On Sun, 9 May 2021 15:43:12 -0500, dpb wrote:

On 5/9/2021 2:05 PM, DerbyDad03 wrote:
When the market is doing well, withdraw the required money from your
stable buckets and re-fill them from the equity side. When the market is
doing poorly, withdraw the money from the stable side and leave the
equities alone. When the market rebounds (it*always* does) refill your
buckets to get back up to six years.

Huh?

We're withdrawing from the "stable" buckets either way...

In the current interest climate, there's essentially no "stable bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.

Draw down from the inflated buckets? If they're at, or near, the top
now, they're likely to be at the bottom tomorrow. Getting the
investments that are out-of-phase is the trick.

On Sun, 9 May 2021 15:04:40 -0400, Bill wrote:

On 5/7/2021 3:10 PM, Leon wrote:

Sooo Billlll.* Did you have anything to add to the actual discussion or
did you just want to add noise.

When I was a little boy, my dad told me it was okay to use the tools,
but to put them away when I was done with them. I think that it is
evident who got a lesson like that in simple courtesy from the way that
they post. Anyhow, that's the part of the story that this thread
rekindled in my mind. Carry on...

Evidently he didn't teach you _how_ to put them away.

Bill (just 2 "els")

OK, ll

On 5/9/2021 5:02 PM, DerbyDad03 wrote:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:
On 5/9/2021 2:05 PM, DerbyDad03 wrote:
When the market is doing well, withdraw the required money from your
stable buckets and re-fill them from the equity side. When the market is
doing poorly, withdraw the money from the stable side and leave the
equities alone. When the market rebounds (it*always* does) refill your
buckets to get back up to six years.
Huh?

We're withdrawing from the "stable" buckets either way...

Yes, that's because many people simply set up a monthly "paycheck"
from the same fund every month. Then every few months or maybe
annually they refill from the equities - assuming that they are up. If
not, then wait. We're talking about not selling equities for income in
times like early 2020 or during the 2007 - 2008 reversal when they
tanked. It's a process. Of course, if you need a big chunk and equities
are up, there nothing saying you can't sell and withdraw directly from
the equities. I'm talking about long term portfolio management.


In the current interest climate, there's essentially no "stable bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Are you suggesting that you should have no "stable assets" in your
portfolio and rely solely on the equity market for all withdrawals?

My "stable assets" substitute for bonds in the current market climate is
a selection of dividend-paying stocks. I don't care what the market
price does (within some reason, of course), but their return beats
virtually anything now other than junk bonds.

The RMD is more than what additional income I need annually by quite a
bit; I try to time market retractions specifically to get more shares
out at a given required $$ amount.

--

On Sunday, May 9, 2021 at 6:40:00 PM UTC-4, wrote:
On Sun, 9 May 2021 12:05:07 -0700 (PDT), DerbyDad03
wrote:

On Saturday, May 8, 2021 at 12:53:42 PM UTC-4, wrote:
On Sat, 8 May 2021 09:19:50 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/7/2021 10:13 PM, Clare Snyder wrote:
On Fri, 7 May 2021 14:17:36 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/6/2021 11:49 AM, wrote:
On Thu, 6 May 2021 09:13:19 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/5/2021 2:01 PM, wrote:
On Wed, 5 May 2021 08:30:29 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 8:07 PM, wrote:
On Tue, 4 May 2021 13:35:40 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 10:41 AM, Clare Snyder wrote:
On Tue, 4 May 2021 10:16:44 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/3/2021 8:34 AM, Ed Pawlowski wrote:
On 5/2/2021 8:32 PM, Clare Snyder wrote:
On Sun, 2 May 2021 17:44:19 -0400, Ed Pawlowski wrote:

On 5/2/2021 4:42 PM, Bill wrote:
On 5/2/2021 3:43 PM, DerbyDad03 wrote:

Their offer was accepted, not just based on the offer price, but also
based on the appraisal clause. Another offer also had an escalation
clause that maxed out at $410K, but the appraisal clause was only
$13K above the appraisal value, $2K less than their offer. That was
close!

I'll assume my previous message has been read. Color my cynical but all
I have to say is "what a coincidence!". That said, I congratulate the
buyers on their new home. The way property is appreciating, it will
surely be a great investment in the long run, and you can live in
it!


I wonder in 3 to 5 years if the house price today will still be a good
investment when interest rates are back up.
I'm betting there will be a lot of people with upside down mortgages
in 5 to 10 years in several areas of the country. Our area is less
likely to see it than many others due to our resiliant economy - but
%7 would definitely be painfull for MANY buyers - even here.


Exactly. A scenario like: I paid 500k for this house, owe 400k and the
highest offer is 300k.

Live there long enough and you are ok, but if you have to relocate, you
are screwed.


This is what is happening now. It will be interesting to see how many
people will be upside down in 2~5 Years.


I paid $63700 39 years ago. That is about $170,000 in 2021 dollars. I
assumed a 6.3% mortgage when the going rate was 23% - 18% if you were
lucky and had an 800 credit score.

40 years and 4 months ago my wife and I paid 60K. 30 years, 12%
interest in Jan 1981 Refinanced 6 years later for 9% for 15 years. We
accelerated the payments after refinance and paid the mortgage off Feb,
1997.

When we first started (July) looking for our first home ('82, I think)
we were looking at 18% interest. We bought in September, with a 14%
30-year mortgage. A couple of years later we re-fi'd to 8%. We paid
$60K.

I recall mortgage rates going up to 18 % shortly after we closed at 12%



Estimated value today $164K. $98K 10 years ago when we sold.

Ours is now $304K (Zillow).

Cash for the next home in 2010.

I wish. The next house was in VT. We paid $150 and sold 14 years
later ('07) for $300. It's now $404. Last I looked the taxes were
$8K but it's not listed now.

Farkin taxes! You can afford to buy a home but can one afford to pay
the taxes on it.

We moved from VT to AL. We bought there for about the same as the
house in VT for ($300K). Taxes, close to $4K. It was about 1.5x the
size and *far* nicer. SWMBO loved the kitchen. She was rather ****ed
when we moved here.

When we asked the RE agent about property tax, she said $1200, maybe
$1500. Wife asked "is that half year", quite seriously. The RE agent
looked at her like she had a third eye.

That wasn't in rural AL, either. It's major employer was Auburn
University. Football weekends were nuts - corporate jets by the dozens
(and dozens) flying in from all over and Class-A motorhomes by the
hundreds, standing ear to in the tailgating area for the weekend.
There is a lot of money among Auburn alum and they show it.

Anyway, we moved here and the taxes are now $3K after about a 30%
discount for being over 65. In this county, school taxes go away
completely after 72. Other counties forgive it at 65. GA is a very
retiree friendly state. Essentially, there is no state income tax on
retirement (pensions, IRA withdrawals, SS, etc.).


That was when people WERE upside-down on their mortgages in a lot of
cases because of the 1980s recession with high rates causing prices to
drop. My MIL was in real estate in Windsor and people were walking
away from $800000 homes. Sadly for Windsor some of those homes are
still not worth very much more than that - - -

The dangers of ARMs. Without enough equity there's no way to
refinance when the interest rate climbs. Same problem in '07-'11.


We almost went with an ARM in 2010. It was locked in for 5 years. We
were only going to borrow about 20K, just to give us some kush after
moving in. We would have paid it off within the next couple of years so
the rate would not have ever gone up on us. But we decided to go all
cash to get and additional 3% discount off of the negotiated sale price.

An ARM in 2010 probably would have been so bad. The neutron bomb had
already been dropped by then.

I remember you buying that house. Have I really been around here that
long?



You should check out Arkansas property taxes.. :~)

Hundreds od dollars vs. thousands.

Swingman has a home in West University TX and a home in Hot Springs AR.
The AR home is certainly smaller than the West U home but not 40 times
smaller. IIRC $24K per year vs.
$6 hundred.

$24K/yr?!! I bet he didn't like Trump's middle class tax reduction
much.


I think he was participating in the over 65 exemption and not paying lately.

He is trying to sell now and probably regretting the exemption now.

That exemption costs you the tax owed plus 8% per year.
In other words its a "republican exemption" - AKA a "deferral"
Very few times that is a good deal.



IMHO only really good if you have no heirs and your money is running out.
Sort'a like some life insurance policies that pay before you die to help
pay medical bills.
Or reverse mortgages. If I plan perfectly, there will be nothing for
my heirs. It's the planning part that hard.

One planning method that many retirees have employed goes like this:

Plan for age 100. More and more of us are going to make it that far.
Adjust as desired for your own specific situation. It's your plan.

When looking at your retirement portfolio, forget about a 60-40 split or
the old school "Put your age in bonds". Instead, use your own actual
income and expenses as shown below.
I'm not so enamored with bonds anymore. Too many games being played
and they seem to be in-phase with stocks now. Makes no sense (in more
than one sense of the word).
Estimate your pre-tax retirement expenses vs. your pre-tax retirement
income. Based on those numbers, determine the annual pre-tax drawdown
from your retirement funds. (IRA's, 401(k), brokerage accounts, etc.)
I'm not sure I follow that. I get the pre-tax part. I'm looking more
at my post-retirement income vs. pre-retirement income. I'll have (a
bit) fewer expenses too.

I think you figured that out further down...


You're above formula sounds like the draw down depends on expenses, no
matter what. It seems that one has to figure on how long one is going
to live and live within that.


The 4% rule sounds good but the brokerage advisor (when I rolled over
one 401K) said that was high, now. Well, interest is 0+delta so,
yeah, 4% is high. I have to contact him again. I may have him take
care of my account. The cost really isn't bad. .5%, IIRC (Fidelity).

It's not the cost, it's what you get for your money. You wouldn't hire a
kitchen contractor based solely on price would you?

Higher returns and more services can be well worth the extra cost.
Not higher returns based on high volatility and speculative investments,
but on a properly constructed and diversified portfolio, based on *your*
needs, but using better products and a better asset allocation.

In addition, tax planning, estate planning, inheritance planning, POA's, etc.
all come at a cost. It's often cheaper if you can get that all in one place.

Using pre-tax values for everything keeps things consistent. e.g. that
$3000 property tax payment is an after-tax number that will require
more than $3000 in pre-tax income.

(Pre-tax living expenses) - (Pre-tax income) = (Pre-Tax Portfolio drawdown)
I see where you're going here. I'm looking at what I'm making now vs
what I'll have then. I'm close with a "reasonable" draw-down.

Based on your feelings on the market (risk tolerance) choose a number
of years, e.g. 6. Multiply your annual drawdown amount by that number.
Put that amount of your retirement assets in stable investments,
e.g. bond funds, etc. Call these your "buckets of income", of which
you now have 6.

