Race from $2M to $4M...and Beyond!

[Dicey]

I was going to go on line today to check our bank balances, but decided against it. Meh. Mind you, I said bank balances. I wouldn't dream of checking the investment accounts. For now, it just is whatever it is. Not spending it any time in the near future (read: at least three years), so it just doesn't matter.

Anybody read any good books lately?

[markbike528CBX]

..................Anybody read any good books lately?

Yep, on the beach in Zipolite, Mexico, no TV most places, or in hotel rooms (ours was $18 USD/day).  We were "loosing" ~$10K USD/day and could't care less.
We only remembered that Corona was something other than a beer when we got to the Mexico City airport.

 This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart, Kenneth S. Rogoff 
TL;DR - Everybody is amazed at financial crashes, currency devaluations etc. EVERY TIME.  "We couldn't have predicted this"- economists, especially government economists when a asset/currency bubble happens.
The only thing, is it was written ~ 2009 and does not show the recovery of various assets post GFC (they call it the Second Great Contraction).

Skin in the Game- Nassim Nicholas Taleb.   TL:DR, most economists don't have any financial gain/loss in play when "prognosticating".

Disclosure: I have a 10 Trillion dollar Zimbabwe note and gave away 250 Billion Zimbabwe dollars for Halloween two years ago (5 billion notes).

[SwordGuy]

..................Anybody read any good books lately?

Yep, on the beach in Zipolite, Mexico, no TV most places, or in hotel rooms (ours was $18 USD/day).  We were "loosing" ~$10K USD/day and could't care less.
We only remembered that Corona was something other than a beer when we got to the Mexico City airport.

 This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart, Kenneth S. Rogoff 
TL;DR - Everybody is amazed at financial crashes, currency devaluations etc. EVERY TIME.  "We couldn't have predicted this"- economists, especially government economists when a asset/currency bubble happens.
The only thing, is it was written ~ 2009 and does not show the recovery of various assets post GFC (they call it the Second Great Contraction).

Skin in the Game- Nassim Nicholas Taleb.   TL:DR, most economists don't have any financial gain/loss in play when "prognosticating".

Disclosure: I have a 10 Trillion dollar Zimbabwe note and gave away 250 Billion Zimbabwe dollars for Halloween two years ago (5 billion notes).

Aren't those $5 billion dollar notes grand!!??     I have a stash of them that I give away for fun.

[2sk22]

I was going to go on line today to check our bank balances, but decided against it. Meh. Mind you, I said bank balances. I wouldn't dream of checking the investment accounts. For now, it just is whatever it is. Not spending it any time in the near future (read: at least three years), so it just doesn't matter.

Anybody read any good books lately?

I am reading "The Gene - an intimate history" by Siddhartha Mukherjee. My older daughter is starting grad school later this year working in genetics so I figured I might as well learn something about the field :-) Genetics is an interesting field - its really a combination of biology and computer science.

[LightTripper]

Oh I read his cancer book and it was amazing, I will have to try that one!!

[Exflyboy]

I am about to give away "The Millionaire Next Door" for a retirement party gag gift.. Sorta.

I started flipping through it remembering how good it was. Best part I only paid one dollar for it..:)

[Dicey]

I am about to give away "The Millionaire Next Door" for a retirement party gag gift.. Sorta.

I started flipping through it remembering how good it was. Best part I only paid one dollar for it..:)

Sort of a gag or sort of a gift? I think it's a great gift! Even better that it was only a buck, plus, I'll bet you didn't have to pay sales tax on it either, which makes it even more valuable. Unless you use used materials, it could cost more to wrap!

[Exflyboy]

I am about to give away "The Millionaire Next Door" for a retirement party gag gift.. Sorta.

I started flipping through it remembering how good it was. Best part I only paid one dollar for it..:)

Sort of a gag or sort of a gift? I think it's a great gift! Even better that it was only a buck, plus, I'll bet you didn't have to pay sales tax on it either, which makes it even more valuable. Unless you use used materials, it could cost more to wrap!

Actually both (sorta) The friend who is retiring (early at 55) we didn't know he was retiring so by definition must have a stash of moolah tucked away. The best bit though is he is a mutual friend of the friend who told me it "really pissed him off" that DW and I were retired.

This guy and his Wife spend EVERYTHING they have and can't figure out how we did it.

Now he will have another friend doing the same thing.. We hope the retiree he opens it close to friend #2...:)

[itchyfeet]

I haven’t looked closely, but I suppose I must be down $400K from the peak. 🥺

As a young man I never would have imagined I’d be in a position to lose almost half a million over a 3 week period... much less that I would still be fairly well of even after losing so much.

