Author Topic: Race from $2M to $4M...and Beyond!  (Read 1411273 times)

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3150 on: May 29, 2020, 03:44:49 PM »
Lots of empty room in this country, @Buffaloski Boris .   Lots of hard-working people all over the world who believe in the American dream and will come here to swell our numbers if we let them.

Or we could just subsidize child care and health care by taxing the ultra rich and the mega-corporations fairly and require companies to pay a living wage.   And change our tariff structure to reward countries with quality labor standards and wages and good environmental practices, and punish those without them.

The biggest reason for bankruptcies is medical debt. 

The biggest obstacle for families wanting to start their own business (the biggest jobs creator) is medical insurance costs.   

The biggest obstacle for families wanting to have more children is the cost of childcare or poverty wages.

The reason we don't have more manufacturing in this country is because we have labor and environmental standards that much of the world doesn't have.   (Sad and pathetic as our labor standards are...)
If we charge punitive tariffs on countries that mistreat their workforce and pollute, our manufacturers become more competitive domestically.   Get the Europeans to go along (not hard on this one) and we (and they) will be competitive internationally as well.

Set tax policies to favor manufacturing away from mega-urban areas.  Provide relocation assistance to people and infrastructure improvement grants to states, counties and cities.  It will reduce urban congestion and spread the wealth across more of the country.

Change pre-K thru 12 education funding to provide national funding of education with local control over spending (except don't fund big sports complexes or high coach salaries).   Structure it so that schools having issues get more money.  Only provide these federal funds if the states implement similar funding formulas so that there are no longer "rich" school districts and "poor" school districts.  This will drive down housing prices because "gotta get into the good school district" won't price people out of the market.  It will also drive down prices because there will be more jobs in less urban areas, so the demand in the mega-markets will drop.

When you have a big problem, you have a big problem.

When you have several big problems, you have the opportunity to use them to solve each other.


Well, at the risk of touching on politics, which I'm well known to detest and hate dislike, you really need to ask the question: who profits from the status quo and how?  And once you've answered that question, you usually have a pretty good framework for understanding why things are the way they are.

But rather than moan about the status quo and our problems, let's talk about some interesting ways to offset them.  Since as has been suggested, that we're rich people*, how would rich people approach a set of problems?  Let's just take an example from upthread.  One of our posters saw a architectural beauty of a building that they thought was going to get torn down.  Well rather than whinge and moan and demand that there outta be a law, they just went ahead and bought it.  And fixed it up.  Because they wanted to.  Which leads to a philosophical truth as expounded by the unwitting capitalist philosopher, Nikita Kruschev:

Freedom in capitalist countries exists only for those who possess money and who consequently hold power..

Or loosely translated as Money Talks. 

As rich people we use our money and power to accomplish our objectives. So why can't a government do the same thing.  Or more accurately, why can't an owned entity of the government (or controlled by it) use it's money and power to do what it sees as necessary?  What I'm alluding to are state level sovereign wealth funds. Somewhat similar to the one run by the state of Alaska.  You know, a very large sovereign wealth fund run started by, oh the state of Texas or California, might have just a little bit of sway in corporate decisions.  Such as where a plant is located. Or how you'll treat your laborers. 

*(I get a real kick out of that thought when driving my ancient SUV to go shop at Aldi). 

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #3151 on: May 29, 2020, 04:00:27 PM »
Did I mention I been offered a job?...:)
Oh?

DavidAnnArbor

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Re: Race from $2M to $4M...and Beyond!
« Reply #3152 on: May 29, 2020, 04:08:33 PM »
@Bateaux ,



Should I sell at the right time and then buy back in at the right time?   Sure as hell should!

If only I knew when that was.  But I don't.   And it turns out that a host of very smart people have worked very hard to figure out how to know and, as far as we know, no one has truly figured it out (or shared it with us if they did).

I think most of us knew that in March the market was way down and it was a good time to put money in, but understandably we didn't know what the market would do next.
Not knowing creates the anxiety - which is completely understandable.

I want everyone to be able to voice their opinions and feelings. It's the only way we can help each other through this crazy time that is causing anxiety for all of us.

