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Good point. But I guess my question is just more general. This thread seems like it's way more level-headed than other investment/retirement threads I've read so mostly just looking for a pulse check from other FI ore FIRE people.... as a soon to be FI person myself.
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Apr 28, 2020 20:17
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Still in the accumulation phase, but I'm staying the course and haven't done anything materially different to alter my approach or strategy. At the intersection of buying a house last year and the current looming crisis, I am holding a bit more cash than I might otherwise hold, but I didn't liquidate investments to do so. I just keep a little bit higher balance before shuffling off to long term investments. Helps me sleep a little easier at night having a full year of current spending rate in cash, but it's still only like 5% of total assets. Once (if) some of the uncertainty passes I'll likely reduce that down again.
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Apr 28, 2020 20:30
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Guinness posted:Still in the accumulation phase, but I'm staying the course and haven't done anything materially different to alter my approach or strategy. Same. And like Hoodwinker it's very nice to be employed still and in an industry that is actually benefiting from this (telecom).
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Apr 28, 2020 21:28
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I'm in accumulation phase, and I discovered that I am completely unperturbed by market fluctuations. In fact, I was more nervous during the market highs of the last two years than during any of the last two months (with regards to the market).
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Apr 28, 2020 21:42
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It made me realize that I spend a LOT less money when I'm not working, so even with my accounts taking an 18% digger I'm probably in a good spot to retire But it also made me realize I would be pretty bored even with Unlimited Free Time for Hobbies
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Apr 28, 2020 21:49
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GoGoGadgetChris posted:It made me realize that I spend a LOT less money when I'm not working, so even with my accounts taking an 18% digger I'm probably in a good spot to retire
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Apr 28, 2020 21:55
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I treated starting my own business more like a retirement. I am in the fortunate position of being a sought after professional engineer. I could live well working part time. So lifestyle at retirement may well be similar just minus working for clients. I'm aiming to retire around 2030 at that point I will probably just travel between music festivals for about 6 months of the year, then mostly hide out at home trading and going to the occasional party for the rest of the year. Once I retire I won't be wanting to go back to the intensely stressful work that I do now.
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Apr 28, 2020 21:59
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All this has really done is make me paranoid about the viability of things like the 3-4% rule over the long term. No matter how much people say and no matter how much I "get" the statistical probabilities (I get that the market just doesn't perpetually go up, and that there are going to be bear markets), it's still unnerving to see your net worth just take a 30%ish hit in just a month, and know that it could just keep dropping. Certainly if you are still employed and nowhere near retirement, you can just assume it will go back up like it always has. But it has made me realize that while I am still fine (I have some buffer) even with that level of loss, there is a level of loss that is going to make nearly anyone who has retired early (or just retired) pretty freaking nervous if they're relying on their retirement savings alone. That's probably a long winded way of saying that things like this make me worry that maybe I'll be the lucky one who gets the black swan event that makes all of the 3% in perpetuity models not true. Unlike a lot of people in the FIRE movement, I don't think it is nearly as easy as some people think to be out of a job for more than a few years and just get hired back for something meaningful. Perhaps part of that is being closer to 50 than in my 20s or early 30s (which is where I get the feeling most people active on early retirement forums are). SlyFrog fucked around with this message at 22:42 on Apr 28, 2020 |
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Apr 28, 2020 22:40
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The only difference that this has made for my strategy is that I'm now contributing to my 401(k) on a Roth basis, rather than pre-tax. I can't imagine that today's (extremely necessary!) stimulus spending will do good things to tax rates in the future. Frankly, if I had the cash to support it, I'd be seriously considering a massive Roth conversion of the existing balance as well, while the market remains down. However, I'm fortunate enough to have the problem of a lot of my wealth being tied up in investment properties, so that's not in the cards.
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Apr 28, 2020 23:34
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SlyFrog posted:)it's still unnerving to see your net worth just take a 30%ish hit in just a month, and know that it could just keep dropping. Or maybe you will, but that seems very unwise to me.
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Apr 28, 2020 23:53
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If you're only drawing down 4% per year you can still have a healthy percentage in stocks, especially in tax-advantaged accounts that you aren't planning on touching until mid 60s anyway.
