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  • #16
    I agree the house is causing all the stress. However, clearly you are in your dream location and likely dream home.

    Have you tried to refinance to a fixed rate product? I would look into that ASAP. I have no experience in jumbo loans however.

    I don’t see property taxes listed on your breakdown either unless it was included in your mortgage payment.

    So you are planning on selling from taxable to finish off the mortgage in 2030? How much will you owe at that point, likely > 1 million? I agree with Tim, I wouldn’t do it that way. Plus you will pay taxes on selling your taxable investments.

    Yes, you should cut down work to prevent burn out and spend more time with family.

    I personally would figure out the mortgage above and start deciding on what schedule I want moving forward. I would put a tentative hold/delay on the renovation until things settle out in terms of your schedule and new reduced salary, and new mortgage payments.

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    • #17
      Originally posted by savingdoc View Post
      Always max out 403B and have employer match of 10% of base (so 51K annually now)
      Just curious, are 403b rules different than 401K rules?

      With 401K, the employer match is capped for highly compensated employees. For 2021, the max comp for a 401K match was $290,000, so a 10% match would have been capped at $29,000. The cap rises to $305,000 for 2022, so in my case, our 6% match is capped at $18,300 this year.

      Regarding your question, in your position I would stretch less (e.g., no $500K reno, no interest-only mortgage pmts) and cut back on call.

      Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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      • #18
        Originally posted by MPMD View Post
        just think you've got $3M now. that's got 30 years to grow until you die. @7% (not a crazy assumption) that's $25M = $12M/kid.
        Anything is possible, but I think it is crazy to project 7% real returns as a base case today. The historical average return is based on historical average valuations. Prospective returns are inversely proportional to starting valuations. The current stock market valuation is in the 98th-99th percentile, and bond valuations are only slightly lower than recent highs beyond anything in history.
        Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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        • #19
          Originally posted by CM View Post

          Anything is possible, but I think it is crazy to project 7% real returns as a base case today. The historical average return is based on historical average valuations. Prospective returns are inversely proportional to starting valuations. The current stock market valuation is in the 98th-99th percentile, and bond valuations are only slightly lower than recent highs beyond anything in history.
          agree to disagree

          if you aren't including 7% returns as at least a possibility in your planning then to me at least it makes very little sense to be investing in equities at all.

          i think it's far more rational to expect the s+p to average a 10% return (obviously inflation factors in here) over the next 20 years than to expect it to be flat or down. one of those things has a 50 year track record, the other has been the permanent rallying cry of tens of millions of permabears -- all of whom have ultimately been dead wrong.

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          • #20
            Originally posted by MPMD View Post

            agree to disagree

            if you aren't including 7% returns as at least a possibility in your planning then to me at least it makes very little sense to be investing in equities at all.

            i think it's far more rational to expect the s+p to average a 10% return (obviously inflation factors in here) over the next 20 years than to expect it to be flat or down. one of those things has a 50 year track record, the other has been the permanent rallying cry of tens of millions of permabears -- all of whom have ultimately been dead wrong.
            The prospective S&P 500 dividend yield is 1.39%:
            https://www.barrons.com/market-data/market-lab

            Holding valuation constant, total, real, stock returns are composed of dividends plus earnings growth, that's just arithmetic, not an opinion.

            From Shiller's website, the annualized growth of real earnings over the last 140 years was 1.78%.
            http://www.econ.yale.edu/~shiller/data.htm

            If you are basing your expectations on historical results, and you expect the S&P 500 valuation to remain among the highest in history forever, then you should expect about 3.19% real from here (i.e., 1.0139*1.0178-1).

            If you want 7% real total returns, then you'll need real earnings growth of about 5.61%, assuming constant valuation. That would be unprecedented.

            Prospective stock returns are low because prospective bond returns are low. The 30 year TIPS (real) yield just poked into positive territory again at 0.04%.
            https://www.bloomberg.com/markets/ra...nment-bonds/us

            So stocks provide a prospective equity risk premium of about 3.15% (i.e., 3.19-0.04). That figure was about 5.1% during the twentieth century (from Dimson, et al. Triumph of the Optimists), so stocks are a little rich relative to bonds, but both offer low returns.

            I'm in the camp that expects lower long-term valuations, and if that occurs, then returns will be worse than above.

            Again, it's just arithmetic with historical guideposts.
            Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

            Comment


            • #21
              Originally posted by CM View Post

              The prospective S&P 500 dividend yield is 1.39%:
              https://www.barrons.com/market-data/market-lab

              Holding valuation constant, total, real, stock returns are composed of dividends plus earnings growth, that's just arithmetic, not an opinion.

              From Shiller's website, the annualized growth of real earnings over the last 140 years was 1.78%.
              http://www.econ.yale.edu/~shiller/data.htm

              If you are basing your expectations on historical results, and you expect the S&P 500 valuation to remain among the highest in history forever, then you should expect about 3.19% real from here (i.e., 1.0139*1.0178-1).

              If you want 7% real total returns, then you'll need real earnings growth of about 5.61%, assuming constant valuation. That would be unprecedented.

              Prospective stock returns are low because prospective bond returns are low. The 30 year TIPS (real) yield just poked into positive territory again at 0.04%.
              https://www.bloomberg.com/markets/ra...nment-bonds/us

              So stocks provide a prospective equity risk premium of about 3.15% (i.e., 3.19-0.04). That figure was about 5.1% during the twentieth century (from Dimson, et al. Triumph of the Optimists), so stocks are a little rich relative to bonds, but both offer low returns.

              I'm in the camp that expects lower long-term valuations, and if that occurs, then returns will be worse than above.

              Again, it's just arithmetic with historical guideposts.
              noted.

              imma keep buying equity heavy mutual funds

              keep in mind that in this discussion i'm always "wrong" and you are always "right." that's how being a permabear works and part of the reason i imagine it's so much fun.

              if the market ends up doing 20% this year (ENTIRELY possible) then i got lucky for one more year before the crash.

              you are always prophetic b/c the end is always nigh. and now the crash is going to be even more shocking.

              please note i'm attacking your position on this, not you personally.

              Comment


              • #22
                Originally posted by MPMD View Post

                noted.

                imma keep buying equity heavy mutual funds

                keep in mind that in this discussion i'm always "wrong" and you are always "right." that's how being a permabear works and part of the reason i imagine it's so much fun.

                if the market ends up doing 20% this year (ENTIRELY possible) then i got lucky for one more year before the crash.

                you are always prophetic b/c the end is always nigh. and now the crash is going to be even more shocking.

                please note i'm attacking your position on this, not you personally.
                Not feeling attacked.

                I'm not predicting a crash, just low long-term returns, because -- history.
                Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

                Comment

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