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Old 04-22-2021, 11:37 PM   #10101
jargon
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One minor annoyance to me about mutual funds is you may want to sell on a day that is either going up or down drastically. This may not apply as much if you're holding for a long time, but you often won't know the final price you're selling at with mutual funds because they're priced at the end of the day. So, if you put in a sell mid-day, the market crashes a few percent in the afternoon, you're SOL. If you have an ETF, you can sell at the price at that instant.

Not a huge deal, but I find it annoying that I don't know what price I'm selling at, even if I put in a sell towards the end of the day (you typically have to sell them an hour or so before market close or they won't go through, which can be a whole separate annoyance).
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Old 04-23-2021, 07:27 AM   #10102
Jack
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Convert to ETFs. They buy/sell just like stocks do and many mutual funds have identical ETFs. Vanguard has tons of these as they are the exact same investments in both. Vanguard had the patent on an ETF being a class of the mutual fund. But others, thinking Schwab have similar MF --> ETF equivalents.

In some cases, ETFs have lower ERs. These days, nearly anything can easily be held for well under 0.1%. My average ER across the portfolio is around 0.02%.
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Old 04-23-2021, 09:56 AM   #10103
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Quote:
Originally Posted by Jack View Post
Convert to ETFs. They buy/sell just like stocks do and many mutual funds have identical ETFs. Vanguard has tons of these as they are the exact same investments in both. Vanguard had the patent on an ETF being a class of the mutual fund. But others, thinking Schwab have similar MF --> ETF equivalents.

In some cases, ETFs have lower ERs. These days, nearly anything can easily be held for well under 0.1%. My average ER across the portfolio is around 0.02%.
Interesting take. I've got to look at what ETF solution are available vs. the mutual fund S&P funds I've been looking at.
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Old 04-23-2021, 11:11 AM   #10104
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I did some in depth planning/forecasting with our retirement funds at the beginning of this year. Funds from basically 6 buckets not including SS. SS at 0%, 50%, and 75%. Taking SS at minimum and maximum ages. Various tax levels: 20%, 22%, 24%, 28%.

Left in a good bit of padding each month. Included withdrawing $X/month that we currently put into long term savings, $X/month that we currently put into short term savings, and a car payment (which may or may not have). Around a $1200 a month that we wouldn't actually take out most months.
Resulting in more interest being earned over the years.

Included cost of medical insurance (which is a big question mark). Then readjusting when we could use medicare.

Overall we're in good shape for retiring early. Just a matter of exactly when. Have our annual meeting with our financial advisor in June. Plan to run my plan over with him and see what he thinks.
Fortunately, even the most expensive care home is less than we spend/month.

No traveling.
Sell the car / cancel the insurance / no further costs etc.
No eating out.
No more golf/skiing.

Just hire a super model nurse to take care you.

Fortunately, all other health care costs are covered in Canada so need to wait until you can claim Medicare, so you just have to cover your Uber cost to get to an appointment, or have a friend take you and then by them lunch

I am certain that the hospital foundation will be counting down the days until we are dead
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Old 04-23-2021, 11:51 AM   #10105
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We're also looking at starting our own retirement compound with our friends. Have a live in nurse(s) and split the cost.

Between all our skill sets we could plan and build everything.

Biggest question is where we would want to live. Right now looking at the PNW or Big Island, HI.
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Old 04-23-2021, 12:01 PM   #10106
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Originally Posted by shiplemw View Post
Interesting take. I've got to look at what ETF solution are available vs. the mutual fund S&P funds I've been looking at.
I started paying a lot more attention to that last year and started migrating to all low or no fee funds in my 401k.

I don't have a huge number of funds to choose from, but even within the options I had, I found several that were an order of magnitude higher fees than a very similar option.

I had a small percentage in an actively managed "fixed income" fund that was almost entirely bonds. Top holdings showed it was invested in nearly identical bonds that were also in a different bond index ETF...with a way lower fee. So I moved out of the active fund into the bond ETF.

The ETF has a little more volatility than the active fund, but it also has performed better over the last 20 years.
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Old 04-23-2021, 12:50 PM   #10107
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I started paying a lot more attention to that last year and started migrating to all low or no fee funds in my 401k.

I don't have a huge number of funds to choose from, but even within the options I had, I found several that were an order of magnitude higher fees than a very similar option.

I had a small percentage in an actively managed "fixed income" fund that was almost entirely bonds. Top holdings showed it was invested in nearly identical bonds that were also in a different bond index ETF...with a way lower fee. So I moved out of the active fund into the bond ETF.

The ETF has a little more volatility than the active fund, but it also has performed better over the last 20 years.
So after doing some reading on here several years ago I re-allocated my assets to lower cost funds inside my 401k through work. I've actively used the ER and overall performance as the main criterion to choose between the (limited) options available to me. I'll have to re-look at this as I did it again recently in 2020 when the company switched from Fidelity to TRoweprice. I don't recall their being any ETF options in our 401k through work.

