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as10675

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  • The Half-Million Dollar Income Project [View article]
    I have UTMA accounts for my grand children. Fidelity told me that the children can not have access to the portfolio until I sign a release even if they are 18, 21 , 23 etc.
    as10675
    Apr 27, 2015. 09:19 AM | 2 Likes Like |Link to Comment
  • The Half-Million Dollar Income Project [View article]
    The Value Portfolio,

    What do you expect the portfolio value to be 50 years from now; $5,000,000?

    What is going to be the monthly contribution amount to the portfolio?

    How many stock positions are you going to cut $4,000 into; 8?

    as10675
    Apr 27, 2015. 12:50 AM | Likes Like |Link to Comment
  • The Half-Million Dollar Income Project [View article]
    The Value Portfolio,

    >>Since I have molded a high-risk portfolio into a portfolio for my son, the portfolio is currently poorly weighted for long-term growth with a focus on both high-yield and high-growth stocks.<<

    You have determined the problem with this approach to achieving your goals. It should be back to the drawing board to figure out plan B.

    as10675
    Apr 26, 2015. 11:21 PM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    >> Many of them have plenty of money to live on.<<

    The median retirement house hold income in the United States is $42,000. Much less when one spouse dies, about $27,000 per year. Moving to warmer weather is not down sizing.

    If a person has enough saved for retirement they do not have to make any lifestyle changes, unless they want to.

    as10675
    Apr 26, 2015. 10:18 PM | 4 Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    >>Because that income is seen as the minimum to support themselves? <<

    Yes, for someone on a tight retirement budget for essential expenses, having the money to pay the bills is the first priority. A person that is trying to just get by from to month on pensions, social security, and savings is no longer trying to make a million dollars. They are trying to prevent a lifestyle reset.

    Why do so many retiree's down size? Answer: Because they do not have enough money to live on. They have to live on only what they have.

    If you want to experience this condition first hand then just reduce your paycheck spending to only 65% to 70% to what you are paid each payday now while you are working for the next two years, but you only have access to the previous month's 65% to 75% accumulation of spending money on the 1st of every month.

    Good luck with your experiment. Here is a hint on the outcome, if you are unable to live on 100% of your salary today, the outcome will be a failure.

    A MonteCarlo simulation will clearly show this outcome. How to change the results:

    1. Save more.

    2. Invest wisely.

    3. Reduce living expenses.

    4. Work longer.

    5. Hope for better market returns.

    as10675
    Apr 26, 2015. 10:04 PM | 3 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio: 1st Quarter 2015 Update [View article]
    Peace4,

    Nice life story! I enjoyed reading it and I am happy for you.

    I too love the sea. I was an avid scuba diver and while in the Navy I flew over the sea all the time and lived mostly by the sea. For the last 20 years I have lived in Texas, so each year we take two or three trips to the islands.

    I wish you well and continued happiness.

    as10675
    Apr 25, 2015. 08:59 AM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    mjtroll1,

    The allocations for diversification can be adjusted in the simulation.

    Someone who needs say every penny of a 4% annual withdrawal has to have an allocation of about 40% stocks, 50% bonds and 10% cash to increase the probability of success to about 90%. I ran a ton of MonteCarlo simulations on my own portfolio and use it as a fall back spending rate.

    My Dad lives in a retirement village in Florida and in 2008 things fell apart and some people living in those communities could no longer pay their bills so they sold their home.

    For some people it can get to the point where there is nothing left to cut to make ends meet. Further down size or sell assets if you are the sole survivor of your marriage (one dies the other looses about half the social security). The social security that they were counting on to pay the monthly bills. Run a MonteCarlo for an under funded or tight funded retirement portfolio and see what the results are. Then run it with only the large social security check.

    Personally my allocation is 98% stocks, 1% bonds and 1% cash, but my situation is different since my retirement is well funded and backed up with dividends. I am single so I only have one social security from the start. My entire portfolio is for discretionary expenses (fun stuff). My lifestyle is adjusted so that pensions and social security cover the essential expenses. That is one reason why I was able to retire at age 60.

    I make way more dividends and have potential for way more capital gains with 98% stocks than a 40%/50%/10% portfolio. I have been making about twice as much. With pensions, social security and dividends I make way more in passive income then when I was working and earning a salary.

    as10675
    Apr 24, 2015. 03:00 PM | 5 Likes Like |Link to Comment
  • Retirement Strategy: Dividends Vs. Capital Gains [View article]
    JoeSalmeri,

    Thanks.

    Yes I am feeling better already. Had the surgery exact two week ago.

    Drove from TX to AZ (Tucson) yesterday and today. I will stay here 3 days and then off to Las Vegas for a day and then on to San Francisco for about two weeks helping my oldest daughter.

    I should be in pretty good shape in another week.

    as10675
    Apr 24, 2015. 02:02 PM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    >>The bogy of the evil of having to sell yout assets is just that.<<

    If a person is in a tight retirement financial situation and the market goes down the impact is real. Where I worked the majority of people who wanted to retire in 2008 had to delay their retire because their 401K was brutalized.

    as10675
    Apr 22, 2015. 08:49 PM | 5 Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    >>Another important issue in a retirement portfolio is the sequence of returns; that is, the order in which returns occur has a dramatic impact on the longevity of a retirement portfolio. Market-based losses (or very low returns) in the early years (just after the person has retired) can be disastrous to the longevity of the portfolio. Thus, a retirement portfolio needs to be sufficiently diversified to minimize “timing-of-returns” risk.<<

    This where Total Return works until it doesn't. If a person must sell to meet expenses they are at higher risk of running out of money. This is what the typical MonteCarlo simulation shows.

