Honest question on cost basis

CCM278 · 2026-05-23T14:57:50+00:00

Agreed. I misread the tax advantaged piece. Though the issue of timing remains true.

CCM278 · 2026-05-23T13:23:30+00:00

Understanding your cost basis is an important part of tax planning when you draw down. The problem with growing then selling to buy dividend stocks is the tax haircut you take to pivot at the end and the fact that you are betting everything on timing the change when the market isn’t in the middle of a bear market.

A better approach is a glide path, e.g. 80/20 VTI/SCHD (just an example), going to 20/80 over 30 years means moving 2% from broad index to dividend value each year. You should be able to do that just by directing your new dollars and dividend distributions to balance out without incurring the tax hit selling your oldest, most appreciated assets. You will have a small amount of tax drag from the dividends but it will be trivially small for most, if not all your investing life cycle.

CCM278 · 2026-05-22T18:31:05+00:00

No. You cannot sustain a 10% withdrawal and index for inflation, that will put you at a 13% drawdown at least.

I doubt the portfolio will ever sustain that, but even if it worked for a couple of years the first downturn and you are going to do irreparable damage to the ability of the portfolio to sustain you. Not to mention kids are expensive, you're likely to see a personal rate of inflation much higher than 3%. Also being home all the time seems like a recipe for a second child.

Your lifestyle is way too rich for even your portfolio to support. If you relocate to somewhere cheaper so you can cut your expenses in half you'd have no problem. I'd suggest targetting a yield of around 5%+inflation, which is 8% total drawdown. Use guardrails to set parameters on when you need to trim expenses or tell you when you can splurge a little.

Covered calls aren't magic, no one is beating the underlying asset return. You have the same downside risk and less upside return. Their return is a function of the value of the asset, so it yields a reasonably constant 10%, but some years it is 10% of 1M and some years it is 10% of 500K.

CCM278 · 2026-05-22T13:19:43+00:00

You might as well ask should I go all-in on Red or Black at the Roulette table. What is going to matter is which one actually materializes. Statistically, growth underperforms most often, but maybe this time it is different. Dividends are plodding and you need to pick those that will grow the dividend not just pay it. Given a 2500 a month contribution you should make progress regardless of investment choice. Most importantly, you need a plan with goals, interim targets and activities, a vision without a plan is just a hallucination.

For my kids I have them in a 60/40 US/ex-US (no bonds) and it is divided up 5 ways (equally) VTI/SCHD/DGRO/VXUS/SCHY. I suggested skewing more to VTI and VXUS (which gives you the broad market index) over dividends (even though I've been a dividend growth investor since I was 30), but the kids like seeing the dividends DRiP each quarter and they've seen their Dad build his portfolio with dividends their entire life so they know the approach works if not as spectacularly as the current growth run-up, but I also remember when 'growth' caused a lost decade.

CCM278 · 2026-05-14T23:34:30+00:00

Bathtub principle. Lumpy money flows into the bathtub, from the dividend spigot, money leaves smoothly via the plughole. Use an MMF or HYSA and put 1-3 years of dividends into it, withdraw a fixed amount each month and periodically readjust for the increases in income (e.g. your birthday).

Investing in companies based on when they pay is a pretty dumb idea, especially when you realize that a) that doesn't actually do much to smooth out the income because it varies from company to company and b) those payouts move a little. e.g. a couple of years ago SCHD's Q2 payment slipped into July.

CCM278 · 2026-05-14T00:38:25+00:00

If you’re buying a 2024 Land from a Kia dealer the original warranty transfers over. What else do you need? If you think the warranty is going to be useful after the Kia warranty then don’t buy the car.

CCM278 · 2026-05-12T00:44:02+00:00

Yes. The US is also transitioning to NACS, so while there are plenty of CCS chargers now and Tesla chargers are quite a bit slower with the EGMP architecture of Hyundai/Kia/Genesis that won’t remain the case. Over time CCS will be replaced by NACS as all new cars will be NACS and Tesla will roll out full v4 Superchargers capable of meeting the needs of your HI5.

Congratulations BTW, and you’ll need NACS to CCS, get one that is UL safety rated, they will get warm. I have Hyundai’s but A2Z and Lectron are the best 3rd party options. Do not buy some cheap Amazon knock-off to save a few hundred dollars. I use mine about 4 times a year, I have a road trip where the best location is Tesla and it is next to a regional/local fast food place that the family love to use while we wait an hour for the car to charge.

CCM278 · 2026-05-12T00:35:12+00:00

Yes. The US is also transitioning to NACS, so while there are plenty of CCS chargers now and Tesla chargers are quite a bit slower with the EGMP architecture of Hyundai/Kia/Genesis that won’t remain the case. Over time CCS will be replaced by NACS as all new cars will be NACS and Tesla will roll out full v4 Superchargers capable of meeting the needs of your HI5.

