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Posts posted by sschullo

  1. 11 hours ago, tony said:

     G A M B L I N G  with your money or investing it  is your choice. The wise do what we do here. Index funds. This guy in this essay sums it up nicely. If you're a newbie this essay is for you.

    Once you have set up a portfolio with a diversified mix of stocks and bonds, using mainly low-cost index funds, you don’t need to do much more, except periodically rebalance it to make sure the stock-bond asset allocation is still appropriate. Most of the time, in fact, it’s best to do nothing.  Article link:


    This is standard response to day traders and gamblers: 

    Not so smart "investor" Dad: “If you just match the benchmark, you are getting an average return. Why would you ever want to be average?” he asked.

    And I like the genuinely smart son's answer which is also decades old: 

    Smart Investor Son: “Well, Dad, that still would put me ahead of most active investors.”

    Nothing ever wrong with the "average" return over many years. The fact is that the average return from the stock market since the 1870s according to Morgan Housel: United States capitalistic system produces about 6.8% return minus inflation since the 1870s (3.1% average inflation generates a total return of 9.9%)

    Has anybody else read Housels book, the Psychology of Money? Here is my 4 star review on Amazon: https://www.amazon.com/gp/customer-reviews/R30TAIVAFIZBC8/ref=cm_cr_arp_d_rvw_ttl?ie=UTF8&ASIN=B084HJSJJ2

  2. Thanks guys,

    Here is another chart I created to show how fees eat into your investments in DOLLARS. Many times when we say to our colleagues that 2% is way over the top in costs, some people think that 2% is very low! I have posted this chart before but I think it's worth posting again. 

    For the record I pay a miniscule $1132.00 in 2020 for my entire portfolio! And that $1132 is calculated by the value of my portfolio at the end of the year. Vanguard as with most companies get their costs by the quarter. The value of my portfolio is about 10% lower at the end of Q1 last year because of the pandemic correction. But its too much work calculating my costs every quarter when the primary point is clear enough that my costs are extremely low. That's the point. 

    If I paid 1.0% AUM for a financial adviser, for example, instead my current cost of $1132.00, I would be paying over $17,000!  Oven ten years, that's $170,000 lost to fees and that's just 1.0%! ONE PERCENT FOLKS! Jack Bogle said it a long time ago and kept saying it until he died two years ago at age 89 on January 16, "FEES MATTER!"

    Costs Comparison to .07% of my cost.png

  3. Just when we thought 2020 was over and a new better year would begin in earnest, all hell breaks loose in DC. 

    For what it's worth, there are three things I am pleased: 1. my wife and I are healthy, 2. a new administration in one week, and 3. my portfolio's performance for 2020--9.34%

    What is incredible is that I am not taking a lot of risk and yet, I am compensated well above the risk I am taking. I know the standard deviation (SD) of my individual investments but not the entire portfolio.  About a third of my portfolio, taxable equities, have a standard deviation of 18 to 25 (high), and 2/3 of my portfolio is 7 or less (low). SD is the measure of market volatility. Both stocks and bonds performed better than expected in 2020. 

    For those of you who are new to this site, I share my portfolio allocation, my costs in percentages and dollars and the returns of my individual securities. So many of you come here and want to get out of such and such annuity but need to know where you are going, and when you get your diversified portfolio set up, how does it work. That's why I share my portfolio every quarter.

    I did the same thing decades ago by getting out of 2 of those horrible annuity products and into genuine stock and bond investments. My portfolio is easily replicated by the broadest asset classes of the Vanguard choices, Treasury Direct and TIAA. 

    Here are the particulars of my portfolio as of December 31, 2020. All the data and statistics are from the portfolio feature on Morningstar. I created the following graphs and tables from Excel. 

    Hope this will be useful for those of you still learning about constructing your balanced and diversified portfolio. 