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Apr 29, 2020 00:00
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My business has been forced into hiatus but government assistance (Australia) is keeping us treading water. It's a shame I can't take advantage while there's blood in the streets (speaking in a financial sense here, please excuse the morbid nature of my comment) but I've found I'm not particularly concerned about the precipitous drop nor the potentially protracted downturn. My plans haven't changed, just paused. If the business closure outlasts the government assistance (which I doubt, the government appears to be willing to provide safety nets) then I guess I'll have to get some sort of work. The only x factor is if my business doesn't recover to the same level of income - but again, I can't really control that so I don't find myself thinking about it all that much. All in all, we'll be fine.
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Apr 29, 2020 00:19
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WithoutTheFezOn posted:If you’re near retirement, you won’t have all your money in stocks. Depends on how young you are and how long you need your retirement to last. Again, there is a lot of evidence that staying heavily allocated in equity is the best strategy for a very long retirement (possibly with a bond tent at the beginning). Going heavy to bonds doesn't work out too well if you retire at 45.
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Apr 29, 2020 00:52
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+1 to job security being a source of great indifference. I'd be excited for the buying opportunity if not for the fact that I'm always buying all I can regardless!
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Apr 29, 2020 04:43
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Accumulation phase. I'm probably 5 or 6 years away, so depending on how any recovery looks may mean me pushing it back a year or two, might not. Like the other poster I found myself more nervous as everything went up, uP, UP than I do now. I do have to catch myself sometimes though, for example I get company stock that vests every year and by my plan I should be liquidating that and getting it into a properly diversified fund. I didn't this April because it obviously took a huge hit. My brain short circuited although clearly the stocks I'd be buying also took a huge hit. I'll do it now but my hesitation cost me a small amount of tax efficiency. Weird how brains work.
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Apr 29, 2020 06:49
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I'm curious, is anyone in this thread attempting to RE, and if so, are you following the 4% rule or being more conservative? I'm just interested in attaining FI so that I'm not reliant on my employer and can take arbitrarily long sabbaticals if I do leave my job (which is not terribly likely). The earliest I can see myself retiring is at 55, which is still 20 years away, but probably more likely the normal 60-65 range. Since I don't think I'll be retiring early, I'm ok with setting my goal as 25 or even 20x annual spend as I'll probably hit it well before I actually retire. That level would still allow me to not worry about my job, and all the growth between when I hit 20-25x and actual retirement would be more than enough to get me under any reasonable SWR when I do actually retire.
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Apr 29, 2020 14:22
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I'd like to pull the plug no later than 50, or at least be in a position where I could if if my career is still enjoyable then. I plan on being more conservative than 4%, maybe 3-3.5% at most - check out the withdrawal guide at earlyretirementnow.com for a verrrry detailed and quantitative reason why.
Guest2553 fucked around with this message at 18:54 on Apr 29, 2020 |
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Apr 29, 2020 14:56
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drainpipe posted:I'm curious, is anyone in this thread attempting to RE, and if so, are you following the 4% rule or being more conservative? I am, but being honest, for reasons other than purely volitional. (It's a long story, but in sum, I pretty much went as long as I could at my career and burned out really badly - I can't do it anymore - I had to leave for my mental health.) I follow a 3% rule (because 4% isn't safe enough for me). I don't think 4% is safe enough for 50 year retirement possibilities. I'd much rather forego some trivial life things than end up eating catfood at 68 years old because "Whoops, I guess you fell into that roughly 5-10% scenario where a 4% withdrawal rate was too high." I also don't want to watch my capital deplete (as it potentially does under the 4% rule) and have some weird dilemma where I hope I don't outlive my principal. That seems really creepy to me, being in your 70s and wondering if you are going to outlive your annually declining capital. As I've said before, I also think that young people way overestimate their ability to be out of the workplace for 5-10 years and then just come back and find a meaningful job, particularly when they are then 50+ years old. The world discriminates against 40+ year olds who actually have a solid employment history. It's not going to be kind to people who essentially tried to retire for 10 years and then realized they were going to run out of money, and now they need a decent job again. Yes, I know there are a ton of arguments like sequence of return will let you know early if you are going to run out, etc. I don't buy them. My opinion is, you don't pull the trigger on something like this unless you know you can weather the storm 99-100% (or unless you are essentially forced to by other circumstances). SlyFrog fucked around with this message at 16:18 on Apr 29, 2020 |
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Apr 29, 2020 16:16
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drainpipe posted:I'm in accumulation phase, and I discovered that I am completely unperturbed by market fluctuations. In fact, I was more nervous during the market highs of the last two years than during any of the last two months (with regards to the market). I'm also following a 3% safe withdrawal rate. Call it  brain, played too much of it and watched way too many 90+% shots miss and cause a failure cascade. Given those numbers I should be financially independent between 8-10 years, when I turn 40-42. At that point, I have no idea whether I'll work or not, but I do love teaching and my career.This quarantine has showed me that I'd do okay in early retirement, except obviously I'd be more social!
