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Devian666 posted:That said that capital appreciation in my portfolio has been 10% this year. Cast_No_Shadow posted:The only thing I would add is this is 2017. You are not forced to invest only in your own country anymore. Many might say that over balancing on domestic stuff is bad, you live there and work there so matter what you do your massively over exposed before you even start.
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Nov 12, 2017 19:18
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Ralith posted:To put a point on this, Vanguard's Total World Stock index fund/ETF is up 19% over the past year. Investing in your own country is great if most of the rest of the world goes to hell while you luck out, but be wary of overweighting. I have some of the fund as I've been rolling into that. It was flat for quite a few months before going up recently. I do recommend being wary of investing too much in the US right now. For some reason many central banks are printing money, buying USD and then buying shares in the US. For the Swiss National Bank they are trying to keep their currency value down. At the same time they are pumping up a lot of US shares. The 13F holdings below are just one example, and I'd be concerned about overbuying S&P500, etc. https://www.holdingschannel.com/13f/swiss-national-bank-top-holdings/
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Nov 12, 2017 19:25
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I'm personally fighting the urge to scale back my US exposure because of the whole superpower suicide thing that's playing out.
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Nov 12, 2017 23:36
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Guest2553 posted:I'm personally fighting the urge to scale back my US exposure because of the whole superpower suicide thing that's playing out. I feel a bit like this, but have 0 trust in China, Russia, and a couple other smaller states. Been throwing money at India, Africa, and some other international things.
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Nov 13, 2017 00:04
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It's a tough issue to face. In discussions with a former bond trader he did point out that there's no way for us to get outside of the financial system. Essentially you'll always be exposed to risk and economic events, so just do the best you can. Despite my investment actions above, which I've done to be resilient to local/regional economic events, I'm returning to modern portfolio theory to apply a statistical approach, as well as improve my diversification.
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Nov 13, 2017 00:56
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The U.S. isn't likely to explode and never recover, but a gradual long term outpacing by other countries is a possibility. Whenever I see people recommend some allocation similar to 80% U.S. and 20% rest of the world, it's odd to me. The U.S. is only about 24% of the world GDP today.
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Nov 13, 2017 20:41
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Inept posted:The U.S. isn't likely to explode and never recover, but a gradual long term outpacing by other countries is a possibility. Whenever I see people recommend some allocation similar to 80% U.S. and 20% rest of the world, it's odd to me. The U.S. is only about 24% of the world GDP today. If you invest broadly in US indices you get a lot of international exposure. The true extent of doing so is difficult to calculate because of the very fluid and multinational nature of globalised modern business. Something like 45% of the revenue of S&P 500 companies comes from outside United States, for example. Some people (for example Warren Buffett) think that you get plenty of international exposure by investing in United States indices. Others argue that US indices underrepresent small and midsized international businesses. Personally I have a mixed portfolio which although is largely US indices has about 20%international indices.
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Nov 13, 2017 22:24
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Inept posted:The U.S. isn't likely to explode and never recover, but a gradual long term outpacing by other countries is a possibility. Whenever I see people recommend some allocation similar to 80% U.S. and 20% rest of the world, it's odd to me. The U.S. is only about 24% of the world GDP today. A few points why a home country bias (in general; I'm not quantifying the amount here, just the mechanics) is preferred over world market cap or GDP weighting: When you invest in domestic assets, you are exposed to economic and business risks associated with them. With foreign ones, the same PLUS exchange rate risk. Diversification suffers diminishing returns with size, especially when risks are correlated (and substantially so for US vs International stocks). The US or EU are fairly large and diverse economies, so international exposure is relatively less important for them than it is for someone in, say, New Zealand. And as previously mentioned, a good chunk of domestic revenues for US stock originate from foreign countries to begin with.
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Nov 13, 2017 23:50
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Eyes Only posted:When you invest in domestic assets, you are exposed to economic and business risks associated with them. With foreign ones, the same PLUS exchange rate risk. In terms of buying funds denominated in different currencies I do have to keep an eye on exchange rates and announcements that create dramatic shifts. I can tap into Vanguard and Blackrock funds on the ASX and the exchange rate for AUD/NZD is still favourable. There's also a fund that I own that's denominated in GBP which is relatively cheap to buy as the UK politicians have done everything possible to sabotage their currency value through their stupidity wrt brexit. It makes the GBP dividends a bit sad but that will eventually correct. I don't want to over-invest in Australia but it's only right that Australians work to make profits for a New Zealander. It's the way things should be.