Yeah, I see where this is going.

When the market is doing well, withdraw the required money from your
stable buckets and re-fill them from the equity side. When the market is
doing poorly, withdraw the money from the stable side and leave the
equities alone. When the market rebounds (it *always* does) refill your
buckets to get back up to six years.

I was thinking a little differently. Stocks, bonds (maybe), cash,
commodities, and foreign.

"Foreign" what?

Foreign equities? Foreign bonds? Foreign exchange (currencies)?
Foreign Legion?

"Foreign" isn't an asset class unto itself. i.e. stock, bonds and foreign
aren't 3 different types of investments. There are only 2 types of
investments in that list.

Depending on what's going good, draw down
from there (once a year). Stock are obvious. Bonds are supposed to
be out-of-phase but they aren't anymore. Cash in case nothing is
working. Commodities for crashes and foreign for dollar fluctuations.

I'm not a fan of annual lump sums. Even with low returns on bonds, I'm
pretty sure I can beat cash over the long term by staying invested. A monthly
draw is kind of like Dollar Cost Averaging, but on the outflow side. Sometimes
you sell low, but sometimes you sell high.

If you think bonds are getting beat by inflation, what about that year's
worth of cash earning 0.0-squat.

Since both the bond and stock markets have always gone up over time, I'd
rather be in the markets than in cash.

This process should allow you to never have to withdraw money from the
equities when they are down. I'm not suggesting that you don't *trade*
equities when they are down. You just don't want to sell at a loss and
withdraw the money. Tax loss harvesting, moving to something that
may rebound faster, etc. are valid reasons to sell equities when they
are down as long as you also buy replacement equities when they are
also down.
Gotcha. I've already been thinking. I'd never heard anyone else
suggest this. It seems to be a no-brainer.

Why did I use 6 years? Take a look at history of the equity market. How
many reversals do you see that lasted more than 6 years? With 6 years
worth of buckets, you should never have to sell equities and realize a loss
by going to cash. If your risk tolerance is high, shorten the number of
years. 4 or 5 buckets might be enough for you to feel comfortable.
Maybe you feel like you need 8 -10. It's your choice.
Things have changed (more fiddling with the market) and that's going
to backfire, IMO.

The goal is to remove the emotion/stress that often occurs during
equity market reversals. If you know that you have X years of income
in fairly stable assets, you can ignore the volatility of the equity market
or use it to your advantage. Hopefully you can avoid making the
biggest mistake any investor can make: "I can't take it anymore. I'm
selling everything and will wait until the market recovers to get
back in." That shouldn't happen if you know that you have X number
of years of income that is remaining fairly stable.
Yes. I see that.
Assume an average growth rate for your portfolio, assume some
inflation, adjust the annual drawdown for one-off situations in the
years that they will occur (paying off the mortgage, paying for a
wedding, that Shaper Origin, etc.) It's not an exact science. There
will be things that you can't plan for. Accept it. Some plan is usually
better than no plan.
Understood. Mortgage is paid but there are roofs to buy and all that.
Lotsa Origin class stuff.

Really, there aren't many toys that I want left to buy. ...or won't
be by then. I want a better DC (HEPA) but we'll see.

This is not a one-time set-it-and-forget strategy. It requires review
and adjustments, probably at least annually.
Like doing taxes.
If you can set up a plan that allows you to withdraw the projected
amounts without running out of money until age 100 (or whatever
age you chose) you should be able to rest easy. If not, you need to
take a hard look at your budget.'

The old standby 4% withdrawal is intended for the money to last
forever, indexed for inflation. Living forever seems a little
conservative but it's a data point. Even 4% puts me in good shape,
now. Given that the state doesn't tax retirement income, it'll put me
where I am now. That is, give or take Medicare. Medicare is still
unclear but I'm getting there. It's almost like the rules were
written by movement or something.

No one lives forever, but we are all (on average) living longer. 100
seems like a reasonable planning age, at least for me.


My retirement part of it is a complete mystery. It makes no sense and
seems contradictory depending on where I look. Some of the links on
the site are broken, as well. Not a good thing considering it's IBM.
;-)
Get it right and you can bounce the check to the undertaker. ;-)
That's the plan. Execution (NPI) of that plan is the problem.

On Sun, 9 May 2021 17:30:21 -0700 (PDT), DerbyDad03
wrote:

On Sunday, May 9, 2021 at 6:40:00 PM UTC-4, wrote:
On Sun, 9 May 2021 12:05:07 -0700 (PDT), DerbyDad03
wrote:

On Saturday, May 8, 2021 at 12:53:42 PM UTC-4, wrote:
On Sat, 8 May 2021 09:19:50 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/7/2021 10:13 PM, Clare Snyder wrote:
On Fri, 7 May 2021 14:17:36 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/6/2021 11:49 AM, wrote:
On Thu, 6 May 2021 09:13:19 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/5/2021 2:01 PM, wrote:
On Wed, 5 May 2021 08:30:29 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 8:07 PM, wrote:
On Tue, 4 May 2021 13:35:40 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 10:41 AM, Clare Snyder wrote:
On Tue, 4 May 2021 10:16:44 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/3/2021 8:34 AM, Ed Pawlowski wrote:
On 5/2/2021 8:32 PM, Clare Snyder wrote:
On Sun, 2 May 2021 17:44:19 -0400, Ed Pawlowski wrote:

On 5/2/2021 4:42 PM, Bill wrote:
On 5/2/2021 3:43 PM, DerbyDad03 wrote:

Their offer was accepted, not just based on the offer price, but also
based on the appraisal clause. Another offer also had an escalation
clause that maxed out at $410K, but the appraisal clause was only
$13K above the appraisal value, $2K less than their offer. That was
close!

I'll assume my previous message has been read. Color my cynical but all
I have to say is "what a coincidence!". That said, I congratulate the
buyers on their new home. The way property is appreciating, it will
surely be a great investment in the long run, and you can live in
it!


I wonder in 3 to 5 years if the house price today will still be a good
investment when interest rates are back up.
I'm betting there will be a lot of people with upside down mortgages
in 5 to 10 years in several areas of the country. Our area is less
likely to see it than many others due to our resiliant economy - but
%7 would definitely be painfull for MANY buyers - even here.


Exactly. A scenario like: I paid 500k for this house, owe 400k and the
highest offer is 300k.

Live there long enough and you are ok, but if you have to relocate, you
are screwed.


This is what is happening now. It will be interesting to see how many
people will be upside down in 2~5 Years.


I paid $63700 39 years ago. That is about $170,000 in 2021 dollars. I
assumed a 6.3% mortgage when the going rate was 23% - 18% if you were
lucky and had an 800 credit score.

40 years and 4 months ago my wife and I paid 60K. 30 years, 12%
interest in Jan 1981 Refinanced 6 years later for 9% for 15 years. We
accelerated the payments after refinance and paid the mortgage off Feb,
1997.

When we first started (July) looking for our first home ('82, I think)
we were looking at 18% interest. We bought in September, with a 14%
30-year mortgage. A couple of years later we re-fi'd to 8%. We paid
$60K.

I recall mortgage rates going up to 18 % shortly after we closed at 12%



Estimated value today $164K. $98K 10 years ago when we sold.

Ours is now $304K (Zillow).

Cash for the next home in 2010.

I wish. The next house was in VT. We paid $150 and sold 14 years
later ('07) for $300. It's now $404. Last I looked the taxes were
$8K but it's not listed now.

Farkin taxes! You can afford to buy a home but can one afford to pay
the taxes on it.

We moved from VT to AL. We bought there for about the same as the
house in VT for ($300K). Taxes, close to $4K. It was about 1.5x the
size and *far* nicer. SWMBO loved the kitchen. She was rather ****ed
when we moved here.

When we asked the RE agent about property tax, she said $1200, maybe
$1500. Wife asked "is that half year", quite seriously. The RE agent
looked at her like she had a third eye.

That wasn't in rural AL, either. It's major employer was Auburn
University. Football weekends were nuts - corporate jets by the dozens
(and dozens) flying in from all over and Class-A motorhomes by the
hundreds, standing ear to in the tailgating area for the weekend.
There is a lot of money among Auburn alum and they show it.

Anyway, we moved here and the taxes are now $3K after about a 30%
discount for being over 65. In this county, school taxes go away
completely after 72. Other counties forgive it at 65. GA is a very
retiree friendly state. Essentially, there is no state income tax on
retirement (pensions, IRA withdrawals, SS, etc.).


That was when people WERE upside-down on their mortgages in a lot of
cases because of the 1980s recession with high rates causing prices to
drop. My MIL was in real estate in Windsor and people were walking
away from $800000 homes. Sadly for Windsor some of those homes are
still not worth very much more than that - - -

The dangers of ARMs. Without enough equity there's no way to
refinance when the interest rate climbs. Same problem in '07-'11.


We almost went with an ARM in 2010. It was locked in for 5 years. We
were only going to borrow about 20K, just to give us some kush after
moving in. We would have paid it off within the next couple of years so
the rate would not have ever gone up on us. But we decided to go all
cash to get and additional 3% discount off of the negotiated sale price.

An ARM in 2010 probably would have been so bad. The neutron bomb had
already been dropped by then.

I remember you buying that house. Have I really been around here that
long?



You should check out Arkansas property taxes.. :~)

Hundreds od dollars vs. thousands.

Swingman has a home in West University TX and a home in Hot Springs AR.
The AR home is certainly smaller than the West U home but not 40 times
smaller. IIRC $24K per year vs.
$6 hundred.

$24K/yr?!! I bet he didn't like Trump's middle class tax reduction
much.


I think he was participating in the over 65 exemption and not paying lately.

He is trying to sell now and probably regretting the exemption now.

That exemption costs you the tax owed plus 8% per year.
In other words its a "republican exemption" - AKA a "deferral"
Very few times that is a good deal.



IMHO only really good if you have no heirs and your money is running out.
Sort'a like some life insurance policies that pay before you die to help
pay medical bills.
Or reverse mortgages. If I plan perfectly, there will be nothing for
my heirs. It's the planning part that hard.

One planning method that many retirees have employed goes like this:

Plan for age 100. More and more of us are going to make it that far.
Adjust as desired for your own specific situation. It's your plan.

