Author Topic: Anyone 10 years out  (Read 7172 times)

oinkette

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Anyone 10 years out
« on: June 08, 2015, 09:07:46 AM »
I was just curious for those of you who have 10 years to FIRE where you put your money.  Specifically:

  • Asset Allocation. Is it all stocks or a balance? If it's a mix, what is the mix?
  • Mutual Funds or ETFs or Individual Stocks? Why did you pick what you did?
  • Are you planning on supplementing with something else like a pension or real estate?  Did this factor into your choices for the two above?

I'm going back and forth between setting myself up with VASGX and forgetting it and doing Dividend Stock Investing. 

VASGX  might be good as I used to "play" around with stocks in the go-go 90s (when you couldn't lose money if you tried) and I don't want to treat this like a game anymore. Also it would keep me from having to be too involved with my funds and obsessing thus over how long I have to go.

On the other hand I can see why people go for dividend stock investing because, income. I have no problems handling the roller coaster ups and downs of the market.   And the whole point is to live off passive income anyway.  I know part of the 4% rule involves selling off some stock, but my mental facilities would handle living off income better. On the other hand, being so actively involved with my funds would cause me to think and over think about things too much.

At any rate, I'm mostly just trying to get a feel for what others on my timeline are doing. Thanks!

TheOldestYoungMan

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Re: Anyone 10 years out
« Reply #1 on: June 08, 2015, 09:45:28 AM »
I do 100% in stock index mutual funds with low fees.  That's based on the following two assumptions:

1.  I'm still working now, so if there's a crash I'll just keep working and enjoy buying in with new money at low prices.

2.  I'll probably always have earned income even in retirement.  I do like working, it's the mandatory 5 days a week that kills me.

I've been convinced that having some in bonds is a good idea, but for now I just use new money for that purpose.  I also want to try rental property at some point, but will probably wait until retirement for that.

The concept of "dividend investing" isn't any different from other investing.  Any potential benefit you think you are getting is probably lost by not having control of when the income comes to you.  "Dividend investing" just means the stocks you own decide when you take money out of your portfolio, with no regard at all to your current tax situation.

That said, the psychological impact of the dividend paying stocks does make me lean towards them when I'm picking a stock, which I do from time to time, just for fun.  This is with a very small portion of my portfolio, mostly done to prove to myself how much better the index investing works.

I do VTSAX on my personal accounts, and then VINIX through the work 403/457 accounts.

My timeline to FI is ~3years, but I may go longer because it'd be cool to say I'm a millionaire.

Retire-Canada

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Re: Anyone 10 years out
« Reply #2 on: June 08, 2015, 09:48:56 AM »
Not sure how far out I am, but 5-10yrs from taking money out of my investments seems about right. I'm going to downshift between now and then with more and more time off as I take my full time job to part time.

I'm following one of the Canadian Couch Potato portfolios  [at least sort of].

- Stocks ETFs [CDN/US/Int'l] 80%
- REITs 10%
- Bonds 10%

Most of my investments are in tax free or tax deferred accounts so I can move them around without paying capital gains should I want to change my AA when I get closer to wanting $$ from my investments.

No plans for now to change things.

Philociraptor

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Re: Anyone 10 years out
« Reply #3 on: June 08, 2015, 09:54:56 AM »
FI in 13 years according to my spreadsheet. Answers to your questions:

1. 80/20 stocks/bonds, 70/30 US/intl.
2. Index funds, both IRA's in Lifestrategy Growth fund (VASGX), my 401(k) in Growth MAP at work, her 401(k) in 4 Vanguard funds approximating VASGX; since we're using exclusively tax-advantaged right now, I keep the same allocation in every account.
3. Maybe some real estate in our future. If we do dabble in it, I plan on still accumulating 25x expenses in retirement accounts before RE as a failsafe.

dandarc

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Re: Anyone 10 years out
« Reply #4 on: June 08, 2015, 10:00:52 AM »
Pretty similar to Philociraptor - about 9 years according to our spreadsheet - although my wife is likely changing careers in the next couple of years, so that might change.

Went to a 55-25-20 (domestic-international-bonds) portfolio at Vanguard with IRAs.  Other accounts are similar, or in-process of being moved to that allocation.  Tax-advantaged only until our house is paid off.

BarkyardBQ

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Re: Anyone 10 years out
« Reply #5 on: June 08, 2015, 10:21:29 AM »
FI in ~7 years, RE in ~10 years. We intend to work part time/freelance after RE for COL expenses. We can use the portfolio for extra spending and dream spending.

We are 100% stocks, 75 US / 25 International, with a 5% tilt toward extended, small value and REIT on US side. We don't dividend invest because we have two 457's, two 403's, and two IRA's, so capital gains should be the focus. 457 and taxable account will be able to handle about anything we could need for a considerable amount of time while doing conversions on the 403->IRA->Roth, but no dividends to collect there. Also with our fund choices it's just easier to stick to the core idea of total market. We have about every flavor of VTSAX (VTI, Institutional) and Spartan funds available, and I'm more concerned about holding total market with low costs than trying to determine whether we should tilt too much, seeks dividends or just take my piece of the average.

