Author Topic: Race from $2M to $4M...and Beyond!  (Read 1633606 times)

JGS1980

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Re: Race from $2M to $4M...and Beyond!
« Reply #8600 on: February 24, 2025, 09:13:47 AM »

Not a timeshare. Every family has their name on the title. Everyone benefits from property appreciation. No one is related, which actually helps with management. Lots of pages of by-laws to enforce non-smoking, property care, no pets, and periodic updating. High season is split equally with all. No renting to outside parties. You can trade weeks with eachother as needed.  You can sell your share when you want to, but the other parties have to agree to the new member. They've been doing this for a few decades, so it seems to be working.

Sure, there are certainly restrictions, but you'd find a lot of these restrictions on an AirBNB rental or VRBO. The price is certainly right, no mgmt fees either In addition, if this is where your spouse wants to be..........

I'm unconvinced, but would be happy to be wrong.  If you end up trying it, let us know how it works out.  Good luck!

Well, we are going for it, and if it all crashes and burns, I'll let y'all know.

The way I see it, it's a low risk play. Worse case scenario I just get my money back (minus and depreciation and/or seller's costs), which would come down to about a 3-4 weeks renting in this location over the summer anyway!

JGS

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #8601 on: March 04, 2025, 08:10:34 AM »
Alrighty my wealthy and wise friends, how are we reacting to this trade war that has just kicked off?

I'll be the first to admit that I've sold off some of my riskiest investments to lock in what gains I still have.  It could've been much better, and maybe I've locked in some of the recent losses, but the latest OpenAI model disappointed, NVDA earnings weren't well received, and I think businesses and consumers will be pulling back as this tariff stuff plays out.  I'll start to DCA back in to QQQ at some point, but I'm in no hurry, I'd rather stay FI and sleep well at night then try to catch this falling knife...

tooqk4u22

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Re: Race from $2M to $4M...and Beyond!
« Reply #8602 on: March 04, 2025, 08:36:19 AM »
Alrighty my wealthy and wise friends, how are we reacting to this trade war that has just kicked off?

I'll be the first to admit that I've sold off some of my riskiest investments to lock in what gains I still have.  It could've been much better, and maybe I've locked in some of the recent losses, but the latest OpenAI model disappointed, NVDA earnings weren't well received, and I think businesses and consumers will be pulling back as this tariff stuff plays out.  I'll start to DCA back in to QQQ at some point, but I'm in no hurry, I'd rather stay FI and sleep well at night then try to catch this falling knife...

The reality is that the markets have knocked off the froth and basically back to election day levels. My bond/cash allocation is ok.  The VTI I bought yesterday, not as good.

Rates are down so that's good for borrowers/housing. 

Wealth inequality is a little (not much) better - bad for me, good for society. 




2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #8603 on: March 04, 2025, 09:03:22 AM »
Alrighty my wealthy and wise friends, how are we reacting to this trade war that has just kicked off?

I'll be the first to admit that I've sold off some of my riskiest investments to lock in what gains I still have.  It could've been much better, and maybe I've locked in some of the recent losses, but the latest OpenAI model disappointed, NVDA earnings weren't well received, and I think businesses and consumers will be pulling back as this tariff stuff plays out.  I'll start to DCA back in to QQQ at some point, but I'm in no hurry, I'd rather stay FI and sleep well at night then try to catch this falling knife...

Maybe we should rename this topic to the race from $4M to $2M and below 😀

In any case, I'm not taking any action just yet. As I've mentioned many times here, we keep multiple years of spending money in cash or equivalents. Having been through three crashes, we have learned our lessons.

JGS1980

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Re: Race from $2M to $4M...and Beyond!
« Reply #8604 on: March 04, 2025, 09:49:40 AM »
Well, I guess I took about 10% off equities and reinvested it in real estate recently. The timing is just coincidental, though.

My updated AA is now 90/10, with about 20% in international. As I am not planning on drawing from the stache in the next 10 years, I will ride this thing down, and then I will ride it up again.

Now if I were properly retired, it is likely I would have already dropped my AA to 70/30 or so to preserve the nest egg a bit.

That's what my Investor Statement says, anyway.

JGS

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #8605 on: March 04, 2025, 10:24:55 AM »
Good point on retirement, once that is on the horizon, I'll certainly glide toward an even more conservative AA.  As it stands, I'm still probably too heavy in equities for a person with no other sources of income, other than investments.  I treat my paycheck a bit like a bond / annuity in terms of asset allocation.  Still not factoring in Social Security, something needs to change there but I don't know how broken it will get and what the fix will be...

The race from and Beyond to $4M continues...

TempusFugit

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Re: Race from $2M to $4M...and Beyond!
« Reply #8606 on: March 04, 2025, 11:40:22 AM »
Since I am approaching my planned retirement I undertook to rebalance last month and reduced my total equity exposure from around 80 to just under 70% and also within my equity holdings I diversified a bit more into small/mid cap and international.  None of this was anything dramatic, but just trying to position myself for a more conservative defensive AA than I have maintained in the accumulation phase. 

