Gyroscopic Investing

iwealth wrote:

Pointedstick wrote: We don't live in that world anymore, if we ever really did in the first place.

And if we did live in that world, health insurance wouldn't have become prohibitively expensive for self-insured middle class citizens to begin with.

As Tyler explained earlier in the thread, it's all a wash.

And it will become much more prohibitively expensive for middle class, working families if a lot of people decide to use this welfare program to retire early. 

So if I'm 40 and planning on working to 60, I'll have to work a little longer so that others can retire at 30/40, etc. 

At the end of the day, this and many other programs provide loopholes that cause fewer and fewer people to do the heavy lifting in our society. 

Fewer horses pulling a heavier cart so to speak.

clacy wrote: And it will become much more prohibitively expensive for middle class, working families if a lot of people decide to use this welfare program to retire early. 

So if I'm 40 and planning on working to 60, I'll have to work a little longer so that others can retire at 30/40, etc. 

At the end of the day, this and many other programs provide loopholes that cause fewer and fewer people to do the heavy lifting in our society. 

Fewer horses pulling a heavier cart so to speak.

I highly doubt anyone is going to retire in his/her 30's just so that they can take advantage of ACA subsidies. I hope that's not the impression you've received from any poster in this thread.

The ACA is so divisive. People that never asked for it, were totally happy with their insurance, happy to go about their lives as planned, and now because they qualify for subsidized premiums (which takes them back to square one except with crappier insurance) they are stigmatized for being welfare recipients.

[quote=TennPaGa]But this sort of behavior is *everywhere*.  Whether or not something is sleazy is in the eye of the beholder, and whether it is accepted as such depends very much on culture.[/quote]

Please note that my response was based more on the OP's bringing Medicaid into consideration to support early retirement, since that program is supposed to be aimed at the truly needy.  Can we not all agree that using other peoples money improperly is "sleazy"?  I don't know if ACA income manipulation falls under that category, but for Medicaid I think it clearly does.

This thread reminds me of some dialog from Catch-22:

"Suppose everyone thought like you?"                 

"I' d be a fool to think different."

clacy wrote:

Libertarian666 wrote:

Under what moral system would the age of either (adult) party make it immoral or unethical for an adult male to have a sexual relationship with an adult female, assuming both are single and there is no coercion involved?

Under my own personal moral system.  Anyone that knows 18 y/o girls know they are not at full mental development and often incapable of making good choices, particularly in that arena.  I would hope that I personally would make the choice to pass if presented with that situation, and if I did it, I'm sure I would regret it after.  I think I would lose some respect if a friend did the same thing in that scenario.

Look, I'm not saying it's a crime against humanity, nor is taking welfare as an ER strategy, but it's a little "sleazy", IMO.

Women (and men) of any age can have widely varying levels of moral development. That's why I said I didn't know of any age-based moral rule (again, assuming adults).

Is it sleazy to take advantage of someone's lack of moral development? Yes, but that can't be determined solely by their age.

Libertarian666 wrote:

Women (and men) of any age can have widely varying levels of moral development. That's why I said I didn't know of any age-based moral rule (again, assuming adults).

Is it sleazy to take advantage of someone's lack of moral development? Yes, but that can't be determined solely by their age.

I can't imagine a scenario where I would be ok with an 18 year old daughter (I have only boys, thank god), sleeping with a 45 year old man regardless of how mature she was.  Just doesn't seem right to me. 

clacy wrote:

Libertarian666 wrote:

Women (and men) of any age can have widely varying levels of moral development. That's why I said I didn't know of any age-based moral rule (again, assuming adults).

Is it sleazy to take advantage of someone's lack of moral development? Yes, but that can't be determined solely by their age.

I can't imagine a scenario where I would be ok with an 18 year old daughter (I have only boys, thank god), sleeping with a 45 year old man regardless of how mature she was.  Just doesn't seem right to me.