As I mentioned, we hope to not be dependent on portfolio income in RE, it'll be nice, but I think I will really enjoy part time freelancing a few projects a year. So the only thing we're concerned about is low COL, savings rate, and keeping fund expenses as low as possible, currently .082%.

Heckler

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Re: Anyone 10 years out
« Reply #6 on: June 08, 2015, 10:22:07 AM »
I just figured out we are ten years away from 1.1 million.  Current bond allocation plan is 20% long term bond (VAB) and 10% short term bond (VSB). 

Actual bond allocation is 20% VAB / 7 % VSB.   The remaining 70% is all global Couch Potato index funds, started 8 month ago from horrible mutual funds collected randomly over the past 18 years.


What I haven't figured out is if I want to add to my poorly performing VSB to bump up the remaining 3% I haven't contributed yet.   I keep writing 20/7 into my plan, and then reverting it back to 20/10, which I know is the right thing for the next crash, but seems so wrong last year...

oinkette

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Re: Anyone 10 years out
« Reply #7 on: June 08, 2015, 10:46:00 AM »
Thanks for all the responses, guys. It's been helpful!

SuperSecretName

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Re: Anyone 10 years out
« Reply #8 on: June 08, 2015, 11:13:09 AM »
I am around 10 years out.

5% bonds
10% reit
40% international (of which 20% is emerging)
45 % us (10% small 10% mid, 25% total market)

mostly ETFs except for mutual funds in 401k.

FIRE will be not having to work at all and just drawing from portfolio.  But in all likelihood, I will probably work at something part-time.  Too far away to plan that though
« Last Edit: June 08, 2015, 11:15:08 AM by SuperSecretName »

Financial.Velociraptor

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Re: Anyone 10 years out
« Reply #9 on: June 08, 2015, 12:01:25 PM »
Hey, I'm no longer 10 years out.  But I was in 1998 when I hatched a 10 year plan to exit the wage-slavery system.  (I failed well - it took 15 years). 

Stage 1 for me was improving my earning power with a graduate degree
Stage 2 was eliminating all debt including home mortgage
Stage 3 was 100% equities
Now in FIRE, I direct my small surplus to fixed income type securities, especially closed end municipal bond funds.

This was probably not the optimally efficient way to do it but it is what worked psychologically for me to allow me to delay gratification and keep aggressive on the saving/investing lever.  I think many approaches work.

mizzourah2006

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Re: Anyone 10 years out
« Reply #10 on: June 08, 2015, 12:15:20 PM »
I'm probably 8-10 years out from FI, but as of now I have no immediate plans for RE, so I may not be a great comparison.

I am about 95% equities 5% bonds.

Of my 95% equities about 60% of that is in individual stocks and 40% of that is in index funds. But, the index fund rate is growing much faster than the individual stocks. All of our 401ks are in index funds and our Roths and brokerage accounts are about 75-80% individual stocks.

theoverlook

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Re: Anyone 10 years out
« Reply #11 on: June 08, 2015, 12:27:51 PM »
My spreadsheets also show us as 10 years from FI.  We are currently 100% equities with VTSAX.  I'm planning on bringing some bonds into the mix, probably 20%, over time as additional purchases - no sales of existing equities.

We do have non-liquid assets that I may liquidate that will move our FI date up.  Right now they aren't included in our FI plans but should be.

aspiretoretire

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Re: Anyone 10 years out
« Reply #12 on: June 08, 2015, 02:29:10 PM »
I'm hoping to be 10 years out, that may be aggressive, but better to try! I think every day that I can't wait to retire so it actually seems like a long way away.
I am also curious about people on a similar track. I'm 40ish, no kids, I love hearing about the 20's people who will retire at 30, that is great, but sometimes it is easier to relate to people closer in age and situation?
77%st,11%bnd,12%other/REIT

theoverlook

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Re: Anyone 10 years out
« Reply #13 on: June 08, 2015, 02:53:09 PM »
I'm hoping to be 10 years out, that may be aggressive, but better to try! I think every day that I can't wait to retire so it actually seems like a long way away.
I am also curious about people on a similar track. I'm 40ish, no kids, I love hearing about the 20's people who will retire at 30, that is great, but sometimes it is easier to relate to people closer in age and situation?
77%st,11%bnd,12%other/REIT

I'm 39 with 1 kid, so closer in age but a little different in family situation.  My wife is a couple years younger than me.  I wish we had learned about investing earlier, we could have moved the FI date up quite a bit but it wouldn't have been a ton earlier since she was in grad school and low-paying post-doc type jobs until recently.  Once she started making "real money" we started saving "real money."  But still - I know there was a couple hundred grand we could have saved earlier in life and had compounding.

Better late than never though!  We're in great shape financially compared to most of our peers.  I think.

