Author Topic: Race from $2M to $4M...and Beyond!  (Read 439228 times)

soccerluvof4

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Re: Race from $2M to $4M
« Reply #2200 on: January 11, 2020, 10:37:02 AM »
The OP conflated expansion of the money supply and increases in assets held by the Treasury in pursuit of an interest rate target that could also be associated with quantitative easing.

The Treasury has eased many times.  Historically it has eased with specific interest rate targets.  In quantitative easing, it doesn't target an interest rate but rather sets a specific amount of bills and bonds that it will purchase (The Treasury can do one but not both of interest rate / money supply targeting,) .

AFAIK the Fed is not doing a QE but has rather been targeting a lower interest range, which generally requires purchases of Treasuries.
An acquaintance who works at a local bank said that for the last three months the Federal Reserve has essentially done another Quantitative Easing, and it would be called QE 4, but it hasn't been given a name. The balance sheet of the Fed is now back to being as high with treasury bonds (and possibly mortgage backed securities too?) as it has ever been.

I was aware that the Fed lowered interest rates three times in 2019, but I wasn't aware of the Quantitative easing.

The cause for this easing was some liquidity crisis with some banks that were having some problems, SoftBank, and Deutsche Bank, and maybe a couple of others, according to this banker.
Not sure why these banks were in this liquidity crisis.  Not clear how the quantitative easing helps these banks.
The banker said the QE is what is sending stocks higher.



Thats interesting, thanks for sharing! but yet scary for many reasons that that could be going on again and not hearing about it.

Not a rumor.  Here's the chart from the Federal Reserve that shows what they're doing.

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm



Interesting stuff..Thanks for sharing

Bateaux

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Re: Race from $2M to $4M
« Reply #2201 on: January 11, 2020, 10:50:26 AM »
Bateaux checking in from Martinique.  All is good.   The volcano is behaving itself and the beer is cold!

dominikm

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Re: Race from $2M to $4M
« Reply #2202 on: January 12, 2020, 02:31:25 AM »
This thread is awesome! I thought MMM was full of people who wanted to retire early on $500K and spend $25K a year.

I just started my journal in the journal section for my road to $3MM. Starting with $5K in the bank as of the end of the month. After years or spending and having fun it's time to take this serious. I've got a 7 year plan and that puts me at 40 when I retire. I've got the skill set to do it from the last 10 years run online businesses but I've always blow the money.

And like some have mentioned in this thread they might not stop. Once I hit my $3MM I'll keep my businesses running and just take a step back. Maybe that means a pay cut but if I can systemise correctly it shouldn't be an issue. Then, from 40 to 50 I should bank another $5MM staying on top of things. So without any investment just living off 4% I'll have my $10K/m till I'm 100 or so. And if I sell off all my businesses after I'm 50 for a lump sum it will be a lot more.

Again, great to see like minded people here.
« Last Edit: January 12, 2020, 05:17:25 AM by dominikm »

pecunia

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Re: Race from $2M to $4M
« Reply #2203 on: January 12, 2020, 09:22:59 AM »
$5,000 to 10 million.  I like it.  It's not quite a rags to riches story, but still a good one.  Unless, you live in your car.  Then, it can be rags to riches.  Good Luck with it.

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Re: Race from $2M to $4M
« Reply #2204 on: January 12, 2020, 10:46:46 AM »
Woo Hoo this is the party thread.  Poping a top in St. Kitts.  Cheers!

Dicey

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Re: Race from $2M to $4M
« Reply #2205 on: January 12, 2020, 04:24:22 PM »
$5,000 to 10 million.  I like it.  It's not quite a rags to riches story, but still a good one.  Unless, you live in your car.  Then, it can be rags to riches.  Good Luck with it.
I'm going to get some popcorn...

Bateaux

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Re: Race from $2M to $4M
« Reply #2206 on: January 13, 2020, 01:09:38 PM »
Final check in from San Juan, Puerto Rico.  Next stop Tampa and the Florida house.  Gonna see a few manatee then back to work in Louisiana.  Geaux LSU Tigers!

2sk22

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Re: Race from $2M to $4M
« Reply #2207 on: January 13, 2020, 04:27:34 PM »
Final check in from San Juan, Puerto Rico.  Next stop Tampa and the Florida house.  Gonna see a few manatee then back to work in Louisiana.  Geaux LSU Tigers!

