Author Topic: Race from $2M to $4M...and Beyond!  (Read 427792 times)

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1700 on: October 19, 2019, 02:00:05 PM »
Fidelity has a similar service free for clients of a high net worth. They donít rebalance automatically for you, but when you have a visit with your advisor they help you figure out what needs rebalanced and make suggestions about other funds etc. They have also set up appointments for me to get advice from their trust team. Ive been very happy with the service. I can talk to my advisor as much or as little as I want. When he makes suggestions I just write it all down and do the research myself and decide if Iím going to move money to that or not. Heís been very supportive of my three fund style portfolio using index funds, but weíve added a couple other funds to tilt to healthcare and tech etc.
I think I could do it myself just fine, but itís nice to have someone to bounce ideas off of or talk tax with. And itís free!

At what level is it free with Fidelity?

Vanguards list of fees does not say "free" at any level, even North of $25M.

2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1701 on: October 24, 2019, 02:40:14 AM »
After working nearly thirty years in the field, I increasingly think I'm done with tech in general. Mostly by luck, my qualifications have become valuable. Not a day goes by without getting cold calls from tech headhunters. I'm being paid a ridiculously high salary and yet it gives me little satisfaction.

All of this came to head yesterday when I watched Zuckerberg being cross examined in congress. It was clear how much Facebook has not thought through the consequences of their product. There was also a great article in Wired recently about the practical consequences of Youtube's recommendation algorithm in promoting radicalization. This all seems like giving kids gasoline and matches as playthings.

I keep getting reminded of this quote from the book The Soul of a new Machine by Tracy Kidder:

Quote
He went away from the basement of Building 14 that day, and left this
note in his cubicle, on top of his computer terminal: "I'm going to a
commune in Vermont and will deal with no unit of time shorter than a
season."

Unfortunately, I can't just walk out just yet. But I will be done for sure by this time next year at the latest.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1702 on: October 24, 2019, 11:46:17 AM »
Good for you @2sk22 .. I remember the reliefe of driving away away from the plant at 10:30am on Jan 9th 2014.. Such a relief..:)

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1703 on: October 24, 2019, 12:17:54 PM »
Fidelity has a similar service free for clients of a high net worth. They donít rebalance automatically for you, but when you have a visit with your advisor they help you figure out what needs rebalanced and make suggestions about other funds etc. They have also set up appointments for me to get advice from their trust team. Ive been very happy with the service. I can talk to my advisor as much or as little as I want. When he makes suggestions I just write it all down and do the research myself and decide if Iím going to move money to that or not. Heís been very supportive of my three fund style portfolio using index funds, but weíve added a couple other funds to tilt to healthcare and tech etc.
I think I could do it myself just fine, but itís nice to have someone to bounce ideas off of or talk tax with. And itís free!
At what level is it free with Fidelity?

Vanguards list of fees does not say "free" at any level, even North of $25M.

 I think the portfolio value to get into the private client group has changed since I joined so I'm not sure. My 401k has been at Fidelity with every employer I've had so I got to know them that way. When my mom wanted me to take over handling her finances I decided to move her to Fidelity because I knew she would want an advisor to be able to see in person. I was so pleased with how they handled everything that I consolidated my Vanguard investments to Fidelity where my 401k was. It's been five years now, and I still like Fidelity better than Vanguard. The customer service is much better. The website is easier. And in most cases the fees are the same or lower. YMMV.

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1704 on: October 25, 2019, 06:23:13 PM »
Fidelity certainly has a lot more offices where you can talk to someone face to face.

Less offices help to keep Vanguard's costs low.

I am with both as different employers for whom I have worked have used both.

Now - You can tell me if that's dumb or maybe you'd say this provides a bit of further diversification.  Still working so for at least the next couple months I have some Vanguard.

DavidAnnArbor

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Re: Race from $2M to $3M.....and beyond!
« Reply #1705 on: October 25, 2019, 09:16:22 PM »
I really like the flexibility that Fidelity offers with respect to allowing a 3rd party to restate the Fidelity Individual 401k Plan.
With this restated 401k that I purchased through a 3rd party I'm able to Rothify assets every year.

I also like Fidelity's HSA plan, it's the best one on the market in terms of no fees and passive stock index funds.