When looking at your retirement portfolio, forget about a 60-40 split or
the old school "Put your age in bonds". Instead, use your own actual
income and expenses as shown below.
I'm not so enamored with bonds anymore. Too many games being played
and they seem to be in-phase with stocks now. Makes no sense (in more
than one sense of the word).
Estimate your pre-tax retirement expenses vs. your pre-tax retirement
income. Based on those numbers, determine the annual pre-tax drawdown
from your retirement funds. (IRA's, 401(k), brokerage accounts, etc.)
I'm not sure I follow that. I get the pre-tax part. I'm looking more
at my post-retirement income vs. pre-retirement income. I'll have (a
bit) fewer expenses too.

I think you figured that out further down...


You're above formula sounds like the draw down depends on expenses, no
matter what. It seems that one has to figure on how long one is going
to live and live within that.


The 4% rule sounds good but the brokerage advisor (when I rolled over
one 401K) said that was high, now. Well, interest is 0+delta so,
yeah, 4% is high. I have to contact him again. I may have him take
care of my account. The cost really isn't bad. .5%, IIRC (Fidelity).

It's not the cost, it's what you get for your money. You wouldn't hire a
kitchen contractor based solely on price would you?

The key is being a fiduciary. Past that, it's pretty hard to tell. My
accounts are with Fidelity, which is one of the three best (Vanguard
and Schwab are the others).

Higher returns and more services can be well worth the extra cost.
Not higher returns based on high volatility and speculative investments,
but on a properly constructed and diversified portfolio, based on *your*
needs, but using better products and a better asset allocation.

Sure. With being a fiduciary, run away!

In addition, tax planning, estate planning, inheritance planning, POA's, etc.
all come at a cost. It's often cheaper if you can get that all in one place.

Using pre-tax values for everything keeps things consistent. e.g. that
$3000 property tax payment is an after-tax number that will require
more than $3000 in pre-tax income.

(Pre-tax living expenses) - (Pre-tax income) = (Pre-Tax Portfolio drawdown)
I see where you're going here. I'm looking at what I'm making now vs
what I'll have then. I'm close with a "reasonable" draw-down.

Based on your feelings on the market (risk tolerance) choose a number
of years, e.g. 6. Multiply your annual drawdown amount by that number.
Put that amount of your retirement assets in stable investments,
e.g. bond funds, etc. Call these your "buckets of income", of which
you now have 6.

Yeah, I see where this is going.

When the market is doing well, withdraw the required money from your
stable buckets and re-fill them from the equity side. When the market is
doing poorly, withdraw the money from the stable side and leave the
equities alone. When the market rebounds (it *always* does) refill your
buckets to get back up to six years.

I was thinking a little differently. Stocks, bonds (maybe), cash,
commodities, and foreign.

"Foreign" what?

Foreign equities? Foreign bonds? Foreign exchange (currencies)?
Foreign Legion?

Not sure, the idea is to smooth the hump caused by currency
fluctuations.

"Foreign" isn't an asset class unto itself. i.e. stock, bonds and foreign
aren't 3 different types of investments. There are only 2 types of
investments in that list.

Depending on what's going good, draw down
from there (once a year). Stock are obvious. Bonds are supposed to
be out-of-phase but they aren't anymore. Cash in case nothing is
working. Commodities for crashes and foreign for dollar fluctuations.

I'm not a fan of annual lump sums. Even with low returns on bonds, I'm
pretty sure I can beat cash over the long term by staying invested. A monthly
draw is kind of like Dollar Cost Averaging, but on the outflow side. Sometimes
you sell low, but sometimes you sell high.


If you think bonds are getting beat by inflation, what about that year's
worth of cash earning 0.0-squat.

Sure but bonds are all over the place and no longer what they used to
be. As I said, both securities and bonds now rise and fall together.
It makes no sense but...

Since both the bond and stock markets have always gone up over time, I'd
rather be in the markets than in cash.

This process should allow you to never have to withdraw money from the
equities when they are down. I'm not suggesting that you don't *trade*
equities when they are down. You just don't want to sell at a loss and
withdraw the money. Tax loss harvesting, moving to something that
may rebound faster, etc. are valid reasons to sell equities when they
are down as long as you also buy replacement equities when they are
also down.
Gotcha. I've already been thinking. I'd never heard anyone else
suggest this. It seems to be a no-brainer.

Why did I use 6 years? Take a look at history of the equity market. How
many reversals do you see that lasted more than 6 years? With 6 years
worth of buckets, you should never have to sell equities and realize a loss
by going to cash. If your risk tolerance is high, shorten the number of
years. 4 or 5 buckets might be enough for you to feel comfortable.
Maybe you feel like you need 8 -10. It's your choice.
Things have changed (more fiddling with the market) and that's going
to backfire, IMO.

The goal is to remove the emotion/stress that often occurs during
equity market reversals. If you know that you have X years of income
in fairly stable assets, you can ignore the volatility of the equity market
or use it to your advantage. Hopefully you can avoid making the
biggest mistake any investor can make: "I can't take it anymore. I'm
selling everything and will wait until the market recovers to get
back in." That shouldn't happen if you know that you have X number
of years of income that is remaining fairly stable.
Yes. I see that.
Assume an average growth rate for your portfolio, assume some
inflation, adjust the annual drawdown for one-off situations in the
years that they will occur (paying off the mortgage, paying for a
wedding, that Shaper Origin, etc.) It's not an exact science. There
will be things that you can't plan for. Accept it. Some plan is usually
better than no plan.
Understood. Mortgage is paid but there are roofs to buy and all that.
Lotsa Origin class stuff.

Really, there aren't many toys that I want left to buy. ...or won't
be by then. I want a better DC (HEPA) but we'll see.

This is not a one-time set-it-and-forget strategy. It requires review
and adjustments, probably at least annually.
Like doing taxes.
If you can set up a plan that allows you to withdraw the projected
amounts without running out of money until age 100 (or whatever
age you chose) you should be able to rest easy. If not, you need to
take a hard look at your budget.'

The old standby 4% withdrawal is intended for the money to last
forever, indexed for inflation. Living forever seems a little
conservative but it's a data point. Even 4% puts me in good shape,
now. Given that the state doesn't tax retirement income, it'll put me
where I am now. That is, give or take Medicare. Medicare is still
unclear but I'm getting there. It's almost like the rules were
written by movement or something.

No one lives forever, but we are all (on average) living longer. 100
seems like a reasonable planning age, at least for me.



My retirement part of it is a complete mystery. It makes no sense and
seems contradictory depending on where I look. Some of the links on
the site are broken, as well. Not a good thing considering it's IBM.
;-)
Get it right and you can bounce the check to the undertaker. ;-)
That's the plan. Execution (NPI) of that plan is the problem.

On Sunday, May 9, 2021 at 9:22:27 PM UTC-4, wrote:
On Sun, 9 May 2021 17:30:21 -0700 (PDT), DerbyDad03
wrote:

On Sunday, May 9, 2021 at 6:40:00 PM UTC-4, wrote:
On Sun, 9 May 2021 12:05:07 -0700 (PDT), DerbyDad03
wrote:

On Saturday, May 8, 2021 at 12:53:42 PM UTC-4, wrote:
On Sat, 8 May 2021 09:19:50 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/7/2021 10:13 PM, Clare Snyder wrote:
On Fri, 7 May 2021 14:17:36 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/6/2021 11:49 AM, wrote:
On Thu, 6 May 2021 09:13:19 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/5/2021 2:01 PM, wrote:
On Wed, 5 May 2021 08:30:29 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 8:07 PM, wrote:
On Tue, 4 May 2021 13:35:40 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 10:41 AM, Clare Snyder wrote:
On Tue, 4 May 2021 10:16:44 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/3/2021 8:34 AM, Ed Pawlowski wrote:
On 5/2/2021 8:32 PM, Clare Snyder wrote:
On Sun, 2 May 2021 17:44:19 -0400, Ed Pawlowski wrote:

On 5/2/2021 4:42 PM, Bill wrote:
On 5/2/2021 3:43 PM, DerbyDad03 wrote:

Their offer was accepted, not just based on the offer price, but also
based on the appraisal clause. Another offer also had an escalation
clause that maxed out at $410K, but the appraisal clause was only
$13K above the appraisal value, $2K less than their offer. That was
close!

I'll assume my previous message has been read. Color my cynical but all
I have to say is "what a coincidence!". That said, I congratulate the
buyers on their new home. The way property is appreciating, it will
surely be a great investment in the long run, and you can live in
it!


I wonder in 3 to 5 years if the house price today will still be a good
investment when interest rates are back up.
I'm betting there will be a lot of people with upside down mortgages
in 5 to 10 years in several areas of the country. Our area is less
likely to see it than many others due to our resiliant economy - but
%7 would definitely be painfull for MANY buyers - even here.


Exactly. A scenario like: I paid 500k for this house, owe 400k and the
highest offer is 300k.

Live there long enough and you are ok, but if you have to relocate, you
are screwed.


This is what is happening now. It will be interesting to see how many
people will be upside down in 2~5 Years.


I paid $63700 39 years ago. That is about $170,000 in 2021 dollars. I
assumed a 6.3% mortgage when the going rate was 23% - 18% if you were
lucky and had an 800 credit score.

40 years and 4 months ago my wife and I paid 60K. 30 years, 12%
interest in Jan 1981 Refinanced 6 years later for 9% for 15 years. We
accelerated the payments after refinance and paid the mortgage off Feb,
1997.

When we first started (July) looking for our first home ('82, I think)
we were looking at 18% interest. We bought in September, with a 14%
30-year mortgage. A couple of years later we re-fi'd to 8%. We paid
$60K.

I recall mortgage rates going up to 18 % shortly after we closed at 12%



Estimated value today $164K. $98K 10 years ago when we sold.

Ours is now $304K (Zillow).

Cash for the next home in 2010.

I wish. The next house was in VT. We paid $150 and sold 14 years
later ('07) for $300. It's now $404. Last I looked the taxes were
$8K but it's not listed now.

Farkin taxes! You can afford to buy a home but can one afford to pay
the taxes on it.

We moved from VT to AL. We bought there for about the same as the
house in VT for ($300K). Taxes, close to $4K. It was about 1.5x the
size and *far* nicer. SWMBO loved the kitchen. She was rather ****ed
when we moved here.

When we asked the RE agent about property tax, she said $1200, maybe
$1500. Wife asked "is that half year", quite seriously. The RE agent
looked at her like she had a third eye.

That wasn't in rural AL, either. It's major employer was Auburn
University. Football weekends were nuts - corporate jets by the dozens
(and dozens) flying in from all over and Class-A motorhomes by the
hundreds, standing ear to in the tailgating area for the weekend.
There is a lot of money among Auburn alum and they show it.

Anyway, we moved here and the taxes are now $3K after about a 30%
discount for being over 65. In this county, school taxes go away
completely after 72. Other counties forgive it at 65. GA is a very
retiree friendly state. Essentially, there is no state income tax on
retirement (pensions, IRA withdrawals, SS, etc.).