Looks like you're really enjoying your Caribbean jaunt!

Car Jack

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Re: Race from $2M to $4M
« Reply #2208 on: January 14, 2020, 08:18:51 AM »
Bateaux checking in from Martinique.  All is good.   The volcano is behaving itself and the beer is cold!

I read this with the cadence of Beastie Boys Paul Revere.

dominikm

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Re: Race from $2M to $4M
« Reply #2209 on: January 15, 2020, 06:31:25 AM »
$5,000 to 10 million.  I like it.  It's not quite a rags to riches story, but still a good one.  Unless, you live in your car.  Then, it can be rags to riches.  Good Luck with it.

Thanks! Goal #1 is to hit $10K/m first. Then I'm off to the races.

A bit more of a positive reply vs what was posted on my journal. But, at the same time I get why people would be like 'ok here we go' if they see a post like that go up and don't know my full background even with my long journal post.

A long road ahead but I'll get there!

RE the car comment. You just sparked a memory from years ago. I actually remember someone posting on Facebook about how he went and slept on the street for 'one' single night so in the future he can say that 'he came from the street' or something like that. Haha! So silly!

EscapeVelocity2020

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Re: Race from $2M to $4M
« Reply #2210 on: January 15, 2020, 07:36:18 AM »
$5,000 to 10 million.  I like it.  It's not quite a rags to riches story, but still a good one.  Unless, you live in your car.  Then, it can be rags to riches.  Good Luck with it.

Thanks! Goal #1 is to hit $10K/m first. Then I'm off to the races.

A bit more of a positive reply vs what was posted on my journal. But, at the same time I get why people would be like 'ok here we go' if they see a post like that go up and don't know my full background even with my long journal post.

A long road ahead but I'll get there!

RE the car comment. You just sparked a memory from years ago. I actually remember someone posting on Facebook about how he went and slept on the street for 'one' single night so in the future he can say that 'he came from the street' or something like that. Haha! So silly!

$10k/mo requires $3M NW which is very attainable since this thread is full of folks that are around that level.  We all started with basically nothing and made it, can't see why you wouldn't as long as you keep your eye on the prize!

Exflyboy

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Re: Race from $2M to $4M
« Reply #2211 on: January 15, 2020, 11:30:59 AM »
@EscapeVelocity2020 Actually I take "small" issue with the statement that $10k/month requires $3M NW.

I think this is glossed over a lot but honestly, if a part of NW is tied up in your house then it cannot be used to calculate your 4% spend. Sure you can argue your house might be sold for a higher value but on average houses do not return what the stock market does.. and before you sell it its costing you in RE taxes, maintenance etc.

So while I agree with the 4% rule.. it has to be 4% invested in the market, not net worth.. OK flame suit is on..:)


Incidently my $400k property where my house sit also generates about $20k in rent after expanses.. I.e a 5% return... So I guess I just kinda skewered my own argument..:)


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Re: Race from $2M to $4M
« Reply #2212 on: January 15, 2020, 11:49:59 AM »
@EscapeVelocity2020 Actually I take "small" issue with the statement that $10k/month requires $3M NW.

I think this is glossed over a lot but honestly, if a part of NW is tied up in your house then it cannot be used to calculate your 4% spend. Sure you can argue your house might be sold for a higher value but on average houses do not return what the stock market does.. and before you sell it its costing you in RE taxes, maintenance etc.

So while I agree with the 4% rule.. it has to be 4% invested in the market, not net worth.. OK flame suit is on..:)


Incidently my $400k property where my house sit also generates about $20k in rent after expanses.. I.e a 5% return... So I guess I just kinda skewered my own argument..:)

Hey, nudge nudge...you with the skewered argument and 20K a year coming in from a 400K property, that's nothing to sneeze at... I need to remind ya'll when you talk to the newcomers that the stock market is not the only path to freedom.  I'm a big believer in multiple streams of income, so have rentals (mostly), stock market and carrying First TD notes in my portfolio.

 I have 10 paid for rentals generating 18K+ a month and they function as a very part time job for us.  Yes, property ownership involves paying taxes and insurance, so that 18K isn't all gravy.  But there's plenty of gravy.   Me and my gravy just got back from Hawaii, and a couple more trips are coming right up back to back to back,  so I'm feeling the FI vibe along with Bateaux. 