For my brokerage account I went through Fidelity because hey that is where all my accounts are (thank you company for switching to TRowe....grrr) and settled on FXAIX which is a S&P index fund, good performance, with a low ER (0.01%). I just don't like the delay in trading though. I, like Jargon, would like to know what I'm selling and buying at with a bit more accuracy.
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Old 04-23-2021, 02:20 PM   #10108
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RE: ETF discussion, thanks for all of the input, I read it all. For those that use Vanguard, a question...

If I want to exchange all of my shares of VDIGX for VIG, it looks like I have to sell VDIGX, put it in my settlement fund, and then buy VIG from my settlement fund?
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Old 04-23-2021, 02:54 PM   #10109
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Originally Posted by .brian. View Post
RE: ETF discussion, thanks for all of the input, I read it all. For those that use Vanguard, a question...

If I want to exchange all of my shares of VDIGX for VIG, it looks like I have to sell VDIGX, put it in my settlement fund, and then buy VIG from my settlement fund?
on your holdings summary page, click 'transact', then 'exchange (sell to buy) Vanguard funds'
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Old 04-23-2021, 03:00 PM   #10110
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Tried that, only option is to transfer to my other mutual funds, or choose a new mutual fund (no option for ETF).
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Old 04-23-2021, 04:20 PM   #10111
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is there the equivalent of a target date in ETF? I have a mishmash of lowcost index ETFs in my roth and post tax accounts. If I could simplify further to a low enough cost Target date strategy I may consider it. I am sure I could just tranfer everything to Vaungard and do a target date MF, but that seems like more effort than I can muster currently.
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Old 04-23-2021, 05:12 PM   #10112
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Originally Posted by docwhorocks View Post
We're also looking at starting our own retirement compound with our friends. Have a live in nurse(s) and split the cost.

Between all our skill sets we could plan and build everything.

Biggest question is where we would want to live. Right now looking at the PNW or Big Island, HI.
Have seriously had the same discussion with friends.
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Old 04-23-2021, 05:18 PM   #10113
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At Vanguard, IF there's an equivalent ETF to a mutual fund, you "can" exchange without selling/buying. But you have to call on the phone their double secret ETF line and they can do it for you.

I made the mistake of calling the general Vanguard telephone number and was first told I had to sell/settle/buy and then was email'd 2 documents supporting their WRONG advice. I posed the question on Bogleheads and they pointed me to the ETF telephone line. I converted VTMGX to VEA. I had to open a brokerage account to do this as I only had a mutual fund account at the time. So I did all that and converted to ETF, let it settle for a few weeks and then transferred the whole thing to TDAmeritrade because I was tired of the incompetence at Vanguard.

I hold both ETFs and mutual funds all over. At Fidelity, because the zero funds are only mutual funds, I've got those there. At Schwab, I have both. TDAmeritrade, all ETFs.
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Old 04-23-2021, 07:00 PM   #10114
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Is there a benefit to having all those separate accounts?
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Old 04-23-2021, 07:51 PM   #10115
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Is there a benefit to having all those separate accounts?
I like to keep account separate just to make it easier to manage various stocks.

Simplistically it is set up as follows, but the reality is a bit more complex.

1. All the high risk ones that I need to babysit are in one account. Either cash out or set stop limits when going on vacation.

2. The less risk stocks are in another. Don't mind not checking up on them for a few days.

3. Stocks I don't worry about except for in 10 years are in the last. Don't lose sleep if not looked at for months at a time.
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Old 04-23-2021, 11:12 PM   #10116
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Old 04-24-2021, 06:34 AM   #10117
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At Vanguard, IF there's an equivalent ETF to a mutual fund, you "can" exchange without selling/buying. But you have to call on the phone their double secret ETF line and they can do it for you.
What a pain. Let me ask, is there a reason I would want to do that (calling the number) as opposed to "selling" my current mutual funds into my settlement account, and then just buying the ETF from that? Like, are there tax implications I would run into or something that I wouldn't incur if I called and exchanged without selling/buying?

Quote:
Originally Posted by f4phantomii View Post
Thanks for sharing. I do want to ask a question, though. The article gives the example of putting $100k into fund A with an ER of .1%, and $100k into fund B with an ER of .05%. It says after 30 years, you have $120k more in B than A. However, that is assuming the exact same ROR I supposed? But if fund A has a higher ER, however, it also has a higher average ROR, say 18% over those 30 years, versus 9% for fund B, doesn't it still make sense to go with fund A despite the higher ER? I know, nothing is guaranteed and you can't assume a higher ROR based on history, but am I looking at this the wrong way? I guess my point is, is ER really that important in and of itself, or should you look at other factors of the fund/ETF and not base your choices solely on ER?
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Old 04-24-2021, 08:59 AM   #10118
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Thanks for sharing. I do want to ask a question, though. The article gives the example of putting $100k into fund A with an ER of .1%, and $100k into fund B with an ER of .05%. It says after 30 years, you have $120k more in B than A. However, that is assuming the exact same ROR I supposed? But if fund A has a higher ER, however, it also has a higher average ROR, say 18% over those 30 years, versus 9% for fund B, doesn't it still make sense to go with fund A despite the higher ER? I know, nothing is guaranteed and you can't assume a higher ROR based on history, but am I looking at this the wrong way? I guess my point is, is ER really that important in and of itself, or should you look at other factors of the fund/ETF and not base your choices solely on ER?
Experts would tell you not to base choices solely on ER. But that also assumes you have the education and desire to understand the variety of factors there. And the vast majority of people either don't have the education background necessary or won't invest the time to learn. Thus, the "easy button" is to just pick the lowest ER.