We have all known for some time that the party will have to end eventually and that something will be the first domino toward what will hopefully be a somewhat typical correction or even bear market, but I’m not sure many of us foresaw that it would be our own government shooting our economy in the leg for no reason. 

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #8607 on: March 04, 2025, 12:34:19 PM »
I'm still at about 90 stock indexes and 10 cash/bonds. With my pension that's enough to weather a pretty good storm. If we get new highs I may move to a little more cash. I've got two houses I could rent if I felt like it. I even considered seeking some work for a while. I thought I'd be taking a few edibles once retired, but I'd have no problem with a drug screen right now.
Instead I'm going hiking. I'll be headed to Georgia next week to finish the Pinhoti Trail and start the Benton MacKaye Trail. I was going to go to the Arizona Trail but I've heard it's quite dry this year and water sources scarce. I'll stick with the Appalachian Mountains for now where there is plenty of water. I won't always have cell service to care about market trends.

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #8608 on: March 04, 2025, 12:48:59 PM »
I might as well have spent $200k on randomness this month-DH got a massive bonus, and we still were flat/down this month. Didn’t change the investments, just was a yuk month and not quitting the day jobs yet.

Turtle

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Re: Race from $2M to $4M...and Beyond!
« Reply #8609 on: March 04, 2025, 04:10:26 PM »
I transferred another couple year’s worth of expenses out of stock and into bond funds a couple weeks ago when the market was still riding high.

At this point I have enough to cover my basic dignity floor for the first 5 years of retirement, but worst case scenario I’d push full retirement out one more year.  (Current plan is beginning of June of 2026.)

By the River

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Re: Race from $2M to $4M...and Beyond!
« Reply #8610 on: March 05, 2025, 12:25:26 PM »
I'm considering a waterfront home in Louisiana. It's about 20 miles downstream from our present Louisiana house. They are asking 950K. It has pretty much all the things I want already established. It's less vulnerable to flooding than our current location. It sits on two acres. It has its own ramp for launching and shed with boat lifts. I'd have to sell the current Louisiana house, the Louisiana rental house and the Florida house to justify the purchase. I'd probably still need to come up with a few hundred thousand from either a loan or sell stock. The home is also within 2 miles of where I spent my childhood. It's a more rural location, but most services are within 30 minutes. I really don't want to lose the Florida house. The Florida house still has a small mortgage about 125K. Current Zillow estimate on the Florida house is 500K. It would be nice to maintain just one place. We do own four acres in Florida a mile from our home. Maybe just build an RV parking shed there. I'll probably take a boat ride down there to look at it soon.

I believe I found the house you are/were considering.  Very nice.  I was looking at the diversion canal homes while on Zillow.  When I lived there in the 80s there was basically nothing between the bridge and blind river bar.  Now, I see million dollar homes.  Wow.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #8611 on: March 05, 2025, 10:23:31 PM »
Hey By The River. This house is on the Amite near Clio. I've all but decided to let it go. My wife is addicted to our grandchildren being on the same street with us in Port Vincent.

https://www.zillow.com/homedetails/16704-Meisner-Rd-Springfield-LA-70462/249352141_zpid/
« Last Edit: March 05, 2025, 10:26:18 PM by Bateaux »

Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #8612 on: March 06, 2025, 04:52:10 AM »
Alrighty my wealthy and wise friends, how are we reacting to this trade war that has just kicked off?

I'll be the first to admit that I've sold off some of my riskiest investments to lock in what gains I still have.  It could've been much better, and maybe I've locked in some of the recent losses, but the latest OpenAI model disappointed, NVDA earnings weren't well received, and I think businesses and consumers will be pulling back as this tariff stuff plays out.  I'll start to DCA back in to QQQ at some point, but I'm in no hurry, I'd rather stay FI and sleep well at night then try to catch this falling knife...

I've learned not to invest based on my feelings about the market/economy, I learned early in life (luckily before I had much money) that I am remarkably bad at that. I also try not to view any market move less than 10% from the highs as significant, there's just too many, and with how multiples can jump around it's hard to understand why a company is priced specifically where it is anyway. 2020 confirmed that to me, I'm glad I made no moves as I would have never guessed that disaster of a year would have resulted in such an up market in the end.

At the end of 2022 i moved to part time.  Realizing I was FatFI somehow combined with the uncomfortable feeling the 2022 drop gave me I slowly moved toward a more conservative allocation.  This also included the incredibly rewarding decision to take much of the recent gains of 2023/2024 and buy a half-million $ lakehouse with cash for my 80 yo father to live in (he pays the utilities) and the extended family to visit often and enjoy.  Besides being the first thing I've bought that actually made me feel incredibly wealthy, I frankly like having some net worth parked somewhere that is not stocks/bonds (like my own paid for home and one investment property).

My NW during this recent dip has basically gone from $5.2M to $5.1M, so I think I accomplished what I wanted.  I understand the flip side of all that means slower gains, which was not something I would have accepted 10 years ago, but am definitely in a different position now.