EscapeVelocity2020

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Re: Race from $2M to $4M
« Reply #2213 on: January 15, 2020, 11:56:39 AM »
@Exflyboy Good points and it's also a good thing to think about.  For instance, there are a lot of variables and games to be played in ER when it comes to managing expenses (healthcare costs from state to state, property and sales taxes, downsizing or outright becoming a renter...) as well as matching withdrawal amounts and pre/post tax locations to tax efficiency (staying below the healthcare subsidy cliff, the capital gains tax cliff, etc.) so one person's 10k/mo might buy the same quality of life as someone's 7k/mo in a LCOL area and giving away less to the tax and health insurance man...  There are lots of post-FIRE threads about folks finding out they can live on less than they thought and that they only use the 4% rule as a guideline. 

BTW - Hope the hand/wrist is doing well!

Exflyboy

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Re: Race from $2M to $4M
« Reply #2214 on: January 15, 2020, 12:10:36 PM »
@Exflyboy Good points and it's also a good thing to think about.  For instance, there are a lot of variables and games to be played in ER when it comes to managing expenses (healthcare costs from state to state, property and sales taxes, downsizing or outright becoming a renter...) as well as matching withdrawal amounts and pre/post tax locations to tax efficiency (staying below the healthcare subsidy cliff, the capital gains tax cliff, etc.) so one person's 10k/mo might buy the same quality of life as someone's 7k/mo in a LCOL area and giving away less to the tax and health insurance man...  There are lots of post-FIRE threads about folks finding out they can live on less than they thought and that they only use the 4% rule as a guideline. 

BTW - Hope the hand/wrist is doing well!

Funny you should mention games.. DW was asking me about the complex dance of income vs insurance subsidies and after a 5 minute explanation she said.. "How on Earth do you keep track of these variables?".

The answer of course is.. You just do.. Or you don't and end up spending more money. If you have an excess of money then of course you might not care anyway.

Being wired the way I am.. threading that needle of providing sufficient income while paying $zero Fed taxes and almost $zero for HC premiums is like throwing a chicken carcass into a pond filled with alligators..:)

jeroly

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Re: Race from $2M to $4M
« Reply #2215 on: January 15, 2020, 12:46:21 PM »
@EscapeVelocity2020 Actually I take "small" issue with the statement that $10k/month requires $3M NW.

I think this is glossed over a lot but honestly, if a part of NW is tied up in your house then it cannot be used to calculate your 4% spend. Sure you can argue your house might be sold for a higher value but on average houses do not return what the stock market does.. and before you sell it its costing you in RE taxes, maintenance etc.

So while I agree with the 4% rule.. it has to be 4% invested in the market, not net worth.. OK flame suit is on..:)


Incidently my $400k property where my house sit also generates about $20k in rent after expanses.. I.e a 5% return... So I guess I just kinda skewered my own argument..:)
I believe that the OP rents, so this point is moot.


$10k/mo requires $3M NW which is very attainable since this thread is full of folks that are around that level.  We all started with basically nothing and made it, can't see why you wouldn't as long as you keep your eye on the prize!
The problem is that this guy fully expects to do it in seven years starting from virtually nothing.

EscapeVelocity2020

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Re: Race from $2M to $4M
« Reply #2216 on: January 15, 2020, 01:58:44 PM »
$10k/mo requires $3M NW which is very attainable since this thread is full of folks that are around that level.  We all started with basically nothing and made it, can't see why you wouldn't as long as you keep your eye on the prize!
The problem is that this guy fully expects to do it in seven years starting from virtually nothing.

Yeah, 7 years to $3M without currently something that would get him to $1M in, say 3 years makes it sound a little far-fetched.  I would also worry about sustainability - better to get to $1M in 7 years but enjoy the ride and want to keep going (if the plan is $3M) than burn yourself out and be miserable.

Edit to add - From his initial post, I got the impression he had experience in an online business that made lots of money, but he was spending it all.  He seemed confident that he could make plenty of money...
« Last Edit: January 15, 2020, 02:03:32 PM by EscapeVelocity2020 »

pecunia

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Re: Race from $2M to $4M
« Reply #2217 on: January 15, 2020, 03:41:39 PM »
Another Record High

https://www.investors.com/market-trend/stock-market-today/dow-jones-leads-stock-market-to-new-record-high-ahead-of-china-deal/

Uuh, so just what is a stock market bubble?