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1706 on: October 26, 2019, 03:54:38 AM »
Well my portfolio has changed a bit. My paid for house instead of being 10-12% of our Portfolio is now 23-25% as we got an offer we put in accepted on a lake house. My goal was to move to NC someday but my favorite place in the world was always Northern Wisconsin but while my DW would of retired there to make me happy I have been considering other options for the last year or so and near where we live now are a ton of lakes but its hard to get on them. Anyhow the one I really liked that is even in our same school district but totally feels like being up North and just fell in love with they dropped the price 50k so I immediately swooped in and made an offer. So were all excited subject to inspections of course. So now I need to get my house on the market this week and of course being part of this group and all I re-calculated everything this morning and excluded my side gig money, my DW's money and were good even if I put only have the proceeds from the sale of current house back into funds. There is some work I want to do to the house before moving in but not half the amount of the proceeds. So hopefully all the inspections go good and our closing Date is set right now for Dec. 6th.

Just want to mention that no way 4.5 years ago when I fire'd I thought this would be possible but MMM and alot of people here and learning what I have is what made this dream come true. Also for those that were thinking about using a Vanguard Advisor  not within 5-6 Hours I had everything I needed done to shift some money around and a letter for the Selling Agent to show I have sufficient funds. They were outstanding, Vanguard.  I got no flack from my advisor and a Congratulations . Now granted alot of that might just be smoke but like i said i do feel at least the guy I use there really has my best interest at hand.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1707 on: October 26, 2019, 02:57:18 PM »
For those in this club, retired or soon to be retired, do you follow or plan to follow the 4% withdrawal rule approximately? Or what is or will be your withdrawal rate?

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1708 on: October 26, 2019, 04:14:19 PM »
For those in this club, retired or soon to be retired, do you follow or plan to follow the 4% withdrawal rule approximately? Or what is or will be your withdrawal rate?
Because we are young with kids, and Iím hoping for a LONG retirement, Iíve used 3%. But there is no budget for frivolous travel or home improvements/purchases, and 3% does not include college tuition. So there will be quite a few years where it is closer to 4% but our basic needs are covered at 3%.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1709 on: October 26, 2019, 04:39:19 PM »
I was aiming for 3% and missed..:)

What happened was the 3% part actually worked, but that was back in 2014 and since then our invested savings have doubled due to market returns.. So that puts us at 1.5%.


Whats "worse" is that I totally failed to include upcoming pensions. Seriously I thought they would be so small as to be irrelevant. Turns out thats not true so we will be at less than 1% when we draw pension income.

CoffeeR

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Re: Race from $2M to $3M.....and beyond!
« Reply #1710 on: October 26, 2019, 06:26:22 PM »
I was aiming for 3% and missed..:)
...
Turns out thats not true so we will be at less than 1% when we draw pension income.
Nice problem to have. I have no pension and I am in my fifties. I will either fire, or semi-fire (e.g. a significant side hustle or part time) next year. If I only semi-fire my withdrawal will likely be close to 0%, I just won't be adding much if anything to the stache. Fully FIRE'd I am aiming at anywhere from 4% to 5% with significant flexibility to decrease spending if conditions warrant. To me, flexibility is the key to making the work and having a lot of fat that can be trimmed helps.

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1711 on: October 27, 2019, 03:08:06 AM »
I'm Fired and for me it is 3-4% . And last year actually was 5%. This year has been closer to 3. So in that range and with side gig if I keep doing then might even be lower.

DavidAnnArbor

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Re: Race from $2M to $3M.....and beyond!
« Reply #1712 on: October 27, 2019, 07:09:45 AM »
For me it's -1.5% because I'm FIREd but I'm still working part time and saving some money.

SwordGuy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1713 on: October 27, 2019, 10:20:36 AM »
Well my portfolio has changed a bit. My paid for house instead of being 10-12% of our Portfolio is now 23-25% as we got an offer we put in accepted on a lake house. My goal was to move to NC someday but my favorite place in the world was always Northern Wisconsin but while my DW would of retired there to make me happy I have been considering other options for the last year or so and near where we live now are a ton of lakes but its hard to get on them. Anyhow the one I really liked that is even in our same school district but totally feels like being up North and just fell in love with they dropped the price 50k so I immediately swooped in and made an offer. So were all excited subject to inspections of course. So now I need to get my house on the market this week and of course being part of this group and all I re-calculated everything this morning and excluded my side gig money, my DW's money and were good even if I put only have the proceeds from the sale of current house back into funds. There is some work I want to do to the house before moving in but not half the amount of the proceeds. So hopefully all the inspections go good and our closing Date is set right now for Dec. 6th.