« Last Edit: March 06, 2025, 04:57:29 AM by Much Fishing to Do »

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #8613 on: March 06, 2025, 08:13:41 AM »
Alrighty my wealthy and wise friends, how are we reacting to this trade war that has just kicked off?

I'll be the first to admit that I've sold off some of my riskiest investments to lock in what gains I still have.  It could've been much better, and maybe I've locked in some of the recent losses, but the latest OpenAI model disappointed, NVDA earnings weren't well received, and I think businesses and consumers will be pulling back as this tariff stuff plays out.  I'll start to DCA back in to QQQ at some point, but I'm in no hurry, I'd rather stay FI and sleep well at night then try to catch this falling knife...

I've learned not to invest based on my feelings about the market/economy, I learned early in life (luckily before I had much money) that I am remarkably bad at that. I also try not to view any market move less than 10% from the highs as significant, there's just too many, and with how multiples can jump around it's hard to understand why a company is priced specifically where it is anyway. 2020 confirmed that to me, I'm glad I made no moves as I would have never guessed that disaster of a year would have resulted in such an up market in the end.

At the end of 2022 i moved to part time.  Realizing I was FatFI somehow combined with the uncomfortable feeling the 2022 drop gave me I slowly moved toward a more conservative allocation.  This also included the incredibly rewarding decision to take much of the recent gains of 2023/2024 and buy a half-million $ lakehouse with cash for my 80 yo father to live in (he pays the utilities) and the extended family to visit often and enjoy.  Besides being the first thing I've bought that actually made me feel incredibly wealthy, I frankly like having some net worth parked somewhere that is not stocks/bonds (like my own paid for home and one investment property).

My NW during this recent dip has basically gone from $5.2M to $5.1M, so I think I accomplished what I wanted.  I understand the flip side of all that means slower gains, which was not something I would have accepted 10 years ago, but am definitely in a different position now.

These buys and sells are strictly in my 'fun money' non-core portfolio.  I use these superfluous funds to 'experiment' with things like Bitcoin and now AI.  Even if they went down 75%, I'd be back to where I started.  But I must admit, when they were way up, I was getting grand delusions of hitting $10M NW before I pulled the plug on work.  I'm now thinking I'm pretty happy with where I'm at and happy that I can be more conservative in AA, I might even leave these funds in a Vanguard MM and use it as a slush fund to spend down early in retirement.  Certainly resigned to seeing slower or no gains, especially compared to what we had during these last 2 20%+ years!

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #8614 on: March 06, 2025, 11:21:42 AM »
Like some other here I consider the clientele of “Race” part over and done with and have already moved to a more conservative position. I don’t need much growth anymore so why ride the equities roller coaster more than necessary. Like others, even 5 years ago, I would have had a very different mindset as I was all about the Race and was even leveraged to get there.

Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #8615 on: March 06, 2025, 03:23:19 PM »
Like some other here I consider the clientele of “Race” part over and done with and have already moved to a more conservative position. I don’t need much growth anymore so why ride the equities roller coaster more than necessary. Like others, even 5 years ago, I would have had a very different mindset as I was all about the Race and was even leveraged to get there.
Yep, I was never overly risky as I liked a paid off house, but I definitely was 95%+ equities until I hit FI.  But frankly that points out such a HUGE weird phase in accumulating.  When I had less than 2 years salary saved I was concerned about losing my job/emergencies etc.  From 2x salary to 20x salary is that humongous phase of knowing there's little to seriously worry about financially....but you do have to keep working....which of course just puts you in the aggressive mindset of getting to that 20x-25x amount when you know you've FINALLY hit the next step....and then its time to back off....

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #8616 on: March 06, 2025, 03:36:05 PM »
Just updated my January net worth spreadsheet, and we've moved to $3.9 million up from $3.7 million.  We overspent our income last month, but the portfolio went up.  Crazy how that works.  Thank you, past self. I was shocked when I was able to join this group in the first place, and now I'm "almost" to the beyond.  DH is due to receive a bonus ($ amount communicated already) in March that should get us to the beyond barring the crazy market conditions.  Even though we aren't saving most months (cash flowing 2 kids in college), the momentum continues.

First - thank you for bringing this back on topic.  Umbrella insurance is great and all, and I learned a few things, but not maybe in its own thread.

Second -did I miss a market move?  5% increase in January when value and gold might be what increased, or individual stocks.  S&P, DOW, Nasdaq, QQQ, BTC, International, didn't do that. 

But yeah, it's great when the portfolio goes up even after overspending and like you paid for spring semester (all costs) and still went up in January - although not 5% for me.

Private equity annual appraisal was received. We are conservative on it, and don’t report until the valuations get updated. So about a year’s worth of income on one area of our portfolio. Plus RSUs vested in January. You didn’t miss a market move.

That "barring crazy market conditions" always seems to get us at the next milestone level.  I'm done racing.  I'm calling us in the "beyond" for now, and I don't know that I'll post here about it anymore on the regular. Over time, spending less than you earn is the real magic on top of the compounding.