Retire-Canada

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Re: Anyone 10 years out
« Reply #14 on: June 08, 2015, 02:57:11 PM »
I'm hoping to be 10 years out, that may be aggressive, but better to try! I think every day that I can't wait to retire so it actually seems like a long way away.
I am also curious about people on a similar track. I'm 40ish, no kids, I love hearing about the 20's people who will retire at 30, that is great, but sometimes it is easier to relate to people closer in age and situation?
77%st,11%bnd,12%other/REIT

I'm 46. Don't feel bad! :)

SuperSecretName

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Re: Anyone 10 years out
« Reply #15 on: June 08, 2015, 02:58:06 PM »
I am 33.  Single dad with full custody of two kids (11 and 9).  Current net worth = 300K.  Shooting for somewhere between 600-800K.  100K salary, DC suburbs.

RichMoose

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Re: Anyone 10 years out
« Reply #16 on: June 08, 2015, 04:17:57 PM »
My wife and I are about 10 years out (15 years if markets really turn bad close to RE date).

100% stocks with a plan to carry this into retirement. I may move into REITs in retirement as well but given the bond and interest rate situation I'm not likely to go into bonds anytime soon. I should add that we both have DB pension jobs and this is a bit of a back stop, even though we plan to FIRE long before the pensions will pay out.

We are young so it is very likely that we will do some work to keep busy and pay for extras (travel / RV / second home, etc.). My wife will likely do some sub teaching, I will do small renovations or some other form of carpentry work.

2300

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Re: Anyone 10 years out
« Reply #17 on: June 08, 2015, 06:45:36 PM »
42 and approximately 10 years out (9-13), but likely a ramp down of sorts to 80% time then some part time in another location. 

AA is roughly this:
80% stock (low fee index, 85%/15% US/International)
10% bond
10% REIT

Plan to pay off house and have ~5 years expenses in non-tax advantaged accounts Roth/401K/Trad IRAs can continue to grow before drawing down.

I'll technically only count myself as FI when the Roth/401K/traditional IRA reach my magic # so the the ~5 years expenses and extra time to grow will be gravy. 

Likely transition AA to approximately 70 stock/20 bond/10 reit in RE.

ender

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Re: Anyone 10 years out
« Reply #18 on: June 08, 2015, 06:59:51 PM »
We're probably 15+ years out, but have basically 10% bonds, 63% US stocks, and 27% international stocks (70/30 mix of stocks).

Probably don't need the bonds I guess... we're going to put together an IPS soon and maybe we can adjust those numbers.

aneel

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Re: Anyone 10 years out
« Reply #19 on: June 09, 2015, 06:15:18 AM »
We are about 13 years out.
10% international
10% REIT
10% bond
70% us
Some are etfs, others are mutual... Still figuring that out.

Livewell

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Re: Anyone 10 years out
« Reply #20 on: June 09, 2015, 12:01:33 PM »
About 5-7 years out
85 stocks/15 bonds or cash

Vanguard is the best way to go IMO, for low fees and just the simplicity of index funds. 

Focus on income and spending.  You have the most control there.  The market over 10 years will do fine, in my experience its best to set and forget with VG.  Good luck!

TomTX

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Re: Anyone 10 years out
« Reply #21 on: June 09, 2015, 06:15:37 PM »
My IRAs are 100% VTSAX.*
My 401k is 100% VFINIX
The only bond is ~3 months in an Ibond, for the emergency fund.

...but I will have a pension in 12 years.

*Okay, except for 1 small IRA with an individually picked stock left over from my stock-picking days. I'll get around to selling it sometime, and buying "service time" in my pension to get out earlier. I can't buy time until later this year.

aspiringnomad

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Re: Anyone 10 years out
« Reply #22 on: June 09, 2015, 10:19:21 PM »
[snip]
« Last Edit: August 24, 2015, 08:22:43 PM by dcmustachio »

frugalnacho

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Re: Anyone 10 years out
« Reply #23 on: June 10, 2015, 08:33:11 AM »
I am 32, and probably 10 years out.  Impossible to nail down exactly when since it depends on so many factors (market returns, job changes, having kids, etc).  Currently have a net worth around $280 including our house.   My plan is to go 100% equities (60% US/40% Intl) and keep that into FIRE.

cloudsail

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Re: Anyone 10 years out
« Reply #24 on: June 10, 2015, 06:30:52 PM »
Ideally I want about half of my retirement income from rental real estate and half from my portfolio.

We have one investment property now and want to get another one sometime next year.  The first one is close to paid off and we plan to buy the second with at least half cash.  The goal is to pay them off before retirement, so together it would be a little over $3000/month in rental income.  After taxes that should account for at least 50% of our expenses.

My portfolio is mostly equity, vast majority in Vanguard total market index fund.  Little bits and pieces here and there, some dividend stocks too, mostly for the psychological high of the income.  But I might allocate some future earnings into high dividend funds in an attempted cushion against any downturns, especially since buying bonds is probably not a good idea right now with the expectation of rising interest rates.