    End of 2020 Returns.jpg

    End of 2020 Costs.jpg

    Asset Allocation 

    End of 2020 Allocation.jpg

  4. 19 hours ago, Educator4_Arts said:

    Hi everyone,

    Thanks for your responses. I have quite a bit of money in a 403b with Equitable. All of the money is currently in a guaranteed interest account (earning 3%) since I'm planning on retiring soon and I don't want to pay the fees for the other products that are offered. I do not pay any fees with this account since it's all in the guaranteed interest and Equitable swears that I'm not paying the 1% mortality fee. I'm still contributing to it, but as I mentioned, I'm planning on retiring in June. I will be 59 and 1/2 in the spring of this year, but I will not need the money from this account (I hope) for a long time. I will not have any surrender fees since I've had this for a long time, and the surrender dates don't restart as you add money.

    I also have a decent amount in a 457b (7) account with Lincoln Investment (self directed = no management fees).  I have 1/2 of the money in a Vanguard Target date retirement fund (yes, I know that's not how it's supposed to work....ugh) and the other half in money market doing nothing....except making me feel safe (and perhaps foolish too).

    Ok, so what should I do? 

    I don't understand your question. While I would never again put my money in any insurance company (except TIAA), I agree with krow36.

    But when an insurance company rep "swears" anything, my red flag goes up big time. They can say anything! He/she does not want you to leave! It is an old emotional game played with educators' minds for decades.  Since we are kind folks we tend to believe what is said to us. It is what's written in the contract you signed that counts. I would check there about the mortality fee. As you probably know, M&E fees are hideous, wasteful and absolutely useless. 

    Happy new year and congratulations on your upcoming retirement. I have been retired for 12 years and love it. 


  5. 10 hours ago, Why Me said:

    Happy new year, Steve.  FYI, the 457b law changed about one year ago. Something called the "Pension and Health Relief to Miners Act" passed at the same time as the "Secure Act," and it changed the rules for governmental 457b accounts; the old higher age limit or separation from service requirements were removed, so 457b money can be rolled to an IRA anytime after 59 1/2, same as with a 403b.  I completed such a rollover (while still employed and contributing) in early 2020.

    Hi whyme,

    I figure you were on to something that I either forgot or never read. Hey that's great for our colleagues going forward, and it simplifies the mind numbing regulations. That's why I rely on people like you to keep track of the old and new regs. I read the regulations and try to remember, but I don't, there are sooooooooooo many. Scotty D. and Micheal D. are too long standing posters who know all, and I mean, ALL the regs.

    All I know is my portfolio expenses are still .07% and my 2020 return was a mindblowing 9.34% for my boring conservative portfolio! Nothing boring about 9.34%. I will put up those numbers in about a week or so. 

    And happy new year to you. 

    Stay healthy and safe. We are not over this thing yet. 


  6. Same as what whyme and Tony said. It makes no sense to leave your money in your employer's sponsored plan and pay the extra costs of administration. Roll them over to Vanguard or fidelity as soon as you retire. With the 457b plan, you have to be separated from service in order to do a rollover. 403b plan you have to be 59.5. 

    hope this all helps, 


  7. 14 hours ago, CTinker said:

    Does this mindset of chasing returns even factor into actively managed funds?  My wife had shares of Vanguard International Growth Fund Admiral Shares (VWILX) and I was amazed at their returns compared to the benchmark.  Then I dug into their holdings and Tesla was #1, which is confusing to me since the fund is supposed to focus on "non-U.S. companies with high growth potential."  I took it as an opportunity to re balance instead of chasing more returns.  Also an opportunity to go from a .33 expense ratio to a .11.



    Consider your wife extremely lucky that she hit it twice, growth and international went through the roof in 2020.  

    Good for you for rebalancing out of this fund, or at least reducing your exposure. 

    Might be due to style drift. Managed funds often do this when the stocks are doing great, especially Tesla this year! OMG! You have to dig deeper into the prospectus to find out why Tesla was an exception because you are right, Tesla should not be in this fund. The data says this fund invests 14% of its holdings in the U.S. https://investor.vanguard.com/mutual-funds/profile/portfolio/vwilx

    Your experience is exactly why I do not invest in such a narrow part of the market. I really don't know if my portfolio is diversified, as you found out, as time goes by. You might as will be invested in Tesla stock!