For those that post comments suggesting that you're as cool as a cucumber regarding the market turmoil - well good for you. But I find it unhelpful in providing support and guidance to the rest of us.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3153 on: May 29, 2020, 04:34:19 PM »
@Bateaux ,



Should I sell at the right time and then buy back in at the right time?   Sure as hell should!

If only I knew when that was.  But I don't.   And it turns out that a host of very smart people have worked very hard to figure out how to know and, as far as we know, no one has truly figured it out (or shared it with us if they did).

I think most of us knew that in March the market was way down and it was a good time to put money in, but understandably we didn't know what the market would do next.
Not knowing creates the anxiety - which is completely understandable.

I want everyone to be able to voice their opinions and feelings. It's the only way we can help each other through this crazy time that is causing anxiety for all of us.

For those that post comments suggesting that you're as cool as a cucumber regarding the market turmoil - well good for you. But I find it unhelpful in providing support and guidance to the rest of us.

As hard as I try I just can't think of a way to design a time machine!

@Dicey .. I'm not going back to work.. honest..;)

@Buffaloski Boris .. Hehe.. I have this 1989 F250 truck. It looks hideous and I think the head gaskets must be leaking a little because the stench of burnt coolant from the exhaust has caused at least one set of spendy friends to look upon it with disgust. Yes we do make a point of driving it to their house occasionally..:) We paid $1400 for it about 8 years ago and it runs great so we have no intention of getting rid.
« Last Edit: May 29, 2020, 04:39:20 PM by Exflyboy »

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3154 on: May 29, 2020, 05:04:11 PM »
@Bateaux ,



Should I sell at the right time and then buy back in at the right time?   Sure as hell should!

If only I knew when that was.  But I don't.   And it turns out that a host of very smart people have worked very hard to figure out how to know and, as far as we know, no one has truly figured it out (or shared it with us if they did).

I think most of us knew that in March the market was way down and it was a good time to put money in, but understandably we didn't know what the market would do next.
Not knowing creates the anxiety - which is completely understandable.

I want everyone to be able to voice their opinions and feelings. It's the only way we can help each other through this crazy time that is causing anxiety for all of us.

For those that post comments suggesting that you're as cool as a cucumber regarding the market turmoil - well good for you. But I find it unhelpful in providing support and guidance to the rest of us.

Maybe some of it is guilt?   Which if it was, I'm pretty much over that now.  This is my first economic crisis as a millionaire.  A millionaire who is retaining a six figure paycheck.  But screw that imposter syndrome.  They are two Americas and that is that.   I'm working towards the option of living wealthy if I want.  Mustacian lifestyle can get you here, but there isn't a requirement to stay that way.  Working right now fantastic, there has never been less stress.  What the Hell else is there anyway for the rest of the year.  I've got 256 hours of vacation time for the rest of the year.   So I'm going to be away a lot anyway.  It's all good.
« Last Edit: May 29, 2020, 06:55:03 PM by Bateaux »

lhamo

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Re: Race from $2M to $4M...and Beyond!
« Reply #3155 on: May 29, 2020, 05:27:38 PM »
Did I mention I been offered a job?...:)

No.  Doing what?  Or do we not want to know?

Yes!.. But I turned it down. My addiction to earning money has been resolved.. Or at least I am "in recovery"..:)

THANK GOD!  I was going to remind you to channel Nancy Reagan, "just say no" and all that....

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3156 on: May 29, 2020, 06:01:12 PM »
@Bateaux ,



Should I sell at the right time and then buy back in at the right time?   Sure as hell should!

If only I knew when that was.  But I don't.   And it turns out that a host of very smart people have worked very hard to figure out how to know and, as far as we know, no one has truly figured it out (or shared it with us if they did).

I think most of us knew that in March the market was way down and it was a good time to put money in, but understandably we didn't know what the market would do next.
Not knowing creates the anxiety - which is completely understandable.

I want everyone to be able to voice their opinions and feelings. It's the only way we can help each other through this crazy time that is causing anxiety for all of us.