That was when people WERE upside-down on their mortgages in a lot of
cases because of the 1980s recession with high rates causing prices to
drop. My MIL was in real estate in Windsor and people were walking
away from $800000 homes. Sadly for Windsor some of those homes are
still not worth very much more than that - - -

The dangers of ARMs. Without enough equity there's no way to
refinance when the interest rate climbs. Same problem in '07-'11.


We almost went with an ARM in 2010. It was locked in for 5 years. We
were only going to borrow about 20K, just to give us some kush after
moving in. We would have paid it off within the next couple of years so
the rate would not have ever gone up on us. But we decided to go all
cash to get and additional 3% discount off of the negotiated sale price.

An ARM in 2010 probably would have been so bad. The neutron bomb had
already been dropped by then.

I remember you buying that house. Have I really been around here that
long?



You should check out Arkansas property taxes.. :~)

Hundreds od dollars vs. thousands.

Swingman has a home in West University TX and a home in Hot Springs AR.
The AR home is certainly smaller than the West U home but not 40 times
smaller. IIRC $24K per year vs.
$6 hundred.

$24K/yr?!! I bet he didn't like Trump's middle class tax reduction
much.


I think he was participating in the over 65 exemption and not paying lately.

He is trying to sell now and probably regretting the exemption now.

That exemption costs you the tax owed plus 8% per year.
In other words its a "republican exemption" - AKA a "deferral"
Very few times that is a good deal.



IMHO only really good if you have no heirs and your money is running out.
Sort'a like some life insurance policies that pay before you die to help
pay medical bills.
Or reverse mortgages. If I plan perfectly, there will be nothing for
my heirs. It's the planning part that hard.

One planning method that many retirees have employed goes like this:

Plan for age 100. More and more of us are going to make it that far.
Adjust as desired for your own specific situation. It's your plan.

When looking at your retirement portfolio, forget about a 60-40 split or
the old school "Put your age in bonds". Instead, use your own actual
income and expenses as shown below.
I'm not so enamored with bonds anymore. Too many games being played
and they seem to be in-phase with stocks now. Makes no sense (in more
than one sense of the word).
Estimate your pre-tax retirement expenses vs. your pre-tax retirement
income. Based on those numbers, determine the annual pre-tax drawdown
from your retirement funds. (IRA's, 401(k), brokerage accounts, etc.)
I'm not sure I follow that. I get the pre-tax part. I'm looking more
at my post-retirement income vs. pre-retirement income. I'll have (a
bit) fewer expenses too.

I think you figured that out further down...


You're above formula sounds like the draw down depends on expenses, no
matter what. It seems that one has to figure on how long one is going
to live and live within that.


The 4% rule sounds good but the brokerage advisor (when I rolled over
one 401K) said that was high, now. Well, interest is 0+delta so,
yeah, 4% is high. I have to contact him again. I may have him take
care of my account. The cost really isn't bad. .5%, IIRC (Fidelity).

It's not the cost, it's what you get for your money. You wouldn't hire a
kitchen contractor based solely on price would you?
The key is being a fiduciary. Past that, it's pretty hard to tell. My
accounts are with Fidelity, which is one of the three best (Vanguard
and Schwab are the others).

Best at what?

Higher returns and more services can be well worth the extra cost.
Not higher returns based on high volatility and speculative investments,
but on a properly constructed and diversified portfolio, based on *your*
needs, but using better products and a better asset allocation.
Sure. With being a fiduciary, run away!
In addition, tax planning, estate planning, inheritance planning, POA's, etc.
all come at a cost. It's often cheaper if you can get that all in one place.

Using pre-tax values for everything keeps things consistent. e.g. that
$3000 property tax payment is an after-tax number that will require
more than $3000 in pre-tax income.

(Pre-tax living expenses) - (Pre-tax income) = (Pre-Tax Portfolio drawdown)
I see where you're going here. I'm looking at what I'm making now vs
what I'll have then. I'm close with a "reasonable" draw-down.

Based on your feelings on the market (risk tolerance) choose a number
of years, e.g. 6. Multiply your annual drawdown amount by that number.
Put that amount of your retirement assets in stable investments,
e.g. bond funds, etc. Call these your "buckets of income", of which
you now have 6.

Yeah, I see where this is going.

When the market is doing well, withdraw the required money from your
stable buckets and re-fill them from the equity side. When the market is
doing poorly, withdraw the money from the stable side and leave the
equities alone. When the market rebounds (it *always* does) refill your
buckets to get back up to six years.

I was thinking a little differently. Stocks, bonds (maybe), cash,
commodities, and foreign.

"Foreign" what?

Foreign equities? Foreign bonds? Foreign exchange (currencies)?
Foreign Legion?
Not sure, the idea is to smooth the hump caused by currency
fluctuations.

"Foreign" isn't an asset class unto itself. i.e. stock, bonds and foreign
aren't 3 different types of investments. There are only 2 types of
investments in that list.

Depending on what's going good, draw down
from there (once a year). Stock are obvious. Bonds are supposed to
be out-of-phase but they aren't anymore. Cash in case nothing is
working. Commodities for crashes and foreign for dollar fluctuations.

I'm not a fan of annual lump sums. Even with low returns on bonds, I'm
pretty sure I can beat cash over the long term by staying invested. A monthly
draw is kind of like Dollar Cost Averaging, but on the outflow side. Sometimes
you sell low, but sometimes you sell high.


If you think bonds are getting beat by inflation, what about that year's
worth of cash earning 0.0-squat.
Sure but bonds are all over the place and no longer what they used to
be. As I said, both securities and bonds now rise and fall together.
It makes no sense but...
Since both the bond and stock markets have always gone up over time, I'd
rather be in the markets than in cash.

This process should allow you to never have to withdraw money from the
equities when they are down. I'm not suggesting that you don't *trade*
equities when they are down. You just don't want to sell at a loss and
withdraw the money. Tax loss harvesting, moving to something that
may rebound faster, etc. are valid reasons to sell equities when they
are down as long as you also buy replacement equities when they are
also down.
Gotcha. I've already been thinking. I'd never heard anyone else
suggest this. It seems to be a no-brainer.

Why did I use 6 years? Take a look at history of the equity market. How
many reversals do you see that lasted more than 6 years? With 6 years
worth of buckets, you should never have to sell equities and realize a loss
by going to cash. If your risk tolerance is high, shorten the number of
years. 4 or 5 buckets might be enough for you to feel comfortable.
Maybe you feel like you need 8 -10. It's your choice.
Things have changed (more fiddling with the market) and that's going
to backfire, IMO.

The goal is to remove the emotion/stress that often occurs during
equity market reversals. If you know that you have X years of income
in fairly stable assets, you can ignore the volatility of the equity market
or use it to your advantage. Hopefully you can avoid making the
biggest mistake any investor can make: "I can't take it anymore. I'm
selling everything and will wait until the market recovers to get
back in." That shouldn't happen if you know that you have X number
of years of income that is remaining fairly stable.
Yes. I see that.
Assume an average growth rate for your portfolio, assume some
inflation, adjust the annual drawdown for one-off situations in the
years that they will occur (paying off the mortgage, paying for a
wedding, that Shaper Origin, etc.) It's not an exact science. There
will be things that you can't plan for. Accept it. Some plan is usually
better than no plan.
Understood. Mortgage is paid but there are roofs to buy and all that.
Lotsa Origin class stuff.

Really, there aren't many toys that I want left to buy. ...or won't
be by then. I want a better DC (HEPA) but we'll see.

This is not a one-time set-it-and-forget strategy. It requires review
and adjustments, probably at least annually.
Like doing taxes.
If you can set up a plan that allows you to withdraw the projected
amounts without running out of money until age 100 (or whatever
age you chose) you should be able to rest easy. If not, you need to
take a hard look at your budget.'

The old standby 4% withdrawal is intended for the money to last
forever, indexed for inflation. Living forever seems a little
conservative but it's a data point. Even 4% puts me in good shape,
now. Given that the state doesn't tax retirement income, it'll put me
where I am now. That is, give or take Medicare. Medicare is still
unclear but I'm getting there. It's almost like the rules were
written by movement or something.

No one lives forever, but we are all (on average) living longer. 100
seems like a reasonable planning age, at least for me.



My retirement part of it is a complete mystery. It makes no sense and
seems contradictory depending on where I look. Some of the links on
the site are broken, as well. Not a good thing considering it's IBM.
;-)
Get it right and you can bounce the check to the undertaker. ;-)
That's the plan. Execution (NPI) of that plan is the problem.

On 5/9/2021 6:58 PM, wrote:
On Sun, 9 May 2021 15:04:40 -0400, Bill wrote:

On 5/7/2021 3:10 PM, Leon wrote:

Sooo Billlll.Â* Did you have anything to add to the actual discussion or
did you just want to add noise.

When I was a little boy, my dad told me it was okay to use the tools,
but to put them away when I was done with them. I think that it is
evident who got a lesson like that in simple courtesy from the way that
they post. Anyhow, that's the part of the story that this thread
rekindled in my mind. Carry on...

Evidently he didn't teach you _how_ to put them away.

Bill (just 2 "els")

OK, ll


I filtered/blocked you yesterday, but I thought I would see if you
replied. Sort of sadly, at the very least, I learned I did the right
thing. I guess there's no reason for drama; consider yourself blocked.

On 5/8/2021 11:14 PM, Clare Snyder wrote:
On Sat, 8 May 2021 09:29:29 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/7/2021 10:26 PM, Clare Snyder wrote:
On Fri, 7 May 2021 13:51:57 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/6/2021 12:12 PM, DerbyDad03 wrote:
On Thursday, May 6, 2021 at 10:37:28 AM UTC-4, Leon wrote:
On 5/5/2021 10:03 AM, DerbyDad03 wrote:
On Wednesday, May 5, 2021 at 10:45:46 AM UTC-4, Leon wrote:
On 5/5/2021 8:57 AM, Scott Lurndal wrote:
Leon lcb11211@swbelldotnet writes:
On 5/4/2021 9:48 PM, DerbyDad03 wrote:
On Tuesday, May 4, 2021 at 6:30:47 PM UTC-4, Leon wrote:
On 5/4/2021 10:09 AM, Scott Lurndal wrote:
Leon lcb11211@swbelldotnet writes:


We were in contract to build a new home in September of last year. We
locked in a price of $365K for a 3800 sq ft home. We would have been
closing right about now on the home and would have gained $70K equity.
The builder canceled all contracts on "to be built homes", claiming
material shortages.

