[Coronita]

This might help.

https://www.forbes.com/sites/jlange/2019/12/26/guide-to-beating-the-new-death-tax-the-end-of-the-stretch-ira/#5a07b92849e9

For the time being, it might be better to nudge contributions leaning slightly more biased to a Roth 401k of you split between traditional and Roth.

[Coronita]

Merry Christmas to you too. Hobbie.

Good point about state school being able to finish in 4….kid, you’re finishing in 4…..

Where I went to school on the east coast, tuition was high, but housing was cheap. And even now property value hasn’t gone anywhere. If my kid stays in CA, I think we have most of CA covered the second half of the college. The exception would be Davis or Obispo. The first half, for social reasons, probably is better to stay on campus. I don’t think the top rsnk colleges are my kid’s cup of tea too. But I included them for a budgetary purposes.

With 5 years left, contributing $2000/month the 529k that I started to do last year, and with about 5% average return (I rebalanced recently reduce the domestic stock concentration to something more conservative), I think we can just about make it to about $360k without tapping any custodian non-college accounts or my own assets/funds. That should put us somewhere in the category between a UC school and a private school, without needing to stretch that much. Anything less expensive will be just money left over that my kids kid can use or my cousins or both.

Good thing I started really early and let drip monthly drip investing, tax efficiency, compounding run its course over decade. I didn’t even notice the extra monthly contributions, but it paid its way forward. Didn’t realize how crazy educational costs have become. And it’s unlikely we would have been successful in hiding assets to qualify for financial aid, short of moving everything offshore…. Shit is expensive these days.

[Coronita]

https://www.marketwatch.com/story/why-higher-stock-prices-a-strong-economy-and-trumps-re-election-are-likely-in-2020-2019-12-23?siteid=yhoof2&yptr=yahoo

[Coronita]

November 18 S&P 500 tracker SPX closes at 3122
December 23 SPX is around 3226

I’ll take the 3% 1 month gain over the less than 2% 1 year CD or 1.88% money market fund and diversify into something else at year’s end. Makes even more of a case for some slow and steady drip investment plan of a small fraction of ones net worth instead of random guesses as to when the next downturn will be.

Merry Christmas Doomsayers.

[Coronita]

Just another observation…..

While all my domestic index funds (S&P500, mid cap, small cap) are all at or near record high , the one noticeable index that has been a dog and has been my international stock market index funds , which are not even close to all time highs. Are US companies earnings prospectives *that* much better than their foreign peers? I think not, but apparently a lot of people do?

For example, just comparing VFIAX (S&P500 Admiral shares) versus
VTIAX (total international Admiral shares)

vtiax has fallen behind.

Maybe moving forward , nudge allocation towards international indexed and reduce allocation on domestic indexes.???? I don’t know.

[Coronita]

[quote=AN][quote=flu]Mira Mesa condos are a slam dunk to rent. Elsewhere, not so much.[/quote]I dunno, MM condo is the biggest PITA for me.[/quote]

Well that’s because I intentionally sent you the pain in the ass tenants so you would capitulate and sell your condo to me with a discount. You know how cutthroat I can be! Just kidding.

[Coronita]

[quote=Myriad]I’m sure a lot of the advice is for people that haven’t saved enough in their 401k, IRA/Roth 401k, IRA. Since the majority of Americans haven’t saved enough in general.

For those that have significant amounts in a tradition 401k/IRA, moving money prior to RMD requires a lot of planning. Converting as much as possible prior to RMD to lower AG taxable income.
It’s hard to imagine tax rates for the 0-90% of income really going up more than a few % points. There would pretty much be riots in the streets if it goes up by 5%. More likely, the step-up basis will be eliminated – a stealth estate tax for the relatively wealthy.

As for real estate, prices are pretty high now and lots of places in SD/CA are cash flow negative. And if interest rates ever go up, the appreciation will be pretty limited.[/quote]

It won’t be cash flow negative if the property is free and clear. Then it’s more or less simply cash on cash return

Hyothetically, one can spend $300k on a 1/1 in MM that rents for $1600 month. Factoring in HOA, insurance, and ptax costing $450/month, that’s still
$13800/300000 or 4.6% return

[Coronita]

[quote=outtamojo]You can gift 15K annually from each parent tax free.
Yes peanuts for you high rollers : )[/quote]

messes up financial aid considerations. I’m kidding.

We do, problem is not sure I want to give money to a kid without an assurance kid can manage well.

[Coronita]

[quote=svelte][quote=flu] If you bought a truck with the blindspot gimic…[/quote]

Might be a gimmick on a single cab with no camper shell. Otherwise there can truly be blind spots on trucks.

A few years ago we bought a car that just happened to have blind spot detection. Once we became used to it, we have insisted it be on every car we have since then. It doesn’t replace looking over the shoulder and mirror usage, but it is one additional check mark that gives us greater peace of mind when changing lanes/turning.

Same with front and rear sensors. At first we were “whatever”, but now that we have them, man do we love them! Just additional data points we can use to determine whether we are positioned correctly. Manufacturers are getting much better at placing the sensors so they are better integrated into the car and don’t look like someone drilled holes into the bumper and slapped in a sensor.

So I guess you can blame my wife and I for all the new electronics in cars. We love them. Our older cars feel like covered wagons when we drive them now.[/quote]

I think a blindspot system and rear camera in general is a good idea on a large vehicle, I just question Ford’s decision to put them in the taillight. it just to me seems to expose those things to easily get damaged. And there probably is a happy medium between wanting luxury and paying for it (now and later) and also wanting a Spartan car geared more for reliability. I don’t think these technology advancements are bad, just they have tradeoffs.

I like the F-150 especially this generations. I’d probably would avoid getting the electronic blindspot sensors, assuming it doesn’t become a mandated requirement for new cars eventually.