For those that post comments suggesting that you're as cool as a cucumber regarding the market turmoil - well good for you. But I find it unhelpful in providing support and guidance to the rest of us.

Well, that's one way to look at it.   And if you do, I suppose you'll find it unhelpful.

Here's a different way to look at it.    I'm very interested in history and since my dad was stationed in Vietnam twice when I was a kid, I had a strong interest in military history.   Military history is chock full of examples of soldiers who kept those around them from panicking and running simply by exhibiting a calm, unruffled, untroubled demeanor.    If those soldiers had broken and run they would have been cut down, but instead they fought on to life and victory.    The movie "Zulu" about the battle of Rorke's Drift is a great example of the concept.   

So, when others are looking panicky and you're starting to feel panicky, which might mean the death or maiming of your fortune if you cut and run, maybe it's good to see others calmly soldiering on.

Anyway, that's the intent.

Best of fortune to you!

BeanCounter

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Re: Race from $2M to $4M...and Beyond!
« Reply #3157 on: May 29, 2020, 06:55:48 PM »
I really appreciate hearing the calm voices amid panic. I admit that I was VERY uncomfortable during the March drop and my husband was downright panicked. It was a good test of our risk comfort level.

The thing is, though I understand that we’ve “won the race”, we’re only 42. We’ve got a long way to go still (I hope!). So no matter how uncomfortable we are during the big drops I know we can’t make a 40-50 year retirement if we shift too much to cash. So we’ve stayed the course. 85/15 and 5% cash. That 5% is about three years of living expenses. Maybe over the next few years we should increase that some more?

The other issue we are still struggling with is trying to FIRE with kids. I know what they need now, but what if they need MORE later? How do we factor that in? Right or wrong, I’m not really comfortable with saying no to things like braces and music lessons if neither of us are working. Any of you have any wisdom on this? I’m thinking if we are living on 3% of assets, we can always bump it up to 4% for the years the kids require more, and still be fine.

Finally I’ll leave you with my mother’s investment wisdom she gave me when the markets were down, (she was a millionaire teacher) “well, if the market is tanking and we’re going broke, then we’ll all be broke together, which means everything is about to get a lot cheaper!”

secondcor521

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Re: Race from $2M to $4M...and Beyond!
« Reply #3158 on: May 29, 2020, 07:02:06 PM »
The other issue we are still struggling with is trying to FIRE with kids. I know what they need now, but what if they need MORE later? How do we factor that in? Right or wrong, I’m not really comfortable with saying no to things like braces and music lessons if neither of us are working. Any of you have any wisdom on this? I’m thinking if we are living on 3% of assets, we can always bump it up to 4% for the years the kids require more, and still be fine.

That's one way of dealing with it, and if that works for you, then good.

I retired before my two younger kids had chosen a college and when my oldest kid was halfway through.  I had some money set aside, but wasn't sure if it would be enough, not enough, or too much.  I didn't want to say "No" to their chosen universities based on costs.  So what I chose to do was retire anyway, use the college savings in a prudent fashion, and then see how things were turning out.  If they needed more, I made the decision in advance that I would then go back to work.

As it turned out, the oldest chose to finish at a public university, the middle one got a large scholarship, the youngest chose a public university and got lots of scholarships, and all three have received financial aid.  So it looks like there will be enough for them to finish with some left over.

Dancin'Dog

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Re: Race from $2M to $4M...and Beyond!
« Reply #3159 on: May 29, 2020, 08:40:21 PM »
We were recently asking about deflation and wondering about what all the result from the money printing by the Fed.  Here's a great little video by Ray Dalio called "How the Economic Machine Works" that explains it all in very simple terms. 


https://www.youtube.com/watch?v=PHe0bXAIuk0

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3160 on: May 29, 2020, 08:59:05 PM »
We were recently asking about deflation and wondering about what all the result from the money printing by the Fed.  Here's a great little video by Ray Dalio called "How the Economic Machine Works" that explains it all in very simple terms. 


https://www.youtube.com/watch?v=PHe0bXAIuk0

It's a great video.