The builder cancelled all contracts to protect his ass as he had NO
IDEA what his costs would be - and at this point he still really does
not know what his costs will be next month


Well that is the excuse that he used but he was willing to sell me the
same home 3 weeks later for and additional $16K.
And the builder was Century Homes. A relative large builder that I am
certain had locked in material pricing in advance.




That neighborhood is now about 2 years old, just over 18 months old
when we went into contract. There are double to triple the amount of
homes in that neighborhood in the last 6 months as the first 18 months.

So we were going to be buying a home that is now selling for $70K more
than what we went into contract for. Obviously there is no materials
shortages. And it appears obvious that the builder wanted to make and
sell the home for $70K extra himself.

SNIPP


A 25% increase in materials cost should not result in a 25% price
increase under normal circumstances. But these are unusual times where
the new to the game are willing to pay the price and unfortunately
likely to pay the consequence when home values go back to what they
should be.
The material cost increase is one heck of a lot more than 25%

Not in this circumstance. Again, as I stated above. Large builders
agree to buy "X" amount of materials from a supplier at a locked in
price. A very common practice by suppliers to guarantee inventory turn
over and to get discounts them selves from the mill.
"locking in" price doesn't guarantee supply and VERY FEW were able
to lock in enough to build like you claim your builder was building.



Well very few must be the condition of east Texas and central Texas.
There are no shortages of supplies or new home going up. Literally
multiple hundreds of spec homes are going up.

DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds. My collection thereof returned slightly over 4%
last year. Tax free.

If you're not confortable buying them individually, use a muni bond
fund (e.g. ABTHX).

On Monday, May 10, 2021 at 11:35:25 AM UTC-4, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.
Even Municipal Bonds. My collection thereof returned slightly over 4%
last year. Tax free.

If you're not confortable buying them individually, use a muni bond
fund (e.g. ABTHX).

I'm not a fan of individual bonds. I prefer a managed product where the
manager can get the best deals and I can buy and sell in whatever dollar
amount I want at any time.

Since bond funds come in all sorts of flavors (munis, HY, international,
IG, govt, etc.) I can be just as diversified on the bond side as I can on
the equity side and freely readjust as I see fit.

On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds. My collection thereof returned slightly over 4%
last year. Tax free.

All of my bond funds are currently averaging 3.5%, not great but better
than any bank.

On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds.Â*Â* My collection thereof returned slightly over 4%
last year.Â* Tax free.

All of my bond funds are currently averaging 3.5%, not great but better
than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus the
composite annualized capital gain since purchase is 7.76% or 13.4% total.

I shouldn't leave impression I have zero conventional bonds/bond
funds/other fixed income assets, but am still 80:20 equities:fixed at
the moment. This drives the brokerage-programmed "advice to the
lovelorn" algorithm bonkers in nagging me to rebalance to their
age-suggested guidelines for the annual mandated fiduciary
responsibility reports.

I could/would change overnight if think/thought it wise/time to
rearrange, but have been in this position for about 15 years now. Rode
out the end 2019 correction but figured were in trouble in late
2007/early 2008 and parked about 65% in CDs/MM funds through the worst
of 2008. Moved back into market over about 18 months beginning roughly
mid 2009. I'll gladly trade some of the total growth from trying to
time absolute bottoms in trade to avoid the entire meltdown.

It's the inverse ratio rule; a retraction of 1/3rd requires a subsequent
gain of 50% to recover. (1-1/3) -- 2/3 * 3/2 = 1)

--

On 5/10/2021 3:07 PM, dpb wrote:
On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable
bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds.Â*Â* My collection thereof returned slightly over 4%
last year.Â* Tax free.

All of my bond funds are currently averaging 3.5%, not great but
better than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus the
composite annualized capital gain since purchase is 7.76% or 13.4% total.
....

"...dividend-paying stocks portfolio is 5.65% average dividend..."

Rate based on acquisition price, not appreciated.

--

On Sun, 9 May 2021 19:20:16 -0700 (PDT), DerbyDad03
wrote:

On Sunday, May 9, 2021 at 9:22:27 PM UTC-4, wrote:
On Sun, 9 May 2021 17:30:21 -0700 (PDT), DerbyDad03
wrote:

On Sunday, May 9, 2021 at 6:40:00 PM UTC-4, wrote:
On Sun, 9 May 2021 12:05:07 -0700 (PDT), DerbyDad03
wrote:

On Saturday, May 8, 2021 at 12:53:42 PM UTC-4, wrote:
On Sat, 8 May 2021 09:19:50 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/7/2021 10:13 PM, Clare Snyder wrote:
On Fri, 7 May 2021 14:17:36 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/6/2021 11:49 AM, wrote:
On Thu, 6 May 2021 09:13:19 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/5/2021 2:01 PM, wrote:
On Wed, 5 May 2021 08:30:29 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 8:07 PM, wrote:
On Tue, 4 May 2021 13:35:40 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/4/2021 10:41 AM, Clare Snyder wrote:
On Tue, 4 May 2021 10:16:44 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/3/2021 8:34 AM, Ed Pawlowski wrote:
On 5/2/2021 8:32 PM, Clare Snyder wrote:
On Sun, 2 May 2021 17:44:19 -0400, Ed Pawlowski wrote:

On 5/2/2021 4:42 PM, Bill wrote:
On 5/2/2021 3:43 PM, DerbyDad03 wrote:

Their offer was accepted, not just based on the offer price, but also
based on the appraisal clause. Another offer also had an escalation
clause that maxed out at $410K, but the appraisal clause was only
$13K above the appraisal value, $2K less than their offer. That was
close!

I'll assume my previous message has been read. Color my cynical but all
I have to say is "what a coincidence!". That said, I congratulate the
buyers on their new home. The way property is appreciating, it will
surely be a great investment in the long run, and you can live in
it!


I wonder in 3 to 5 years if the house price today will still be a good
investment when interest rates are back up.
I'm betting there will be a lot of people with upside down mortgages
in 5 to 10 years in several areas of the country. Our area is less
likely to see it than many others due to our resiliant economy - but
%7 would definitely be painfull for MANY buyers - even here.


Exactly. A scenario like: I paid 500k for this house, owe 400k and the
highest offer is 300k.

Live there long enough and you are ok, but if you have to relocate, you
are screwed.


This is what is happening now. It will be interesting to see how many
people will be upside down in 2~5 Years.


I paid $63700 39 years ago. That is about $170,000 in 2021 dollars. I
assumed a 6.3% mortgage when the going rate was 23% - 18% if you were
lucky and had an 800 credit score.

40 years and 4 months ago my wife and I paid 60K. 30 years, 12%
interest in Jan 1981 Refinanced 6 years later for 9% for 15 years. We
accelerated the payments after refinance and paid the mortgage off Feb,
1997.

When we first started (July) looking for our first home ('82, I think)
we were looking at 18% interest. We bought in September, with a 14%
30-year mortgage. A couple of years later we re-fi'd to 8%. We paid
$60K.

I recall mortgage rates going up to 18 % shortly after we closed at 12%



Estimated value today $164K. $98K 10 years ago when we sold.

Ours is now $304K (Zillow).

Cash for the next home in 2010.

I wish. The next house was in VT. We paid $150 and sold 14 years
later ('07) for $300. It's now $404. Last I looked the taxes were
$8K but it's not listed now.

Farkin taxes! You can afford to buy a home but can one afford to pay
the taxes on it.

We moved from VT to AL. We bought there for about the same as the
house in VT for ($300K). Taxes, close to $4K. It was about 1.5x the
size and *far* nicer. SWMBO loved the kitchen. She was rather ****ed
when we moved here.

When we asked the RE agent about property tax, she said $1200, maybe
$1500. Wife asked "is that half year", quite seriously. The RE agent
looked at her like she had a third eye.

That wasn't in rural AL, either. It's major employer was Auburn
University. Football weekends were nuts - corporate jets by the dozens
(and dozens) flying in from all over and Class-A motorhomes by the
hundreds, standing ear to in the tailgating area for the weekend.
There is a lot of money among Auburn alum and they show it.

Anyway, we moved here and the taxes are now $3K after about a 30%
discount for being over 65. In this county, school taxes go away
completely after 72. Other counties forgive it at 65. GA is a very
retiree friendly state. Essentially, there is no state income tax on
retirement (pensions, IRA withdrawals, SS, etc.).


That was when people WERE upside-down on their mortgages in a lot of
cases because of the 1980s recession with high rates causing prices to
drop. My MIL was in real estate in Windsor and people were walking
away from $800000 homes. Sadly for Windsor some of those homes are
still not worth very much more than that - - -

The dangers of ARMs. Without enough equity there's no way to
refinance when the interest rate climbs. Same problem in '07-'11.


We almost went with an ARM in 2010. It was locked in for 5 years. We
were only going to borrow about 20K, just to give us some kush after
moving in. We would have paid it off within the next couple of years so
the rate would not have ever gone up on us. But we decided to go all
cash to get and additional 3% discount off of the negotiated sale price.

An ARM in 2010 probably would have been so bad. The neutron bomb had
already been dropped by then.

I remember you buying that house. Have I really been around here that
long?



You should check out Arkansas property taxes.. :~)

Hundreds od dollars vs. thousands.

Swingman has a home in West University TX and a home in Hot Springs AR.
The AR home is certainly smaller than the West U home but not 40 times
smaller. IIRC $24K per year vs.
$6 hundred.

$24K/yr?!! I bet he didn't like Trump's middle class tax reduction
much.


I think he was participating in the over 65 exemption and not paying lately.

He is trying to sell now and probably regretting the exemption now.

That exemption costs you the tax owed plus 8% per year.
In other words its a "republican exemption" - AKA a "deferral"
Very few times that is a good deal.



IMHO only really good if you have no heirs and your money is running out.
Sort'a like some life insurance policies that pay before you die to help
pay medical bills.
Or reverse mortgages. If I plan perfectly, there will be nothing for
my heirs. It's the planning part that hard.

One planning method that many retirees have employed goes like this:

Plan for age 100. More and more of us are going to make it that far.
Adjust as desired for your own specific situation. It's your plan.

When looking at your retirement portfolio, forget about a 60-40 split or
the old school "Put your age in bonds". Instead, use your own actual
income and expenses as shown below.
I'm not so enamored with bonds anymore. Too many games being played
and they seem to be in-phase with stocks now. Makes no sense (in more
than one sense of the word).
Estimate your pre-tax retirement expenses vs. your pre-tax retirement
income. Based on those numbers, determine the annual pre-tax drawdown
from your retirement funds. (IRA's, 401(k), brokerage accounts, etc.)
I'm not sure I follow that. I get the pre-tax part. I'm looking more
at my post-retirement income vs. pre-retirement income. I'll have (a
bit) fewer expenses too.