The ASX is now down roughly 20% from the peak. I asked DW whether it was time to start buying yet. I think I’ll wait a little longer.... but it’s starting to become tempting...

Buying is not really going to change much. I’d only be adding 5% additional investment on the stash already there.

[Bateaux]

Y'all see oil?  Holy guacamole!  It's going be a rough morning.

[itchyfeet]

Y'all see oil?  Holy guacamole!  It's going be a rough morning.

Australia/ Japan down 6% today

[mjr]

7% now.

This is just the start, still due to fear.  The inevitable recession hasn't hit yet...

[itchyfeet]

I’ll hold onto the positive signs of lowering infection rates in China and Korea...

[Bateaux]

I’ll hold onto the positive signs of lowering infection rates in China and Korea...

Positive news on the virus will help, but this slowdown is already happening.

[2sk22]

Positive news on the virus will help, but this slowdown is already happening.

Recovery is going to be a lot slower than people  expect. Even if the virus "burns itself out" by say June, travel will not resume immediately. People are still scared to travel and it will take some time for this fear to dissipate. It will be a year or more before air travel volumes recover.

[tooqk4u22]

At this rate my stock allocation will be insignificant in a couple of weeks....we will almost certainly test the December 2018 lows. Hopefully some technical support there.

This is only my second large drop as an investor, but the first one after FIREing (on a shoestring budget!).

It does look like this means I go back to work in a year to reduce SRR and obliterate my portfolio.

SP500 is still up 6% for last 12 months and 16% since 12/31/19 - before dividends.   Those numbers aren't that bad.   Have a couple 2019 lows to test before the 2018 lows - Sep19 2855 (hit it last week but didn't break it) and then 2750 from may of last year.   Incidentally those levels would be close to 15% and 20% declines respectively, not crazy by any means, don't get me wrong I don't like it but its not crazy.   

Lows if 2018 would be close to a 30% drop from highs....back up the truck.   

Times to reallocate is all.

Broke through the 2019 lows....next mark is 2018 low of 2408 in December of 2018.   

[Exflyboy]

Yup 2408 is the 20% down from recent highs mark.. I'm thinking of dipping another toe in at that point.

Might happen today.

[itchyfeet]

The ASX 200 futures are pointing to another big drop tomorrow. Sheesh 😒

I know this shouldn’t impact my FIRE plans for this year, but it might.

Work feels a safe place to be for now.

I accept that if 1 month ago I had $1million and that a safe withdrawal at that time was $40K, then today of if that $1m is now worth only $800k the $40k safe withdrawal still stands. If I fired tomorrow I should consider 5% as a safe withdrawal rate now (40/800).

But somehow, I can write that here but I’m not quite feeling it.

[Bateaux]

Dancing on my tippy toes through my OMY!

[ysette9]

Quite a time for this to be my last week at work.
Then again, I did call the market crash timed with my retirement on The Top Is In thread several weeks ago. To bad you all weren’t paying attention! :)

[tooqk4u22]

The ASX 200 futures are pointing to another big drop tomorrow. Sheesh 😒

I know this shouldn’t impact my FIRE plans for this year, but it might.

Work feels a safe place to be for now.

I accept that if 1 month ago I had $1million and that a safe withdrawal at that time was $40K, then today of if that $1m is now worth only $800k the $40k safe withdrawal still stands. If I fired tomorrow I should consider 5% as a safe withdrawal rate now (40/800).

But somehow, I can write that here but I’m not quite feeling it.

If I was working still I would be hiding out in the "safety" of my job, just like I did in 4Q 2018 when markets went down 20%.   I FIRE'd in June 2019 but it was the 20% drop from the highs in 9/2018 to the lows in 12/2018 that confirmed I was comfortable with the risk.  From 1/2019 to 6/2019 I added another 5-7% or to the stash from year end bonus, annual 401k match, vesting RSUs etc.  Also, the market basically recovered back to prior highs by the time I FIRE'd and at that time I moved about 10% from equities to bonds to have a more conservative AA/glide path plan so I could sleep at night.  Definitely had FOMO as markets ran up the rest of the year and into this year but didn't change anything and as a result now I still sleep at night.

Don't get me wrong, I still lost a boat load but still not back to 12/2018 lows, which may/probably be hit but that will be close to the 30% from highs.  Maybe it goes more.   I will rebalance some as this continues.   

The standstill that is being caused by coronavirus, even if the issue/fear lasts only another month, will ripple through the economy and SP500 earnings will drop - how much, who knows.   If its 20-30% then market is where it should be, if its more it will drop more but will recover faster like during the financial crisis. 