Is there a bubble?

https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart

For people planning to go from $5,000 to $10,000,000 - these may be the days to do it.

2sk22

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Re: Race from $2M to $4M
« Reply #2218 on: January 16, 2020, 02:54:20 AM »
Uuh, so just what is a stock market bubble?

For people planning to go from $5,000 to $10,000,000 - these may be the days to do it.

I do think about this too but then, I can re-assure myself that we have four years of expenses in cash available :-)

Dicey

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Re: Race from $2M to $4M
« Reply #2219 on: January 16, 2020, 04:46:16 AM »
The problem is that this guy fully expects to do it in seven years starting from virtually nothing.
Then there's the fact that he has only managed to hang on to $5k of all the money he's ever earned. Perhaps he should add YMOYL to his reading list. Seems he has a spending problem AND a savings problem.

Funny he chose this thread as the appropriate place to bitch about the responses he received over on his case study.

I wonder what advice the hard working  "Saving to $10k" crowd would have for him?

If it walks like a troll duck...
« Last Edit: January 16, 2020, 04:48:09 AM by Dicey »

Bateaux

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Re: Race from $2M to $4M
« Reply #2220 on: January 16, 2020, 07:06:14 AM »
Whoo.  Back in Tampa and time to diet.  Glad I brought my fat pants.   

dominikm

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Re: Race from $2M to $4M
« Reply #2221 on: January 16, 2020, 07:14:57 AM »
Haha. This is fun getting talked about! And this is why I'm here to move on from an old and shitty situation that I created. Learn, evolve as a person and get advice from a community of others. Making the cash was never really the issue. I've done well in the past. The issue was geared towards spending to much and not saving enough.

The problem is that this guy fully expects to do it in seven years starting from virtually nothing.
Then there's the fact that he has only managed to hang on to $5k of all the money he's ever earned. Perhaps he should add YMOYL to his reading list. Seems he has a spending problem AND a savings problem.

Funny he chose this thread as the appropriate place to bitch about the responses he received over on his case study.

I wonder what advice the hard working  "Saving to $10k" crowd would have for him?

If it walks like a troll duck...

Your Money or Your Life. I Googled it and is it the book by Vicki Robin? I'm an open book and want to learn and improve and if this would be a good read I'll get it.

There is also more to that story that I don't want to really go into much detail. In short there was a period of time I kept getting sick so I was just in maintenance mode making my few grand a month due to serious lack of energy from being sick. That's all sorted now and I'm all better. When the last business wrapped up I had a good chunk of savings that I lived off while I had a break for a while from work and that I used while I got my new income stream going, that I've still got now. Everything added up. Yes, $5K savings as the last two or so years have been in that maintenance mode making a few grand a month, basically the cost of living. Recently I started my new method that's scaling fast so things are moving forward quick now :)

It was hardly bitching also haha. All I said was thanks for the positive comment vs the comment another made who doesn't know my history. And again I get that. No dramas there. As, in reality no one knows strangers pasts online right.

I was chatting to a buddy the other day about my plan I've known for ten years as he's seen what I've done in the past as I've taken it very high and he does very well himself and he's confident I'll get there. I just need to get on top of the saving side vs spending as I make it and it comes in. 2020 coming around and realising I'm not 21 any more has been a big wake up call. So I have no doubt I'll be ok, progress and grow out of that shit mindset :)

Whatís the save to $10k crowd about? Or is that a joke lol. Iím so green I donít know if youíre being serious haha

$10k/mo requires $3M NW which is very attainable since this thread is full of folks that are around that level.  We all started with basically nothing and made it, can't see why you wouldn't as long as you keep your eye on the prize!
The problem is that this guy fully expects to do it in seven years starting from virtually nothing.

Yeah, 7 years to $3M without currently something that would get him to $1M in, say 3 years makes it sound a little far-fetched.  I would also worry about sustainability - better to get to $1M in 7 years but enjoy the ride and want to keep going (if the plan is $3M) than burn yourself out and be miserable.