    Interestingly, 58% is what my portfolio returned in 1999 with the tech bubble, and you know don't want to know what happened to my portfolio 2 years later. 

    Since those terrible years 20 years ago, I have my money in broadest diversified index funds, only two equity funds. Total Stock market index and total international stock market index and a balance fund, Wellesley.  


  8. Everytime the market is as rip roaring as it has been since 2008 (with occasional short term hiccups), some people are lucky with their short-term, overnight get rich, style. Of course there will be some people who made it big on Tesla stock. There are many problems with reporting about this kind of "investing" but the first one is that there is no follow up that I know of five or ten years down the road. 

    To nobody's surprise for the regulars here, and from all the books that I have read, this is how NOT to invest: https://www.morningstar.com/news/dow-jones/20201227504/investors-double-down-on-stocks-pushing-margin-debt-to-record This is anadulterated g ambling! 

  9. bk10s,

    There was one important factor I left out. I don't need to take the risk to grow my portfolio as somebody who is working or retiring at a younger age than normal retirement. At my age, I have won the game. I have "enough". I have enough fixed income and enough investments. My portfolio is about the preservation stage and if I am lucky enough it might grow enough to keep pace with inflation and pay the income taxes. If not, I will still have enough to last the rest of my days. I have two healthcare plans, long term insurance and best of all I am extremely fortunate that I can manage my money without an expensive adviser and save a ton of money.  

    Here is a discussion on bogleheads about the "ability, willingness and need to take risk." https://www.bogleheads.org/forum/viewtopic.php?f=10&t=333831&newpost=5684634 

    Below is a table I created and posted on this forum previously.  It shows who I actually pay (in green) compared to the cost of somebody else managing my portfolio. The difference is staggering! 



  10. The 30/70 allocation is not popular especially with financial advisers say this allocation is too conservative. As I have said before, I look at the data of this allocation and according to Vanguard it returns about 7.7% (15 years ago it was 7.3%): https://investor.vanguard.com/investing/how-to-invest/model-portfolio-allocation. What the heck is wrong with 7.7% return? NOTHING. My portfolio has average almost 6.0% per year since 2008 and I have spend a lot of money, and it's still growing! Of course, I am 100% lucky that I (we all) had a bull market all of these years. But what was unexpected is the bonds have done well too. I don't understand the usual negative narrative about bonds, consider this discussion on the bogleheads: https://www.bogleheads.org/forum/viewtopic.php?t=310761

    Sleep better. Yes, I am loss averse because of two issues, my age and I need my investments for retirement. My pension is modest as I only worked for 24 years and retired at 61 because of my savings and property investments. Both my late spouse and my current one only have social security as with most Americans they do not have a pension. If I were like you and did not need my investments for retirement it doesn't matter what age, I would have a higher allocation to stocks absolutely. You said "we" so I am guessing both you and your spouse have pensions? If so heck, put 100% in equities and let your descendents worry about it. 

    There is a lot written about drawdowns when retired whether it's the buckets, 3%, 4% rule brought about by the Trinity Study or more. Come January, I will draw down from capital gains, dividends from both my stocks and bonds. I will sell shares too: since my total stock market index is through the roof and my stock/bond balance is now about 36% stock 64% bonds, I will take out money from my VTI. I have to make a RMD so next year I will take 100% out of the Total bond Market index as it too is through the roof, at $11.51 a share! 

    Nobody knows about the future and if the 30/70 will work as well as it did for me the last 12 years. But it looks like to me, you can keep your allocation at 60/40 because you don't need your investments for retirement purposes. Your pensions are plenty and that makes all the difference. 