[Bateaux]

Well because of the frothy stock market my liquid assets crossed the $2 million mark, to $2,007,000

On top of that I have another $425,000 in equity.

The Top is In.  The market will promptly crash now.

Sorry for the minor correction, but a crash is scheduled for mid next month when I will be quitting work for good.

Mark your calendars, folks.

I've started the alignment to retire and really want to see some significant crash before quitting.  Working in the Petro/chemical business you know pretty much when things are slowing. The refineries are feeling the China problems as well as the disruption of demographics.  People are driving less miles per person.  I'm in chemical manufacturing and thus far our issues have been lack of raw material supply. We've had major on-site equipment repair and new construction which has temporarily slowed our production.  Demand thus far is strong as well as pricing.  We make polyurethane, inventory is low and demand is still high.  There will be no deep recession until demand for our products levels and drops.  That however doesn't have much to do with panic drops in the market.   Ten to twenty percent swings at this level could be considered chatter and noise.  We aren't seeing that yet because the government and the consumer are spending debt like crazy.  Many of us here have taken advantage of that for quite a while now.  For now our dollars of profit are just as real as their debt.  Who knows how much longer the big Ponzi scheme can go.

Ysette9 you were saying🤣😠😈😎

[ysette9]

Thank you very much.

This will be the first and last time I call the market

[Bateaux]

Thank you very much.

This will be the first and last time I call the market

Good luck with your well deserved retirement.  We all want the absolute best for you and know you'll be just fine.

[soccerluvof4]

Think this one is going to take awhile to figure out as we wait for this Virus to work through, now oil and then the election and have  to see the carnage after it all. In the end it will all work out so staying the course but no rush i see to add more here but instead will live off cash reserve till things settle a bit. Getting a bounceback in futures because of some things the administration might do but we have a long ways to go imo to get through this all.

[tooqk4u22]

Think this one is going to take awhile to figure out as we wait for this Virus to work through, now oil and then the election and have  to see the carnage after it all. In the end it will all work out so staying the course but no rush i see to add more here but instead will live off cash reserve till things settle a bit. Getting a bounceback in futures because of some things the administration might do but we have a long ways to go imo to get through this all.

Probably, I think the coronavirus will sort out/become normalized/accepted sooner rather than later and oil will stabilize in next 90 days but won't increase until demand comes back from the first stuff.   The election however is probably now the riskiest.   Trump may be a moron but stock markets have been good, but his handling of the coronavirus and immediate and looming additional shocks to the economy have greatly opened the door to him not being re-elected.  If Biden gets elected most things that change will be slight and not impactful, but the big thing would be tax rates - if they go back to pre tax cut levels that would be another 20% cut to earnings and the markets - that is the big risk.     

[BlueHouse]

Well, I'm down over $250K, so I guess I won't be seeing you all for a few months or maybe a year.  It was nice for the ONE DAY that I was an official member. 

Good luck to all and I hope to see you again soon.

[itchyfeet]

Well, I'm down over $250K, so I guess I won't be seeing you all for a few months or maybe a year.  It was nice for the ONE DAY that I was an official member. 

Good luck to all and I hope to see you again soon.

See you soon 😁

[PathtoFIRE]

2,011,045

Hanging on by a thread!

[pecunia]

Think this one is going to take awhile to figure out as we wait for this Virus to work through, now oil and then the election and have  to see the carnage after it all. In the end it will all work out so staying the course but no rush i see to add more here but instead will live off cash reserve till things settle a bit. Getting a bounceback in futures because of some things the administration might do but we have a long ways to go imo to get through this all.

So - I can understand the virus slowing business.  What I can never understand is why the lower price of oil is bad for the entire economy.  I can see it being bad for the oil business.  I can also see it being good for everybody else.  I just bought some gas a few minutes ago.  It was about $2.00 / gallon.  The difference from previous prices is money in my pocket.  The lower gas prices mean a lot of money in just about everybody's pocket.  I mean, it's like a tax cut with no increase to the Federal deficit.  This kind of thing is supposed to be an economic stimulus.

I wish I could figure this stuff out instead of riding it like being on the back of an angry tiger.  I'm glad you guys have been warning me. 

[SwordGuy]

Think this one is going to take awhile to figure out as we wait for this Virus to work through, now oil and then the election and have  to see the carnage after it all. In the end it will all work out so staying the course but no rush i see to add more here but instead will live off cash reserve till things settle a bit. Getting a bounceback in futures because of some things the administration might do but we have a long ways to go imo to get through this all.

