Author Topic: Race from $2M to $4M...and Beyond!  (Read 536557 times)

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1750 on: October 30, 2019, 05:34:19 PM »

- SNIP -

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

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

Haha.. If we do get the big crash I am moving to 90/10.. Heck maybe even 95/5..:)

alienbogey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1751 on: October 30, 2019, 11:20:06 PM »
99% equities  (32% individual stocks)

1% cash

:)

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1752 on: October 31, 2019, 01:03:13 AM »
99% equities  (32% individual stocks)

1% cash

:)

With today's all time high I would have to say your strategy has been more successful than mine (75/25)..:)

2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1753 on: October 31, 2019, 06:22:10 AM »
How much umbrella insurance do you guys keep? I just got the renewal notice for my policy and am wondering if I need to increase my coverage.

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1754 on: October 31, 2019, 06:48:23 AM »
How much umbrella insurance do you guys keep? I just got the renewal notice for my policy and am wondering if I need to increase my coverage.
Oh good! I thought I had stumbled on to the "Top Is In" thread. How much do you carry and how much more would each increment cost you? Umbrella insurance is kind of an odd duck and not typically worth as much the insurance companies want you to believe it is.

2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1755 on: October 31, 2019, 06:54:48 AM »
Oh good! I thought I had stumbled on to the "Top Is In" thread. How much do you carry and how much more would each increment cost you? Umbrella insurance is kind of an odd duck and not typically worth as much the insurance companies want you to believe it is.

My current policy liability limit is $ 1 million "per occurrence". And it costs us about $300 per year (both car and house are insured by the same company). I need to call the agent to find out how much it will cost to increase coverage.

Car Jack

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Re: Race from $2M to $3M.....and beyond!
« Reply #1756 on: October 31, 2019, 07:45:43 AM »
My AA:  50/50

nancyfrank232

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Race from $2M to $3M.....and beyond!
« Reply #1757 on: October 31, 2019, 07:51:27 AM »
My rough AA: 10% cash. 40% equities. 50% RE (real estate was dirt DIRT cheap in 2009; I bought a bunch of B class homes in B class neighborhoods that were cheaper than many mid-luxury cars)
« Last Edit: October 31, 2019, 07:52:59 AM by nancyfrank232 »

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Re: Race from $2M to $3M.....and beyond!
« Reply #1758 on: October 31, 2019, 09:02:50 AM »
Well, you guys are making me feel bad. We are probably too aggressive. But we haven't actually retired yet so that's part of it.
 Our $2.5M portfolio is- 80% stocks (largely in a three index fund portfolio) 10% bond and 5% cash. The cash gives me some comfort as there is about two years of living expenses in that.
I am planning to RE in May. DH has not yet set a date. We may change our allocations as we get closer to having no income.

This sounds very similar to us.  $2.9M portfolio.  Was about 90/10 equities/bonds but FIRing probably in the next year so have already started moving toward my FIRE plan which is somewhere around 80/10/10 equities/bonds/cash (about where I am at now) to maybe 70/20/10 at the most conservative.

nancyfrank232

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Race from $2M to $3M.....and beyond!
« Reply #1759 on: October 31, 2019, 09:37:46 AM »
Well, you guys are making me feel bad. We are probably too aggressive. But we haven't actually retired yet so that's part of it.
 Our $2.5M portfolio is- 80% stocks (largely in a three index fund portfolio) 10% bond and 5% cash. The cash gives me some comfort as there is about two years of living expenses in that.
I am planning to RE in May. DH has not yet set a date. We may change our allocations as we get closer to having no income.

How old are you?

It doesnít sound too aggressive to me. We were 80/20 equity/cash before the credit crisis and we were in our 30s when we had a similar sized portfolio

$5m portfolio now
« Last Edit: October 31, 2019, 09:50:37 AM by nancyfrank232 »

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1760 on: October 31, 2019, 10:49:37 AM »
Well, you guys are making me feel bad. We are probably too aggressive. But we haven't actually retired yet so that's part of it.
 Our $2.5M portfolio is- 80% stocks (largely in a three index fund portfolio) 10% bond and 5% cash. The cash gives me some comfort as there is about two years of living expenses in that.
I am planning to RE in May. DH has not yet set a date. We may change our allocations as we get closer to having no income.

How old are you?