    Happy holidays,



  11. Here are some important details about Vanguard:

    Found on the Vanguard website

    Began operations
    May 1, 1975
    Oldest fund
    Wellington Fund (inception: July 1, 1929)
    Total assets
    About $6.2 trillion in global assets under management, as of January 31, 2020
    Number of funds
    About 190 U.S. funds (including variable annuity portfolios) and about 230 additional funds in markets outside the United States, as of January 31, 2020
    Number of investors
    More than 30 million investors, in about 170 countries, as of January 31, 2020
    Average expense ratio
    0.10% (U.S. asset-weighted fund expenses as a percentage of 2019 average net assets)
    Chairman and CEO
    Mortimer J. Buckley
    Number of employees (crew)
    About 17,600 in the United States and abroad, as of January 31, 2020
    Core purpose
    To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success

  12. 3 hours ago, Deana said:

    I am in a similar situation. I'm in Georgia, and I have a 403b plan through Midland National that I've been contributing to for about 5 years. I stopped contributing last month after listening to Clark Howard and finding you guys at 403bwise. However, I haven't moved the money yet. My school district doesn't offer ANY companies that are not high fee, etc. All are through insurance companies. What now? Should I leave it where it is or pay my surrender fees and taxes and just pull it out?  Can I initiate a transfer  to another company like Vanguard or Fidelity and then would it have to be in a ROTH IRA or traditional? I'm learning but still limited in knowledge regarding all of this. I just wish I'd never signed up for that 403b but was talked into it!! Ultimately it's no ones fault but my own but would love some help getting out of this mess!

    Welcome to the forum, Deana! 

    Your story is decades old. Most of us regulars here have similar stories. I was sold two annuities 35 years ago and the same thing is still happening.

    You did the first step correctly by stopping immediately!

    Do NOT pull the money out! Just leave it there for the time being and we can guide you along about what to do moving forward. But we need more information. Now provide the other companies that are available so we can take a look. There might be one gem in the rough.  


  13. 16 hours ago, whyme said:

    That is a fine level of retirement income!  Steve, your transparency about your finances (both your successes and your earlier stock market stumbles) is a valuable and inspiring model for teachers and others trying to find a path to retirement.  Please keep it up.

    Thanks whyme! That's all I do is just share what I do. While people want authenticity and transparency, unfortunately the qualitative experience is not as respected as the quantitative analyses (Although The Psychology of Money by Morgan Housel is making huge inroads into this murky area: read my review of his book: https://www.amazon.com/gp/customer-reviews/R30TAIVAFIZBC8/ref=cm_cr_arp_d_rvw_ttl?ie=UTF8&ASIN=0857197681 ).

    What I do is directly from Bogleheads and other readings. Nothing from me is original BUT my data is a case study and a qualitative example from one ordinary investor who learned a thing or two from the experts about diversification, COSTS, reasonable returns, long term thinking, and the pesky little variable--RISK-- with real and deep losses on the way to eventual success. My portfolio above reflects my emotional and rational story of discovery, learning, study, pain, and thrills!  Its about life from one ordinary investor! 

  14. On 12/6/2020 at 12:04 PM, whyme said:

    Steve, you are doing really well on the risk/reward front!  My mostly-stocks portfolio is, as of Friday, up a smidge more than yours for the year (9.3%), but mine carries much greater risk of volatility than your portfolio and could sink dramatically at any point.  It does feel strange that the markets are up during this cataclysmic year (the pushed-down-to-nothing bond rates probably have a lot to do with it, driving up the value of your bond funds and forcing more money into the stock market since new fixed income investments may not even keep up with inflation).   It certainly does highlight the ever-widening economic gap in this country.  Not only are work-from-home types (like me) financially stable while millions face unemployment, reduced schedules and business closures (not to mention illness), but the benefit of holding investments is concentrated in a depressingly small sliver of the population: something like half of US households have zero market holdings, and most of the other half have only a little invested, with balances unlikely to produce much income in retirement. 

    To quote from a government "fact sheet": "Among elderly Social Security beneficiaries, 50% of married couples and 70% of unmarried persons receive 50% or more of their income from Social Security [...] 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income."  

    Very grim statistics, but the 45% of unmarried seniors relying on social security only has been steady for years. After all of the news media talking about the importance of planning for retirement more than half cannot or will not set aside some money. 

    My portfolio has done well because both stocks and bonds are going through the roof. Interest rates dropped to near zero and that's the primary cause for the value of both stocks and bonds to rise in value (inverse relationship. Interest goes down bond prices go up and visa versa). This year interest rates plummeted again. 

