad people because they have a relatively privileged background. Indeed, Dustin talked about his own advantages in life, Ed seems to have a large salary at a young age, I don't know about his background but I'm guessing he'd count himself among the lucky ones, too. I could also point to advantages in my own upbringing (stable food and housing, books in the house, some travel and a parent who sponsored my attendance at a fancy college) that stand in stark contrast to the circumstances that I see many of my community college students struggling with: homelessness, having to care for parents, grandparents, children and siblings, physical abuse, language fluency issues, or simply coming from communities with few resources, high crime, no culture that supports education and very few successful adult role models.
  15. whyme

    Fanning The Flames Of The FIRE movement

    Steve: Dustin and Ed are raising a criticism about one narrow aspect of the FIRE discussion: the claim that "anybody" can become financially independent at a young age. They are not attacking the people you met (nor am I). As Ed points out, he is among the FIRE aficionados himself. As to why think critically about the FIRE movement and its claims--maybe because they take it seriously?
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