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Apr 29, 2020 19:38
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Olive Branch posted:This is also me. I posted earlier in another thread about seeing much of my net worth get vaporized and I thought, "Ah, this is what it looked like for people in the late 90s and 2000s." Turned out I was perfectly cool with it, that downs must follow ups. I'm actually more perturbed that the market is going up again at this time when it really "shouldn't" given the unemployment numbers, but the market is going to market and all I can do is keep saving money, buying more stonks, and staying the course. Also, X-Com brain is very real, and a good thing. Very much appreciate your invocation of the missed-shot failure cascade, as I think I'll keep that tucked away for extra motivation to save and invest after I've already hit the "safe" mark.
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Apr 29, 2020 19:52
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SlyFrog posted:As I've said before, I also think that young people way overestimate their ability to be out of the workplace for 5-10 years and then just come back and find a meaningful job, particularly when they are then 50+ years old. The world discriminates against 40+ year olds who actually have a solid employment history. It's not going to be kind to people who essentially tried to retire for 10 years and then realized they were going to run out of money, and now they need a decent job again. I mini retired a few years ago to have a kid. A couple years in, I decided I wanted to do a little work since we were pushing the 4% boundary and I actually enjoy working. Within a week I was hired as a math tutor, and I ended up taking on some extra SAT students at $250/hr. Republished some of my old novels on different platforms and got a couple hundred a month from that. Then I decided I wanted to try financial planning and quit my tutoring job, got hired a couple months after doing an informational interview with a local CFP - mind you, I have no experience in finance, I came in with the job title of "romance novelist" on my resume. Is it that hard to make a few hundred dollars a month to bolster your withdrawals? It sure doesn't seem like it, especially if you pick up skills during retirement. Most FIRE people are highly motivated anyway. Given a few years' runway, you could do anything, including beginning a new career if you wanted. I'm glad I didn't wait to take a break from work until I was 100% ready. Part time, flexible work is perfect for me, and the couple years' family leave was awesome. If you hate working and want to be completely sure you never work again, then go for that 2% withdrawal rate or whatever. But there are so many ways to make money, I'm not going to stress over it.
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Apr 29, 2020 22:27
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moana posted:Ill push back on this line of thought. Thing is, you don't really need a decent job, even a minimum wage job would probably get you back on track. And you wouldn't wait until you were going to eat cat food to start looking. As far as meaningful, I think you can find meaning in most work, especially if you have a solid gently caress you fund so you can push back if poo poo happens at work. I'm not sure you're pushing back. Everything you said makes sense, I just think we are coming at it from different angles. I was high income, and I knew that I did not want to feel like I ever had to go work again at something like minimum wage, a warehouse job, etc. The last thing I wanted to do was end up having to work 40 hour weeks in my 50s or 60s because all I could find was near minimum wage. And I don't have a skillset in math or something similar for the types of things you mentioned. My skillset was pretty specific for one job, and for anything else, I would pretty much just be competing with 20 somethings with liberal arts degrees. There's a lot of them, and I have no idea why someone would hire a 50 year old (nor, from what I have seen, would they). I also admittedly do not have motivation to pick up new skills. If there was some new work skill that I felt like I wanted to do/could do, I'd probably just do that, and not be retired. Again, just a different preference/situation from you I think. I do think you might be oversimplifying how easy it is to make money. There's a reason there are all of those terrifying stories of near retirees having to work in Amazon warehouses because they don't have enough to retire. It's not because they're turning down SAT tutoring jobs (and a lot of them do have college degrees, etc.) to instead choose to sweat and blow out their joints in poorly ventilated Bezos boxes. I see this a fair bit with people who are intelligent with a decent skillset. They underestimate how easy it is for more average people to find meaningful work of the sorts you mentioned. I mean, I have friends my age who literally can't find good jobs in their actual field, let alone reinventing themselves in their 50s to go do something completely different. But overall, I do get where you're coming from. As I said, I think it is more a difference of what someone might be looking for than an actual disagreement. SlyFrog fucked around with this message at 01:19 on Apr 30, 2020 |
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Apr 30, 2020 01:04
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SlyFrog posted:Everything you said makes sense, I just think we are coming at it from different angles. I was high income, and I knew that I did not want to feel like I ever had to go work again at something like minimum wage, a warehouse job, etc. I should say that living in a HCOL area has this as one of its perks - tons of people make minimum wage-ish income doing random stuff because people here have money to spend on things like "children's fairy portraits in the redwoods" and "birthday party face painter" and "custom ceramic dog bowls". Making money becomes a lot easier when people around you have money to throw around. Something else to consider if your FIRE plans require you to move to a very LCOL area.