It doesnít sound too aggressive to me. We were 80/20 equity/cash before the credit crisis and we were in our 30s when we had a similar sized portfolio

$5m portfolio now

We are 42. Which is a lot of the reason we've been pretty aggressive. I see being young as both a positive and a negative. It's a negative (and reason to be more conservative) because we will hopefully have a very LONG retirement to cover. It's a positive because we still have the ability to be nimble. I really see age as more of a factor in changing our AA over changing our employment status. maybe that's not smart.
The 5%-6% in cash has been debated by us over and over. It's in a MM earning 1.7%. There's a few reasons we've kept it-
 -I think it will be helpful to have cash to draw from as I RE so that I can control my taxable income, could help with the ACA
 - We have considered using it to pay off our house. I was firmly in the keep a mortgage camp, but when the standard deductions changed, the mortgage (at 4%) offers no real benefit to us other than keeping more money in the market.
 -We could decide to use it in a market downturn to buy a property or two, or we could just throw it in the market in a downturn
-oh, and my DH's car has 210k miles on it so we never know when we'll need to jump and solve that problem. That'll suck up $20k or so.

nancyfrank232

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Race from $2M to $3M.....and beyond!
« Reply #1761 on: October 31, 2019, 11:03:45 AM »
We are 42. Which is a lot of the reason we've been pretty aggressive. I see being young as both a positive and a negative. It's a negative (and reason to be more conservative) because we will hopefully have a very LONG retirement to cover. It's a positive because we still have the ability to be nimble. I really see age as more of a factor in changing our AA over changing our employment status. maybe that's not smart.
The 5%-6% in cash has been debated by us over and over. It's in a MM earning 1.7%. There's a few reasons we've kept it-
 -I think it will be helpful to have cash to draw from as I RE so that I can control my taxable income, could help with the ACA
 - We have considered using it to pay off our house. I was firmly in the keep a mortgage camp, but when the standard deductions changed, the mortgage (at 4%) offers no real benefit to us other than keeping more money in the market.
 -We could decide to use it in a market downturn to buy a property or two, or we could just throw it in the market in a downturn
-oh, and my DH's car has 210k miles on it so we never know when we'll need to jump and solve that problem. That'll suck up $20k or so.

I agree that being young is a double edged sword when it comes to money, but outside of that, itís all positive!

It sounds like you have things well thought out

Nice job!
« Last Edit: October 31, 2019, 11:05:23 AM by nancyfrank232 »

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1762 on: October 31, 2019, 11:09:51 AM »
How much umbrella insurance do you guys keep? I just got the renewal notice for my policy and am wondering if I need to increase my coverage.
Oh good! I thought I had stumbled on to the "Top Is In" thread. How much do you carry and how much more would each increment cost you? Umbrella insurance is kind of an odd duck and not typically worth as much the insurance companies want you to believe it is.

I used to have a $1MM umbrella policy. I dropped it when my current insurance company (with Costco) did not have umbrella policy and I had to get it from another company.

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flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1764 on: October 31, 2019, 11:13:08 AM »
Well, you guys are making me feel bad. We are probably too aggressive. But we haven't actually retired yet so that's part of it.
 Our $2.5M portfolio is- 80% stocks (largely in a three index fund portfolio) 10% bond and 5% cash. The cash gives me some comfort as there is about two years of living expenses in that.
I am planning to RE in May. DH has not yet set a date. We may change our allocations as we get closer to having no income.

This sounds very similar to us.  $2.9M portfolio.  Was about 90/10 equities/bonds but FIRing probably in the next year so have already started moving toward my FIRE plan which is somewhere around 80/10/10 equities/bonds/cash (about where I am at now) to maybe 70/20/10 at the most conservative.

I was wishing that I had 100% equity portfolio yesterday when the market reached a new high. Then I realized that I have been financially independent and I need to worry about the downturn, and find more interesting ways to actually spend money.
« Last Edit: October 31, 2019, 01:39:41 PM by flyingaway »

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1765 on: October 31, 2019, 11:26:31 AM »
On moving to say, a 70/20/10 portfolio. Here's something I haven't quite answered definitively.
 Do bonds really help you that much in a downturn? Do they help you enough to outweigh the drag they put on your portfolio? And is the answer to this question different by portfolio size?
I think the 85/10/5 may be enough that it helps my draw down and tax strategy, but increasing the bonds doesn't necessarily give me much portfolio protection that's really needed? I need to probably spend more time thinking and modeling on this.