There will be some lumpy spending coming up, as grandma (99) will be moving to our home early May and that will require some spending for basic safety measures for her.  Grab bar in shower/toilet, ramp to front door area, and some visual alarm improvements as she's very hard of hearing so I want her to have a visual fire alarm signal in her room.  Also, First Class airplane tickets from CA to VA when I'm normally an economy girl. She doesn't fly, so it's going to be awful to get her on a plane in the first place.  Premium service will help. I'm praying she doesn't balk and make us take a train because that would be so much worse for her in terms of time and hassle. Today, I put a "recommendation for geriatric doctor" to our neighborhood, which has some doctors.  Bingo - neighbor is a geriatric specialist, so I'm already covered there.  I think grandma will like her, as I do.  I will also make sure grandma is "nice" to her, since she's a neighbor. 

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #8617 on: March 07, 2025, 02:26:57 AM »
The markets are down.  I’m on vacation.  With retirement this summer I have at least a 5 year cash/bond amount so honestly it doesn’t matter.  In other news US/New Zealand currency differences are fun.  Gets bill, eek that’s a lot $169 for a glow worm Kayak tour, gets capital one price text oh, it’s less than $100USD.

Louise

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Re: Race from $2M to $4M...and Beyond!
« Reply #8618 on: March 07, 2025, 04:43:37 PM »

There will be some lumpy spending coming up, as grandma (99) will be moving to our home early May and that will require some spending for basic safety measures for her. 

That's so sweet that you are taking your grandma in.

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #8619 on: March 07, 2025, 05:46:36 PM »
Hey By The River. This house is on the Amite near Clio. I've all but decided to let it go. My wife is addicted to our grandchildren being on the same street with us in Port Vincent.

https://www.zillow.com/homedetails/16704-Meisner-Rd-Springfield-LA-70462/249352141_zpid/
Wow, that's a huge price drop.

Photo #14 cracks me up. Do people still not know that most refrigerator doors are reversible and it only takes a screwdriver to make it happen?

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #8620 on: March 07, 2025, 05:49:24 PM »
There will be some lumpy spending coming up, as grandma (99) will be moving to our home early May and that will require some spending for basic safety measures for her. 
That's so sweet that you are taking your grandma in.
+99.

If you need help, I'm raising my hand. You know where to find me.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #8621 on: March 07, 2025, 08:05:37 PM »
Hey By The River. This house is on the Amite near Clio. I've all but decided to let it go. My wife is addicted to our grandchildren being on the same street with us in Port Vincent.

https://www.zillow.com/homedetails/16704-Meisner-Rd-Springfield-LA-70462/249352141_zpid/
Wow, that's a huge price drop.

Photo #14 cracks me up. Do people still not know that most refrigerator doors are reversible and it only takes a screwdriver to make it happen?
Dang you're observant! Does screw up the kitchen work triangle.

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #8622 on: March 07, 2025, 08:09:40 PM »
Hey By The River. This house is on the Amite near Clio. I've all but decided to let it go. My wife is addicted to our grandchildren being on the same street with us in Port Vincent.

https://www.zillow.com/homedetails/16704-Meisner-Rd-Springfield-LA-70462/249352141_zpid/
Wow, that's a huge price drop.

Photo #14 cracks me up. Do people still not know that most refrigerator doors are reversible and it only takes a screwdriver to make it happen?
Dang you're observant! Does screw up the kitchen work triangle.
Heh. I've just had lots of practice.

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #8623 on: March 07, 2025, 08:40:47 PM »
Hey By The River. This house is on the Amite near Clio. I've all but decided to let it go. My wife is addicted to our grandchildren being on the same street with us in Port Vincent.

https://www.zillow.com/homedetails/16704-Meisner-Rd-Springfield-LA-70462/249352141_zpid/
Wow, that's a huge price drop.

Photo #14 cracks me up. Do people still not know that most refrigerator doors are reversible and it only takes a screwdriver to make it happen?

Wait - I thought that was on purpose so people didn’t have to walk all the way in to get drinks or stuff from the fridge. Ha. My lake house is like that because I prefer it that way.

couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #8624 on: March 07, 2025, 08:45:13 PM »
There will be some lumpy spending coming up, as grandma (99) will be moving to our home early May and that will require some spending for basic safety measures for her. 
That's so sweet that you are taking your grandma in.
+99.

If you need help, I'm raising my hand. You know where to find me.
Thank you for the bat signal. I am flying in on 4/30, packing her out of the board and care into her own home for maybe 2-3 days while we pack for VA. I will have a SUV rental and “think” most of it should be manageable. Hopefully sister and BIL will help as there’s a recliner I won’t be able to manage solo (don’t actually care if it goes, but I know she will). I’m watching longevity series now. Interesting stuff.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #8625 on: March 15, 2025, 04:25:25 AM »
It's Saturday morning and I'm updating my tracking spreadsheet. In terms of our investments, we are down about 3% from the peak on Feb 16. here's how the asset allocation (in percentages) has changed due to the ongoing correction.