Just want to mention that no way 4.5 years ago when I fire'd I thought this would be possible but MMM and alot of people here and learning what I have is what made this dream come true. Also for those that were thinking about using a Vanguard Advisor  not within 5-6 Hours I had everything I needed done to shift some money around and a letter for the Selling Agent to show I have sufficient funds. They were outstanding, Vanguard.  I got no flack from my advisor and a Congratulations . Now granted alot of that might just be smoke but like i said i do feel at least the guy I use there really has my best interest at hand.
@soccerluvof4 , I'm confused.  You're staying in Wisconsin, is that it?

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1714 on: October 27, 2019, 10:44:09 AM »
For me it's -1.5% because I'm FIREd but I'm still working part time and saving some money.

I consider myself as semi-retired or semi-FIREd, or work part-time, depending upon which direction to look. But I would like to do something close to 4% to be comfortable in retirement.

EscapeVelocity2020

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Re: Race from $2M to $3M.....and beyond!
« Reply #1715 on: October 27, 2019, 11:02:50 AM »
For those in this club, retired or soon to be retired, do you follow or plan to follow the 4% withdrawal rule approximately? Or what is or will be your withdrawal rate?

One nice perk of being in the $2M+ club is that a 3% super-safe WR provides for that sweet spot $60k+ perpetual income.  Once we are done with the house payment and college is covered (in other words, if the expenses are just for my spouse and myself), $60-90k will be more than enough.  And once we hit 65 and get to Medicare and start taking some SS at 62 (spouse) and eventually mine at 70, the WR will probably drop to 1 - 2% and we will need to get more serious about estate planning.  It's a nice result of good planning and some luck.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1716 on: October 27, 2019, 11:12:24 AM »
For those in this club, retired or soon to be retired, do you follow or plan to follow the 4% withdrawal rule approximately? Or what is or will be your withdrawal rate?

One nice perk of being in the $2M+ club is that a 3% super-safe WR provides for that sweet spot $60k+ perpetual income.  Once we are done with the house payment and college is covered (in other words, if the expenses are just for my spouse and myself), $60-90k will be more than enough.  And once we hit 65 and get to Medicare and start taking some SS at 62 (spouse) and eventually mine at 70, the WR will probably drop to 1 - 2% and we will need to get more serious about estate planning.  It's a nice result of good planning and some luck.

When the withdrawal rate is in the range of 1-2%, do you plan to increase your spending? or increase it before that time if you know the money is coming?

SwordGuy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1717 on: October 27, 2019, 12:06:38 PM »
I just applied for social security.  Our withdrawal rate in a normal year will drop to 0%.   I'm starting to get used to the idea that the stash might just last.

EscapeVelocity2020

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Re: Race from $2M to $3M.....and beyond!
« Reply #1718 on: October 27, 2019, 12:22:57 PM »
For those in this club, retired or soon to be retired, do you follow or plan to follow the 4% withdrawal rule approximately? Or what is or will be your withdrawal rate?

One nice perk of being in the $2M+ club is that a 3% super-safe WR provides for that sweet spot $60k+ perpetual income.  Once we are done with the house payment and college is covered (in other words, if the expenses are just for my spouse and myself), $60-90k will be more than enough.  And once we hit 65 and get to Medicare and start taking some SS at 62 (spouse) and eventually mine at 70, the WR will probably drop to 1 - 2% and we will need to get more serious about estate planning.  It's a nice result of good planning and some luck.

When the withdrawal rate is in the range of 1-2%, do you plan to increase your spending? or increase it before that time if you know the money is coming?

We already spend quite freely (eating out and trying new things) so I can't imagine increasing spending from where we are currently at, especially when we are older.  I stopped worrying about spending when we passed 3M and have increased charitable giving, but still the stash is growing (especially in years with 10+% returns on 3M+ and, with a mortgage and 529 contributions, spending ~100k).  At 65+, we will turn our efforts toward active philanthropy - supporting causes with our time and money that we deeply believe in, hoping to leave the world a better place (and not give our kids so much money that they have no incentive to make it on their own). 