PathtoFIRE

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Re: Race from $2M to $3M.....and beyond!
« Reply #1766 on: October 31, 2019, 11:38:52 AM »
While I can't cite it off the top of my head, I believe the research has shown that in the past, a small allocation to bonds definitely improves your risk-adjusted returns, and sometimes gives a higher overall return than 100% equities. That's in a theoretical investor, and this reasoning probably accounts for 1/3 of the reason I keep 20% in bonds even during accumulation.

But the other 2/3s of the reason I do it is for the psychological, n=1 reason that the success of my portfolio is going to be determined by my own actions to a large degree, and while I believe that I have a high tolerance for risk, I have not thoroughly tested that, plus I have a slightly more conservative spouse, so I believe that my own personal chance of success is higher if I keep a little bit of my stash out of the equities market.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1767 on: October 31, 2019, 01:49:40 PM »
On moving to say, a 70/20/10 portfolio. Here's something I haven't quite answered definitively.
 Do bonds really help you that much in a downturn? Do they help you enough to outweigh the drag they put on your portfolio? And is the answer to this question different by portfolio size?
I think the 85/10/5 may be enough that it helps my draw down and tax strategy, but increasing the bonds doesn't necessarily give me much portfolio protection that's really needed? I need to probably spend more time thinking and modeling on this.

Yeah, I'm not gonna promise to know the answer or that my 70/20/10 is the 'right' one because it of course changes a lot over time.  Often bonds were thought to just be a 'slower moving' investment vehicle so though gains could be muted so would losses, but if rates rose quickly right now that of course could be incorrect.  Often bonds were thought of a good hedge for stocks as they'd usually be negatively correlated, but from what I remember in the 2008 drop they both got pummeled (same thought for real estate properties, but of course RE was killed then too in many places).  And one thing I noticed with backtesting was that the differences between 85/10/5 and 70/20/10 results were almost always not really that much.  I like having the 10 in cash probably for little reason other than a few years of cash would have gotten me thru the 2000 and 2007 downturns without having to sell equities at a bad loss, and those are the only big dops I've been investing thru in my lifetime.  And I fully admit switching some to cash now was probably easier to stomach with cash paying north of 2% as opposed to the 0% it was at for so long.

The big hedges (to me) are really things like owning a house (so I can;t get priced out of one now) and things like SS which will eventually kick in and last till death.  I considered increasing that pot of safety by buying an immediate lifetime annuity, but with rates so low and REing they are very expensive right now so don;t seem to make any sense.

Taran Wanderer

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Re: Race from $2M to $3M.....and beyond!
« Reply #1768 on: October 31, 2019, 02:25:12 PM »
How much umbrella insurance do you guys keep? I just got the renewal notice for my policy and am wondering if I need to increase my coverage.

Iím keeping our umbrella policy equal to or slightly ahead of our net worth, though past $3 million I donít think Iíll bump it up further. We both serve on boards, and our policy provides an additional level of personal protection beyond the non-profitsí D&O insurance, and a base level of protection if they have no directorsí insurance. 

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1769 on: October 31, 2019, 02:44:30 PM »
I keep about 1/3rd of my NW as umbrella coverage.

As 2/3rds of my NW is in house and 401k's which are not exposed in a lawsuit (in Theory) is seems to make sense to protect the assets that are not protected, which is about $1M in our case.

If and when I cease to be in the slumlord business I MAY cancel the umbrella policy.

PathtoFIRE

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Re: Race from $2M to $3M.....and beyond!
« Reply #1770 on: October 31, 2019, 03:33:31 PM »
The thing about an umbrella though is that it's not necessarily protecting any particular amount. I can't say that $1M is bare bones FIRE for my family, so I'll hold a $1M umbrella to protect that amount. If you have a successful claim of $3M, you're still going to have to pay out most of your otherwise unprotected assets. I mean, I did the same thing, bought a $1M umbrella when we reached $1M, though haven't pushed it higher with a further NW increase. But what we really need to know is claims data against individuals, what are the up bounds in like 95% of cases, and then just protect against that amount. The umbrella discussion comes up from time to time here, but I've never seen anyone present data to that effect, and don't really know where to look. It also may be highly variable by state, family composition, etc, but I'd still feel better know that 95% of claims are $X or less, and then hold an umbrella at $X or $X-(what I'm willing to lose in investments on an unlikely chance).