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Nov 14, 2017 00:10
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Eyes Only posted:When you invest in domestic assets, you are exposed to economic and business risks associated with them. With foreign ones, the same PLUS exchange rate risk.
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Nov 14, 2017 00:14
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I'd like the wind the clock back about two years when the USD was really cheap. I managed to buy a lot of stuff from the US at pretty decent prices. However I've seen a lot of investors pull money out of non-US investments to hold USD/bullion/US equities. That's a big bet on the USD.
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Nov 14, 2017 00:20
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Thanks for all the info, FI goons!spf3million posted:Minimizing your income tax bill is a big part of the equation. I don't know how your military income is taxed so can't comment on what type of accounts would be best for you. My current plan is to pay off the last of the debt I have, and then start saving. How much should I keep in an emergency account as my income is guaranteed? Dwight Eisenhower posted:Also: Your goal of $500/month works out to you needing ~$150,000 if you went for a 4% withdrawal rate.  Good catch, maybe my first step towards FI is learning how to use a calculator.Ralith posted:Investing in index funds using regular brokerage accounts (such as provided by Vanguard) lets you get the money back out whenever you like; restrictions only apply for tax-advantaged accounts, and there are workarounds even then. However, investing such that there is very little risk of having a net loss over 5 years is very different from investing such that you can support withdrawing a certain amount indefinitely; the latter calls for a much less conservative approach, since really you're trying to have a substantial annualized gain over many decades, which low-volatility investing doesn't accomplish. You'll need to decide which is your priority: pulling all the money out again soon, or long-term sustainable bonus income?
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Nov 15, 2017 05:38
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Beast Pussy posted:Is there a medium term option? I don't need the money in the next 5 years if I'm working, but I would like to be able to use it while I'm young(er) instead of thinking of this as a proper retirement (~65) investment.
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Nov 15, 2017 05:46
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Beast Pussy posted:My military money isn't taxed, how does that change things on my end? Your emergency fund should be enough to get you out of a jam whether that's a car problem, a medical problem not immediately covered by the VA, legal issues, an emergency flight, etc. Most people recommend 3-6 months of living expenses but since you have a guaranteed income, less would likely be ok. Like a few thousand dollars minimum? Enough to keep you from putting it on a credit card and getting back into to debt.
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Nov 15, 2017 06:29
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Ralith posted:What does "use it" mean to you? Are you planning to spend it all, or just start drawing a sustainable fraction of it on a regular basis? Drawing a sustainable fraction on a regular basis ideally, but I guess I'm a little less risk averse than most, because a portion of my income will always be there. If I'm doing my math right this time, and I saved up $150,000 I could withdraw $500/mo for 25 years before interest, right? I feel like that's a pretty acceptable amount of time for ~5 years of work, and interest would carry it a lot further, right? spf3million posted:This might be a good place to start regarding military specific info. Thanks, that's where I was sort of aiming for before I found this thread.
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Nov 15, 2017 07:06
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Beast Pussy posted:Drawing a sustainable fraction on a regular basis ideally, but I guess I'm a little less risk averse than most, because a portion of my income will always be there. If I'm doing my math right this time, and I saved up $150,000 I could withdraw $500/mo for 25 years before interest, right? I feel like that's a pretty acceptable amount of time for ~5 years of work, and interest would carry it a lot further, right? Ralith fucked around with this message at 07:30 on Nov 15, 2017 |
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Nov 15, 2017 07:27
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I found this essay by Benjamin Franklin today and was blown away how relevant the general advice is. Benny Frank was the man. There is a lot of great information, but I got a real good laugh out of this line, even if I don't quite believe it:quote:Women and wine, game and deceit, My dad always put it this way: quote:If you stay single, your pockets will jingle https://liberalarts.utexas.edu/coretexts/_files/resources/texts/1758%20Franklin%20Wealth.pdf
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Nov 25, 2017 22:08
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Benjamin Franklin posted:felix quem faciunt aliena pericula cautum Translation: happy are those who read the BWM thread. 
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Nov 25, 2017 23:14
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a dingus posted:I found this essay by Benjamin Franklin today and was blown away how relevant the general advice is. Benny Frank was the man. There is a lot of great information, but I got a real good laugh out of this line, even if I don't quite believe it:  but really, I'd have a lot less saved if I had to live on my own and not have DINK money.