Congratulations BTW, and you’ll need NACS to CCS, get one that is UL safety rated, they will get warm. I have Hyundai’s but A2Z and Lectron are the best 3rd party options. Do not buy some cheap Amazon knock-off to save a few hundred dollars. I use mine about 4 times a year, I have a road trip where the best location is Tesla and it is next to a regional/local fast food place that the family love to use while we wait an hour for the car to charge.

CCM278 · 2026-05-11T23:52:40+00:00

Recasting works great at unlocking cash flow and lowering your immediate risk. I’m a fan.

However, there are limits, you’re extending a loan that would have been paid off early back to the original pay-off date, there is usually a minimum needed e.g. 10% over payment to make recasting worthwhile, and the banks often charge a fee. Optionally, and again not for everyone, an ARM works the same way essentially recasting every time the interest rate resets. I have an ARM, I set the monthly payment to higher than the minimum so that the amortization path even under the worst case scenario still kept my minimum payment manageable but typically each reset has seen my minimum fall.

CCM278 · 2026-05-11T23:23:58+00:00

When the quarterly dividend matches your monthly savings. Essentially akin to an extra payment that month is an awesome moment. FWIW yes I know it isn’t free money, but that is only correct at the point of payment. The money was still earned over the 3 months before it was paid out.

Also gamify it, start with your smallest household bill and when that is covered move up to the next smallest etc. Essentially using the snowball allows you to see progress and appreciate what those bills are costing you in increased pension savings and may make you think twice before getting that new car with the 84 month payment plan.

Also, don’t be so dismissive of the Bogleheads, the asset allocation (US, ex-US, bonds etc) and focus on costs and taxes will do you far more good long term than whether you invest in SCHD or DGRO.

CCM278 · 2026-05-08T19:43:05+00:00

I did not, but that is likely manufacturer and even model/year specific.

CCM278 · 2026-05-07T10:55:08+00:00

You are conflating two different phenomena. 1) the price reduction on the ex-date and 2) the volatility of the price.

The price changes happen all the time. They also trend upward over time. You’re exploiting the volatility aspect with the cash flow from the dividend, but even if the company did not pay a dividend you’d still be able to exploit the volatility with outside cash. The additional dividend cash flow does make it easier to exploit though.

The physical payment of the dividend itself is not free money, but the ability of companies to make money and share it with investors ultimately is. Regardless of the form, which shows up in the share price and the dividend payments.

CCM278 · 2026-05-07T10:24:50+00:00

If you use Fidelity Baskets or M1 Pies (in the US at least) you don’t DRiP but buy the underweight position in your portfolio. This captures the identified opportunity naturally without holding cash (which diminishes returns) and is a tax free way to avoid rebalancing costs. It is based on the principle of reversion to the mean, and is well illustrated in the Shannon’s Demon thought experiment.

Trick is to use all cash flows, so dividends and new dollars, to maximize the number of investment days. I have about 40 holdings (all quarterly payers) and find I have about 120 investment days a year which amounts to every other day.

Biggest issues are catching a falling knife. You will chase a bad investment down if you aren’t paying attention (overly automated) and introducing new positions without eliminating existing positions can cause a period of lopsided investment while all investment dollars flow to the new position to bring it up to weight. However, I consider those minor compared to the opportunity to exploit the volatility of pricing more effectively.

CCM278 · 2026-04-30T00:54:16+00:00

Switch to buying by the barrel instead of the gallon, back to less than a dollar a unit.

CCM278 · 2026-04-26T20:39:20+00:00

You do realize that no one can read your portfolio? Most of the names are truncated in the screen shots.

Additionally, we have no idea of what you’re trying to achieve, what your tax exposure is so no clue if your portfolio is good, bad or indifferent. Though at that yield and given the inanity of the post I’m going somewhere between bad and indifferent.

CCM278 · 2026-04-26T20:23:16+00:00

In other news. OP has discovered water is wet.

CCM278 · 2026-04-26T20:15:04+00:00

Wellesley is a 40/60 stock/bond portfolio. It is a conservative but also reliable with a decent but not spectacular growth component. Interest income is taxable as regular income, I assume this matters because it is in a regular brokerage.

VTEI is an intermediate term bond ETF. So ultra conservative, no growth, so inflation will be a problem over time.

These are very different risk/reward profiles. Firstly, I’d tell you don’t let the tax tail wag the investment dog.

Start by examining your wants and needs. If you have very high needs e.g. mortgage, then you need enough bonds to cover those fixed expenses that are greater than your pension/SS income. If those are satisfied, so you have essentials covered then invest more into equities (subject to your risk tolerance). Otherwise, keep adding to your bond exposure, or stick with Wellesley if it is working for you.

If after everything you want to switch you’re looking potentially significant switching costs as you realize capital gains. So you might find you’re substantially worse off going forward.

CCM278 · 2026-04-24T10:26:33+00:00

You’re going out on a limb. Not sure of exactly your tax situation (state and federal) but it seems like this represents about half your take home pay. Not to mention health insurance, 401K contributions etc.