I think you figured that out further down...


You're above formula sounds like the draw down depends on expenses, no
matter what. It seems that one has to figure on how long one is going
to live and live within that.


The 4% rule sounds good but the brokerage advisor (when I rolled over
one 401K) said that was high, now. Well, interest is 0+delta so,
yeah, 4% is high. I have to contact him again. I may have him take
care of my account. The cost really isn't bad. .5%, IIRC (Fidelity).

It's not the cost, it's what you get for your money. You wouldn't hire a
kitchen contractor based solely on price would you?
The key is being a fiduciary. Past that, it's pretty hard to tell. My
accounts are with Fidelity, which is one of the three best (Vanguard
and Schwab are the others).

Best at what?

Lowest cost, brokers are fiduciaries, products... In every way.

On Mon, 10 May 2021 01:10:57 -0400, Bill wrote:

On 5/9/2021 6:58 PM, wrote:
On Sun, 9 May 2021 15:04:40 -0400, Bill wrote:

On 5/7/2021 3:10 PM, Leon wrote:

Sooo Billlll.* Did you have anything to add to the actual discussion or
did you just want to add noise.

When I was a little boy, my dad told me it was okay to use the tools,
but to put them away when I was done with them. I think that it is
evident who got a lesson like that in simple courtesy from the way that
they post. Anyhow, that's the part of the story that this thread
rekindled in my mind. Carry on...

Evidently he didn't teach you _how_ to put them away.

Bill (just 2 "els")

OK, ll


I filtered/blocked you yesterday, but I thought I would see if you
replied. Sort of sadly, at the very least, I learned I did the right
thing. I guess there's no reason for drama; consider yourself blocked.

You can't even figure out how to use a kill file. You are one dumb
*******. ...and a liar.

On 5/10/2021 3:07 PM, dpb wrote:
On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable
bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds.Â*Â* My collection thereof returned slightly over 4%
last year.Â* Tax free.

All of my bond funds are currently averaging 3.5%, not great but
better than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus the
composite annualized capital gain since purchase is 7.76% or 13.4% total.

Well I have the mutual funds too. Just had a meeting with my money
manager last week. Since about 2008 my portfolio has tripled. That was
when I dropped my previous money manager.

I was mostly mutual funds until the crash last year. I got out before
it hit bottom and back in about 3 weeks later, lower than when I got
out. But with a more conservative approach, 50% bond funds and 50%
mutual funds.

Even with that mix I have seen about a 30% increase in value since April
last year.





I shouldn't leave impression I have zero conventional bonds/bond
funds/other fixed income assets, but am still 80:20 equities:fixed at
the moment.Â* This drives the brokerage-programmed "advice to the
lovelorn" algorithm bonkers in nagging me to rebalance to their
age-suggested guidelines for the annual mandated fiduciary
responsibility reports.

I could/would change overnight if think/thought it wise/time to
rearrange, but have been in this position for about 15 years now.Â* Rode
out the end 2019 correction but figured were in trouble in late
2007/early 2008 and parked about 65% in CDs/MM funds through the worst
of 2008.Â* Moved back into market over about 18 months beginning roughly
mid 2009.Â* I'll gladly trade some of the total growth from trying to
time absolute bottoms in trade to avoid the entire meltdown.

It's the inverse ratio rule; a retraction of 1/3rd requires a subsequent
gain of 50% to recover.Â* (1-1/3) -- 2/3 * 3/2 = 1)

--

On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:
On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable
bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds. My collection thereof returned slightly over 4%
last year. Tax free.

All of my bond funds are currently averaging 3.5%, not great but
better than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus the
composite annualized capital gain since purchase is 7.76% or 13.4% total.
Well I have the mutual funds too. Just had a meeting with my money
manager last week. Since about 2008 my portfolio has tripled. That was
when I dropped my previous money manager.

I was mostly mutual funds until the crash last year. I got out before
it hit bottom and back in about 3 weeks later, lower than when I got
out. But with a more conservative approach, 50% bond funds and 50%
mutual funds.


Bond funds are mutual funds.

I assume you mean bond mutual funds and equity mutual funds.

On 5/11/2021 9:40 AM, DerbyDad03 wrote:
On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:
On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable
bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds. My collection thereof returned slightly over 4%
last year. Tax free.

All of my bond funds are currently averaging 3.5%, not great but
better than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus the
composite annualized capital gain since purchase is 7.76% or 13.4% total.
Well I have the mutual funds too. Just had a meeting with my money
manager last week. Since about 2008 my portfolio has tripled. That was
when I dropped my previous money manager.

I was mostly mutual funds until the crash last year. I got out before
it hit bottom and back in about 3 weeks later, lower than when I got
out. But with a more conservative approach, 50% bond funds and 50%
mutual funds.


Bond funds are mutual funds.

I assume you mean bond mutual funds and equity mutual funds.

Mutual bond and stock 50/50.

On 5/11/2021 9:29 AM, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:
On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable
bucket"
that even makes the current (relatively) low inflation rate so you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds.Â*Â* My collection thereof returned slightly over 4%
last year.Â* Tax free.

All of my bond funds are currently averaging 3.5%, not great but
better than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus the
composite annualized capital gain since purchase is 7.76% or 13.4% total.

Well I have the mutual funds too. Just had a meeting with my money
manager last week.Â* Since about 2008 my portfolio has tripled.Â* That was
when I dropped my previous money manager.
....

Been pretty hard to lose in that time frame since from the approximate
lows in early 2009 the DJIA is ~4X and S&P 500 ~6X. "Rising tide..."

--

On 5/11/2021 1:01 PM, dpb wrote:
On 5/11/2021 9:29 AM, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:
On 5/10/2021 1:32 PM, Leon wrote:
On 5/10/2021 10:35 AM, Scott Lurndal wrote:
DerbyDad03 writes:
On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:

In the current interest climate, there's essentially no "stable
bucket"
that even makes the current (relatively) low inflation rate so
you're
losing ground in purchasing power besides.


That is not true. There are indeed bond funds that are still making
more than inflation. If you look hard enough or have a financial
advisor that knows where to look, there is still money that can be
made in bonds. Managed products, not index funds.

Even Municipal Bonds.Â*Â* My collection thereof returned slightly
over 4%
last year.Â* Tax free.

All of my bond funds are currently averaging 3.5%, not great but
better than any bank.

My dividend-paying stocks portfolio is 5.65% average dividend plus
the composite annualized capital gain since purchase is 7.76% or
13.4% total.

Well I have the mutual funds too. Just had a meeting with my money
manager last week.Â* Since about 2008 my portfolio has tripled.Â* That
was when I dropped my previous money manager.
...

Been pretty hard to lose in that time frame since from the approximate
lows in early 2009 the DJIA is ~4X and S&P 500 ~6X.Â* "Rising tide..."

--

Fortunately. Unfortunately i went through the fiasco of the 1999-2000
tech bubble. My money manager was not good. I was ****ed that he did
not suggest to go to cash long before we did.

On 5/11/2021 9:29 AM, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:

....

....

I was mostly mutual funds until the crash last year.Â* I got out before
it hit bottom and back in about 3 weeks later, lower than when I got
out.Â* But with a more conservative approach, 50% bond funds and 50%
mutual funds.
....

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities. Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth, so do have a somewhat similar dampening effect
on overall appreciation gain, but not nearly as strong an effect in
current market as do actual bonds or bond funds.

When conditions change (as they will, eventually) to a more historical
pattern, I'll adjust the mix to match; meanwhile I see no reason not to
ride the rocket as long as can...

Do have to pay attention and be willing to "pull the plug!" when it's
time this way, though, granted, and not leave it all up to somebody else.

I certainly take broker's advice/recommendations into account, but don't
wait around for him to tell me it's time to move--he has a ticker that
gives him flags, but he's also got a bunch of other clients (as all do)
so can't rely on being the first on the call list.

--

Leon lcb11211@swbelldotnet writes:
On 5/11/2021 9:40 AM, DerbyDad03 wrote:
On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:


I was mostly mutual funds until the crash last year. I got out before
it hit bottom and back in about 3 weeks later, lower than when I got
out. But with a more conservative approach, 50% bond funds and 50%
mutual funds.


Bond funds are mutual funds.

I assume you mean bond mutual funds and equity mutual funds.

Mutual bond and stock 50/50.

Let's step back to basic definitions:

Mutual Fund

A fund where multiple individuals provide investment capital
which is allocated to a class of assets, or a mix of asset
classes by the fund manager.

So you can have "Bond" fund where the capital from the investors
is allocated amonst one or more bonds (or a subset of bond classes
such as Municipal, Industrial Aaa rated, or Junk), an "Equity" fund where
the capital from the investors in the fund is allocated amongst
one or more equity (AKA stock) positions. Or a fund that invests
in multiple asset classes (e.g. 50/50 bonds and equities).

There are other asset classes as well that can be the target of
mutual fund investment managers, such as real property (land,
buildings, tangible assets or derivative financial instruments
such as collateralized debt obligations).

There are also exchange traded funds (ETF) which have similar investment
philosophies and goals but where the investor simply buys or
sells shares in the fund on the equity markets. Examples are DIA,
IVV, QQQ, et alia.

dpb writes:

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities. Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

On 5/11/2021 2:18 PM, Scott Lurndal wrote:
dpb writes:

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities. Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

They are...and have at an annualized rate of about 7-8%.

OTOH, a portfolio concentrating on growth stocks may have doubled that
over the same time frame (with much higher volatility, too).

These are not serving that purpose, however, however tempting it is to
always go for the gains!

--

On 5/11/2021 1:20 PM, dpb wrote:
On 5/11/2021 9:29 AM, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:



Snip

When conditions change (as they will, eventually) to a more historical
pattern, I'll adjust the mix to match; meanwhile I see no reason not to
ride the rocket as long as can...

Do have to pay attention and be willing to "pull the plug!" when it's
time this way, though, granted, and not leave it all up to somebody else.

I certainly take broker's advice/recommendations into account, but don't
wait around for him to tell me it's time to move--he has a ticker that
gives him flags, but he's also got a bunch of other clients (as all do)
so can't rely on being the first on the call list.

--


Exactly, I have had more than one conversation with moth of my money
managers concerning the OBVIOUS.

It there is bad news on the networks. The long time awaited tech stocks
crash leading up to the first quarter in 2000. and then The Corona virus
at the first of last year.