So - I can understand the virus slowing business.  What I can never understand is why the lower price of oil is bad for the entire economy.  I can see it being bad for the oil business.  I can also see it being good for everybody else.  I just bought some gas a few minutes ago.  It was about $2.00 / gallon.  The difference from previous prices is money in my pocket.  The lower gas prices mean a lot of money in just about everybody's pocket.  I mean, it's like a tax cut with no increase to the Federal deficit.  This kind of thing is supposed to be an economic stimulus.

I wish I could figure this stuff out instead of riding it like being on the back of an angry tiger.  I'm glad you guys have been warning me.

If American shale oil companies go out of business, several things happen:

1) Their employees become unemployed.
2) Many of them are in flyover states where they are providing a huge economic boom.  That boom evaporates.
3) The folks in those oil boom flyover states who invested to provide goods and services watch their market evaporate.  They go bust.
4) US oil exports have been key to making the balance of trade more in our favor.   That goes away and causes disruptions.
5) Oil prices are lower because demand is down, not because we've figured out a way to use less oil.   All that demand was because people were doing things that use up energy and now they aren't.   Those things contributed to the economy and now they aren't.    People lose money.

Lower price gas won't help much if people lose their jobs or much of their income due to these disruptions.

[Bateaux]

Think this one is going to take awhile to figure out as we wait for this Virus to work through, now oil and then the election and have  to see the carnage after it all. In the end it will all work out so staying the course but no rush i see to add more here but instead will live off cash reserve till things settle a bit. Getting a bounceback in futures because of some things the administration might do but we have a long ways to go imo to get through this all.

So - I can understand the virus slowing business.  What I can never understand is why the lower price of oil is bad for the entire economy.  I can see it being bad for the oil business.  I can also see it being good for everybody else.  I just bought some gas a few minutes ago.  It was about $2.00 / gallon.  The difference from previous prices is money in my pocket.  The lower gas prices mean a lot of money in just about everybody's pocket.  I mean, it's like a tax cut with no increase to the Federal deficit.  This kind of thing is supposed to be an economic stimulus.

I wish I could figure this stuff out instead of riding it like being on the back of an angry tiger.  I'm glad you guys have been warning me.

Every drop of shale oil is back by a tremendous level of debt.  The means to pay that debt is by extracting the oil and bringing it to market.  Problem is, at these levels shale oil producers will be operating at a cost higher than they can sell the oil.  Saudi Arabia can produce and profit on sub 20 dollar a barrel oil.  Simple economic reality.   The layoffs and the rippling effect are coming.

[Dancin'Dog]

I've recently incurred some substantial losses and I'm wondering about harvesting them to offset future real estate capital gains.  This is the first time I have done tax loss harvesting.  I realize that I need to avoid a wash sale.  Where can I find info about what I can safely swap out?  (I have VTSAX, VITAX, & VIGAX, which I plan to convert to ETFs tomorrow.)  I assume cashing them out & parking the cash in my MM settlement fund for 30 days would also work? 


Some of the losses are short term & some are long term.  Is there a reason to not just harvest all of them?  If so, how do you decide which to sell first?
 
I'll ask my accountant, and my Vanguard rep, but I figured I'd ask you guys (& gals) too since I'd like to get as much info as I can. 

[Dicey]

Well, I'm down over $250K, so I guess I won't be seeing you all for a few months or maybe a year.  It was nice for the ONE DAY that I was an official member. 

Good luck to all and I hope to see you again soon.

See you soon 😁

As King George sings in Hamilton, "You'll be back..."

[Exflyboy]

Almost 20% down and thinking of dipping another toe..:)

[2Birds1Stone]

At this rate my stock allocation will be insignificant in a couple of weeks....we will almost certainly test the December 2018 lows. Hopefully some technical support there.

This is only my second large drop as an investor, but the first one after FIREing (on a shoestring budget!).

It does look like this means I go back to work in a year to reduce SRR and obliterate my portfolio.

So much for technical support....

This sucks :(

[Dancin'Dog]

Almost 20% down and thinking of dipping another toe..:)

I like your positive attitude.  :)


You must not be listening to the fake news.  ;)

[Exflyboy]

Almost 20% down and thinking of dipping another toe..:)

I like your positive attitude.  :)


You must not be listening to the fake news.  ;)

I held off as it didn't close below the 20% down mark.. I'm betting there will be a bounce tomorrow and then a new low on Friday.. I'll probably toe dip then.

[Dancin'Dog]

Almost 20% down and thinking of dipping another toe..:)

I like your positive attitude.  :)


You must not be listening to the fake news.  ;)

I held off as it didn't close below the 20% down mark.. I'm betting there will be a bounce tomorrow and then a new low on Friday.. I'll probably toe dip then.

So, you're thinking the 20% mark will cure the pandemic? 