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1719 on: October 27, 2019, 03:44:33 PM »
Highest we have spent in FIRE is $52k for the two of us with the house paid off.

That for us was pushing the boat out quite a bit. Its hard to imagine how we would spend any more than that, even with our WR heading towards zero%.

A lifetime of thrift is not an easy habit to break.. Heck I have lunch ONCE PER WEEK with a good friend of mine.. So what? you ask?.. Well buying lunch is something I haven't done for 30 years and I still find myself wanting to eat at the cheapest place and scanning the menu for the best deal.

2Birds1Stone

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Re: Race from $2M to $3M.....and beyond!
« Reply #1720 on: October 27, 2019, 04:08:24 PM »
That sounds like a terrible way to view money......but it's super interesting to hear how some people can't loosen the purse strings and enjoy the fruit of their labor.

I can think of many creative ways to spend money and enrich not only my life, but those around me as well. Shit, just the things I would want to do while I was able bodied and had the energy/desire. Once you're 65+, the research shows folks slow down and spending subsequently does as well.

Y'all are an inspiration here.....much food for thought.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1721 on: October 27, 2019, 04:30:43 PM »
That sounds like a terrible way to view money......but it's super interesting to hear how some people can't loosen the purse strings and enjoy the fruit of their labor.

I can think of many creative ways to spend money and enrich not only my life, but those around me as well. Shit, just the things I would want to do while I was able bodied and had the energy/desire. Once you're 65+, the research shows folks slow down and spending subsequently does as well.

Y'all are an inspiration here.....much food for thought.

Yes. I think I can figure out things to spend money on. No, that is not the usually honorable charity spending that people like to talk and hear about.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1722 on: October 27, 2019, 04:34:13 PM »
Highest we have spent in FIRE is $52k for the two of us with the house paid off.

That for us was pushing the boat out quite a bit. Its hard to imagine how we would spend any more than that, even with our WR heading towards zero%.

A lifetime of thrift is not an easy habit to break.. Heck I have lunch ONCE PER WEEK with a good friend of mine.. So what? you ask?.. Well buying lunch is something I haven't done for 30 years and I still find myself wanting to eat at the cheapest place and scanning the menu for the best deal.

I have been working at my current job for more than 20 years. I only went out for lunch with the best friend in my work place once. I bring my lunch to the office most of the time. In one or two times in a year that I did not have leftover to bring to the office, I went to McDonalds.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1723 on: October 27, 2019, 04:36:21 PM »
I just applied for social security.  Our withdrawal rate in a normal year will drop to 0%.   I'm starting to get used to the idea that the stash might just last.

Then, do you have a plan for your portfolio of $2M plus?

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Re: Race from $2M to $3M.....and beyond!
« Reply #1724 on: October 27, 2019, 07:49:32 PM »
Our planned 60K annual spending has dipped into the sub 3 percent withdrawal range.  We haven't FIRED yet.  More likely than not lots of those here will be giving away money towards the end of life.
« Last Edit: October 27, 2019, 07:54:20 PM by Bateaux »

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1725 on: October 27, 2019, 08:05:27 PM »
I'll bet most of that money given away will be given away wisely.  These people recognize value.

Just looking at the names here I see: Exflyboy, flyingaway and 2birdsone stone.  I won't say anything about airheads.

SwordGuy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1726 on: October 27, 2019, 09:58:25 PM »
I just applied for social security.  Our withdrawal rate in a normal year will drop to 0%.   I'm starting to get used to the idea that the stash might just last.

Then, do you have a plan for your portfolio of $2M plus?

We have a daughter with Down syndrome.   Most of it will go into a special needs trust.  A nice chunk will be used to help our son and his three kids.    W just bought a charity house that we'll be doing a slow renovation on to provide low cost, non-profit group housing to folks.   

And, of course, there's our blood-sucking medical system that can run thru a small fortune in months that might get ahold of some of it.   My plan is to be shot dead by a jealous husband on my 120th birthday, so if all goes well, the medical bills will be pretty low. :)   

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Re: Race from $2M to $3M.....and beyond!
« Reply #1727 on: October 28, 2019, 12:19:17 AM »
I just applied for social security.  Our withdrawal rate in a normal year will drop to 0%.   I'm starting to get used to the idea that the stash might just last.