EscapeVelocity2020

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Re: Race from $2M to $3M.....and beyond!
« Reply #1771 on: October 31, 2019, 10:24:18 PM »
Just to throw this out there, I've heard the opposite effect of holding umbrella insurance - that you can become a target of a lawsuit because now not only do you have actual money, you also have a first layer of 'other people's money' insurance.  Once the litigant finds out that you have an umbrella policy, they lawyer up much more than if you were just Joe No-mustachioso.  The data around implementation of an umbrella policies is really thin so I'm just self insuring (and having ready access to good lawyers) for now.

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1772 on: November 01, 2019, 02:35:03 AM »
Just to throw this out there, I've heard the opposite effect of holding umbrella insurance - that you can become a target of a lawsuit because now not only do you have actual money, you also have a first layer of 'other people's money' insurance.  Once the litigant finds out that you have an umbrella policy, they lawyer up much more than if you were just Joe No-mustachioso.  The data around implementation of an umbrella policies is really thin so I'm just self insuring (and having ready access to good lawyers) for now.
I'm not sure about what you've "heard", but I do see cake. I'm sure I know what that means. Happy birthday,  EV2020!

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Re: Race from $2M to $3M.....and beyond!
« Reply #1773 on: November 01, 2019, 03:19:56 AM »
Good to see the board get active again. I am curious if people dont mind answering since things are change for us. In figuring your NW WITH your house and age. What % is your home. Mine is going to be doubling and I guess there is comfort in knowing.

I.E. My NW is in todays value $2,974,000.00

Ages 55/51
Home value will be 23-25% by the time we move and additional costs. Was around 10%

I am Fire'd work some part time gigs more in the summer now looking for another flip or?  and the DW still is working because she wants loves it  and for Healthcare etc..but mostly cuz she likes to. After tax and deductions net 3k a month she makes 20$ an hour. When contributing to 401k and HSA etc...more like 1200$ which is what we have always done but the last two months of this year I dont want to take out anymore money from our funds because of capital gains and I have enough to live on till our current house sells etc.. in cash.



EscapeVelocity2020

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Re: Race from $2M to $3M.....and beyond!
« Reply #1774 on: November 01, 2019, 06:25:37 AM »
I'm not sure about what you've "heard", but I do see cake. I'm sure I know what that means. Happy birthday,  EV2020!
@Dicey Indeed, and thanks!

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1775 on: November 01, 2019, 07:48:19 AM »
Good to see the board get active again. I am curious if people dont mind answering since things are change for us. In figuring your NW WITH your house and age. What % is your home. Mine is going to be doubling and I guess there is comfort in knowing.

I.E. My NW is in todays value $2,974,000.00

Ages 55/51
Home value will be 23-25% by the time we move and additional costs. Was around 10%

I am Fire'd work some part time gigs more in the summer now looking for another flip or?  and the DW still is working because she wants loves it  and for Healthcare etc..but mostly cuz she likes to. After tax and deductions net 3k a month she makes 20$ an hour. When contributing to 401k and HSA etc...more like 1200$ which is what we have always done but the last two months of this year I dont want to take out anymore money from our funds because of capital gains and I have enough to live on till our current house sells etc.. in cash.

We bought an expensive new house in 2006 in a low cost living area. The house value did not appreciate a penny for the past 13 years. So the NW percentage decreased from about 38% to about 15%.
We did not make any money out of the house, but we did make a lot of happiness out of it, especially my wife.

Car Jack

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Re: Race from $2M to $3M.....and beyond!
« Reply #1776 on: November 01, 2019, 08:06:33 AM »
Jumped from $2.5M to $2.6M with a $50k dump into Schwab to collect the $200 bonus.  I would have invested anyways, but it's nice to get something coming in.

House (paid) is worth about $600k

62/58

I'm still working.  Wife is actually looking for a ft job.  Been per diem for years.  I have a "target" on my spread sheet that I had been upping $100k as I crossed the previous target.  Jumped it up as I crossed 2.6 to $2.75M.  Sounds better to me....two and three quarters.

In other news, my podiatrist says I need to buy some good, new walking shoes.  He was unimpressed with the Asics shoes I'm wearing.  I inherited these from my dad who passed in 2008.  I don't buy clothes. 