Edit to add - From his initial post, I got the impression he had experience in an online business that made lots of money, but he was spending it all.  He seemed confident that he could make plenty of money...

Yes, correct. Making the money isn't the issue. I already have a few things underway.

$3M in 7 is a good goal for me. From what I'm seeing with the planning and getting one method to $10K/m that's already $720K in 6 years. Year one I'll take those profits and invest into other business ideas and expand on the current ones. So getting to $1M isn't really that big of a goal. I do focus as much as I can on getting VAs in the Philippines to work my methods as much as possible so once that $10K/m is hit I just manage a little. That's a lot of free time wasted if I just go for $1M. It doesn't fell right. It seems way to small.

$5,000 to 10 million.  I like it.  It's not quite a rags to riches story, but still a good one.  Unless, you live in your car.  Then, it can be rags to riches.  Good Luck with it.

Thanks! Goal #1 is to hit $10K/m first. Then I'm off to the races.

A bit more of a positive reply vs what was posted on my journal. But, at the same time I get why people would be like 'ok here we go' if they see a post like that go up and don't know my full background even with my long journal post.

A long road ahead but I'll get there!

RE the car comment. You just sparked a memory from years ago. I actually remember someone posting on Facebook about how he went and slept on the street for 'one' single night so in the future he can say that 'he came from the street' or something like that. Haha! So silly!

$10k/mo requires $3M NW which is very attainable since this thread is full of folks that are around that level.  We all started with basically nothing and made it, can't see why you wouldn't as long as you keep your eye on the prize!

Thanks for the encouragement. It does seems like there are two crowds here. One that says it can't be done and one that says it can. I guess I'll see where I end up over the years. But I'm pretty confident.

@EscapeVelocity2020 Actually I take "small" issue with the statement that $10k/month requires $3M NW.

I think this is glossed over a lot but honestly, if a part of NW is tied up in your house then it cannot be used to calculate your 4% spend. Sure you can argue your house might be sold for a higher value but on average houses do not return what the stock market does.. and before you sell it its costing you in RE taxes, maintenance etc.

So while I agree with the 4% rule.. it has to be 4% invested in the market, not net worth.. OK flame suit is on..:)


Incidently my $400k property where my house sit also generates about $20k in rent after expanses.. I.e a 5% return... So I guess I just kinda skewered my own argument..:)
I believe that the OP rents, so this point is moot.

Correct, I rent and I honestly don't plan to get a place for a long time to come. I go into detail about this in my journal. If I do get a place it will be something about 70K max. 100K if I fully deck the place out. In summary a nice apartment in a ski hill town that had mass over building the mid 2000s. So now the really good apartment complexes that did cost you $400K to buy now sell for $30K. And the penthouses in those buildings go for 100K or so.

@EscapeVelocity2020 Actually I take "small" issue with the statement that $10k/month requires $3M NW.

I think this is glossed over a lot but honestly, if a part of NW is tied up in your house then it cannot be used to calculate your 4% spend. Sure you can argue your house might be sold for a higher value but on average houses do not return what the stock market does.. and before you sell it its costing you in RE taxes, maintenance etc.

So while I agree with the 4% rule.. it has to be 4% invested in the market, not net worth.. OK flame suit is on..:)


Incidently my $400k property where my house sit also generates about $20k in rent after expanses.. I.e a 5% return... So I guess I just kinda skewered my own argument..:)

Hey, nudge nudge...you with the skewered argument and 20K a year coming in from a 400K property, that's nothing to sneeze at... I need to remind ya'll when you talk to the newcomers that the stock market is not the only path to freedom.  I'm a big believer in multiple streams of income, so have rentals (mostly), stock market and carrying First TD notes in my portfolio.

 I have 10 paid for rentals generating 18K+ a month and they function as a very part time job for us.  Yes, property ownership involves paying taxes and insurance, so that 18K isn't all gravy.  But there's plenty of gravy.   Me and my gravy just got back from Hawaii, and a couple more trips are coming right up back to back to back,  so I'm feeling the FI vibe along with Bateaux. 