Their answer is, it will come back. My response, why in the world ride
it to the bottom? Get back in "near the bottom. Get out until the the
stocks come back up. And I am not talking about knee jerk market
reactions.

Yes it is hard to tell when the recovery starts but some thing are obvious.

On 5/11/2021 3:54 PM, dpb wrote:
On 5/11/2021 2:18 PM, Scott Lurndal wrote:
dpb writes:

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities.Â* Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

They are...and have at an annualized rate of about 7-8%.

OTOH, a portfolio concentrating on growth stocks may have doubled that
over the same time frame (with much higher volatility, too).

These are not serving that purpose, however, however tempting it is to
always go for the gains!

I have considered letting the dividends go to cash for the income stream
to satisfy the RMD, yes, but there are other places/ways in the overall
portfolio to do that, so, so far, I've just let them grow in situ in
order to keep roughly same balance.

Since they haven't done quite as well as the overall portfolio, they
have slipped some in the overall mix percentage; I did buy into one here
in the recent downturn to boost the overall up a little and also was a
real opportunity to raise the effective dividend rate by bringing down
the average cost/share a little.

--

On 5/11/2021 2:16 PM, Scott Lurndal wrote:
Leon lcb11211@swbelldotnet writes:
On 5/11/2021 9:40 AM, DerbyDad03 wrote:
On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:


I was mostly mutual funds until the crash last year. I got out before
it hit bottom and back in about 3 weeks later, lower than when I got
out. But with a more conservative approach, 50% bond funds and 50%
mutual funds.


Bond funds are mutual funds.

I assume you mean bond mutual funds and equity mutual funds.

Mutual bond and stock 50/50.

Let's step back to basic definitions:

Mutual Fund

A fund where multiple individuals provide investment capital
which is allocated to a class of assets, or a mix of asset
classes by the fund manager.

So you can have "Bond" fund where the capital from the investors
is allocated amonst one or more bonds (or a subset of bond classes
such as Municipal, Industrial Aaa rated, or Junk), an "Equity" fund where
the capital from the investors in the fund is allocated amongst
one or more equity (AKA stock) positions. Or a fund that invests
in multiple asset classes (e.g. 50/50 bonds and equities).

There are other asset classes as well that can be the target of
mutual fund investment managers, such as real property (land,
buildings, tangible assets or derivative financial instruments
such as collateralized debt obligations).

There are also exchange traded funds (ETF) which have similar investment
philosophies and goals but where the investor simply buys or
sells shares in the fund on the equity markets. Examples are DIA,
IVV, QQQ, et alia.



Of course. I have been pretty heavily invested since 1993. It is
complicated listing all of the types of investments I have been involved
with.
Mutual Property investments did not go well for me. Mutual Medical has
not been bad. Those are two separate smaller accounts.

On 5/2/2021 2:43 PM, DerbyDad03 wrote:
Snip


So I have indicated that there is not a shortage of building materials
in this area. A new subdivision is being built across the street from
our subdivision, about 1/16 mile from our home.

The infrastructure began in early December and about half of the streets
have gone in since March, they are still hauling dirt and pouring concrete.

The model home started going up over the concrete foundation week before
last and or Monday two weeks ago. In a MUD meeting this morning the
builder rep, Meritage Homes, gave us updates. The model will be
completed this week. 3 weeks start to finish after the foundation was
poured. The home looks finished on the outside. 6 more foundations
were poured yesterday morning. In all there should be 130 or so homes
and estimated build out will be at the end of the year.

On 5/11/2021 4:01 PM, dpb wrote:
On 5/11/2021 3:54 PM, dpb wrote:
On 5/11/2021 2:18 PM, Scott Lurndal wrote:
dpb writes:

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities.Â* Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

They are...and have at an annualized rate of about 7-8%.

OTOH, a portfolio concentrating on growth stocks may have doubled that
over the same time frame (with much higher volatility, too).

These are not serving that purpose, however, however tempting it is to
always go for the gains!

I have considered letting the dividends go to cash for the income stream
to satisfy the RMD, yes, but there are other places/ways in the overall
portfolio to do that, so, so far, I've just let them grow in situ in
order to keep roughly same balance.

Since they haven't done quite as well as the overall portfolio, they
have slipped some in the overall mix percentage; I did buy into one here
in the recent downturn to boost the overall up a little and also was a
real opportunity to raise the effective dividend rate by bringing down
the average cost/share a little.

--

I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's

On 5/11/2021 5:39 PM, Leon wrote:
....

I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's

Not exactly "rolled over"; you can convert, but it's not painless by any
stretch for most.

I've converted some, but it ain't a no-brainer it's agonna' be a win in
any short time.

You pay tax on it first at ordinary marginal income rates unless you
have post-tax contributions inside the ordinary IRA.

Plus, RMDs are not eligible to be rolled over and you must take the RMD,
anyway. Thus, whatever you convert will first be ordinary income above
and beyond that of the RMD for the year. And, that extra can be enough
extra to kick in the AMT bite to make the pain even more.

If you can stand that immediate pain, then remember that a distribution
from a Roth is tax- and penalty-free after a five-year aging period.

If you're of an age that you debate buying green bananas, ...

I shoulda' done starting 30 years ago; now it's pretty painful first
bite to undergo.

--

On Tuesday, May 11, 2021 at 6:39:29 PM UTC-4, Leon wrote:
On 5/11/2021 4:01 PM, dpb wrote:
On 5/11/2021 3:54 PM, dpb wrote:
On 5/11/2021 2:18 PM, Scott Lurndal wrote:
dpb writes:

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities. Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

They are...and have at an annualized rate of about 7-8%.

OTOH, a portfolio concentrating on growth stocks may have doubled that
over the same time frame (with much higher volatility, too).

These are not serving that purpose, however, however tempting it is to
always go for the gains!

I have considered letting the dividends go to cash for the income stream
to satisfy the RMD, yes, but there are other places/ways in the overall
portfolio to do that, so, so far, I've just let them grow in situ in
order to keep roughly same balance.

Since they haven't done quite as well as the overall portfolio, they
have slipped some in the overall mix percentage; I did buy into one here
in the recent downturn to boost the overall up a little and also was a
real opportunity to raise the effective dividend rate by bringing down
the average cost/share a little.

--
I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's

Another option...

If you donate to charities, you may be able to do the donations directly
from your IRA and not pay any taxes on the RMD. They are called Qualified
Charitable Donations. You just can't take possession of the funds. You
have to have them sent directly to the charity(s).

Plus side: Even though the RMD age has been raised to 72, they still
allow QCD's starting at age 70-1/2. They would have screwed a lot of
charities out of donations if they didn't make that exception.

So, all you "kids" out there...donate!

On Tuesday, May 11, 2021 at 7:54:31 PM UTC-4, dpb wrote:
On 5/11/2021 5:39 PM, Leon wrote:
...
I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's
Not exactly "rolled over"; you can convert, but it's not painless by any
stretch for most.

I've converted some, but it ain't a no-brainer it's agonna' be a win in
any short time.

You pay tax on it first at ordinary marginal income rates unless you
have post-tax contributions inside the ordinary IRA.

Plus, RMDs are not eligible to be rolled over and you must take the RMD,
anyway. Thus, whatever you convert will first be ordinary income above
and beyond that of the RMD for the year. And, that extra can be enough
extra to kick in the AMT bite to make the pain even more.

If you can stand that immediate pain, then remember that a distribution
from a Roth is tax- and penalty-free after a five-year aging period.

Sort of...distribution of funds from contributions/conversions is allowed at
any time. It's the *growth* that can't be withdrawn tax/penalty free prior
to 59 1/2 or before 5 years, whichever is longer. There are also exceptions
to that rule. IRS Publication 590-B can be a fun read. ;-)


If you're of an age that you debate buying green bananas, ...

I shoulda' done starting 30 years ago; now it's pretty painful first
bite to undergo.

--

On 5/11/2021 7:18 PM, DerbyDad03 wrote:
....

If you donate to charities, you may be able to do the donations directly
from your IRA and not pay any taxes on the RMD. They are called Qualified
Charitable Donations. You just can't take possession of the funds. You
have to have them sent directly to the charity(s).
....

If one does have to take the RMD, the QCD is a no-brainer for _any_
charitable deductions, no matter the size.

If you're going to donate anyway, it's throwing money down the tax hole,
otherwise.

In particular, a QCD is even better than a charitable contribution--the
latter is a tax deduction but from income; the QCD portion of an RMD is
not even counted as income; it's just reported as nontaxable.

It's especially easy if your IRA is set up with check-writing
privileges-- you can write the check yourself rather than have the
holder of the IRA do it for you.

The only limitation on a QCD to qualified charity is $100K/year.

With the higher personal exemption, many who used to be able to itemize
and no longer can do so; the QCD is a savior in that regards for those
in the RMD boat.

The CARES Act did add a provision that each can deduct up to $300 in
charitable contributions ($600 joint return) even if don't itemize
deductions. This was extended into 2021 by the last stimulus bill; it's
not permanent law so likely will sunset with the demands for higher
taxes all the proposals are going to generate.

The 100% AGI deduction is still in play if you're between 59-1/2 and
70-1/2 for withdrawals from a conventional IRA but not RMD.

As always, "consult your own tax professional" but having been
President of the local community college foundation for last 10 years or
so, I've become pretty familiar with the rules for nonprofits.

--

On 5/11/2021 7:45 PM, DerbyDad03 wrote:
On Tuesday, May 11, 2021 at 7:54:31 PM UTC-4, dpb wrote:
....

If you can stand that immediate pain, then remember that a distribution
from a Roth is tax- and penalty-free after a five-year aging period.

Sort of...distribution of funds from contributions/conversions is allowed at
any time. It's the *growth* that can't be withdrawn tax/penalty free prior
to 59 1/2 or before 5 years, whichever is longer. There are also exceptions
to that rule. IRS Publication 590-B can be a fun read. ;-)
....

I glossed over the Roth side, yes...if one has an RMD requirement that
is already painful from the tax side that one doesn't really need for
current income, then even if it's not taxable, there's not much
incentive to pull out from the Roth even if can without penalty.

Hence, it doesn't rank very high on my radar but if one is in different
circumstances, yes, it could be helpful.

--

On Tuesday, May 11, 2021 at 4:59:51 PM UTC-4, Leon wrote:
On 5/11/2021 1:20 PM, dpb wrote:
On 5/11/2021 9:29 AM, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:
Snip

When conditions change (as they will, eventually) to a more historical
pattern, I'll adjust the mix to match; meanwhile I see no reason not to
ride the rocket as long as can...

Do have to pay attention and be willing to "pull the plug!" when it's
time this way, though, granted, and not leave it all up to somebody else.