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Re: Race from $2M to $3M.....and beyond!
« Reply #1777 on: November 01, 2019, 09:25:28 AM »

In other news, my podiatrist says I need to buy some good, new walking shoes.  He was unimpressed with the Asics shoes I'm wearing.  I inherited these from my dad who passed in 2008.  I don't buy clothes.

Yeah, I don't generally buy clothes very often, but spend relatively plenty of research time and money on my Boots/shoes as I consider those a COMPLETELY different category.  I naturally over-pronate (even to the point of rolling my ankles probably a little too often), but have found Brooks brands generally good for that, e.g. 

I don't think Feet/Ankles/Knees/hip joints were ever 'designed' to last 70+ years and advanced longevity is really bringing out their weaknesses....

The new market highs have finally pushed my invested assets above $2.95M and my NW (which is that plus House, fairly unprofitable rental house, a DAF, and all the kids 529s) over $3.9M after approaching it quite a few times over the past year, so maybe my 'final' targets of $3M/$4M are just around the corner now.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1778 on: November 01, 2019, 11:22:38 AM »
Its always curious to me how to actually value a house, especially in our case where there are very few comps. So with the our house at best a SWAG..

$2.2M invested (crossed that boundary today)

$525k in pensions.. once gain funny money because we don't "own" that money.. it will pay $35k/year 3 years from now.

$ 450k house.

58/54 and FIREd

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1779 on: November 01, 2019, 11:30:19 AM »
I treat my NW calculation a little different than most.
 We've got $2.5M invested. And that's what I use as our NW calculation for FIRE. But we've also got $60k in 529s for kids college, $14k in HSA for healthcare expense and $100k equity in our house. No pensions and only one of us will be eligible for SS.
We are both 42 with two elementary aged kids still under our roof.
We haven't RE'd yet. I'm shooting for May. DH is planning to keep going until kids are older. We are still wrapping our brains around the fact that we are FI. Likely very FI.

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1780 on: November 02, 2019, 02:33:58 AM »
I treat my NW calculation a little different than most.
 We've got $2.5M invested. And that's what I use as our NW calculation for FIRE. But we've also got $60k in 529s for kids college, $14k in HSA for healthcare expense and $100k equity in our house. No pensions and only one of us will be eligible for SS.
We are both 42 with two elementary aged kids still under our roof.
We haven't RE'd yet. I'm shooting for May. DH is planning to keep going until kids are older. We are still wrapping our brains around the fact that we are FI. Likely very FI.


Yea i normally dont include my paid for house in my equation and definitely not my 529's or HSA. I was just curious more about % overall of peoples portfollio so mine going to be 25% with additional income coming in for a few years reducing my investment part I'll be fine and the new house will bring alot more happiness at least in theory by knowing where were going to be for the long haul and other reasons.

2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1781 on: November 02, 2019, 03:56:32 AM »
Just updated data in Quicken which is my Saturday morning chore - we have $ 4.6 million invested (bank, liquid assets, IRA and 401k) - gulp! This does not include our fully paid off house and pensions. Our pensions (mainly my wife's really)  is likely to be quite a lot but I feel a bit uneasy about how much we can count on that.

I'm definitely done this coming year. Feeling a bit burned out on the software business in general. My wife is a senior exec in her company and intends to keep working - more power to her :-)

trashtalk

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Re: Race from $2M to $3M.....and beyond!
« Reply #1782 on: November 02, 2019, 08:47:01 AM »
Just updated data in Quicken which is my Saturday morning chore - we have $ 4.6 million invested (bank, liquid assets, IRA and 401k) - gulp! This does not include our fully paid off house and pensions. Our pensions (mainly my wife's really)  is likely to be quite a lot but I feel a bit uneasy about how much we can count on that.

I'm definitely done this coming year. Feeling a bit burned out on the software business in general. My wife is a senior exec in her company and intends to keep working - more power to her :-)

Inspiring. Congrats to you and your wife on all your good choices paying off so handsomely.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1783 on: November 02, 2019, 10:08:57 AM »
@2sk22 So $4.6M at 3% is $138,000 per year plus your pensions.

I think you're done dude!.. Well done!

SwordGuy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1784 on: November 02, 2019, 10:30:23 AM »
Our personal home would be worth 12% of our net worth if it were paid for.   As it is, it's worth 5.3%.




2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1785 on: November 02, 2019, 11:32:20 AM »
@2sk22 So $4.6M at 3% is $138,000 per year plus your pensions.

I think you're done dude!.. Well done!

