- 14,808
It's not the years in your life but the life in your years. I know some financial pack-rats. They don't spend crap and all they can think about is retirement. Although investing is obviously smart tomorrow is promised to no one. Go ahead and don't take the trip to Cancun because and maybe by the time you retire you're physically unable to go. There's a book called "Die Broke" - very interesting reading. http://www.amazon.com/Die-Broke-Radical-Four-Part-Financial/dp/0887309429
We have people accuing massive wads of money for what? So you can leave it to your kids when you die? No way. You think I invest and give a rat's ass about inheritance? I'm gonna pour through that money like shit through a goose when I retire. There won't be a country my wife and I won't visit (although I'd have to drug her to visit Asia or India.)
The kids had to intervene with my parents who retired and had a lot of money, yet they did next to nothing. Come to find out during a family meeting they were concerned about inheritence. Bullshit on that. So my parent's aren't gonna to go Hawaii, die, leave me the cash so I can go to Hawaii? Lol. Now my parents travel extensively. And when they pass away if I get $2,000 that's $2,000 more than I had the day before.
We have people accuing massive wads of money for what? So you can leave it to your kids when you die? No way. You think I invest and give a rat's ass about inheritance? I'm gonna pour through that money like shit through a goose when I retire. There won't be a country my wife and I won't visit (although I'd have to drug her to visit Asia or India.)
The kids had to intervene with my parents who retired and had a lot of money, yet they did next to nothing. Come to find out during a family meeting they were concerned about inheritence. Bullshit on that. So my parent's aren't gonna to go Hawaii, die, leave me the cash so I can go to Hawaii? Lol. Now my parents travel extensively. And when they pass away if I get $2,000 that's $2,000 more than I had the day before.
- 477
john_petrowski said:
John, I admire your balls and investing philosophy, but those returns aren't even close to representative. You're right to say that more people probably SHOULD get them, that people should be focused on the long-term, but it will never happen. People are just scared to begin with and most don't have your knowledge (or that of James, most anyone else here on the board or, hell even myself, when speaking of the average consumer) on financial matters and just don't have what it takes. Agents pushing people to put 100% of their retirement into something like WL may be a part of the problem, but not nearly as big of a problem as the consumer mentality.
Neighbors of mine when I was growing up had some investments start to dip into principal and they instantly moved ALL retirement planning into CDs, government bonds, and life insurance. I believe they're looking real good last time I talked to them, because they had high income (probably earned 200K), and were generally pretty disciplined to avoid debt and poor spending choices. Hey, anyone can fund their retirement on relatively low rates of return...if they put a ton of money into it. Not what I recommend, but many folks are terrified of losing their principal.
- 477
john_petrowski said:
Stay away from Yemen and Somolia. :wink:
- 14,808
Retirement for most Americans will soon be re-defined. Long gone are the days of our parents and the pension plans. Now it's 401K and your retirment is whatever your portfolio did over the years. Most workers don't even know how to allocate their money in their 401K. More people don't put anything into it since it's voluntary, they'd rather take the spend the money.
What's scary is what we do. 100% self-employed. Aside from social security what we'll have to live on 100% depends on what we invest. That's why I get so wound up when people are touting safe investments with low returns. Unless you have wads of cash to shovel into vehicles that are returning 5% you'll be quite shocked as what you end up having after taking inflation into account. You need 10% growth after inflation which means 13% growth on average. I'm a big fan of the Roth - pay the taxes now.
But you have to wake up and smell the coffee. 5% after inflation is 2% and my savings account gets 1.9%. Safety will been paying a huge price when the time comes.
What's scary is what we do. 100% self-employed. Aside from social security what we'll have to live on 100% depends on what we invest. That's why I get so wound up when people are touting safe investments with low returns. Unless you have wads of cash to shovel into vehicles that are returning 5% you'll be quite shocked as what you end up having after taking inflation into account. You need 10% growth after inflation which means 13% growth on average. I'm a big fan of the Roth - pay the taxes now.
But you have to wake up and smell the coffee. 5% after inflation is 2% and my savings account gets 1.9%. Safety will been paying a huge price when the time comes.
- 14,808
Reality is ugly:
Invest $200 a month at 5% annual growth at age 30. At age 65 you have just over $240,000. You need to live off that at maybe 4% so you get $9,600 a year.
Are you 30 years old? Are you actually putting $200 a month into invesments? And actually, that $240,000 isn't weighted for inflation. You'll have about $4,000 a year in today's dollars. Hope they still make Ramen noodles.
Take that same $200 a month at 10% and it's now $800,000. At 4% you've living off $32,000 a year. In today's money that's gonna be about $16,000. Now you can add cheese to your Ramen noodles.
You want a comfortable retirement? Try 2 mill in investments after 35 years. That's $80,000 a year income and in today's dollars about $40,000. Now at least you can have some type of life. Oh, you'd need to put $500 a month into investments at 10%.