DateStockBondsCash
Feb 1665.3727.437.2
Mar 1563.3128.518.19

weebs

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Re: Race from $2M to $4M...and Beyond!
« Reply #8626 on: March 15, 2025, 08:08:11 AM »
It's Saturday morning and I'm updating my tracking spreadsheet. In terms of our investments, we are down about 3% from the peak on Feb 16. here's how the asset allocation (in percentages) has changed due to the ongoing correction.

DateStockBondsCash
Feb 1665.3727.437.2
Mar 1563.3128.518.19

It's great that you're only down 3%.  Our AA is similar and it will be interesting to see where we're at when I do our quarterly update at the end of this month. 

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #8627 on: March 15, 2025, 09:49:29 AM »
It's Saturday morning and I'm updating my tracking spreadsheet. In terms of our investments, we are down about 3% from the peak on Feb 16. here's how the asset allocation (in percentages) has changed due to the ongoing correction.

DateStockBondsCash
Feb 1665.3727.437.2
Mar 1563.3128.518.19

It's great that you're only down 3%.  Our AA is similar and it will be interesting to see where we're at when I do our quarterly update at the end of this month.

I was mildly surprised too. So far at least, foreign stocks and bonds are acting as counterweights in this downturn unlike in 2022 when everything went down.

LightTripper

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Re: Race from $2M to $4M...and Beyond!
« Reply #8628 on: March 17, 2025, 03:35:21 AM »
As a foreign holder of US assets I'm wondering if I need to shift my allocation (further) away from US equities.  I'm mainly in global trackers (with a bit extra in Developing World, Asian and European trackers as I wanted to be less concentrated on tech), but those global trackers still tend to be around 65% US assets (and about two thirds of that tech stocks) so probably half my assets are still US equities.  Looking at the government there openly ignore court orders/the rule of law while joking about it on social media, as well as their general hatred for anything foreign, it makes me feel rather queasy as a US-asset holder who is not a US citizen (even leaving aside any projections on future valuations, which I wouldn't be crazy enough to take a punt on).  Could they just be confiscated?  It might be popular at home - and who would realistically stop it?  Same for bonds now I come to think of it...

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #8629 on: March 18, 2025, 07:28:10 AM »
I can’t help on the if you should change allocations, but I’m happy that I’m not solely a VTSAX and chill, but am glad I have a diversified portfolio with money in EX-US funds as well.

In another area, a podcast got me thinking what is my real income tax rate including social security and Medicare yesterday.  I’m curious as it compare to the rest of the world.  The economist said in reality that middle and lower class people in the US pay much less than other parts of the world because  all our deductions and the like. On a $235k salary federally I’m at 20% with an extra 5% for living in California.  If you take away social security and Medicare I’m more in the 15% range.

ROF Expat

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Re: Race from $2M to $4M...and Beyond!
« Reply #8630 on: March 18, 2025, 09:24:06 AM »
The economist said in reality that middle and lower class people in the US pay much less than other parts of the world because  all our deductions and the like. On a $235k salary federally I’m at 20% with an extra 5% for living in California.  If you take away social security and Medicare I’m more in the 15% range.

I've lived around the world and have friends from around the globe and I'm convinced that for most people, comparing tax rates is a bit of a red herring.  Yes, my marginal tax rate when I live in the US is substantially lower than my friends in Western Europe.  And the difference in taxes paid is even more major when you factor in things like VAT (which is effectively a regressive tax) and higher taxes on things like gasoline.  Even so, at the end of the day, I found that my lower tax rate didn't make much of a difference.  I found that the money I had to put away to pay for things like college tuition, child care, retirement savings, and health insurance pretty much made up the difference. 

My feeling is that if you're planning to be on the very low end of he wage scale or live in poverty, you are better off in a European country with a strong social welfare system.  If you live a very high-income, high consumption lifestyle you will probably be financially better off in the US or maybe a place like Singapore or the Emirates.  For those of us in the middle, the end result in terms of lifestyle is usually pretty comparable.  I will say that one major difference is that I think the US system might work better for people who are focused on very early retirement. 

YMMV. 

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #8631 on: March 18, 2025, 11:35:20 AM »
The economist said in reality that middle and lower class people in the US pay much less than other parts of the world because  all our deductions and the like. On a $235k salary federally I’m at 20% with an extra 5% for living in California.  If you take away social security and Medicare I’m more in the 15% range.

I've lived around the world and have friends from around the globe and I'm convinced that for most people, comparing tax rates is a bit of a red herring.  Yes, my marginal tax rate when I live in the US is substantially lower than my friends in Western Europe.  And the difference in taxes paid is even more major when you factor in things like VAT (which is effectively a regressive tax) and higher taxes on things like gasoline.  Even so, at the end of the day, I found that my lower tax rate didn't make much of a difference.  I found that the money I had to put away to pay for things like college tuition, child care, retirement savings, and health insurance pretty much made up the difference. 

My feeling is that if you're planning to be on the very low end of he wage scale or live in poverty, you are better off in a European country with a strong social welfare system.  If you live a very high-income, high consumption lifestyle you will probably be financially better off in the US or maybe a place like Singapore or the Emirates.  For those of us in the middle, the end result in terms of lifestyle is usually pretty comparable.  I will say that one major difference is that I think the US system might work better for people who are focused on very early retirement. 