    Just lucky because I have had 65% or more in bonds for years. Still I am on track to be making a gross 2020 income and wealth of $200,000+. 

  15. As of close of markets last Friday, December 4th, 2020 my portfolio returned:

    8.9% YTD.

    All three markets DJIA, Nasdaq, and S&P 500, and the fourth market, Russell 2000 small caps, all broke records!, including the value (dollar amount) of my portfolio. 

    My extended market index allocation is 27%! and the biggest surprise, International index up 8.6%. This index has been in the negative for most of this year and in the past (my portfolio AA is above).  

    What's driving this when the economy has not recovered? It's a familiar story, with tons of complications, but on the surface, "the rich get richer and the poor...."  Stimulus and the vaccine DUH!

    In the meantime, my niece and her adult daughter are leaving California to stay with her son and his family in N. Carolina. They are both waitresses and lost their jobs this year and could not find another job, I helped pay some of their bills.

    The people who can work remotely are doing better. I have a grand nephew who does IT design and has his own at-home business with Halliburton (yeah, he admits that Halliburton has history of less than a positive company) as a primary client, has tons of work, as a son of a friend, both are doing great. Both are in their 30s but they are both trained in IT and design. 


  16. OP. I remember the FEELING of paying off my mortgage when I was 57. What a relief! Here is another article that may help you decide: https://www.cnbc.com/select/what-age-to-be-debt-free/. In this day and age of tens of thousands of financial blogs, articles, discussions and podcasts, there are hundreds of articles on this one subject and multiple discussions on the Bogleheads forum. FWIW, it's not just the numbers, but the debt free experience that counts too. Heck, if you don't like being debt free, you can always borrow money and purchase Tesla stock like this fellow did: https://www.bogleheads.org/forum/viewtopic.php?t=330263

  17. After all of you newbies come here and get excellent information about changing from those annuities into something like Vanguard, Fidelity or NEA Direct Invest, you will get the returns that you deserve when you construct your diversified portfolio. I use mine as an example.

    My portfolio is very boring and conservative because I need my portfolio to fund my retirement. It's not for anybody who has pension(s) or are young. You want to be much more aggressive by increasing the stock allocation over the bonds.

    My Vanguard and TIAA portfolio YTD return is 6.8% for a 34/66 stock bond split after today's close. I am happy with this return. It's almost doubled from the Q3 report at the end of September. 

    The second image is a report generated by Vanguard. It tells me I have too much value stocks, too little international bonds and stocks. 


    Q3 2020 Asset Allocation.jpg

    Q3 2020 Vanguard Portfolio Watch Report.png

  18. Pushing this announcement up.

    Everyone is welcome! Register here. Just by observing how Dan Otter, Scott Dauenhauer, Barbara Healy, (first pic below) the United Teachers Los Angeles Union Pre-Retirement Issues Committee Chair, Leonard Goldberg (2nd pic) and former Chair, Dr. Sandy Keaton, put on a financial literacy show that cannot be beat. You can beg, borrow or steal the excellent content presented and use it at your school or district. Dr. Sandy Keaton has been coordinating these workshops twice a year for Los Angeles teachers for over a decade. She is first on the agenda at 8:00 am Pacific time today. 

    DanScottBarb.pngLeonard Goldberg.jpg

    Dr. Sandy Keaton.png

    Valuable and FREE resources: When COVID is behind us, Dan and Scott are available to go anywhere in the country to provide a workshop for your teachers. If you are a professor at a college or university teaching future teachers, they are especially interested in providing future teachers the financial information they need long before the vultures come into their classroom trying to sell those despicable high cost 403(b) annuities.

    Tim Ranzetta has been mentioned before on this forum. But for new teachers here and are also interested in teaching your students financial literacy, get to know Tim and his incredible website, Next Gen Personal Finance Discovery. All of his thousands upon thousands of video clips, lesson plans, stock market games, excel spreadsheets, presentations and financial workshops on every conceivable financial topic are FREE. 

    My friends and I have been taking these FREE certification courses: https://www.ngpf.org/certification-course/ 

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