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Apr 30, 2020 01:35
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Ersatz posted:I was likewise surprised by my shoulder-shrugging response to a 20% net-worth drop. Feels good to have a plan. XCom is certainly on topic as I think I'll get the new game today as it looks quite fun. My objective is not to RE as soon as I have the chance. I'll be investing until there is enough cashflow for lifestyle and a bit extra. It will be more than I need and I probably don't have a use for the extra money but I like the goal. Next Level Life has a few definitions of FI that go beyond just reaching FI. https://www.youtube.com/watch?v=kDSHHiFMJ_I
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May 1, 2020 00:29
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dexter6 posted:(sorry/not sorry for bumping this thread) if a market drop makes you have to come out you were never financially independent. I've been working so many hours for so long that this actually has made me decide that I may just retire now. I have plenty of money but I enjoyed the challenge of work but something about it seems so meaningless now especially because i've been separated from my fiancee because of travel bans for the last few months in separate countries.
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May 9, 2020 09:26
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I've been reading through this thread and feel like a bit of an idiot, I've been keeping all my savings in a savings account, at a whopping 0.150% interest rate. I took the last two years off and went sailing on my sailboat, but I am back and want to set up a nest egg so I can stop working entirely as soon as possible. Currently I got lucky and have a very highly paid job while having very low living expenses, meaning I'm saving between 4k and 5k a month. I have 25k in my savings account, 60k in an RRSP and 2k in crypto (lol) My living expenses are normally around 1 to 1.5k a month (closer to 1). My aim is to get a steady passive income of 1k a month. I guess my question is - how do I even get started investing? I am good at a bunch of things but financial stuff isn't one of them. Someone told me to buy a house and rent it out at a rate that covers the mortgage. I'm 37 and wish I'd started this a long time ago Alctel fucked around with this message at 03:16 on Jul 11, 2020 |
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Jul 11, 2020 03:14
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I would recommend a robo-advisor (in Canada WealthSimple is pretty popular but they're all very similiar). Pick an aggressive profile if you're comfortable with that and start contributing as much as you can monthly and it'll be automatically invested across a variety of broad-market funds. At 37 I'd probably be very aggressive and go with an all-stock portfolio since you're starting later than usual but if you save that amount per month you'll do just fine (keeping expenses under control).
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Jul 11, 2020 03:17
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Alctel posted:I've been reading through this thread and feel like a bit of an idiot, I've been keeping all my savings in a savings account, at a whopping 0.150% interest rate. This is the thread you're looking for. - https://forums.somethingawful.com/showthread.php?threadid=2892928
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Jul 11, 2020 03:35
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Lovely thanks
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Jul 11, 2020 03:45
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Alctel posted:words CubicalSucrose posted:This is the thread you're looking for. - https://forums.somethingawful.com/showthread.php?threadid=2892928
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Jul 11, 2020 04:34
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The long term thread is for financial planning for investing on long time horizons. If Alctel is aiming to retire as soon as possible, the three fund portfolio might not be right. I mean, go to the other thread and get the advice, there’s a lot of great posters in there. But at 37 and trying to retire soon (how soon is soon?), that could mean a much shorter time horizon where the basic cadence of long term investing no longer applies. On the other hand, you plan to live for a long time, so some of your money should go into a long term portfolio. I think it would be interesting to reason through that here, as it’s a different mindset (with overlap). Napkin math: If you are spending $1.5k a month and saving $4.5k, then every month of work is buying you ~3 months of future. So if you’re working like this for 10 years, you’ll have 30 years of future, even without any investments. That gets you retired at 47 and out of money at 77. Not a bad start but not great, either. The basic good advice of retirement threads assumes that the money will be invested for 20-30 years. So your goal is to figure out how to put aside enough to meet that time horizon (what will be available to you at traditional retirement age) and then how to bridge the gap between when you actually retire and when the time horizon of long term investing has passed.