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Nov 26, 2017 17:11
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Inept posted:
Condoms winning both the ultimate life hack and gwm awards
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Nov 26, 2017 22:56
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Get snipped in a country with socialized medicine, GWM and GWS 
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Nov 27, 2017 23:32
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I've been tracking my house mortgage as debt and house value as an asset and including that in my net worth monitoring in YNAB. At the beginning of 2017, I started tracking my mortgage payments breaking out interest, taxes & insurance, and principle payments as discrete categories, and start classifying principle payments as retirement spending for easily elision for calculating yearly expenses. My savings rate was ~48% under this model (most of that was into other vehicles than the house). If I look at annual spending for 2017 not inclusive of interest or retirement savings deposits, my passive income in 2017 was about 12.5% of my total expenses in 2017. Having put the numbers down and looking at them in retrospect I feel way more optimistic about getting out of the grind now. Happy bits: - 12.5% in 2017 will compound AND I can continue to contribute additional savings to increase that, so I could reasonably suspect geometric growth. - I can likely pay off my mortgage in 2018. While my investments are beating my mortgage interest, my investments are risky, while not paying mortgage interest is a guaranteed return. - This is only looking at income in taxable accounts and not in any 401ks or IRAs. Bummer bits: - Paying off the mortgage will require liquidating all the investments giving up that passive income. I think it's the right move but I'm not certain. - Wife and I want to move out of the current house, which will be way easier if it's paid off, but means getting back on that treadmill of expense and tanks the 12.5% number. Still, feels good to look at a year of deliberate logged info and feel like retiring early is realistic if I hold to my plan. I did some non-trivial amount of degenerate gambling in my taxable account too that lowered my overall return. Looking at the numbers is helping me resist the urge to buy ridiculous stocks now.
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Jan 3, 2018 17:13
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Don't liquidate investments and realize capital gains to pay off an affordable 3-4% mortgage, why would you ever do that?* *unless you mean bitcoin when you say your investments are risky
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Jan 3, 2018 17:31
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Yeah I understand the feeling of wanting to be debt free but dogg, selling your investments to pay off a 3.5% mortgage is not advice I would give to anyone. If anything, I'd rebalance the speculative gambling into passive index funds and let that money run until you need it, and keep making them house payments.
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Jan 3, 2018 17:45
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Much like other people, I fail to see what the purpose of paying off the mortgage is, provided that it's at a good rate.
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Jan 3, 2018 18:54
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a) It's not a good rate, it's 6.75% b) Paying off the mortgage both frees up a significant chunk of monthly income and vastly eases moving to another house if and when that time comes because I will neither need to pay two mortgages nor try to arrange a sale to correspond with my purchase. c) It's more robust than continuing to have to service a debt in the event of loss of income, for example. I'm not totally resolved to pay it off mind you, and I am posting mainly to get input on my proposed plan, but it seems silly to me to pay for a refi and then continue to pay interest when the payoff is within arm's reach, and replenishing my investments over the following 2-3 years is realistic. My investments are largely boring ETFs. Yes, I'll have to take the capital gains hits and will stop being able to deduct the mortgage interest, but I won't be running the risk of my portfolio devaluing in a market crash when I could have paid off the house by liquidating it.
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Jan 3, 2018 20:31
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Dwight Eisenhower posted:a) It's not a good rate, it's 6.75%
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Jan 3, 2018 20:39
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Refinance your terrible mortgage in that case to a 15 year at 3% or less. Why haven't you refinanced sooner than now if you've been sitting on a huge pile of liquid investments? If you are just one of the people who is completely risk adverse/debt allergic for whatever reason, or alternately your primary motivation for doing this is to ease your way into a more than hypothetical move to a new house that it doesn't sound like you really have a concrete plan to do, then fine but it is not a good tax move at all as currently stated. A low interest bridge loan or alternately even a low interest margin loan on your apparently large portfolio would both be easier and more tax friendly ways to handle a house move without a sale contingency if a sale contingency would really present a problem in your housing market.