That's because this doesn't pass the 'half plus seven' rule. Youngest age a 45 year old can date amd be considered not weird is 29.5. (45/2) + 7

Ha!  I deleted my post just before you quoted it because I wasn't sure others would appreciate it as much as I did.  I should know better than to question the fine sense of humor of the forum. 

Too good not to share (warning - it's one of those emails that floats around from time to time).  It "sort of" fits with this thread in a few ways.  You want to retire early in this mess?  Good luck. 

... M

If you can get arrested for hunting or fishing without a license, but not for being in the country illegally, you live in a country run by idiots.


If you have to get your parent's permission to go on a field trip or to take an aspirin in school, but not to get an abortion, you live in a country run by idiots.


If you have to show identification to board an airplane, cash a check, buy liquor or check out a library book, but not to vote who runs the government, you live in a country run by idiots.


If the government wants to ban stable, law-abiding citizens from owning gun magazines with more than ten rounds, but gives 20 F-16 fighter jets to the crazy leaders in Egypt , you live in a country run by idiots.


If, in the largest city, you can buy two 16-ounce sodas, but not a 24-ounce soda because 24-ounces of a sugary drink might make you fat, you live in a country run by idiots.


If an 80-year-old woman can be strip-searched by the TSA but a woman in a hijab is only subject to having her neck and head searched, you live in a country run by idiots.


If your government believes that the best way to eradicate trillions of dollars of debt is to spend trillions more, you live in a country run by idiots.


If a seven year old boy can be thrown out of school for saying his teacher is cute, but hosting a sexual exploration or diversity class in grade school is perfectly acceptable, you live in a country run by idiots.


If hard work and success are met with higher taxes and more government intrusion, while not working is rewarded with EBT cards, WIC checks, Medicaid, Subsidized Housing and Free Cell Phones, you live in a country run by idiots.


If the government's plan for getting people back to work is to incentivize NOT working with 99 weeks of unemployment checks and no requirement to prove they applied but cannot find work, you live in a country run by idiots.


If being stripped of the ability to defend yourself makes you more safe according to the government, you live in a country run by idiots.


If you are offended by this article, I'll bet you voted for the idiots who are running our great country into the ground.


GOD BLESS AMERICA
KEEP YOUR DOCTOR - CHANGE YOUR SENATOR       
AND YOUR PRESIDENT TOO!

clacy wrote: I can't imagine a scenario where I would be ok with an 18 year old daughter (I have only boys, thank god), sleeping with a 45 year old man regardless of how mature she was.  Just doesn't seem right to me.

Is it more right for your 18-year old son to be sleeping with a 45-year old woman?

IMO, either of these has the same degree of "right"-ness (IMO, basically none).  A 45-year old fooling around with an 18-year is creepy regardless of the sexes of the individuals involved.  There's no bright line here, but when you're chasing someone who is the same age as one of your (actual or potential) offspring I think you're probably a creep. 

WildAboutHarry wrote: Doing jiggery-pokery with your income to qualify for certain benefits seems, to me, to be in poor taste at best.  It reminds me of the Saturday morning "elder advocate" radio shows demonstrating how the kids can get mom and dad to transfer assets so that the government, rather than mom and dad, will pay for their long-term care.  And of course the kids get the money.

The consolation is Medicaid is the absolute bottom of the barrel sickcare.  You get what you pay for.  There's no free lunch.

Also, EBT is extremely hard to get unless you're truly asset-destitute or you're engaging in fraud to get it (more likely).  You can have luxury cars and luxury fur coats and limited luxury things like that (i.e. Welfare Queens), but nothing else.

Pointedstick wrote: But Obamacare is intended for working age, able bodied people. I think that's one of the things that makes it so distasteful to you, but that's just the way the cookie crumbled. That's what we get for electing Democrats to the Presidency and Congress at the same time.

