"Pssst!! Wellesley"

[Nords]

I'm pretty sure we collaborated.

Wasn't the "Psssst" part of the joke based on a quote that William Shatner/Denny Crane used to say to Candice Bergen's character in "Boston Legal" or whatever the show is called?

I've never seen the show, let alone heard the dialogue, but that's the vague memory I have from a couple years/50,000 posts ago...

 

[thaidyed]

Until finding this board I always figured that bonds were something to put money into 'later' when I was 'old'. Now I'm thinking perhaps that reasoning is unwise...
I have no bonds in my portfolio at all and the ways to buy direct (I-bonds, TIPS, etc.) and are not very appealing right now so I am intrigued by the idea of using Wellesley as a bond fund (ala FIREDreamer) sounds like a good one...(of course have to finish doing my research first, thnx WantTo).

But assuming I do decide to get into bonds through a dividend generating fund like this, I have a choice to make of what type of account to do it with and the tax implications of dividends are more than I can quite figure out. My tax bracket is all over the place and highly variable (living abroad now, if I move home it will totally change) so I can't really do the numbers and will just have to go by a rule of thumb.

I could use some of my Roth account to hold Wellseley but as I've got a good number of years to go yet and investing aggressively for that reason, seems in the long term, the savings of tax from long-term aggressive stock investing will be more than what I'd save avoiding paying tax on dividends.

Is my logic sound on this?

 

[Rambler]

Thanks to all, I'll check out the links provided by W2R and others. I'm still accumulating, and in a high tax bracket...but when the j*b goes, I want the high tax bracket to go as well. Also, I am at this point not selling anything to re-allocate, just buying into different products to get to my FIRE AA. I do believe in dividends, as you have probably seen from my previous posts, but I also believe in growth. Most of what I have is in growth stocks, and my additions over the past 8-10 months have been in divvie payers and bonds. But after reading this post, I think it would be a lot easier to manage pssst Wellesley than trying to do all of the management myself. So, I'll be watching a few other funds I have along with dividends produced, and see if I can harvest enough tax losses to get into Wellesley with 100k later in the year. Problem with that though, is that I wouldn't want to sell something that is 20% down yoy when I sold it, to buy something that is only 6% down yoy. So I'll have to do quite a bit of analysis as well as save my pennies so I can get in with over 100k.

Again, thanks to all who have responded.

R

 

[Ronnieboy]

I think this might be a good fund for my mom. She is 66, has been approached by the financial adviser, buy you dinner, sales pitches for some insurance products where it doesn't cost her a dime to purchase (I wonder how the insurance company and FA get paid?!?), never loses money, and she can take out at least 10% year, oh, and it will never deplete!

Anyhow she is asking advise and I am thinking throwing what she has ~$100k into Wellesley and taking the quarterly payouts along with her SS and alimony (she gets till the old man croaks) she should do o.k.

 

[ChrisC]

norwegian widow

Can someone explain the origin of this and what it means? I think I understand it from the context of its use, but can someone shed some additional light?

 

[CitricAcid]

Until finding this board I always figured that bonds were something to put money into 'later' when I was 'old'. Now I'm thinking perhaps that reasoning is unwise...
I have no bonds in my portfolio at all and the ways to buy direct (I-bonds, TIPS, etc.) and are not very appealing right now so I am intrigued by the idea of using Wellesley as a bond fund (ala FIREDreamer) sounds like a good one...(of course have to finish doing my research first, thnx WantTo).

But assuming I do decide to get into bonds through a dividend generating fund like this, I have a choice to make of what type of account to do it with and the tax implications of dividends are more than I can quite figure out. My tax bracket is all over the place and highly variable (living abroad now, if I move home it will totally change) so I can't really do the numbers and will just have to go by a rule of thumb.

I could use some of my Roth account to hold Wellseley but as I've got a good number of years to go yet and investing aggressively for that reason, seems in the long term, the savings of tax from long-term aggressive stock investing will be more than what I'd save avoiding paying tax on dividends.

Is my logic sound on this?