Then, do you have a plan for your portfolio of $2M plus?

We have a daughter with Down syndrome.   Most of it will go into a special needs trust.  A nice chunk will be used to help our son and his three kids.    W just bought a charity house that we'll be doing a slow renovation on to provide low cost, non-profit group housing to folks.   

And, of course, there's our blood-sucking medical system that can run thru a small fortune in months that might get ahold of some of it. My plan is to be shot dead by a jealous husband on my 120th birthday, so if all goes well, the medical bills will be pretty low. :)   
Hmmm, what is your wife's plan?

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Re: Race from $2M to $3M.....and beyond!
« Reply #1728 on: October 28, 2019, 02:22:08 AM »
Well my portfolio has changed a bit. My paid for house instead of being 10-12% of our Portfolio is now 23-25% as we got an offer we put in accepted on a lake house. My goal was to move to NC someday but my favorite place in the world was always Northern Wisconsin but while my DW would of retired there to make me happy I have been considering other options for the last year or so and near where we live now are a ton of lakes but its hard to get on them. Anyhow the one I really liked that is even in our same school district but totally feels like being up North and just fell in love with they dropped the price 50k so I immediately swooped in and made an offer. So were all excited subject to inspections of course. So now I need to get my house on the market this week and of course being part of this group and all I re-calculated everything this morning and excluded my side gig money, my DW's money and were good even if I put only have the proceeds from the sale of current house back into funds. There is some work I want to do to the house before moving in but not half the amount of the proceeds. So hopefully all the inspections go good and our closing Date is set right now for Dec. 6th.

Just want to mention that no way 4.5 years ago when I fire'd I thought this would be possible but MMM and alot of people here and learning what I have is what made this dream come true. Also for those that were thinking about using a Vanguard Advisor  not within 5-6 Hours I had everything I needed done to shift some money around and a letter for the Selling Agent to show I have sufficient funds. They were outstanding, Vanguard.  I got no flack from my advisor and a Congratulations . Now granted alot of that might just be smoke but like i said i do feel at least the guy I use there really has my best interest at hand.
@soccerluvof4 , I'm confused.  You're staying in Wisconsin, is that it?


Haha,,,Yea, well kinda. I always said to my DW the only two places i would retire are Northern WI where we use to have our cabin or NC BUT 10-15 minutes from us to the North is a particular lake that has the feel of being Up North but is ideal for the kids and everything else if were going to stay here. The plan would be in 5 years when all the kids are out now to Head to NC for a month or two in dead of winter but seeing as the place we bought will always have a good resale that can always change but we felt it was time to do something for us now since both in our mid 50's to enjoy cuz you just never know what the future will bring. And in 5 years we will be in a better position if our health and all is good to make an out of state move if we decide to go that route.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1729 on: October 28, 2019, 08:06:38 AM »
Our planned 60K annual spending has dipped into the sub 3 percent withdrawal range.  We haven't FIRED yet.  More likely than not lots of those here will be giving away money towards the end of life.

Looks like 3% or similar annual spending is the way to go in this club. I am sure people in other threads on this forum are fiercely defending the 4% rule. I just don't know how many people are actually using the 4% rule in spending.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1730 on: October 28, 2019, 08:32:22 AM »
Our planned 60K annual spending has dipped into the sub 3 percent withdrawal range.  We haven't FIRED yet.  More likely than not lots of those here will be giving away money towards the end of life.

Looks like 3% or similar annual spending is the way to go in this club. I am sure people in other threads on this forum are fiercely defending the 4% rule. I just don't know how many people are actually using the 4% rule in spending.

I plan to and am comfortable with starting with the 4% withdraw and spending that money, whether on myself or giving away, but then adjusting downward if and when needed, as failure at this withdraw rate seems not to happen quickly but over a very long period.  When I do get concerned with a 4% rate (or even a 5% rate) in the boards is when folks are FIRing with the withdraw being based on their current very barebone basics, as both unexpected future expenses (which I easily see happening over a 40 year retirement) and black swan investment events can't be handled with any flexibility.  If someone is using a very bareboned approach at figuring the rate I'd support 3% or just accept that going back to work is a viable option to handle the unexpected (which is a fine approach if accepted).