It could have been worse.  We could have had HillaryCare instead.  That would have been epic!  While I don't understand why ObamaCare is 33,000 pages long, it really didn't do much but tweak the existing rotten system.

WildAboutHarry wrote: But we all don't benefit when someone fraudulently claims disability to gain Social Security disability payments, or otherwise gains benefits that are not truly warranted.

Was it any different before "Welfare Reform" aka Welfare-To-Work sent them all over to Disability?  People that don't want to work are not going to work.  People that can't find work in Appalachia still need welfare without work requirements.  Who is to say what is and what is not warranted but the individual himself?

Conservatives have a scarcity mentality.  They think there's a fixed pie that is being drawn upon for these welfare "transfer payments".  That's not operational reality.  Keep in mind they're so convinced about their delusion they are willing to shut the government down over it.

WildAboutHarry wrote: Please note that my response was based more on the OP's bringing Medicaid into consideration to support early retirement, since that program is supposed to be aimed at the truly needy.  Can we not all agree that using other peoples money improperly is "sleazy"?  I don't know if ACA income manipulation falls under that category, but for Medicaid I think it clearly does.

ACA and Medicaid income manipulation are the one in the same in the states that did the Obamacare expansion.  Without Obamacare expansion you would have to resort to asset manipulation, such as transferring your assets above $2K into a irrevocable trust so you can qualify for a nursing home.  In fact, I would think knowledgeable people would wisely want to avoid Medicaid given how rock bottom crappy it is and get on a real sickcare insurance plan from the exchange.

Tyler wrote:

iwealth wrote: What happens if you need extra money in any given year. Major house repair, a loved one desperately needs financial help, etc. I'm sure I wouldn't be able to count the unknown possible reasons one could need an extra $10-15k in any given year. I imagine it could negate your subsidies for the entire year?

That's the beauty of the PP cash.  You can easily take out $15k for an emergency and because the capital gains are so low the income is marginal.  I paid off my house by selling some SCHO last year and it only increased my reported income by a few hundred dollars.  That wouldn't affect subsidies at all. 

Now if you have a portfolio short on cash, that's a whole 'nother story.

a well structured plan no matter what the portfolio should always have sources of cash and emergency money and  likely does .  retirees have been generating cash from systematic withdrawals or bucket buffers  from portfolio's forever no matter what the allocations . this isn't something unique to the pp ,  .


you do know that study after study shows cash buffers are a mental thing  and actually hve no additional value  in a portfolio by design .

even spending down  from 100% equity retirees would have had very very  high success rates over very 30 year time frame .

WHY ?  because the weight of cash and even bonds  pull equity's back in up markets . 100% equity's has always gone up so much more that spending directly down in good and bad times has not been a problem .  now i am not saying retirees should be 100% equity , but the fact is if they were  it really was much  ado about nothing as they still did just fine through just about every time frame  .

going out beyond 30 years they actually have a higher success rate then a 50/50 mix .  so you do not need big percentages of cash . you may want to hold a bit more cash and bonds until after the first up cycle but from that point on having a big cash buffer is not something that adds anything but comfort .

pfau , blanchett and kitces have  released papers on this fact over and over

mathjak107 wrote: you do know that study after study shows cash buffers are a mental thing  and actually hve no additional value  in a portfolio by design .

Cash came up in this thread with regards to the Affordable Care Act and how irregular income affects the healthcare costs of an early retiree.  My quote was an answer to how cash in a portfolio can help mitigate the risk of a large unexpected expense bumping your reportable income (caused by needing to sell stocks) to the point where you owe more for health expenses.  That's a new wrinkle almost certainly not accounted for in the studies and success rates you quote. 

In my case, the PP cash is a necessary tool to generate exactly the amount of reportable income I need each year to qualify for healthcare subsidies and minimize taxes.  I can do this every year on my own schedule and regardless of market returns or unexpected expenses like a new roof.  Largely eliminating most taxes using cash as one tool at my disposal is a tangible financial benefit that studies ignoring or over-simplifying taxes will never appreciate.  I can assure you I am better off with a good amount of cash than without. 