[Exflyboy]

Almost 20% down and thinking of dipping another toe..:)

I like your positive attitude.  :)


You must not be listening to the fake news.  ;)

I held off as it didn't close below the 20% down mark.. I'm betting there will be a bounce tomorrow and then a new low on Friday.. I'll probably toe dip then.

So, you're thinking the 20% mark will cure the pandemic?

No I think its going lower after Trump's speech!.. Futures down 4% already.

[Taran Wanderer]

Geez, if it keeps going like this, I might have to leave the club.  Lots of cash on hand, though, so pretty soon the buy-in will feel really good.  And then, like Arnold, I'll be back.

[Dancin'Dog]

Almost 20% down and thinking of dipping another toe..:)

I like your positive attitude.  :)


You must not be listening to the fake news.  ;)

I held off as it didn't close below the 20% down mark.. I'm betting there will be a bounce tomorrow and then a new low on Friday.. I'll probably toe dip then.

So, you're thinking the 20% mark will cure the pandemic?

No I think its going lower after Trump's speech!.. Futures down 4% already.

He must have slipped up and got caught telling the truth, by mistake of course. 

[Bateaux]

Was thinking 2018 lows would be the bottom.  Now Dow 20,000 is in doubt.  Country is shutting down. 

[2sk22]

Having lived through three big downturns (early 90s, 2000, 2008), this is what I posted a few months back

I know this number is an outlier but that's what works for us, in terms of peace of mind. We have about 6 years worth of living expenses in money market and savings accounts.

[Car Jack]

Russia bluffing SA and SA saying that "oh, by the way, we were just joking about our cost.....it's actually $3 a barrel" has blown the price of oil.  The US is just collateral damage but of course oil companies are going to be hammered.  Good news/bad news.  Several XOM, Chevron come to mind in the S&P 500.  Good news is when I put gas in my car.  I'm sure the Canadians pushing sludge through the Keystone are kicking themselves now. 

On the drops.......if your AA truly reflects your risk tolerance, then at most, you're watching your AA vs your target for rebalance.  Bonds have mostly been doing phenomenally well.  Some time ago (more than 30 days, but I forget exactly when), I had rebalanced out of equity, into bonds.  In the last week, I did some rebalance from bond into equity and will watch the AA to see if I do it again.  Some strategic tax loss harvesting.  I'm also getting a nice tax refund that's enough to fund mine and my wife's Roths completely. 

All of this is opportunity.  If your AA was too heavy in equity and now you don't feel so good, just hold on.  Think about what your tolerance truly is, adjust your target AA and when things have recovered, start rebalancing to that new target.

[Exflyboy]

Today is toe dipping day.. well maybe half a foot..:)

I have 17 years in bond+cash.. so I gotta rebalace a bit.

[PathtoFIRE]

Tally from yesterday's losses put me exactly 4,010 out of this club, for now. But who else will understand my troubles except you all?

I went to tax loss harvest today, for the first time since 2015/2016. Ah, but my days (and accounts) were more straight forward back then; now most of my accounts, both pre-tax and post-tax, have VTSAX and VTIAX, which is what I'd mostly sell to TLH thousands in recent losses, but my solo 401k and cash balance plans both had contributions as recently as 2/28, so wash rule territory.

So I was about to turn off dividend reinvestments and set a calendar reminder for 3/30, when it occurred to me that instead of eking out $1k tax savings/yr for the next few years, I'd make far more just accelerating a few planned monthly contributions and doing a little rebalancing (assuming the markets recover of course); neither could be done if I wanted to TLH at the end of the month. So have I truly graduated out of TLH and into a dirty market timer? Of course, I'm not all in, just rebalanced some bonds in my old 401k to bring my small cap allocation up from 6.5%, and may exchange some aftertax bonds into equities before the bell. The G and F funds in the TSP remain untouched...for now.

[itchyfeet]

Sheesh...... -600K AUD..... maybe more but I can’t get motivated to type what I see on my brokerage screen into my spreadsheet.

Looks like I am working for a few extra months to wait this out... maybe a few years 😟

A good chunk of the world is closed for business.

However.......lChina only had 18 new cases today. It’s barely 3 months since this all began. Korea is also doing well in containment.

I remain optimistic that the recovery will happen this year..., maybe late this year....

[Exflyboy]

I have "lost" $480k US so far.... Thats more than my house is worth...:)

[2sk22]

Today is toe dipping day.. well maybe half a foot..:)

I have 17 years in bond+cash.. so I gotta rebalace a bit.

You have 17 years of expenses in bonds&cash? Wow - I thought I was extreme in having six years :-)
I think tomorrow is going to be my toe dipping day.