Have you thought about swapping some to Airbnb? I've seen some crazy numbers done with properties when people get Airbnb right. Managed right with a small team to deal with issues. Customer services fully outsourced. There is lots out there about doing it. Not just slapping up a listing and hoping for the best. It needs to be done right.
« Last Edit: January 16, 2020, 07:43:45 AM by dominikm »

Car Jack

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Re: Race from $2M to $4M
« Reply #2222 on: January 16, 2020, 08:53:56 AM »
Whatís the save to $10k crowd about? Or is that a joke lol. Iím so green I donít know if youíre being serious haha

Here's the topic:
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/saving-to-$10k/

I think it is indeed appropriate for you to go there with your story.  Working up to $10k saved is a reasonable first step.  There are a number of "race to" threads in this section.  It makes the most sense to start in a thread that matches where you are.  This one specifically defines this as "you already have at least $2M of liquid investments and are targeting $3M". 

There's lots of good information in the MMM forums.  I'd suggest lots of reading.
« Last Edit: January 16, 2020, 08:55:56 AM by Car Jack »

pecunia

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Re: Race from $2M to $4M
« Reply #2223 on: January 16, 2020, 09:13:41 AM »
"This one specifically defines this as "you already have at least $2M of liquid investments and are targeting $3M".

We're going for 4 now!

carstenjames

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Re: Race from $2M to $4M
« Reply #2224 on: January 16, 2020, 09:17:28 AM »
"This one specifically defines this as "you already have at least $2M of liquid investments and are targeting $3M".

We're going for 4 now!

I still miss the "...and beyond!"

BeanCounter

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Re: Race from $2M to $4M
« Reply #2225 on: January 16, 2020, 09:53:30 AM »
I think Iím still in shock. Our invested assets increased $575k in 2019. Only $45k was additional contributions. This is after donating $20k to charity.
We also spent $80k on a home renovation but then managed to save another $50k in cash (not include above)

And I have 17 more weeks of work. Give or take how it goes when I put my notice in.

Itís all too good to be true.

Bateaux

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Re: Race from $2M to $4M
« Reply #2226 on: January 16, 2020, 10:44:37 AM »
"This one specifically defines this as "you already have at least $2M of liquid investments and are targeting $3M".

We're going for 4 now!

Considering the stretch to 3M.  We're running towards the 2.5 number really quickly.  Certainly going to wait out 2020 working and will test the waters in about 12 months.  We're back from the 11 day cruise and relaxing in 80 degree weather by our Florida home pool.  Working is certainly getting low on priority list.  Just got a text asking if I can come back to work a day early next week.  I said NOPE!   I've got a full bar here in Florida that needs my attention a few more days!

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Re: Race from $2M to $4M
« Reply #2227 on: January 16, 2020, 11:24:49 AM »
"This one specifically defines this as "you already have at least $2M of liquid investments and are targeting $3M".

We're going for 4 now!

I still miss the "...and beyond!"

Back by popular demand.....

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #2228 on: January 16, 2020, 12:17:12 PM »
Itís looking like Jan will be another of those +$100k increase to net worth months..... (yes only AUD funny money)...

My first house cost less than that and I took out a 30 year mortgage to buy it .... what was once a 30 year saving goal is now a 30 day blink in time....

EscapeVelocity2020

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Re: Race from $2M to $4M
« Reply #2229 on: January 16, 2020, 12:26:52 PM »
"This one specifically defines this as "you already have at least $2M of liquid investments and are targeting $3M".

We're going for 4 now!

I still miss the "...and beyond!"

Back by popular demand.....

Yay!  Beyond is back, back to beyond!!

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #2230 on: January 16, 2020, 01:37:54 PM »
I never felt poor until I met YOU PEOPLE...:)

jeroly

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Re: Race from $2M to $4M...and Beyond!
« Reply #2231 on: January 16, 2020, 02:21:02 PM »
Itís looking like Jan will be another of those +$100k increase to net worth months..... (yes only AUD funny money)...

My first house cost less than that and I took out a 30 year mortgage to buy it .... what was once a 30 year saving goal is now a 30 day blink in time....
Thanks for that , puts it all in perspective.

EscapeVelocity2020

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Re: Race from $2M to $4M
« Reply #2232 on: January 16, 2020, 02:29:14 PM »
Another Record High
Uuh, so just what is a stock market bubble?

Yeah, Alan Greenspan would be coming up with new ways to say 'irrational exuberance' at this point. 