You need 2 mill:
Age 30 - $500 per month at 10%
Age 30 - $2,100 a month at 5%
Age 40 - $1,500 a month at 10%
Age 40 - $3,200 a month at 5%
Invest $200 a month at 5% annual growth at age 30. At age 65 you have just over $240,000. You need to live off that at maybe 4% so you get $9,600 a year.
Are you 30 years old? Are you actually putting $200 a month into invesments? And actually, that $240,000 isn't weighted for inflation. You'll have about $4,000 a year in today's dollars. Hope they still make Ramen noodles.
Take that same $200 a month at 10% and it's now $800,000. At 4% you've living off $32,000 a year. In today's money that's gonna be about $16,000. Now you can add cheese to your Ramen noodles.
You want a comfortable retirement? Try 2 mill in investments after 35 years. That's $80,000 a year income and in today's dollars about $40,000. Now at least you can have some type of life. Oh, you'd need to put $500 a month into investments at 10%.
You need 2 mill:
Age 30 - $500 per month at 10%
Age 30 - $2,100 a month at 5%
Age 40 - $1,500 a month at 10%
Age 40 - $3,200 a month at 5%
- 477
Well, retirement is a bitch, no matter how you shake it. There's a reason why politicians talk about seniors eating dog food and going without medicine. :shock:
- 14,808
This crap is real and it's no joke. My parents are in their mid-70's and they have many friends who live check to check on social security and modest savings. Even when you own your own home you still get hit with assessment taxes. In fact, it's so bad in Maryland that most counties have a cap on how much property taxes can go up - capped at around 9%, because it's been forcing elderly people to sell their homes. Those taxes were manageable when they bought their house for $50,000 25 years ago. Now it's assesed at $350,000 and they get nailed.
If you're in your 30's or 40's you can't afford to have your invesments in anything that's not returning 10% to 15%.
If you're in your 30's or 40's you can't afford to have your invesments in anything that's not returning 10% to 15%.
- 2,152
I find this amazing, well not really but expected. John sets up numbers and I show that using real numbers that most investments in funds and indexes don't work out as many think they do. Yet then, lo and behold we have a new game! The Drip or I guess you'll talking about DRP's, basically a low entrance fee that is base on Dividend Reinvestments, typically disallows large amount of investment.
So the DRP is okay, a cheap way of buying stocks and using the dividend to your favor. I didn't buy into it at the seminar last year (yes there is several groups known as "Transfer Agents") circling the country giving seminars selling this concept. By the way it isn't all that new, the idea of using dividend reinvestment has been around a long long time.
Once again John why do you have to distort what is actually being stated? I only disagree with how to invest and what really constitutes an investment Vs savings. Yet obviously you have serious issues in dealing with various ideas, I'm sorry if you find yourself being attacked I assure you your not being attacked yet I was hoping for a more honest discussion. Obviously you can't or don't have the ability so since I destroy your theory you are again trying to espouse, I won't even bother to destroy it again. Have a nice day.
So the DRP is okay, a cheap way of buying stocks and using the dividend to your favor. I didn't buy into it at the seminar last year (yes there is several groups known as "Transfer Agents") circling the country giving seminars selling this concept. By the way it isn't all that new, the idea of using dividend reinvestment has been around a long long time.
Once again John why do you have to distort what is actually being stated? I only disagree with how to invest and what really constitutes an investment Vs savings. Yet obviously you have serious issues in dealing with various ideas, I'm sorry if you find yourself being attacked I assure you your not being attacked yet I was hoping for a more honest discussion. Obviously you can't or don't have the ability so since I destroy your theory you are again trying to espouse, I won't even bother to destroy it again. Have a nice day.
- 14,808
DRIPs solve the problem of investing in individual companies for most investors which is diversification. It allows you to purchase partial shares therefore someone with a modest investment budget of say $400 a month can participate in several companies thereby spreading out the risk. Some companies even offer incentive for participating. They are great vehicles.
And I don't mind any adult discussion James. Just don't come here saying that with a 16% annual average return I might as well have an annuity with average returns of 5%. It makes the entire conversation look uneducated. I have some index funds that are kicking ass and management fees are extremely low.
I'm looking for and getting 15% to 20% returns on my stock investments with modest research. If I want 5% I'll buy a CD.
As I get older obviously my portfolio will change. But if you're saying that a 39 year old male making six figures should be in agressive investments then you have zero investment knowledge.
And I don't mind any adult discussion James. Just don't come here saying that with a 16% annual average return I might as well have an annuity with average returns of 5%. It makes the entire conversation look uneducated. I have some index funds that are kicking ass and management fees are extremely low.
I'm looking for and getting 15% to 20% returns on my stock investments with modest research. If I want 5% I'll buy a CD.
As I get older obviously my portfolio will change. But if you're saying that a 39 year old male making six figures should be in agressive investments then you have zero investment knowledge.