But I'll give you an example. Fidelity has a zero fee international stock fund (FZILX). They also have a nearly identical ETF, (FSPSX) that has a very low ER of 0.035%. The difference between the two is the ETF has exposure to about 30% more companies in it's holdings. There is barely any difference in fund performance, but more exposure thru additional holdings in the ETF could be better.

Are you going to pull the full list of holdings for both funds and compare them side by side, then look at what difference those companies made in the broader ETF vs the zero fee one?

Not unless its your job. Not as a retail investor.

So those funds do perform slightly differently, but its extremely complex to determine if the difference is enough to make up for the ER on the ETF, and predict if that will continue to be true in the future.

Keep in mind it's not just the drag of the fee on your balance over that 30yr period. It's the growth of the fees you didn't have to pay. So higher ERs hurt you twice. Once when getting deducted from your balance, and again because the money extracted in fees isn't invested anymore for compound growth over 30yrs.
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Old 04-24-2021, 02:18 PM   #10119
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What a pain. Let me ask, is there a reason I would want to do that (calling the number) as opposed to "selling" my current mutual funds into my settlement account, and then just buying the ETF from that? Like, are there tax implications I would run into or something that I wouldn't incur if I called and exchanged without selling/buying?
If it's a taxable account, when you sell with a gain, you're paying taxes. If you do just an exchange, there isn't.

I have all those accounts because of sign on bonuses. I figure since Schwab bought TDAmeritrade, they'll combine at some point. I also have eTrade and ally invest because.....sign on bonuses.

Everything's on an excel spread sheet. It really isn't difficult to manage. Half of my money's in a Fidelity IRA. That's where I rebalance. The other accounts all have only one fund/etf. My spread sheet tells me everything I need to know. ER, $ per year that ER costs, % of each category, total liquid, total net worth. I put balances in manually so there's no hacking worry. It's on a USB stick.
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Old 05-07-2021, 07:14 PM   #10120
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crossposting, edkwon-style, because some of y'all may be interested in HELOC rates this good:



Third Federal. Now ya know. That's prime - 1.01%. (I heard of someone getting prime - 1.5% last year but this is as good as it gets now, apparently.)
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Old 05-07-2021, 08:36 PM   #10121
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Originally Posted by shikataganai View Post
crossposting, edkwon-style, because some of y'all may be interested in HELOC rates this good:



Third Federal. Now ya know. That's prime - 1.01%. (I heard of someone getting prime - 1.5% last year but this is as good as it gets now, apparently.)
Thanks for this!! Was just considering a HELOC. What equity percentage does it borrow up to? 85%? Also what do they use to verify house value?
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Old 05-07-2021, 10:44 PM   #10122
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I think they go to 80%. Some others will go to 89.9 or 90% but not as good rates.

They'll do their own appraisal, I am guessing.
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Old 05-12-2021, 12:52 PM   #10123
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Anyone have an LLC or S-Corp registered in the Caymans or other zero corp tax rate countries?

As best I can tell, as a US biz you sell all of your "intellectual property" or other company assets to the offshore corp for say $1.

The offshore corp then licenses that IP or leases the physical assets back to the US-based biz...usually for an annual amount that is roughly equivalent to the amount of profits the US-based biz makes that year.

US-based biz is only taxed on profits, which are effectively net of $0.

Annual profits of the offshore biz are taxed (or not) based on the laws of the country the offshore biz is registered in.
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Old 05-12-2021, 01:35 PM   #10124
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Default Tax implications?

I hold 100 shares of stock ???. It’s long enough to be considered capital gain/loss.

I was going to increase my position by 50 more shares. But accidentally sold instead. This would have cause me to realize a loss. After I figured out what I had done. I buy 100 shares to get to my desired 150. Do I consider this as two distinct transactions? Realize the loss. Set the basis for the newly purchased 100 shares. Or does this fall under some sort of other rules since the sale and buy are less than 61 days apart.
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Old 05-12-2021, 02:10 PM   #10125
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Anyone have an LLC or S-Corp registered in the Caymans or other zero corp tax rate countries?

As best I can tell, as a US biz you sell all of your "intellectual property" or other company assets to the offshore corp for say $1.

The offshore corp then licenses that IP or leases the physical assets back to the US-based biz...usually for an annual amount that is roughly equivalent to the amount of profits the US-based biz makes that year.

US-based biz is only taxed on profits, which are effectively net of $0.

Annual profits of the offshore biz are taxed (or not) based on the laws of the country the offshore biz is registered in.
I am not a tax professional nor accountant, but I think USGAAP may require you to report these type of things in "fair value", so using $0 may trigger an IRS audit in which you'd probably have to get a professional to give you fair value assessment to prevent getting fined.
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