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Re: Race from $2M to $3M.....and beyond!
« Reply #1731 on: October 28, 2019, 09:16:25 AM »
I have a hard time not thinking of ways that I'd spend the money, if I was struggling to spend at our planned withdrawal rate. Off the top of my head:
-Helping others (already listed, but I'm thinking of in addition to planned DAF, things like surprising people at the grocery store, donating to a great local kids charity, paying off kids lunch bills, donating supplies to our local classroom).
-Taking people with me. I love to travel & vacation with friends (my sister & BFF), parents, etc, but have a much bigger travel fund than they do. I'd bring them along & splurge on additional activities (surf lessons, etc)
-I'd spend more on kid experiences. Right now, we try & limit that for a variety of reasons, but I'd definitely add a few experiences (not flying on a private jet to some exotic vacation destination, just more things like some additional family time skiing or at our vacation house, etc)
-I'd stop cleaning my own house. I know, I know. Such a hot topic.

bluebelle

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Re: Race from $2M to $3M.....and beyond!
« Reply #1732 on: October 28, 2019, 10:03:50 AM »
Our planned 60K annual spending has dipped into the sub 3 percent withdrawal range.  We haven't FIRED yet.  More likely than not lots of those here will be giving away money towards the end of life.

Looks like 3% or similar annual spending is the way to go in this club. I am sure people in other threads on this forum are fiercely defending the 4% rule. I just don't know how many people are actually using the 4% rule in spending.
I'm still working on the newest version of my spreadsheet that factors in tax rates at various withdrawals from various sources (if someone has a Canadian version of this, please share the link)

The first 10 years of retirement will have higher withdrawal rates 5-8% depending on the year, I expect these to be higher spend years because (note:  I'm not convinced we'll spend that much, but it's in the spreadsheet to ensure we have 'enough')
1) moving to a new house as part of our retirement, that is lakefront, so dock, used boat, landscaping, a couple of used sleds etc
2) expect these to be the GO GO years, where we will travel a bit more
3) no government payouts yet (CPP, OAS)
4) we need to replace our 14 and 16 year old cars
5) we'll entertain more, see item (1) (expect people to want to visit a lake house rather than a suburban toronto home)
6) I want to draw down our RRSP a bit before RRIF conversion.   I don't want to be in the position when I'm 80 that my mandated minimum withdrawal is high enough to claw back my OAS.  I'll spend it when I'm 60 before I'll let the government get it in taxes when I'm 85!  FFS, I'll spend frivolously before I'll willingly let my government spend it foolishly.

Since we're 'barely' into this club, I expect our withdrawals will be in the 3% range after that....but the inheritances I'm not counting, may push us closer to $3M or the market goes on another upward tear might push us down to 1.5%.  If that happens I'd up my spending, probably gifts to niece and nephew or charity.   See some good from my money while I'm alive. 



Car Jack

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Re: Race from $2M to $3M.....and beyond!
« Reply #1733 on: October 28, 2019, 10:55:17 AM »
My spread sheet shows me 4%, 3% and 2% numbers.  I'm already at the 2% number, still working and have an old pension that I plan to lump sum into my IRA in a bit over 2 years (over 1 full year of spending right there).  My plan is to pay attention to what we actually spend and then likely lighten up on the tight reigns of spending.  Oh....and my wife plans to go from 4 shifts per diem to full time work sometime soon.

itchyfeet

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Re: Race from $2M to $3M.....and beyond!
« Reply #1734 on: October 28, 2019, 12:43:31 PM »
I am planning on spending above 4%, as I am an optimistic guy.😁


Based off history even a 6% draw down rate has more than a 50% chance of success, not that I am brave enough to roll the dice that far,


I am targeting around 4.5%


 But
  - I have a large discretionary budget that can be slashed/ deferred comfortably. Itís not Plan A to have to spend less,  but given the high probability that plan A (4.5% drawdown) will work out, Iím willing to take the risk that I might not be able to take fancy overseas trips for a few years here and there.

  - I have a large sinking fun budget (cars and home maintenance/ improvements), that wonít be used in down years. Home renovations and car replacements can be dalyed for many years.