Thanks - I am definitely feeling done now :-)

This is mostly the result of steady automatic investment in index funds over 25 years. I still remember the moment it all began. In late 1993, I was walking down Broadway in the upper west side of NY City and bought a small book called "The Wall Street Journal Guide to Understanding Money and Investing" from a street vendor. I read through the book cover to cover and called Fidelity the next day to set up our account.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1786 on: November 02, 2019, 11:37:05 AM »
@2sk22 So $4.6M at 3% is $138,000 per year plus your pensions.

I think you're done dude!.. Well done!

Thanks - I am definitely feeling done now :-)

This is mostly the result of steady automatic investment in index funds over 25 years. I still remember the moment it all began. In late 1993, I was walking down Broadway in the upper west side of NY City and bought a small book called "The Wall Street Journal Guide to Understanding Money and Investing" from a street vendor. I read through the book cover to cover and called Fidelity the next day to set up our account.

Nice I began something similar but it was in March 2003, the day after I paid off my house in fact.:)

Unlike you though, I quit almost 6 years ago (A couple of contract gigs were indulged in after I quit cus y'know.. Money)

Time to get out man.. way past time.. unless you love what you do of course.
« Last Edit: November 02, 2019, 11:39:22 AM by Exflyboy »

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1787 on: November 02, 2019, 12:50:07 PM »
All you guys are doing very well.

The average salary is about $55,000 a year.  It's not easy to find because the articles that you find just love to present median data instead of averages.  Have you ever heard anyone say they are about "median?"  I'll bet you've heard it quite often when someone says they are an "average" person.

https://wallethacks.com/average-median-income-in-america/

So $ 55,000 /.03 = $ 1,833,333

Taken another way $ 1,833,333 / $55,000 = 33 years of living as an average Joe.

Here's another good thing.  A lot of you are doing more than kicking back, watching the ball game and having a beer.  Your comments indicate that you are doing good in this world for others.

My hat's off to you.

DavidAnnArbor

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Re: Race from $2M to $3M.....and beyond!
« Reply #1788 on: November 02, 2019, 09:14:43 PM »
I'm on the poor side of this group (I'm single - only one paycheck coming in) and my liquid assets are worth $1.86 million. My home equity is approx. another $350-400K
I'm about 85% equities

I just opened 4 business checking accounts in the last 2 months, and if I correctly jump through all the hoops, I hope to gain $2450 in bonuses from the banks.

EscapeVelocity2020

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Re: Race from $2M to $3M.....and beyond!
« Reply #1789 on: November 02, 2019, 10:06:24 PM »
Like John Bogle says in his book Enough, it doesn't really matter how much money you have once you hit your 4% (or even, maybe, FU money and a willingness to hustle).  It is a mindset.  There are people with craploads of money that feel like it is not enough, because they compare themselves to others and want for bigger 'boats, homes, second homes, etc.'.  It never ends for some people...

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Re: Race from $2M to $3M.....and beyond!
« Reply #1790 on: November 03, 2019, 02:51:28 AM »
I'm on the poor side of this group (I'm single - only one paycheck coming in) and my liquid assets are worth $1.86 million. My home equity is approx. another $350-400K
I'm about 85% equities

I just opened 4 business checking accounts in the last 2 months, and if I correctly jump through all the hoops, I hope to gain $2450 in bonuses from the banks.



I'd definitely not say your on the poor side of the group being single with those assets and might be on the high side. Two incomes, being married and having kids doesn't equate to more money and in most cases probably less.

2sk22

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Re: Race from $2M to $3M.....and beyond!
« Reply #1791 on: November 03, 2019, 02:53:21 AM »
Like John Bogle says in his book Enough, it doesn't really matter how much money you have once you hit your 4% (or even, maybe, FU money and a willingness to hustle).  It is a mindset.  There are people with craploads of money that feel like it is not enough, because they compare themselves to others and want for bigger 'boats, homes, second homes, etc.'.  It never ends for some people...

It definitely ends for me. I think I have more than enough material stuff - We have one house and a couple of cars. No second house, no boats and definitely no planes :-) The money I've earned is mostly a matter of luck of being in the right field at the right time. In 1992, absolutely no one thought that machine learning would actually amount to anything. Now that it actually works, I'm getting increasingly alarmed that its being misused in some really bad ways.

billsfan1_2000

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Re: Race from $2M to $3M.....and beyond!
« Reply #1792 on: November 03, 2019, 05:40:36 AM »
Where are you guys getting this 3% guaranteed annual return from?  What asset class is actually yielding that? 