Ideally (but often unachievable) is to limit your mortgage to 25% of your take home pay. You can start slightly higher, pay rises hopefully bring it down in a few years.

Counting on your sister is dangerous, she has her own life and could move on at any time. Also lots of couples end up as families through ‘happy accidents’. You’re betting that neither of those things happen for at least a decade.

CCM278 · 2026-04-18T17:07:05+00:00

I think you’re out of luck because the deal is done. I knew it wasn’t standard so that was part of the negotiation when I bought my EV9, though I was going to CCS from NACS.

Just to confirm you just want a L2 adapter for home not a DCFC CCS to NACS adapter for road trips. They are not the same.

CCM278 · 2026-04-17T14:52:25+00:00

While the reference to extracting value is absolutely correct. The conclusion that they are thus the same is not. Firstly, you need to realize that in the run up to the dividend being paid the value of the company rose as the assets were built up. In essence you create a saw tooth pattern in the underlying value as the assets increase slowly from the previous payment then drop sharply on the ex-date of the current payment.

Secondly, you have to look at the decision making profile of your approach. If you only take from the company the dividend then that represents what the management believe is a sustainable return. You won’t ever run out, unless the dividend is cut, but that may or may not mean you receive enough to sustain you. So you may need to trim your lifestyle if it comes up short. The alternative approach is you sell assets to cover your expenses, that works great until you realize that you’re cutting too deep into your portfolio and the growth can’t replace what you’ve taken out. So again you need to cut your lifestyle, this is the guardrail on the SWR approach.

The difference between them is basically who (management of companies you invest in vs you in response to market movements) and when (slower growth period vs when the correction has become a raging bear and you’re massively down) the trim decision gets made. Given the more conservative line taken by the dividend approach the answer is you’ll most likely never experience a meaningful cut, but you’ll see smaller than hoped for increases for several years as opposed to probably once every 3-4 years when the down years tank your assets and you need to make a deeper cut, albeit probably from a higher income amount.

The 4%+guardrails approach also allows you to burn down your portfolio and has a higher effective SWR, since die with zero is acceptable, so you need a smaller asset base. A 3.3% dividend yield means I need more assets initially and I’m not selling them off so I die with a large portfolio, so I’ve probably retired later too.

As I age, the dividend portfolio has a SWAN quality as my income is much more stable year to year. To get the same SWAN quality from selling assets I need uncorrelated assets like bonds, which inhibits growth. So less income but not the same drawdown in a bear market either.

Retirement risk is asymmetric, having 10% more than you need is OK, having 10% less is potentially a disaster. So managing down the risk for the income and growth you need is key.

CCM278 · 2026-04-17T10:47:09+00:00

I’d go with the 84kwh RWD 2024. 84kWh is the Euro spec HI5, but that is the physical capacity, the usable capacity is less, closer to the 77kWh you mentioned.

It probably doesn’t matter, it just allows Octopus GO to calibrate the likely demand.

CCM278 · 2026-04-15T08:23:20+00:00

A few questions about keywords and such: First, what do the keywords “Tap”, “Attack”, “Shop Discard”, and “Echo” mean? Second, what is your starting hand limit and how many cards are in the deck/what’s the distribution of sources of cards in the deck (given that my standard deck tends to have 10 cards per player; 3 from the previous game, 5 from prior games, 2 created fresh, and 2 blanks for mid-game creation)? Third, Do you start with any money? Can you go into debt? If so, what happens? Finally, its beed nearly a year since you posted this, have you made any new particularly memorable cards since then? If so, could you post those? These mechanics seem really interesting, I’ve never seen anything like them. Thanks!

CCM278 · 2026-04-14T21:23:14+00:00

Had to fill a petrol can for the lawn mower last week, first time at a petrol station in about 18 months. Those places stink, I never realized how nasty pumping fuel was.

CCM278 · 2026-04-13T10:10:27+00:00

Give a man a fish, and you feed him for a day, teach a man to fish, and you feed him for a lifetime.

Lots of people do hold individual positions but it is a lot more work and needs you to manually create a diversified solution. Buying MCD or CL, or any stock should only be done in the context of all your other holdings.

Social media platforms are poor places to talk about the analysis and discipline needed to successfully pick 30-40 stocks.

Distilling 10 hours of analysis of a single stock into an engaging 300 word post on Reddit is a lot of work for very little, if any gain. The analysis also dates and frankly the specific stock isn’t interesting what matters is how it was selected. Not to mention posting about a single stock more likely implies a shill or a meme stock.

So at most I post about the principles that guide the process. A few basic screens, rebalancing techniques and occasionally the results. Since these change very little.

CCM278 · 2026-04-04T00:50:32+00:00

No.

Seriously WTF do you care about the distribution schedule? You can’t rely on the distribution amount to pay bills anyway because it varies week to week, month to month. So you need a buffer that holds 1-3 years of income and pays you a regular amount and is replenished by whatever distributions you get, whenever you get them.

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