 - If in a year I spend half my travel budget and none of my sinking funds, my withdrawal rate is just above 3%.... so pretty much bulletproof safe.

  - There is a high probability that DW will continue to earn a small casual income. If she works 3 months in a year our withdrawal rate will also be just above 3% and If we combine 3 months of her working with no spending of our sinking funds and spend 50í% of our travel budget we will be drawing below 2.5%.

  - we always have the option of selling our house to buy something cheaper, or do a reverse mortgage, if things really go to shit.

  - worst case we will get a partial old age government pension like the majority of Australian retirees. I really donít expect that we will ever need govt money though.

For me itís either OMY or take the plunge with what I have. I have convinced myself that I have the means to have a successful early retirement without working the extra year. So onwards and upwards!

The only thing that nags at me is passing up on the potential to buy an even more expensive home now..... but as Iíll be drawing only 4.5% and the long term average real stock market returns are 7%+, I suspect 10 or 15 years from now Iíll have the option to upgrade our housing if the desire still nags at me..... and as we plan to travel a lot over the next decade, having a fancy house during that time will be unnecessary.... or so I am telling myself 😬 itís so hard to predict how we will feel 5 years from now amd what will be important to us at that time.


pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1735 on: October 28, 2019, 04:42:03 PM »
Sad to say but many of us do not work the 40 hour week.  With work occupying so much of our time, it is not even possible to spend the money on discretionary items.  This can create a false sense of what it will cost to live free.  When the time becomes available the spending may actually increase on all of the fun stuff that has been held back.

I need lots of fat in my estimate, but I'm still optimistic to holding it down to 3%.

If the big crash comes, it may slide up to 4%.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1736 on: October 28, 2019, 06:18:58 PM »
Sad to say but many of us do not work the 40 hour week.  With work occupying so much of our time, it is not even possible to spend the money on discretionary items.  This can create a false sense of what it will cost to live free.  When the time becomes available the spending may actually increase on all of the fun stuff that has been held back.

I need lots of fat in my estimate, but I'm still optimistic to holding it down to 3%.

If the big crash comes, it may slide up to 4%.

Good point. In our case the spend went from $30k up to about $52k for that very reason alone.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1737 on: October 28, 2019, 07:07:55 PM »
Sad to say but many of us do not work the 40 hour week.  With work occupying so much of our time, it is not even possible to spend the money on discretionary items.  This can create a false sense of what it will cost to live free.  When the time becomes available the spending may actually increase on all of the fun stuff that has been held back.

I need lots of fat in my estimate, but I'm still optimistic to holding it down to 3%.

If the big crash comes, it may slide up to 4%.

I agree with this statement. That is why I have been intentionally increasing my spending on some hobbies that I may or may not pursue in retirement to see how much I actually want or could spend. I call that experiencing retirement. I do not work 40 hours a week, but I have not fully retired.

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1738 on: October 30, 2019, 02:51:53 AM »
Sad to say but many of us do not work the 40 hour week.  With work occupying so much of our time, it is not even possible to spend the money on discretionary items.  This can create a false sense of what it will cost to live free.  When the time becomes available the spending may actually increase on all of the fun stuff that has been held back.

I need lots of fat in my estimate, but I'm still optimistic to holding it down to 3%.

If the big crash comes, it may slide up to 4%.

I agree with this statement. That is why I have been intentionally increasing my spending on some hobbies that I may or may not pursue in retirement to see how much I actually want or could spend. I call that experiencing retirement. I do not work 40 hours a week, but I have not fully retired.



This is why being Fire'd I too have been doing side gigs and also enjoying things a little more than I plan to in the near future and also spending $ on things like the new house for hopefully rest of our lives. Little easier mentally when the market is up. I want to be able to really dig in my heels when the next crash comes and be able to buy but I have also taken more out being higher by about 1% and have spent my side gig money freely.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1739 on: October 30, 2019, 08:19:22 AM »
So, for those of you in this club, what is your current asset allocation?
For me, my target allocation is 70/30. It is probably around 68/27/5 (stocks/bonds/cash) now. I do not rebalance frequently.

2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1740 on: October 30, 2019, 09:22:20 AM »
So, for those of you in this club, what is your current asset allocation?
For me, my target allocation is 70/30. It is probably around 68/27/5 (stocks/bonds/cash) now. I do not rebalance frequently.