I certainly take broker's advice/recommendations into account, but don't
wait around for him to tell me it's time to move--he has a ticker that
gives him flags, but he's also got a bunch of other clients (as all do)
so can't rely on being the first on the call list.

--

Exactly, I have had more than one conversation with moth of my money
managers concerning the OBVIOUS.

It there is bad news on the networks. The long time awaited tech stocks
crash leading up to the first quarter in 2000. and then The Corona virus
at the first of last year.

Their answer is, it will come back. My response, why in the world ride
it to the bottom? Get back in "near the bottom. Get out until the the
stocks come back up. And I am not talking about knee jerk market
reactions.

Yes it is hard to tell when the recovery starts but some thing are obvious.

Have you ever verified that you made the correct moves? Ever tracked
where you would have been if you had followed the advice to stay in?

Perhaps you did time it correctly or perhaps you just assume that you
did. Only you can determine that. Well, your advisor probably could too,
assuming he knows what moves you made and when.

I know you aren't talking about hard core market timing or panic moves,
but missing even a few of the market's best days can be detrimental.
This article deals more with the standard definition of market timing,
so feel free to disregard most of the text and just review the "How
much exactly?" section.

https://www.fool.com/investing/2020/...market-days-c/

Yes, I know, maybe you missed some good days but you offset it by
missing some of the bad ones too. I get it. Like I said, the only way
to really know is to go back and chart where you would be today
if you stayed in - assuming you care. If doing it your way makes you
feel better, that's fine too. My only point is that if you want an
accurate answer to your question "Why in the world ride it to the
bottom?" you'd have to actually figure it out using your numbers and
your moves.

On Tuesday, May 11, 2021 at 8:58:40 PM UTC-4, dpb wrote:
On 5/11/2021 7:18 PM, DerbyDad03 wrote:
...

If you donate to charities, you may be able to do the donations directly
from your IRA and not pay any taxes on the RMD. They are called Qualified
Charitable Donations. You just can't take possession of the funds. You
have to have them sent directly to the charity(s).
...

If one does have to take the RMD, the QCD is a no-brainer for _any_
charitable deductions, no matter the size.

....and not just for RMD's.


If you're going to donate anyway, it's throwing money down the tax hole,
otherwise.

In particular, a QCD is even better than a charitable contribution--the
latter is a tax deduction but from income; the QCD portion of an RMD is
not even counted as income; it's just reported as nontaxable.

It's especially easy if your IRA is set up with check-writing
privileges-- you can write the check yourself rather than have the
holder of the IRA do it for you.

Sure, you can write the check, but you better have cash in your IRA or
the ability to raise cash on your own. Some firms allow client trading
in IRA's, some don't.

The main drawback is the inability to control when the cash is withdrawn.
The distribution doesn't happen until the "personal" check is deposited by
the charity. If the custodian issues the check, the distribution occurs on
the day the check is issued.

Worst case is you decide to do a QCD as your RMD late in the year and the
charity holds your check until January. Technically you would be on the hook
for a IRS penalty of 50% of the RMD because you never really took your RMD
for the previous year. You could probably get out of it, but it would take some
work. I'm just saying that letting the custodian issue the check eliminates that
issue.

The only limitation on a QCD to qualified charity is $100K/year.

Thus my use of the word "may". ;-)


With the higher personal exemption, many who used to be able to itemize
and no longer can do so; the QCD is a savior in that regards for those
in the RMD boat.

Also works for those who turn 70 1/2 after January 1, 2020. The
SECURE Act left the QCD age at 70 1/2 when it increased the RMD
age to 72.


The CARES Act did add a provision that each can deduct up to $300 in
charitable contributions ($600 joint return) even if don't itemize
deductions. This was extended into 2021 by the last stimulus bill; it's
not permanent law so likely will sunset with the demands for higher
taxes all the proposals are going to generate.

The 100% AGI deduction is still in play if you're between 59-1/2 and
70-1/2 for withdrawals from a conventional IRA but not RMD.


As always, "consult your own tax professional"

Best. Advice. Ever.

but having been
President of the local community college foundation for last 10 years or
so, I've become pretty familiar with the rules for nonprofits.

--

On 5/11/2021 11:17 PM, DerbyDad03 wrote:
On Tuesday, May 11, 2021 at 8:58:40 PM UTC-4, dpb wrote:
....

It's especially easy if your IRA is set up with check-writing
privileges-- you can write the check yourself rather than have the
holder of the IRA do it for you.

Sure, you can write the check, but you better have cash in your IRA or
the ability to raise cash on your own. Some firms allow client trading
in IRA's, some don't.

Well, if you are one who doesn't keep track of and ensure the cash is
where you want it, then yes, Virginia, this option is probably not for
you...

The main drawback is the inability to control when the cash is withdrawn.
The distribution doesn't happen until the "personal" check is deposited by
the charity. If the custodian issues the check, the distribution occurs on
the day the check is issued.

Worst case is you decide to do a QCD as your RMD late in the year and the
charity holds your check until January. Technically you would be on the hook
for a IRS penalty of 50% of the RMD because you never really took your RMD
for the previous year. You could probably get out of it, but it would take some
work. I'm just saying that letting the custodian issue the check eliminates that
issue.
....

Find a better-managed charity to which to donate and/or don't wait until
the last minute...

--

On 5/11/2021 10:35 PM, DerbyDad03 wrote:
On Tuesday, May 11, 2021 at 4:59:51 PM UTC-4, Leon wrote:
On 5/11/2021 1:20 PM, dpb wrote:
On 5/11/2021 9:29 AM, Leon wrote:
On 5/10/2021 3:07 PM, dpb wrote:
Snip

When conditions change (as they will, eventually) to a more historical
pattern, I'll adjust the mix to match; meanwhile I see no reason not to
ride the rocket as long as can...

Do have to pay attention and be willing to "pull the plug!" when it's
time this way, though, granted, and not leave it all up to somebody else.

I certainly take broker's advice/recommendations into account, but don't
wait around for him to tell me it's time to move--he has a ticker that
gives him flags, but he's also got a bunch of other clients (as all do)
so can't rely on being the first on the call list.

--

Exactly, I have had more than one conversation with moth of my money
managers concerning the OBVIOUS.

It there is bad news on the networks. The long time awaited tech stocks
crash leading up to the first quarter in 2000. and then The Corona virus
at the first of last year.

Their answer is, it will come back. My response, why in the world ride
it to the bottom? Get back in "near the bottom. Get out until the the
stocks come back up. And I am not talking about knee jerk market
reactions.

Yes it is hard to tell when the recovery starts but some thing are obvious.

Have you ever verified that you made the correct moves? Ever tracked
where you would have been if you had followed the advice to stay in?

Yes, I pulled the plug myself after watching $70K disappear over an 8
month period. And it stayed down pretty much for several years after that.

When I decided to get back in I went with a new money manager and of all
people he said that I had timed the market well as far as getting back
in goes.

Last time around the big 3 indexes were still down compared to where I
am now as apposed to before it crashed last year. Basically when the
market came back to where it was last year I was better off.



Perhaps you did time it correctly or perhaps you just assume that you
did. Only you can determine that. Well, your advisor probably could too,
assuming he knows what moves you made and when.

Not an assumption. I track the major indexes too.




I know you aren't talking about hard core market timing or panic moves,
but missing even a few of the market's best days can be detrimental.
This article deals more with the standard definition of market timing,
so feel free to disregard most of the text and just review the "How
much exactly?" section.

https://www.fool.com/investing/2020/...market-days-c/

Yes, I know, maybe you missed some good days but you offset it by
missing some of the bad ones too. I get it. Like I said, the only way
to really know is to go back and chart where you would be today
if you stayed in - assuming you care. If doing it your way makes you
feel better, that's fine too. My only point is that if you want an
accurate answer to your question "Why in the world ride it to the
bottom?" you'd have to actually figure it out using your numbers and
your moves.


I'm certain that I indeed did not make the perfect moves but better than
doing nothing.

My investment in the market is pretty much emergency money and or what I
plan to pass on to my son. I do not want to put myself in the position
of being at a low with the market and needing money at that point.

The market remained down for several years after the tech stock crash 20
years ago. I knew that the pandemic reaction would be temporary and I
decided to not ride it to the bottom but get back in when the fear in
the market subsided.

And the feel better factor is a big part, I sleep better at night and
that is important for me.

Leon lcb11211@swbelldotnet writes:
On 5/11/2021 4:01 PM, dpb wrote:
On 5/11/2021 3:54 PM, dpb wrote:
On 5/11/2021 2:18 PM, Scott Lurndal wrote:
dpb writes:

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities.Â* Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

They are...and have at an annualized rate of about 7-8%.

OTOH, a portfolio concentrating on growth stocks may have doubled that
over the same time frame (with much higher volatility, too).

These are not serving that purpose, however, however tempting it is to
always go for the gains!

I have considered letting the dividends go to cash for the income stream
to satisfy the RMD, yes, but there are other places/ways in the overall
portfolio to do that, so, so far, I've just let them grow in situ in
order to keep roughly same balance.

Since they haven't done quite as well as the overall portfolio, they
have slipped some in the overall mix percentage; I did buy into one here
in the recent downturn to boost the overall up a little and also was a
real opportunity to raise the effective dividend rate by bringing down
the average cost/share a little.

--

I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's

Yes, at a cost. You pay the taxes on the rollover. The ROTH grows
tax free from that point forward, but you still need to pay the taxes
deferred by the 401k/IRA.

On 5/11/2021 6:54 PM, dpb wrote:
On 5/11/2021 5:39 PM, Leon wrote:
...

I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's

Not exactly "rolled over"; you can convert, but it's not painless by any
stretch for most.

Yes, distributed, taxed, and then moved into a ROTH IRA.

AND IIRC there is a limit that can be reinvested in the ROTH each year. $7K?



I've converted some, but it ain't a no-brainer it's agonna' be a win in
any short time.

You pay tax on it first at ordinary marginal income rates unless you
have post-tax contributions inside the ordinary IRA.

Plus, RMDs are not eligible to be rolled over and you must take the RMD,
anyway.Â* Thus, whatever you convert will first be ordinary income above
and beyond that of the RMD for the year.Â* And, that extra can be enough
extra to kick in the AMT bite to make the pain even more.

If you can stand that immediate pain, then remember that a distribution
from a Roth is tax- and penalty-free after a five-year aging period.

If you're of an age that you debate buying green bananas, ...

I shoulda' done starting 30 years ago; now it's pretty painful first
bite to undergo.

--

I first IRA's were in the 80's, first ROTH, 2009 IIRC.