If you have other tax-deferred accounts that is NOT a Roth, I would highly suggest you put Wellesley in the other tax-deferred, instead of the Roth. The big advantages of the Roth is that ALL the CG and capital growth is tax-free, where in regular IRAs and 401ks, the CGs eventually get taxed as regular income. So, you want the best performing growth to occur in your Roth. Obviously, with all the dividends spitting out, you want to DRIP without tax implications so another tax-deferred account would be preferable to a Roth for Wellesley.

 

[REWahoo]

Can someone explain the origin of this and what it means? I think I understand it from the context of its use, but can someone shed some additional light?

You can thank Unclemick for this one. It is a reference to investing in dividend paying stocks - picture a Norwegian widow waiting by the mailbox for her quarterly check...

 

[NW-Bound]

I do not have this fund, but will study.

It is quite more conservative than my Dodge & Cox Balanced, which did very well until recently. A couple other value funds I have also recently stumbled. Turned out the one thing they have in common is too much financials in their holdings. Were the managers lured in by the high dividends of financials?

There was a value-oriented mutual fund manager who appeared on TV all the time in the 2002-2005 time frame touting WaMu. He was right, until he became wrong. I just look at WaMu chart. Shocking!

By the way, many people are mislead when they look at price charts of stocks on the Web. A stock or mutual fund throwing off lots of dividends does not look good next to a growth stock, due to low price appreciation. For a fair comparison, one must include the total growth as if the dividends were reinvested. The pictures often look entirely different. I have shown some charts to my friends that really open their eyes.

I like this thread. The pros & cons are explained well. When people disagree, it is with mutual respect.

 

[2B]

I like this thread. The pros & cons are explained well. When people disagree, it is with mutual respect.

I'm sure some would disagree.

 

[2B]

heh heh heh - 1966 - 1982 flat I look back as my 'true grit' period - actually I made every stupid move in the investment book except perhaps commodities. Hence I work on grumpy and opinionated - WITH a Curmudgeon Certificate..

I started about the same time but went into the late 90's before discovering index investing. I also did commodities with the predictable, usual result.

 

[Marquette]

I also did commodities with the predictable, usual result.

Your wealth was commoditized?

 

[cute fuzzy bunny]

He'll be drinking frozen orange juice for a very long time.

 

[NW-Bound]

I'm sure some would disagree.

Oh boy! Even when I am nice, people can still pick on me

 

[Da Nag]

Can somebody explain the difference between VWIAX and VWINX?

I though I'd read somewhere they are identical, with the only difference being a lower expense ratio on VWIAX - which is available through my employer's plans. Is this correct?

 

[Rich_by_the_Bay]

Can somebody explain the difference between VWIAX and VWINX?

I though I'd read somewhere they are identical, with the only difference being a lower expense ratio on VWIAX - which is available through my employer's plans. Is this correct?

Both are wellesley, but one is standard and the other is "admiral shares" meaning you have $100K balance. The latter has a slightly lower expense ratio and thus a slightly higher return if you are willing and able to fund it to that amount.

 

[W2R]

Can somebody explain the difference between VWIAX and VWINX?

I though I'd read somewhere they are identical, with the only difference being a lower expense ratio on VWIAX - which is available through my employer's plans. Is this correct?

It's a nice, conservative fund, around 38% equities (the exact percentage changes now and then). Over the years the share prices have kept up with inflation pretty nicely. It sheds some nice dividends, too.

https://personal.vanguard.com/us/funds/snapshot?FundId=0527&FundIntExt=INT (VWIAX) if you have over $100K to invest in it, or

https://personal.vanguard.com/us/funds/snapshot?FundId=0027&FundIntExt=INT (VWINX) for those with less than $100K in Wellesley.

So, for some of us it is a nice ER investment core. I have 30% Wellesley, as per my plan, and I am very happy with it. This is not a fund for brave, aggressive, young investors in the accumulation phase. This is a fund for cautious, conservative ERs.

I labeled each, which I believe will answer your question. Vanguard gives lowered expense ratios for Admiral shares ($100K minimum) on some of its funds.