    If the retirement is under funded then cash reserves and bonds (if they pay anything) are needed to stabilize the cash flow in a market down turn.

    as10675
    Apr 22, 2015. 07:27 PM | 3 Likes Like |Link to Comment
  • Why You Should Dip Into Your Taxable Account To Max Out Your IRA [View article]
    >> (you're right..right? :) <<

    Yes.

    People need to manage the accumulation phase (how am I being taxed now?) and the distribution phase (how will I be taxed later) for taxation.

    Based on my experience many people with savings may save taxes by delaying pensions (ordinary income) and social security to stay in 15% tax bracket for distribution especially if they has money in a brokerage account.

    My girl friend has a 21 year old college student son single, his savings direct to Roth IRA. Some brokerage savings of stock gifted from me, tax rate 0% on qualified dividends and 0% LT capital gains. Anything else 10% tax.

    Her daughter age 27 single, 1% to 401K, no employer match and the remainder direct to Roth IRA. Some brokerage savings of stock gifted from me, tax rate 15% on qualified dividends and 15% LT capital gains.

    My grand children, some brokerage savings of stock gifted from me, tax rate 0% on qualified dividends and 0% LT capital gains. Anything else 10% tax.

    For me, single, on distribution in retirement Roth tax 0%, Pensions 28% tax bracket, Traditional IRA 28% or higher, Brokerage savings tax rate 15% on qualified dividends, 15% LT capital gains and 28% or higher on anything else.

    Also for my social security 85% is taxed at 28% tax bracket or higher.

    as10675
    Apr 22, 2015. 07:10 PM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    Alan,

    Maybe so, but that would still be $260,000 per $1,000,000. I can't imagine doing that in my portfolio.

    as10675
    Apr 22, 2015. 02:42 PM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    DVN,

    No I do not rebalance.

    I trimmed some stock in the past right after 2009 where I removed my investment and left the house money.

    The one's I trimmed in recent years, I should have left alone for example APD for IBM after run up, or CNI for NFC. I left MO run so it is three times larger than it should be.

    I don't have any bonds so no balancing there.

    as10675
    Apr 22, 2015. 02:41 PM | 2 Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    I gave SCHD a look last night and loaded the 101 portfolio holdings into my EXCEL file. After I looked at it I found the following:

    * I own 46 of the 101 stocks listed and previously owned another 6 for 52 of the stocks.

    * This is a weighted portfolio with 42% of the portfolio in the top ten stocks and 68% in the top 21 stocks. So about 5% of the portfolio controls the portfolio performance. By the time I get down to stock 30 the majority of the portfolio (80%) is in those 30 stocks. I own all of the first 20 stocks and 24 of the 30.

    * SCHD is in essence a subset of my portfolio but it does not perform as well as my portfolio. My yield is 4.45% and I can not figure out what it is for SCHD. Being equity income you would think that they would post it.

    * Turn over rate is 26%. They are selling 26 of the 101 stocks per year. I think that they would be creating an annual tax bill for me in my brokerage account.

    * Fees are approximately $2,100 per year verses say $240 (30 trades @ $8) for my three accounts.

    * The ETF is too new to determine the capital growth rate.

    * The top 30 stocks that comprise about 80% of the portfolio weight are shown below.

    Symbol, Description, % Portfolio Weight

    CVX CHEVRON CORP 4.63%
    PFE PFIZER INC 4.61%
    VZ VERIZON COMMUNICATIONS INC 4.59%
    XOM EXXON MOBIL CORP 4.58%
    PG PROCTER & GAMBLE CO/THE 4.50%
    JNJ JOHNSON & JOHNSON 4.49%
    MSFT MICROSOFT CORP 4.39%
    KO COCA COLA CO/THE 3.57%
    INTC INTEL CORP 3.52%
    IBM INTL BUSINESS MACHINES CORP 3.32%
    HD HOME DEPOT INC 3.31%
    PEP PEPSICO INC 3.22%
    WMT WAL MART STORES INC 2.76%
    QCOM QUALCOMM INC 2.51%
    MMM 3M CO 2.33%
    MO ALTRIA GROUP INC 2.29%
    BA BOEING CO/THE 2.23%
    UTX UNITED TECHNOLOGIES CORP 2.19%
    MCD MCDONALD S CORP 2.07%
    COP CONOCOPHILLIPS 1.87%
    LLY ELI LILLY & CO 1.60%
    UPS UNITED PARCEL SERVICE CL B 1.49%
    DD DU PONT (E.I.) DE NEMOURS 1.45%
    TXN TEXAS INSTRUMENTS INC 1.36%
    CL COLGATE PALMOLIVE CO 1.33%
    ACN ACCENTURE PLC CL A 1.32%
    DOW DOW CHEMICAL CO/THE 1.24%
    LMT LOCKHEED MARTIN CORP 1.17%
    CAT CATERPILLAR INC 1.14%
    TGT TARGET CORP 1.14%

    An analysis like this for me reinforces my choice to select individual stocks. I could see SCHD as a holding tank to accumulate funds for future stock purchase or for diversity for an investor or for someone who is uncomfortable with owning individual stocks.

    as10675
    Apr 22, 2015. 11:23 AM | 16 Likes Like |Link to Comment
  • The Perfect Portfolio For Retirement Is An Illusion [View article]
    Paul,
    Well said.

    as10675
    Apr 22, 2015. 10:46 AM | Likes Like |Link to Comment
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