YMMV.

It maybe red herring, but I’d like to know what it is.  I’m not asking VAT, I’m asking what payroll taxes actually are in other countries, out of pure curiosity.

ROF Expat

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Re: Race from $2M to $4M...and Beyond!
« Reply #8632 on: March 18, 2025, 08:52:47 PM »
It maybe red herring, but I’d like to know what it is.  I’m not asking VAT, I’m asking what payroll taxes actually are in other countries, out of pure curiosity.

It is pretty common in petroleum rich Gulf countries and small Caribbean countries to have no income tax at all.   

LightTripper

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Re: Race from $2M to $4M...and Beyond!
« Reply #8633 on: March 19, 2025, 04:08:05 AM »
Very roughly, here in the UK you pay (roughly converted to USD):

Up to $16k - zero income tax
From $16k to $65k - 20%
From $65k to $195k - 40%
Above $195k - 45%

There are also "national insurance contributions" (which raise nearly as much tax as income tax as they are paid by employers too) - this is notionally a contribution towards your state pension although I think the government just treats it all as cash. The part an employee pays can be another 8% (less for lower and higher earners as it kicks in late and caps out early).

There are various adjustments (e.g. you get your tax back on money you put into your private pension up to certain limits, you don't pay any tax on the first bit of savings interest or dividend income, you get a (shrinking) tax-free capital gains allowance each year, you get your tax back on charity contributions, etc.).  There are also certain means-tested benefits (e.g. child benefit) that get withdrawn at higher income levels, and caps on how much you can put into your pension tax free also start to bite at around this income level, so we have a nasty "sour spot" around $130k where you can be effectively paying over half your incremental income in taxes (or lost benefits) - which is a bit bonkers.

The big drivers of government income are income tax, NICs and VAT.
https://commonslibrary.parliament.uk/research-briefings/cbp-8513/#:~:text=Most%20receipts%20come%20from%20three,value%20added%20tax%20(VAT).

VAT here is high at 20% but nothing on food/children's clothes and only 5% on fuel.  Small businesses with low enough turnover don't have to register with the scheme (so often you may not have to pay VAT on e.g. a single-person cleaning service or picture framer or decorator or something like that).

There are a few other things like local council tax (varies depending on your house value and local authority - generally not huge); inheritance tax (40% on assets over around $500k depending on whether you leave to children/grandchildren or someone else - no tax to pay if you leave to your spouse/civil partner); stamp duty (quite large - up to 12% at the margin if you are buying an expensive house) and various other bits and bobs but as you can see from the link above, few people actually pay these with the exception of council tax, and they don't contribute much to the Treasury.

On the plus side that covers your state pension, job seekers allowance if you're out of work, reasonably good parental leave, free healthcare (dental is not free for most people but is regulated and quite good value, as are drug prices where even if you don't qualify for free meds by dint of being a child, retired or unemployed you pay a flat ~£10 fee for a prescription, regardless of what the medicine is, and if you have a chronic prescription you can buy a pre-pay certificate to make it cheaper).  Some people will get subsidised or free eye care/glasses, etc.

ROF Expat

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Re: Race from $2M to $4M...and Beyond!
« Reply #8634 on: March 19, 2025, 04:55:11 AM »
The economist said in reality that middle and lower class people in the US pay much less than other parts of the world because  all our deductions and the like.

I suppose one could also argue that all of us in the US pay less tax because at the moment our taxes bear no relationship to government spending.   

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #8635 on: March 19, 2025, 09:17:16 AM »
The economist said in reality that middle and lower class people in the US pay much less than other parts of the world because  all our deductions and the like.

I suppose one could also argue that all of us in the US pay less tax because at the moment our taxes bear no relationship to government spending.   

The interesting thing about the US is that most people have low expectations for what their tax dollars will get them.  Most socialist style countries have high taxes but actually get quite a lot of government services provided to them.  You'll get a majority of people 'happily and proudly' paying their income tax, because they generally get a higher standard of life, universal healthcare, and a decent retirement program.  Gulf Countries are unique in that they basically provide a decent life for their citizens in return for maintaining power.  In the US, we have a constantly changing tax regime with the citizens not expecting much and the wealthy benefiting greatly.  This is coming to a head as the national debt explodes and we don't have a homogenous society like Japan or a communist society that will be 'receptive' to a forcing toward a balanced budget.  Americans in my generation are going to get shafted on one of the levers that need to be pulled during our lifetime - either revenue (taxes go up) or expenditures (the big ones being Social Security and Medicare / Medicaid).  It'll probably be all of the above since we still aren't addressing this hair on fire situation and instead salivating over extending tax cuts and adding more tax cuts, leading to a lower quality of life in America in the future when the bills come due and people stop funding our borrowing.