 

[Da Nag]

I labeled each, which I believe will answer your question. Vanguard gives lowered expense ratios for Admiral shares ($100K minimum) on some of its funds.

I've nowhere near $100K invested in VWIAX currently...so I'm assuming they make exceptions for employer plans, perhaps treating the entire plan in considering the $100K minimum?

Thanks for the links - I've seen those pages before but didn't drill down into the links they contain where things are explained more clearly. In particular, this page gives a clearer picture of Vanguard's Admiral Share funds in general.

 

[ChrisC]

You can thank Unclemick for this one. It is a reference to investing in dividend paying stocks - picture a Norwegian widow waiting by the mailbox for her quarterly check...

But why a Norwegian widow? The picture I'm supposed to get is of a widow that's attractive looking, orphan/waif-like looking, homely-looking, plump-looking or what, with blond hair and blue eyes? I'm just trying to figure out what image I'm supposed to conjure up? I have serious cultural and educational gaps in my early childhood education, so occasionally there are some phrases that many of you understand but I just don't get.

 

[CitricAcid]

I do not know how your specific company/fund does it, but often in cases similar to this, you can buy into the admiral shares because your company as a whole has over $100,000 giving them access to them.

 

[Marquette]

Letters to the Editor

Looks like it was because she was Norwegian and a widow.

 

[REWahoo]

But why a Norwegian widow? The picture I'm supposed to get is of a widow that's attractive looking, orphan/waif-like looking, homely-looking, plump-looking or what, with blond hair and blue eyes? I'm just trying to figure out what image I'm supposed to conjure up?

That's the beauty of it - the image is only limited by your imagination. (Psssst. I think she's 28 and blond...)

...occasionally there are some phrases that many of you understand but I just don't get.

Maybe this thread will help:http://www.early-retirement.org/forums/f47/acronyms-slang-frequently-used-forum-34884.html

 

[REWahoo]

Letters to the Editor

Posting a link to this guy without a warning message is a dastardly deed...

 

[Marquette]

Posting a link to this guy without a warning message is a dastardly deed...

I don't know who it is. I was just posting the first relevant Unclemick story regarding the widow.

To save anyone else, though, here's the c&p

I received this letter from Unclemick. He refers to himself as Unclemick - the Norwegian widow dividend guy. The Norwegian widow lived on dividend checks. She was the one person in his neighborhood who always paid the kids with cash as soon as they finished mowing her lawn.

 

[cute fuzzy bunny]

There is nothing all that special about Wellesley, except that you get it all in one fund.

There is ONE rather special thing about it.

"Okay Gramma, lets talk about this mutual fund we think you should invest in. It invests in nice blue chip companies, all of which you've heard of, that pay good dividends, and lots of good high quality bonds. There are a whole bunch of fund managers from several companies who decide which stocks and bonds to buy and when to sell them. The company charges only a tiny amount to do the management vs most funds. Its been around for almost 40 years and has returned more than 10% a year. In the last ten years its returned more than 6% a year while the stock market has gone nowhere. Recently its paid a dividend in the 4-5% range and we'll arrange to just have that put into your checking account automatically. You spend it. Thats it."

or

"Okay Gramma, we're thinking about putting you into a 65% mix of the intermediate bond index fund and 35% of the large capitalization value stock index fund. These indexes are managed by nobody. They're very inexpensive and very efficient. Once a year we'll move some money from one to the other to keep it at 35/65. If I die in a car wreck, here's what you'll need to do..."

 

[cute fuzzy bunny]

I don't know who it is.

He's JWR1945, he and Ho$uc combine to form the dynamic troll duo. JWR is the "numbers guy", while Ho$uc is...well..we know what he is.

By the "numbers guy" I mean he data mines about 7% of a data set that conforms to whatever wacky point Ho$uc is trying to make, then runs it through unrelated and invalid formulas, rounds off numbers to 3 or 4 decimal places...on either side of the decimal...and then spits out the numbers while declining to explain how he produced them.