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Jul 11, 2020 12:05
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Yeah, I’ve gone back and forth on that myself. On the one hand, if one plans to retire soon. A simpler, equities-heavy portfolio is going to be more volatile. On the other hand, if one is young, they need their portfolio to last a long time, and you wouldn’t want to forego that grow early in life. Ultimately, I plan on being financially independent in the next 10 years but I don’t plan on stopping work (unless it makes sense for a lot of reasons). So even though “retirement” is less than 10 years away, I want that sweet sweet growth and I want to live a long time and not eat cat food. So I opted for an allocation based on my age, not based on my timeline (90% equities / 10% bonds).
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Jul 11, 2020 12:51
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dexter6 posted:Yeah, I’ve gone back and forth on that myself. I've said this before - there's a lot of theory that suggests the higher bond ratio doesn't make sense in general, particularly if you retire early. In any event, your age is your timeline, somewhat regardless of whether you want to retire early. You shift to bonds because you're going to die soon, not because you're retired. Unless you have stupefying amounts of wealth, early retirement relies on getting those equity returns. There is a wholly separate question of whether you should use a bond tent in the first few years of retirement to reduce early sequence of returns risk, but putting that aside, if you believe in early retirement, you generally believe in a high equity allocation. It's necessary to get the 3-4% plus inflation needed to fuel early retirement cash flow. You're not going to get that from a high bond allocation.
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Jul 11, 2020 16:35
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This would be the Deppian Opportune Moment to plug ERN's safe withdrawal series. It's what SlyFrog said with quantitative proof.
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Jul 11, 2020 17:47
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Ideally, my aim is to be getting ~1,000 a month in passive income so I wouldn't have to touch my capital at all. Back of the envelope maths is at 5% return (is that reasonable?) I'd need 240,000 in savings, which is around 5 years or so, putting me at 42. Butttttt, for 240,000 that's pretty close to a house in the Hull area that I could be renting out at 2,000 a month. Hmm. My aim isn't to retire 'fully', but it'd be nice just to take work where and when I feel like it while bobbing around on my boat on the BC coastline. Alctel fucked around with this message at 18:30 on Jul 11, 2020 |
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Jul 11, 2020 18:22
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Alctel posted:Ideally, my aim is to be getting ~1,000 a month in passive income so I wouldn't have to touch my capital at all. Not that you explicitly mention it, but in case it comes up: remember there's no difference between dividends and selling shares that appreciate in value. (Except possibly taxes, if your income is very low.) quote:Back of the envelope maths is at 5% return (is that reasonable?) I'd need 240,000 in savings, which is around 5 years or so, putting me at 42. 5% after inflation is a long term (20+ year) average expected return holding US equities. If you want to take 5% out (inflation-adjusted) each year, you'll need a plan: either save more in case the market tanks early in your semi-retirement, or be ready to pay yourself less and work more in the down years. quote:Butttttt, for 240,000 that's pretty close to a house in the Hull area that I could be renting out at 2,000 a month. Hmm. Well, subtract repairs, upkeep, taxes from that rent. And if you're trawling the BC coast then you're maybe paying someone closer to Hull to help manage the place. I think what you're pondering is very doable, hopefully I don't come across as a downer. Just want to point some things out that might affect the how and when.
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Jul 11, 2020 18:52
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Alctel posted:Ideally, my aim is to be getting ~1,000 a month in passive income so I wouldn't have to touch my capital at all. Remember a diverse stock portfolio doesn't have a roof to replace, have periods without tenants or suffer from people wrecking the place. Also diversity matters.
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Jul 11, 2020 18:54
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4% is the usual number that gets brought up when discussion safe withdrawal rates although there are people who advocate for 3.5-ish% as actually safe (see the ERN series above). I would say that 4-5% can work, but you'd have to have a decent amount of spending flexibility or additional income for the bad times.
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Jul 11, 2020 18:55
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Depending on how long you want in to last and how much risk of ruin you are willing to bare 2.5% might he more sensible for longer horizons.
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Jul 11, 2020 19:09
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Thank you for all the responses. I guess I have a lot more reading to do, hah.
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Jul 11, 2020 19:12
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