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David Crosetti  

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  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Larry:

    You keep telling us what the "4% Rule" is not, but you seem to never state your opinion as to what it is.

    It is easy to mouth off a denial an then go to another article, but you offer absolutely nothing except continuous criticism. It would be fantastic if the criticism were constructive, but it never is, coming from you.

    Here's a take on the 4% Rule as it was intended by the guy who created it:

    "Ever since a California financial planner named William P. Bengen proposed it in 1994, retirees have relied on what’s known as the 4% rule – if they withdraw 4% of their nest eggs the first year of retirement and adjust that amount for inflation thereafter, their money would last at least 30 years."

    Now that seems pretty clear to me, Larry. How about you?

    Now, notice that the statement does not suggest 40 years worth of longevity--it suggests 30 years.

    "But Bengen’s rule has lately come under attack. It was developed when interest yields on bond index mutual funds hovered around 6.6%, not the 2.4% of today, raising clear questions about how well bonds could support a 4% rule."

    Please, Larry, do YOUR homework.
    Apr 23, 2015. 12:46 PM | 32 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Point:

    Well, for the poor sob that invested his money in the SPY from 12/31/98-12/31/2010 that 4% rule would have not worked out very well.

    The assumption is that your portfolio is going to grow at a rate that is greater than the 4% that you are withdrawing. So, do the math.

    When some years you get a nice 20% bump in your portfolio, you might have reason to celebrate.

    It's when you have those years of little or no growth in the value of your nest egg where the men start getting separated from the boys.

    Assumptions are interesting. You do know what happen when you assume something don't you?
    Apr 23, 2015. 10:20 AM | 7 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Paul:

    Are you suggesting that you never saw that particular Twilight Zone episode?

    Dave
    Apr 23, 2015. 10:14 AM | 10 Likes Like |Link to Comment
  • General Electric: It Is What It Is [View article]
    Kathy:

    I am honored to be put in the same sentence with those two gentlemen. However, at my age, sometimes I'm not even sure if anyone famous actually made the quote or if I actually heard it from some drunk in a biker bar.

    Life is like that.

    Dave
    Apr 23, 2015. 10:10 AM | 1 Like Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Sounds like a new version of those "magic pants" except this is the "magic pantry." It never empties. It's always full. And all the children are above average.
    Apr 22, 2015. 10:28 PM | 8 Likes Like |Link to Comment
  • Warren Buffett And Losing Billions Of Dollars [View article]
    John:

    Same thing is true about owning a boat!

    Dave
    Apr 22, 2015. 10:12 PM | 5 Likes Like |Link to Comment
  • Warren Buffett And Losing Billions Of Dollars [View article]
    Reb:

    Not to be argumentative, but until the money is in your pocket, you haven't made a dime.

    I have a friend who wants to sell some land adjacent to mine. He wants about $1000 an acre more than I am willing to pay. I made him an offer and he told me:

    "I talked to a guy from Chicago and he's moving down here. He wants to buy my land for my price and he will be calling me on Monday to close the deal."

    OK.

    It's Wednesday and he hasn't got a call from the guy in Chicago. His calls have gone unanswered.

    I felt so sorry for him, that I made him another offer for his land--cash money--but $500 an acre less than my original offer.

    He owns the land, but he hasn't made a dime on the Chicago guy's offer, nor has he made a dime on my offer which is still out there.

    He will not make or lose a dime on that land until he actually closes a real estate contract.
    Apr 22, 2015. 05:20 PM | 14 Likes Like |Link to Comment
  • Warren Buffett And Losing Billions Of Dollars [View article]
    Reb:

    Let's say that your holdings are worth MORE today than they were worth yesterday. Does that mean that you MADE money?

    Of course not.

    The sale of the portfolio has to happen so that money can actually enter into your account.

    In the meantime, it's an electronic blip on a computer screen.

    Why people don't grasp that is beyond me.
    Apr 22, 2015. 05:01 PM | 18 Likes Like |Link to Comment
  • General Electric: It Is What It Is [View article]
    I think that it was Warren Buffett who said:

    Buy a company that any idiot can run because sooner or later an idiot will be running it.
    Apr 22, 2015. 01:06 PM | 9 Likes Like |Link to Comment
  • Johnson & Johnson: An Excellent 3% Dividend Choice For Risk-Averse Income Investors [View article]
    as:

    That might be compelling to Elvis fans, but....................

    Thank you. Thank you very much.

    Elvis has left the building.
    Apr 22, 2015. 12:03 AM | Likes Like |Link to Comment
  • Johnson & Johnson: An Excellent 3% Dividend Choice For Risk-Averse Income Investors [View article]
    MLPs are pass-through entities, meaning they don't pay taxes on their earnings as long as they pass the vast majority of them on to investors as distributions.

    Typically 80% to 90% of the distribution is in the form of return of capital, or ROC, which is a fancy way of saying that, thanks to numerous write-offs and depreciations the partnership takes on its equipment, most of your payout is tax deferred.

    The exact breakdown of taxable income versus ROC is shown in the K-1 form, which the partnership sends out to all investors annually.

    The way ROC works is that rather than pay taxes right away, you deduct them from your cost basis. Then when you sell units of MLPs, you pay taxes on your units sold.

    This can have a powerful long-term benefit. For example, say you invested $10,000 in an MLP. If you hold the units long enough, eventually your cost basis will go to $0.

    As long as you don't sell, then $10,000 of otherwise taxable income will be permanently deferred from the IRS. You can pass on MLP units to your heirs, and as long as they don't sell them, they don't have to pay taxes, either. However, this only applies as long as your cost basis is above zero.

    As a result of these tax benefits, MLPs get a bit more complicated. For example, if you do sell your units of an MLP, some of the profit will be taxed as long-term capital gains, and some will be "recaptured" (taxed as ordinary income). This includes things like depreciation, inventory appreciation, and unrealized receivables. This information can be found in the annual K-1 your MLP will send you.
    Apr 21, 2015. 08:01 PM | Likes Like |Link to Comment
  • Johnson & Johnson: An Excellent 3% Dividend Choice For Risk-Averse Income Investors [View article]
    There is a huge difference between MLP's and traditional dividend paying equities.

    MLP's do not pay dividends. They pay a "return of capital."

    There are significant other differences. Before you invest in MLP's I would suggest that you sit down with a good (if not great) CPA who understands the differences and can explain them to you.

    Dave
    Apr 21, 2015. 07:20 PM | 1 Like Like |Link to Comment
  • Johnson & Johnson: An Excellent 3% Dividend Choice For Risk-Averse Income Investors [View article]
    Do you actually know what an MLP is?

    Dave
    Apr 21, 2015. 06:08 PM | Likes Like |Link to Comment
  • Why You Should Dip Into Your Taxable Account To Max Out Your IRA [View article]
    Bruce:

    Being beyond the age of 59 1/2, I have to admit that sometimes I forget that there are people out there that are younger than me. Sorry. Should be more clear.

    Dave
    Apr 21, 2015. 03:49 PM | 1 Like Like |Link to Comment
  • Why You Should Dip Into Your Taxable Account To Max Out Your IRA [View article]
    Your contributions remain tax free regardless of the "age" of the Roth. It's earnings that are taxable if the Roth is less than 5 years in existence.

    Dave
    Apr 21, 2015. 12:29 PM | 2 Likes Like |Link to Comment
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