You may as well give up all retirement goals if you don't buy into the fact that the market goes up. Or find something that doesn't apply like property management.
I entirely disagree. One can have perfectly valid, achievable retirement goals that do not rely on the market going up.
One such approach might be:
- Fully own one's relatively inexpensive land and home in a low cost of living area with low property taxes. Perhaps throw up some small scale solar for basic energy needs.
- Develop the property through gardens, local livestock (chickens/rabbits/goats/etc), and perhaps a small fish pond such that one can provide for the bulk of one's own food needs and, preferably, have an excess to trade/sell for other needs.
- Save up something in excess of one's expected minimum needs for property taxes and the like.
- Develop hobbies that are inexpensive to engage in and pay for themselves, with the ability to scale them up a little bit as needed for some spare income.
It's a system of retirement that is largely independent of "the markets" through self sufficiency and low cost of living. It's probably not for everyone, but it's pretty low risk.
So bury your money in the backyard and hope for no inflation.
I don't prefer my back yard, but I do keep a non-trivial amount of cash on hand. I don't lose that much even with opportunity cost and inflation considered, and it's a very strong hedge against "not having resources on hand in the event of a local disaster." ATMs and the like aren't perfect, and neither are credit cards. Of note, neither of them work worth a damn without power.
Bottom line you can't Mathematically or logically defend your stance.
Looking at all of the headwinds against the markets (climate change and related costs, peaking of conventional oil production and the 2-3 year lag for production to respond to demand, the "bubble economy" of the last 15 years), I care somewhat more about risk reduction than gains. Especially since we've been saving up to buy a house, which may very well end up being a cash purchase because of... a lot of annoying factors.
From the perspective of "theoretical maximizing of my money in a rising market," I agree. I don't have the best option. I just question the assertion of endlessly rising markets, and my wife & I care about things other than a few more dollars in the bank. I certainly intend to "retire early" and not work until I'm 60, but I can also rely on the fact that I'm not planning on just investment income to support me - I tend to find profitable little hobbies to play with.
Guy has 100k loan and 50k to invest or pay down loan.
Person 1 pays down loan and instantly gets laid off has 50k in debt and no income.
Person 2 invests and money is cut in half due to down economy had 25 k when he is laid off at same time.
Well, step 1 in my book would be about a $25k emergency fund, so neither situation would really matter that much.
Bottom line stop thinking and use math and logic. Life isn't that hard just be frugal and maximize returns
If your advice begins with "stop thinking" and continues to "use math and logic," you've created an amusing contradiction, since "using logic" would be a form of thinking.
I'm "maximizing returns" of things I care about, which is low risk, a happy wife (who comes from a very frugal tradition with a severe distrust of markets), and flexibility. If we have more money some years, we can travel a bit more, and if we have less, we cut back and do more things locally. Does this mean I might work a few more years than an "optimal market projection" simulation might indicate? Sure. But I can do it part time, more or less on my own terms, doing stuff I like doing. It really doesn't bother me.
I know I own my house. Yippee I wasted money.
That's one way of looking at it. Another would be 15-20 years of 4%-ish returns from not having a mortgage, regardless of what the markets do.