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1793 on: November 03, 2019, 06:04:50 AM »
I don't remember seeing any guarantees.  As I understand it the 3% is merely a hedge from the "standard" 4 percent.  This is from Trinity University:

https://en.wikipedia.org/wiki/Trinity_study

Perhaps, only time will discredit the study. 

This s from the Wikipedia article:

Laurence Kotlikoff, advocate of the consumption smoothing theory of retirement planning, is even less kind to the 4% rule, saying that it "has no connection to economics.... economic theory says you need to adjust your spending based on the portfolio of assets you're holding. If you invest aggressively, you need to spend defensively. Notice that the 4 percent rule has no connection to the other ruleóto target 85 percent of your preretirement income. The whole thing is made up out of the blue."[6]

So 3 percent could be considered the adjustment that Mr. Kotlikoff says you need.

I'm counting on Index Funds because the smart folks on this site seem to favor them.  Historical evidence bears out the 4 percent rule.

https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

Now!  This could all change with the next election as some presidential candidates are promoting taxes on "wall street speculation."  Statements are being made that taxes from equity gains should be taxed higher than 15 percent.  These higher taxes will lower the net returns.

The above was just a rehash of previous presentations.  Feel free to append or correct.

flyingaway

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Re: Race from $2M to $3M.....and beyond!
« Reply #1794 on: November 03, 2019, 09:25:53 AM »
Maybe folks in this club should think about how to spend more money.
If you don't spend, the portfolio will keep growing.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1795 on: November 03, 2019, 09:39:35 AM »
Where are you guys getting this 3% guaranteed annual return from?  What asset class is actually yielding that?

No guarantees whatsoever.. None!

What HAS happened is on average the Stock market has returned a little over 10% per year and Bonds make about 3.5... Of course this has been the case since the early 1900's so included some pretty bloody awful times, yet still these amazing stock market returns happened.

Place your bets..:)

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1796 on: November 03, 2019, 12:55:33 PM »
Where are you guys getting this 3% guaranteed annual return from?  What asset class is actually yielding that?

No guarantees whatsoever.. None!

What HAS happened is on average the Stock market has returned a little over 10% per year and Bonds make about 3.5... Of course this has been the case since the early 1900's so included some pretty bloody awful times, yet still these amazing stock market returns happened.

Place your bets..:)
Or go make popcorn. Or both.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1797 on: November 03, 2019, 01:06:50 PM »
Maybe folks in this club should think about how to spend more money.
If you don't spend, the portfolio will keep growing.

Yes this is a giant conundrum for me (like a freaking GREAT problem to have).

I've mentioned this elsewhere but I'm 58 and currently draw 1.5%. When our pension kick in fully (4 years) our WR would be $zero based on our highest spending year so far.

So for spending what would make me happy?.. honestly spending doesn't make me happy so buying a fancy car/house/airplane won't do much for me.

The "best" I've come up with is to take long international trip in Business class.. But thats such a giant waste of money.

And round we go again..:)

I think I might do it for the next trip to Malaysia in April.. like JFDI and see how I feel.. Gulp!

nancyfrank232

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Race from $2M to $3M.....and beyond!
« Reply #1798 on: November 03, 2019, 06:41:16 PM »
Maybe folks in this club should think about how to spend more money.
If you don't spend, the portfolio will keep growing.

So for spending what would make me happy?.. honestly spending doesn't make me happy so buying a fancy car/house/airplane won't do much for me.

The "best" I've come up with is to take long international trip in Business class..

+1

This is the best way to ďspend more moneyĒ that Iíve found as well. And not just for international flights. Business/first class is worth it for domestic flights too IMO

In other areas, spending more doesnít correlate with much, if any benefit

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1799 on: November 04, 2019, 02:01:49 AM »
Where are you guys getting this 3% guaranteed annual return from?  What asset class is actually yielding that?

No guarantees whatsoever.. None!

What HAS happened is on average the Stock market has returned a little over 10% per year and Bonds make about 3.5... Of course this has been the case since the early 1900's so included some pretty bloody awful times, yet still these amazing stock market returns happened.

Place your bets..:)
Or go make popcorn. Or both.

+1 , gotta have some kinda strategy so if 1% below the standard 4% is the comfort zone that much better!