Both mine and my wife's 401k are at 60/40  stocks/cash&bonds
For liquid assets: Its about 55/45 (will have to pay for college in a couple of years and it's likely to be expensive). On the other hand, a big stock grant will vest in the coming year so that will even things out towards 60/40.

However, we have such ridiculously large numbers that I'm embarrassed even to say how much :-)
« Last Edit: October 30, 2019, 09:24:01 AM by 2sk22 »

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1741 on: October 30, 2019, 10:12:12 AM »
About 75/22/3 for all our liquid investments.

But then we have rental income (roughly 40% of current spend) and in 4 years our pensions will be 70% of current spend. I intend to be out of the rental business at that point.. maybe..:)

If anything I'd like to be a little more aggressive with investments.. but you KNOW the big crash is coming...:)

Bateaux

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Re: Race from $2M to $3M.....and beyond!
« Reply #1742 on: October 30, 2019, 10:39:20 AM »
65% stocks
15% cash balance lump sum pension
10% bonds
5% cash
5% REITs

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1743 on: October 30, 2019, 11:26:42 AM »
Well, you guys are making me feel bad. We are probably too aggressive. But we haven't actually retired yet so that's part of it.
 Our $2.5M portfolio is- 80% stocks (largely in a three index fund portfolio) 10% bond and 5% cash. The cash gives me some comfort as there is about two years of living expenses in that.
I am planning to RE in May. DH has not yet set a date. We may change our allocations as we get closer to having no income.

ysette9

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Re: Race from $2M to $3M.....and beyond!
« Reply #1744 on: October 30, 2019, 11:31:01 AM »
I believe we are around 35% now (?), but our goal is to be 60/40 when we reach The Number, which is pretty much right now. We have switched our weekly vanguard contributions to bond funds instead of stock, so this will slowly start drifting in the right direction.

Up until a year or two ago we were about 90% stock.

PathtoFIRE

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Re: Race from $2M to $3M.....and beyond!
« Reply #1745 on: October 30, 2019, 12:15:43 PM »
We are mostly in index funds, so I use the Morningstar allocations for each of those (and guesstimate for wife's TSP funds), split between stocks, bond, cash, and alternatives. We are right at 82% stocks/alts and 18% bonds/cash in the index funds, more like 75/25 when I add in bank account cash, and 62/20 plus 18% RE when I add in usable home equity.

Bateaux

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Re: Race from $2M to $3M.....and beyond!
« Reply #1746 on: October 30, 2019, 12:31:23 PM »
Well, you guys are making me feel bad. We are probably too aggressive. But we haven't actually retired yet so that's part of it.
 Our $2.5M portfolio is- 80% stocks (largely in a three index fund portfolio) 10% bond and 5% cash. The cash gives me some comfort as there is about two years of living expenses in that.
I am planning to RE in May. DH has not yet set a date. We may change our allocations as we get closer to having no income.

Without tossing in my 400K of cash balance pension, we'd be closer to 80% stocks.  You've got 2.5M in stash.  You don't have to own bonds or hold much cash.  That big portfolio will carry you through a down turn, even if selling devalued stocks.  We only in the last year started to load up some bonds.  We own about 200K in bonds.  That's enough for me. 

trashtalk

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Re: Race from $2M to $3M.....and beyond!
« Reply #1747 on: October 30, 2019, 12:41:39 PM »
We have virtually no bonds but we are youngish (early 40s) so feel comfortable with an aggressive allocation. About 10 percent of our net worth is cash.

We could probably RE now if we saw fit but our kids are small and DH loves working so we believe we have a long runway.

Taran Wanderer

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Re: Race from $2M to $3M.....and beyond!
« Reply #1748 on: October 30, 2019, 01:51:10 PM »
Weíre at about 80% stocks, 15% income generating real estate, and 5% cash. We keep talking about moving some of the equities into bonds, but the market keeps climbing and reminding us why we donít. Sooner or later we will regret this when the market reverses.

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1749 on: October 30, 2019, 05:17:40 PM »

- SNIP -

If anything I'd like to be a little more aggressive with investments.. but you KNOW the big crash is coming...:)

Oh man - I'm hearing it again.  Time to rush to bonds and wait it out.  Maybe go to heavy metals.