[Coronita]

[quote=svelte][quote=flu]
10 years goes by really fast. Life is short.[/quote]

That’s why I keep my life really simple. More time for things I enjoy.

Also a reason I’m not a landlord – I watched my dad do it and it was such a time sink and frustration in his life. I know here in SoCal that is how you can really build wealth, but I cherish my free time.

Also, the real estate route is promising here in SoCal, but in most of the rest of the country it is not nearly as financially beneficial.

I agree with Hobie who stated they should have a LOT more on financial planning in high school. I’ve also always thought they should have a course on preparing for work life also: interviewing, resumes, proper workplace behavior.

Those types of topics would truly prepare one for adult life.[/quote]

I can totally understand how this could be the case. I think I am learning that depending on the type of property and clientele, it could drastically affect the pain in the ass factor. Mira Mesa condos are a slam dunk to rent. Elsewhere, not so much.

[Coronita]

Speaking of expensive tailights. Here’s another example. The Ford F150.

If you bought a truck with the blindspot gimic, and someone smashes your tailights or it gets cracked, be prepared to fork over +$350-$600+
https://www.1aauto.com/2015-17-ford-f150-driver-side-led-tail-light/i/fdltl00025?f=1024396&y=2017&utm_campaign=gb_csv_br&utm_content=LTL&gclid=Cj0KCQiAovfvBRCRARIsADEmbRLcOydEgHeg37GlnWm7UltvzdvmHIytPCXBhu5AECJHQG0no6_HUOwaAlqsEALw_wcB
(List price is $1000 )! That’s just for the LED tailight. You still need to move the blindspot module into the new headlight

If you just bought a no frills truck, that taillight is $42 with an easily replaceable bulb.

https://www.carparts.com/details/Ford/F-150/Replacement/2015-2017/RF73010008.html?TID=gglpla&origin=pla&utm_source=google&utm_medium=pla&utm_campaign=221983653&gclid=Cj0KCQiAovfvBRCRARIsADEmbRJv9nOETf51gWif3RZ9a8xO6ho9_4slMreyh_6Zs—HhQ6Dw5k0X8aAlkiEALw_wcB&gclsrc=aw.ds

All these overengineered electronic designs in cars are just one more thing driving up long term customer cost of maintenance and ownership.

at least BMW didn’t make servicing the rear brake pads require a BMW scan tool to release the e-brake….yet…

I just wonder how long that e-brake motor will last. Probably not longer than a traditional cable

[Coronita]

[quote=spdrun]It’s a 2200 lb car. Can you depower the stupid thing and call it a day? Some cars even mount the motor on the column, not in the rack, making it even easier to convert to a manual system (if you have a reasonably normal level of arm strength).[/quote]

Conversion, yes. depower easily no. People tried disabling, but it was an awful experience going through slaloms..

Flying Miata did conversion to a hydraulic system. But they did that as part of their V8 LS3 conversion. Mazda reprogrammed the steering for some cars starting my year, so I personally like the feel. purists complain about it though. I would prefer if Mazda spent their time fixing the weak gearbox. The Fiat 124 isnt bad. It’s basically Miata with a Fiat engine. And they are pretty cheap new now that Fiat is on the verge of being extinct in the US. You can pick up a new Fiat 124 for around $21k, and there’s now a pretty decent tuning option for them. Untuned, they are kinda sluggish.

[Coronita]

[quote=spdrun]Your ND Miata still has mechanical steering … there’s a mechanical shaft connected to the steering wheel driving a gear on the rack. The power ASSISTANCE is just electrical, not hydraulic — it’s actually less prone to leaks and easier to “depower” than a hydraulic rack. Even Teslas (techbro mobiles par excellence) have a mechanical connection between the wheel and the steering rack.[/quote]

Correct, poor choice of words on my parts. Although electronic PS has not been problematic on my ND yet, it certainly has been problematic on the BMWs.

[Coronita]

I can’t imagine electric cars being a long lifetime car that you can keep for 20+years.

But you know I don’t think most new cars will last as long as older more mechanical cars. Here’s another example. Most new ICE cars don’t use a real mechanical gas pedal anymore. And many don’t use a mechanical steering rack too.

My ND Miata uses both drive by wire pedal and also electronic steering. These things are bound to break. BMWs no longer use mechanical shifters for their automatics and many of their cars now use electronic emergency brakes. I would say my NA Miata will probably me more reliable than my NDx even though my ND is a better overall miata…(My ND Miata has other issues. the manual gearboxes have been snapping easily by people. People think they’ve took the gram strategy too far. I’m about to order a spare transmission from Mazda Motorsports with a racer’s discount and store it away in case I snap one out of warranty. I think I already voided it anyway since I stuck a blower on the engine, lol. $1600 for a new transmission with a racer’s discount. that’s cheap. Funny thing is the Fiat 124 is actually more reliable. Fiat engineers stick with the previous generation NC transmission

[Coronita]

[quote=Hobie]Nice analysis flu! This kind of discussion/analysis should be part of every high school students coursework. Real world investing and financial decision making. Heck, they only touched on this in my college classes … and I was a business major.

As you are aware, lots of people can not deal with the landlord part of the real estate investing so RE is not for everyone… ok maybe a REIT ;)[/quote]

I agree. But at the same time, I also think the financial/money management industry have been perpetuating a lie. The stock market isn’t that great for the non lazy. and also 401k/IRAs are tax magnet that probably well disciplined people dont need. See my other thread.

The other thing is, what will the next 10 years look like?
It’s not cash, that’s definite losing proposition. For real estate, at least in SD, appreciation will probably be flat. So you’ll need to primarily count on cash flow. Maybe stock will be the best option for the next 10 years? Don’t know.

[Author]

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