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Jan 3, 2018 20:41
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Ralith posted:Can you refinance this to a good rate instead? I have excellent credit, and the LTV is ~72% at this point. My wife and I have 84% of the payoff saved up in post-tax accounts, so paying off the house wouldn't touch any IRAs, 401k, or other retirement vehicles. Yes, I could refinance to a good rate. If I refi'd I'd either have to either embrace a new set of closings costs, or get a strictly inferior rate to waive the closing costs. If I don't refi, my accounts need to make 6.75% per year just to break even. I'm actually really interested in the reasoning here for embracing the costs (either in closing costs or in sub-par rate) to continue to have a mortgage. Suppose I had inherited the house, had clean title to it with no debt encumbrances, and had $0 to my name. Would it make sense to mortgage it and take the resulting monies and stick them in a taxable account? If not, what is different about that situation from the one I presently find myself in (save that I already am saddled with a lovely rate that I can dispose of!)?
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Jan 3, 2018 20:58
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Dwight Eisenhower posted:I have excellent credit, and the LTV is ~72% at this point. My wife and I have 84% of the payoff saved up in post-tax accounts, so paying off the house wouldn't touch any IRAs, 401k, or other retirement vehicles. Yes, I could refinance to a good rate. Dwight Eisenhower posted:I'm actually really interested in the reasoning here for embracing the costs (either in closing costs or in sub-par rate) to continue to have a mortgage. Suppose I had inherited the house, had clean title to it with no debt encumbrances, and had $0 to my name. Would it make sense to mortgage it and take the resulting monies and stick them in a taxable account?
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Jan 3, 2018 21:11
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I think you're running in to a numbers versus emotions game here. You should of course run the math on a refi with real numbers but based on the LTV and your rate I think it's very likely that it will be a better mathematical choice than paying off the mortgage. However, if it will make you ~feel~ significantly better to pay off the mortgage, that's fine! Just do the math and recognize the price you will pay for that feeling of security, and make sure you are willing to pay it.
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Jan 4, 2018 15:27
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"Dwight Eisenhower" posted:
And yes, I had a paid off house and took out a mortgage for as much as I could at sub 3.5% rates. It made mathematical sense. If that doesn't outweigh the emotional impact of being mortgage free, then fine, but be honest about it with yourself.
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Jan 5, 2018 08:32
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After reading over responses I'm re-evaluating. Yeah, being mortgage free is emotionally super appealing. However there's no reason I couldn't continue with my investments and at some later date pay off the mortgage, while having those funds liquid for other purposes. This has strictly better optionality than having it sunk into the house and needing to do another mortgage / heloc in order to get at the funds. Consequently I'm going to be slowing my deposits to the investment account, focusing most of my income directed to savings on the mortgage than on my brokerage account, and will not be liquidating anything and thus incurring no capital gains taxes. A decent chunk of my portfolio is already focused on income from dividends and writing covered calls, so I can use that to supplement principle payments after maintaining my intended cash reserves. Additionally I'll get a few refi quotes and run the break even schedules for no-cost and closing cost refis.
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Jan 5, 2018 15:22
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Sounds like a much better plan than incurring capital gains taxes to make a lower rate of return 
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Jan 5, 2018 15:37
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I would be shocked if you didn't get a breakeven of less than one year unless your mortgage is really tiny
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Jan 5, 2018 15:58
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I'm surprised you have neglected to refinance the mortgage for so long, given that mortgage rates have been below your origination rate for 8 years.
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Jan 5, 2018 18:01
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Exactly, not refinancing much sooner was a significant blunder
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Jan 5, 2018 18:41
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What's the best way to invest in gold futures over the internet? Let's say I have 10K to invest. Also feel free to tell me why this is a terrible idea.
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Jan 24, 2018 10:10
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FieryBalrog posted:What's the best way to invest in gold futures over the internet? Why futures? What do you think is going to happen to the price of gold, when and why? If you have really specific thoughts and ideas about what the price of gold is going to do and when, futures "over the internet" (it's 2018 weirdo everything is over the internet) aren't the worst idea in the world, but as an asset class and a strategy commodity/precious metal futures are pretty specific and pretty niche, so you'll need to know exactly how and why you're going to make money (including that the CW is wrong, probably). EAT FASTER!!!!!! fucked around with this message at 14:19 on Jan 24, 2018 |
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Jan 24, 2018 14:12
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please post in this thread when you inevitably fail to sell off your futures contracts and a literal ton of gold is delivered to your doorstep and your neighbors all come out of the woodwork to steal it as apocrypha have convinced me is an absolute certainty in any futures contract trade for physical commodities
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Jan 24, 2018 22:45
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