I agree that cash availability is not exclusive to the PP. I recommend that all retirees consider adding some cash no matter what portfolio they use. 

but incoming dividends , and bond interest  which you can't control if enough can screw that up . that is my problem this year .  being it is our first year in retirement we can basically live off cash and a small pension  but the dividends and interest i can't control will kill the subsidy for me . as well as the managed funds had far better performance over the years then if i indexed which would have had less distributions .

all things being equal th special capital gains rates far out weight the subsidy but none the less  the dividend issue is a real world factor .

having cash is one thing but the distributions on the other assets may be something else and you can't control that each year .

Yep -- every personal situation is different, which is why you can't generalize. 

I have the opposite problem.  With my personal proportion of taxable vs tax-deferred accounts and an extremely tax-efficient Permanent Portfolio, dividends and interest alone aren't enough to qualify for ACA coverage at all.  In my state, without action to artificially generate additional reportable income (Roth conversions, intentional rebalancing, etc.) I'd be denied subsidies for my income being too low!

now that i am at retirement , i wish roth's existed during my career . i really blew it when they finally did by going for the tax deduction in the  traditional 401k .

but as always , we don't know what we don't know . i never imagined how many other things are linked to retirement tax income .

getting your ss taxed , medical subsidy , medicare surcharges , how much you pay for medicare , rmd's , etc etc .  this is even if tax rates don't budge .

Tyler wrote: Yep -- every personal situation is different, which is why you can't generalize. 

I have the opposite problem.  With my personal proportion of taxable vs tax-deferred accounts and an extremely tax-efficient Permanent Portfolio, dividends and interest alone aren't enough to qualify for ACA coverage at all.  In my state, without action to artificially generate additional reportable income (Roth conversions, intentional rebalancing, etc.) I'd be denied subsidies for my income being too low!

in our state go below 15k or so  and you can find yourself on medicaid like it or not .

mathjak107 wrote: going out beyond 30 years they actually have a higher success rate then a 50/50 mix .  so you do not need big percentages of cash . you may want to hold a bit more cash and bonds until after the first up cycle but from that point on having a big cash buffer is not something that adds anything but comfort .

pfau , blanchett and kitces have  released papers on this fact over and over

Believe me, the past 30 years is not representative of the future, so projecting the past into the future is the height of naivety.  Stocks are so historically overvalued, they make 1929 look like a walk in the park.  We still have the 2000 high to surpass in price terms, however, but valuation wise we've blown past it by a couple orders of magnitude.

Frankly, I think the sheer desperation of the Baby Boomers is what has driven up valuations to such nose-bleed levels.  They blew it.

mathjak107 wrote: in our state go below 15k or so  and you can find yourself on medicaid like it or not .

You don't have to use it.  But it's a "safety net", so its certainly better than nothing.

don't mis-understand . if you are a retiree and living off cash our taxable income is very low . i am only 62 so i have an aca gold plan .  if our income  falls below the poverty threshold of about 15k we do not have a choice anymore of an aca plan . you are put right on a Medicaid plan whether we want to be or not .  i would have to do roth conversions if that happened to get income high enough .

mathjak107 wrote: don't mis-understand . if you are a retiree and living off cash our taxable income is very low . i am only 62 so i have an aca gold plan .  if our income  falls below the poverty threshold of about 15k we do not have a choice anymore of an aca plan . you are put right on a Medicaid plan whether we want to be or not .  i would have to do roth conversions if that happened to get income high enough .

Well, you're superrich so I think its a nice problem to have.

not at all ,  my retirement income for nyc buys a lower end middle class lifestyle .  don't confuse a middle class income with a middle class lifestyle . a middle class lifestyle according to an article in the ny times takes mid 6 figures in the city for a couple  .