Not much you can do in a bubble though.  You can sell and watch the market run away from you or you can buy and hope to get back out before the sell off.  I'm content to try not to be too sad when the latest paper gains are vaporized...  in the meantime, life is pretty darn good.  Keep a balanced asset allocation and at least you can feel like you did your best when fear takes hold again.

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #2233 on: January 16, 2020, 05:51:27 PM »
Yet another record high

https://www.ccn.com/dow-smashes-record-as-animal-spirits-seize-the-u-s-stock-market/

This headline gives a nod to John Maynard Keynes, "animal spirits."

Yeh - That is a good phrase, "irrational Exuberance."   Mr. Greenspan said it during the dot com bubble in the1990s.

Maybe the animal spirits will warn us before the bubble bursts.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #2234 on: January 17, 2020, 04:07:05 AM »
I never felt poor until I met YOU PEOPLE...:)
Just making our hay while the sun shines.  We could all be crying and gnashing our teeth in a blink.  I don't know what it feels like to lose a million dollars in the stock market.  Some of us will eventually.  Till then roar on 20'$

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #2235 on: January 17, 2020, 04:23:12 AM »
Losing $1 million would be something to talk about.

But last year my house in Sydney dropped $300K and it didnít really matter. The tenants kept paying their rent. In fact I increased the rent.

Iím really not sure that a drop of $1million would shake me much.

I guess you are contemplating a 30% loss.

On the positive side Iíd still have 70%

.... and that last $1million only took about 3 years to build. Easy come easy go.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #2236 on: January 17, 2020, 05:42:23 AM »
I have been investing steadily on autopilot since 1994 - right through two bubbles: the tech bubble in 1999 and the housing bubble. Although I'm definitely getting a mild sense of dejavu, I don't plan to change my strategy now. I'm content with my 60/40 AA and am sticking to it.

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #2237 on: January 17, 2020, 06:34:24 AM »
I recently switched my total AA from 80/20 to 70/30 where it will likely stay because I hit my minimum FIRE goal.  Iím not likely to drop further as I will have a pension in 66 months that if taken as part of an AA probably would drop me to at least 50/50.  I probably could keep everything liquid in stocks but I think that would cause me more anxiety than itíd be worth.  And yet with this market my investments this week will ďpay meĒ more than my salary.  My god itís crazy good. 

Car Jack

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Re: Race from $2M to $4M...and Beyond!
« Reply #2238 on: January 17, 2020, 07:04:37 AM »
I'm at 50/50.  When stocks go up, I see my equity go up and am happy.  When stocks go down, but bonds go up, I look at my bonds and am happy.

flyingaway

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Re: Race from $2M to $4M...and Beyond!
« Reply #2239 on: January 17, 2020, 07:20:28 AM »
My current asset allocation is probably 65/35. I don't check it frequently and don't care about a small range of perturbations. My current focus is fining ways to make my life happy (by spending some money if needed).

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #2240 on: January 17, 2020, 07:23:13 AM »
We're not really worried about a drop in stock market prices.   Our income streams are pretty diversified and other than the next 2-3 years while we pay off the home we bought yesterday, we don't even need to spend the RMDs from our IRAs and 401Ks.   As it is, now we need 2/3rds the RMDs from the 2 accounts that are subject to them (which are only about 40% of our holdings).

Once the new house is paid off (or if the market tanks before we sell our old home and one of our flips), we'll have a surplus and be buying stocks and bonds.

carstenjames

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Re: Race from $2M to $4M...and Beyond!
« Reply #2241 on: January 17, 2020, 08:43:18 AM »
We're not really worried about a drop in stock market prices.   Our income streams are pretty diversified and other than the next 2-3 years while we pay off the home we bought yesterday,

Congrats on the new house!

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #2242 on: January 17, 2020, 08:47:51 AM »
We're not really worried about a drop in stock market prices.   Our income streams are pretty diversified and other than the next 2-3 years while we pay off the home we bought yesterday,

Congrats on the new house!

If it hadn't been for what we learned from MMM and others in the FIRE world, we would never have been able to afford it, much less pay it off in about 2 years.