Edit to add:  Just heard this and it's pertinent to this discussion, basically if the April 2nd blanket universal tariffs go on, the US will also have a VAT.
« Last Edit: March 19, 2025, 05:19:02 PM by EscapeVelocity2020 »

Car Jack

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Re: Race from $2M to $4M...and Beyond!
« Reply #8636 on: March 20, 2025, 03:49:51 PM »
With the current situation, I'm making a change this year.  I'm retired with too much in pre-tax IRA.  Last year was  a two hundred something thousand dollar Roth conversion.  Add interest and dividends and I kept it below the IRMAA limit with Federal taxes of about $27k.  This year is different.  I'm going to pay zero federal tax.  Doing sales from taxable to a limit a bit under a hundred grand of gain.  Zero LTCG bracket.  I also have the goal of ridding my taxable of any dividend payors, which are VTI and SCHB.  So most of the money coming out goes right back in to buy BRK/b.  Eventually, there will be no dividends to deal with which will make things like Roth conversions easier to deal with.  There will be some Roth conversions this year and I am keeping a sharp eye on interest and dividends.


couponvan

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Re: Race from $2M to $4M...and Beyond!
« Reply #8637 on: March 20, 2025, 09:44:15 PM »
Car jack-do you recommend doing more Roth conversions before the IRMAA kicks in for Medicare if possible? I’m hoping to start around 57-58. We also have too much pre-tax.

jrhampt

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Re: Race from $2M to $4M...and Beyond!
« Reply #8638 on: March 21, 2025, 01:04:10 PM »
It's Saturday morning and I'm updating my tracking spreadsheet. In terms of our investments, we are down about 3% from the peak on Feb 16. here's how the asset allocation (in percentages) has changed due to the ongoing correction.

DateStockBondsCash
Feb 1665.3727.437.2
Mar 1563.3128.518.19

It's great that you're only down 3%.  Our AA is similar and it will be interesting to see where we're at when I do our quarterly update at the end of this month.

I was mildly surprised too. So far at least, foreign stocks and bonds are acting as counterweights in this downturn unlike in 2022 when everything went down.

I looked at my accounts today and I'm down less than 4% - finally a case for foreign stocks!  I sold off a small chunk of them back in my taxable account in 2023 to cover a large purchase after noting they had basically just gone sideways for the entire time I'd held them.  Glad I stuck with my allocation in my other accounts, though.  My taxable account is ~90% s&p 500 so it's taken around a 10% hit, but my 401k accounts are roughly 25% foreign stock indexes and 10% fixed income/bonds with 65% US stocks.  It's surprising what a difference that has made over the recent downturn.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #8639 on: March 22, 2025, 03:38:46 AM »

I looked at my accounts today and I'm down less than 4% - finally a case for foreign stocks!  I sold off a small chunk of them back in my taxable account in 2023 to cover a large purchase after noting they had basically just gone sideways for the entire time I'd held them.  Glad I stuck with my allocation in my other accounts, though.  My taxable account is ~90% s&p 500 so it's taken around a 10% hit, but my 401k accounts are roughly 25% foreign stock indexes and 10% fixed income/bonds with 65% US stocks.  It's surprising what a difference that has made over the recent downturn.

We have enough in Fidelity that we get a dedicated rep. I have told our reps over the years that I am strictly DIY. They have respected this and don't push dubious investments. In fact, they have often offered good advice over the years.

Back in late November when I had a call with our current rep, he suggested I ought to think about increasing our weightage in foreign stock. After thinking it over, I found that I agreed with him and did a mini-rebalance in my IRA moving a part of our stock allocation to a foreign index fund. I need to thank him the next time I talk to him!

AuspiciousEight

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Re: Race from $2M to $4M...and Beyond!
« Reply #8640 on: March 22, 2025, 04:34:59 AM »
I checked my account statements yesterday and found I am only down around 2.4%...

Which sounds awesome, except I've had a large percentage of my assets invested in foreign stocks and reits and food manufacturers for years now which have been dragging down overall returns for a long long time, and this very minor downturn doesn't really compensate for having such a conservative portfolio for several years.

Trying to get the best returns while still sleeping well at night is a tough balancing act, imo.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #8641 on: March 22, 2025, 11:54:29 AM »
Hard to believe but I'm actually up for the year at the moment due to a concentration in oil and gas stocks as well as having sold off my once highflying tech investments and Bitcoin.  I have all of my income needs met by dividend and mutual fund yield, so I'm not really sure what will trigger me to jump back from cash in to equities...  At least that is one less thing to be anxious about these days.

Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #8642 on: March 24, 2025, 08:05:27 AM »
I checked my account statements yesterday and found I am only down around 2.4%...

Which sounds awesome, except I've had a large percentage of my assets invested in foreign stocks and reits and food manufacturers for years now which have been dragging down overall returns for a long long time, and this very minor downturn doesn't really compensate for having such a conservative portfolio for several years.

Trying to get the best returns while still sleeping well at night is a tough balancing act, imo.

Yeah, I invest very simply and would never have guessed that my choice of US/international balancing vs. pure S&P500 (or total US market) would have made such a difference.  Basically the same difference as choosing 80/20 vs 60/40 stock/bond would have made.  That has prob cost me around $1M in networth but I'm definitely not gonna try to figure it out....

flyingaway

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Re: Race from $2M to $4M...and Beyond!
« Reply #8643 on: March 26, 2025, 11:21:06 PM »
I believe that once you have spent your money, any corrections or bear markets cannot take it back. So I have been busy in planning our next month trip to Italy, Egypt, and Jordan. Up market makes me happy, down market makes me sad. But I don't do anything.

Fomerly known as something

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Re: Race from $2M to $4M...and Beyond!
« Reply #8644 on: March 27, 2025, 10:18:36 PM »
I have been spending in March like a drunken enlisted soldier.  It feels super weird with all the market chaos, but it’s planned spending.

ATtiny85

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Re: Race from $2M to $4M...and Beyond!
« Reply #8645 on: March 28, 2025, 05:45:43 AM »
I have been spending in March like a drunken enlisted soldier.  It feels super weird with all the market chaos, but it’s planned spending.

Yeah, this month has also been like that for us. A couple vacations booked with one taken, property taxes, and two unplanned charity donations. Not even going to mention the six figure paper losses in the portfolio.

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #8646 on: March 28, 2025, 10:33:40 AM »
FINALLY!!

I have given notice and am retiring.....

I was originally plotting FIRE in the Class of 2019 thread, but somehow 6 years more years have rolled by before we got to the point where there really was nothing more to gain from working. I have no regrets.

My career has been good and I am happy with what I have achieved. I can leave feeling I got plenty out of that part of my life. I am also happy with the bigger stash from working all of these extra years.

We are now age 53 and 47, so hopefully we will have a few good years ahead of us.

My employer asked for 6 months notice, and I have agreed. The company and the management have been good to me over the past 20 years, so why not.

I have some leave during the 6 months (we are going to Spain and Scotland) and some interesting projects to advance before I walk out the door for the final time, so it will go quickly I hope. I'll be finishing up at the end of winter in Australia, so I will be able to make the most of my first summer of freedom.

Explaining why I was leaving was a little awkward. I like my job and the people I work with. They were open to any ideas I might have to encourage me to stay on, including more salary or relocating to a different country (I am based in France atm). I explained all I hoped to do with my early retirement and in the end both of my managers confessed that they were envious (they are roughly the same age as me and in no position seemingly to be considering leaving work).

FINALLY. WOOHOO!




AuspiciousEight

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Re: Race from $2M to $4M...and Beyond!
« Reply #8647 on: March 28, 2025, 11:34:13 AM »
FINALLY!!

I have given notice and am retiring.....

I was originally plotting FIRE in the Class of 2019 thread, but somehow 6 years more years have rolled by before we got to the point where there really was nothing more to gain from working. I have no regrets.

My career has been good and I am happy with what I have achieved. I can leave feeling I got plenty out of that part of my life. I am also happy with the bigger stash from working all of these extra years.

We are now age 53 and 47, so hopefully we will have a few good years ahead of us.

My employer asked for 6 months notice, and I have agreed. The company and the management have been good to me over the past 20 years, so why not.

I have some leave during the 6 months (we are going to Spain and Scotland) and some interesting projects to advance before I walk out the door for the final time, so it will go quickly I hope. I'll be finishing up at the end of winter in Australia, so I will be able to make the most of my first summer of freedom.

Explaining why I was leaving was a little awkward. I like my job and the people I work with. They were open to any ideas I might have to encourage me to stay on, including more salary or relocating to a different country (I am based in France atm). I explained all I hoped to do with my early retirement and in the end both of my managers confessed that they were envious (they are roughly the same age as me and in no position seemingly to be considering leaving work).

FINALLY. WOOHOO!

Congrats!

deborah

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Re: Race from $2M to $4M...and Beyond!
« Reply #8648 on: March 28, 2025, 11:51:38 AM »
Congratulations itchyfeet! And welcome back home soon.

Turtle

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Re: Race from $2M to $4M...and Beyond!
« Reply #8649 on: March 28, 2025, 01:57:31 PM »
FINALLY!!

I have given notice and am retiring.....

I was originally plotting FIRE in the Class of 2019 thread, but somehow 6 years more years have rolled by before we got to the point where there really was nothing more to gain from working. I have no regrets.

My career has been good and I am happy with what I have achieved. I can leave feeling I got plenty out of that part of my life. I am also happy with the bigger stash from working all of these extra years.

We are now age 53 and 47, so hopefully we will have a few good years ahead of us.

My employer asked for 6 months notice, and I have agreed. The company and the management have been good to me over the past 20 years, so why not.

I have some leave during the 6 months (we are going to Spain and Scotland) and some interesting projects to advance before I walk out the door for the final time, so it will go quickly I hope. I'll be finishing up at the end of winter in Australia, so I will be able to make the most of my first summer of freedom.

Explaining why I was leaving was a little awkward. I like my job and the people I work with. They were open to any ideas I might have to encourage me to stay on, including more salary or relocating to a different country (I am based in France atm). I explained all I hoped to do with my early retirement and in the end both of my managers confessed that they were envious (they are roughly the same age as me and in no position seemingly to be considering leaving work).

FINALLY. WOOHOO!

Congratulations!  And good timing to have multiple summers in a row.