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #2243 on: January 17, 2020, 11:33:11 AM »
Lately, I've been thinking a lot about increasing our equities exposure.  It's sort of weird (to me at least) that the more we have, the less of it we need, as a percentage. Therefore, it's okay if our money grows, but it doesn't kill us if it drops. Like @SwordGuy, we have multiple income streams. Our cash stash*, rentals and DH's Defined Benefit Pension kind of mimic bonds, so why not put the rest into equities? There, it can grow long term and earn more money to give a portion to our heirs, and an even bigger slug to charity. Something to think about. It flies in the face of conventional wisdom, but that's the way mustachians do things, right?

*We flip houses for fun and profit occasionally, so we keep an insane (by mustachian standards) amount of moolah in plain old ready cash. Not under the mattress, of course, but in liquid accounts.

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #2244 on: January 17, 2020, 01:54:41 PM »
Lately, I've been thinking a lot about increasing our equities exposure.  It's sort of weird (to me at least) that the more we have, the less of it we need, as a percentage. Therefore, it's okay if our money grows, but it doesn't kill us if it drops. Like @SwordGuy, we have multiple income streams. Our cash stash*, rentals and DH's Defined Benefit Pension kind of mimic bonds, so why not put the rest into equities? There, it can grow long term and earn more money to give a portion to our heirs, and an even bigger slug to charity. Something to think about. It flies in the face of conventional wisdom, but that's the way mustachians do things, right?

*We flip houses for fun and profit occasionally, so we keep an insane (by mustachian standards) amount of moolah in plain old ready cash. Not under the mattress, of course, but in liquid accounts.

Doesn't seem dumb at all.  Once your needs are met, you can take a bigger risk with the rest of it.  You are already covered.  Roll those dice.  If you don't come out on top, you've at least had the courage to play the game.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #2245 on: January 17, 2020, 04:48:55 PM »
Yup I been thinking the same thing. Even if the market took a 50% dump we'd be perfectly OK.

Heck if we drew our pensions and continued taking rent we'd have more income than total expenditure in our most expensive year of FIRE so far.. It would not be very tax efficient (and definitely not healthcare subsidy efficient) to do so however.

Makes me wonder if our 75/25 (invested portfolio) is a bit conservative however.
« Last Edit: January 17, 2020, 04:54:29 PM by Exflyboy »

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #2246 on: January 18, 2020, 11:32:39 AM »
You can roll the dice, but looking at the recent increases if you hold off a bit before rolling the dice, you may have better effective yields.

I know.  I know.  You can't time the market, but look at that steep hill.  I visualize someone standing on the top of a step ladder reaching out.

https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

I thought the same thing last year.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #2247 on: January 18, 2020, 04:50:38 PM »
Oh totally I'd wait for a significant pullback before rolling more into stocks.

I was about to roll to 85/15 last year at 20% down on Christmas eve.. Literally was about to pull the trigger and then it went back up..

Coulda, woulda, shoulda..:)

soccerluvof4

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Re: Race from $2M to $4M...and Beyond!
« Reply #2248 on: January 20, 2020, 05:20:06 AM »
Oh totally I'd wait for a significant pullback before rolling more into stocks.

I was about to roll to 85/15 last year at 20% down on Christmas eve.. Literally was about to pull the trigger and then it went back up..

Coulda, woulda, shoulda..:)
You can roll the dice, but looking at the recent increases if you hold off a bit before rolling the dice, you may have better effective yields.


+3 I feel the same. No reason imo to rush to put $ in at this point. Im a bit cash heavy myself but going to live on that and withdraw less until we get a pull back.
I know.  I know.  You can't time the market, but look at that steep hill.  I visualize someone standing on the top of a step ladder reaching out.

https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

I thought the same thing last year.

soccerluvof4

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Re: Race from $2M to $4M...and Beyond!
« Reply #2249 on: January 21, 2020, 03:39:21 AM »
You know everyone always use the 50% drop like the bottom of a crisis and I suppose that is based on some historical reasoning. And while I think of think of our net worth in the same way because lets face it you have to set some perimeters I cant help but to wonder with such a run up if realistically the drop couldn't be even a lot worse. Typically at some point money would come pouring in but has anyone else thought perhaps the same thing? I thought I heard too less people are investing in the stock market because they don't trust it and I want to say mostly millennial's. Not sure if that's true or not. Just curious what others have thought about that if at all because did people really think the market would be chasing Dow 30k if not more.