2Birds1Stone

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Re: Race from $2M to $4M...and Beyond!
« Reply #3161 on: May 30, 2020, 12:15:22 AM »
@BeanCounter, if 5% of stash = 3 years of expenses then mathematically you're already at 60 years of expenses in total assets....sounds like any way you slice it you're going to die very very rich.

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Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3162 on: May 30, 2020, 07:20:58 AM »
I really appreciate hearing the calm voices amid panic. I admit that I was VERY uncomfortable during the March drop and my husband was downright panicked. It was a good test of our risk comfort level.

The thing is, though I understand that we’ve “won the race”, we’re only 42. We’ve got a long way to go still (I hope!). So no matter how uncomfortable we are during the big drops I know we can’t make a 40-50 year retirement if we shift too much to cash. So we’ve stayed the course. 85/15 and 5% cash. That 5% is about three years of living expenses. Maybe over the next few years we should increase that some more?

The other issue we are still struggling with is trying to FIRE with kids. I know what they need now, but what if they need MORE later? How do we factor that in? Right or wrong, I’m not really comfortable with saying no to things like braces and music lessons if neither of us are working. Any of you have any wisdom on this? I’m thinking if we are living on 3% of assets, we can always bump it up to 4% for the years the kids require more, and still be fine.

Finally I’ll leave you with my mother’s investment wisdom she gave me when the markets were down, (she was a millionaire teacher) “well, if the market is tanking and we’re going broke, then we’ll all be broke together, which means everything is about to get a lot cheaper!”

We have kids as well and of course they can be a money suck.  Building their character is also important, though, and having to work and not get everything they want right now just because they happen to be breathing are important life lessons. We've pretty much limited the paid activities to one sport or extracurricular.  More because of available time than anything.  Braces are expensive but you can get dental insurance.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3163 on: May 30, 2020, 08:13:39 AM »
We were recently asking about deflation and wondering about what all the result from the money printing by the Fed.  Here's a great little video by Ray Dalio called "How the Economic Machine Works" that explains it all in very simple terms. 


https://www.youtube.com/watch?v=PHe0bXAIuk0

Green Eggs - That was good.  I didn't really like the end of the story.  The portion, "The Lost Decade,"  is a bit depressing.  It may take 10 years to climb out of this economic trough.  Not mentioned in the film is the means to making the money.  If you simply cannot produce a saleable good or service, you cannot borrow and get those economic gears turning again.  In the movie, even the bar didn't do well in the end.  We might be in for some trouble in the times ahead.

It did mention 4 ways to get out of the trough and one would be to do some necessary infrastructure projects as it would be government spending.  My prediction is that we may end up doing that in the next couple years.  It could shorten the lost decade to maybe 8 years.

The movie made me feel better living with this big stack of cards they call the economy.


lhamo

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Re: Race from $2M to $4M...and Beyond!
« Reply #3164 on: May 30, 2020, 08:49:34 AM »
Braces are about $5-6k for a typical course of treatment.  It is pretty easy to carve that much out of travel, eating out, or other "nice to have but not truly necessary" line items in the budget.  Or somebody takes a temporary or PT job for awhile if it is really causing you to have bucket levels drop below where you feel comfortable.

Similarly with kids activities -- unless they are in non-school sports where there are a bunch of travel and add on costs this is not going to exceed a few $$$/month.  I also recommend not having kids in too many activities.  They can work to pay some of the cost at a certain point, too.

Stuff is going to come up, regardless.  But people in this range of savings should be able to handle the unexpected expenses without too much pain.  We have absorbed the following since FIREing with no real issues:

2015 New (modest) car purchase after car we were using was totaled, roughly $20k
2017 Braces for DD, $6k
2017 Unexpected repair to faulty window, $5-6k
2020 Sewer line repair, $20k

The latter means we will defer replacement of our backyard fence + some additional landscaping for an additional year.  Annoying but really no big deal.

So based on our track record maybe you figure in an extra $10-15k/year for those "oh shit, gotta spend some money we hadn't planned" moments?  And keep plenty in the living expenses bucket so that you can wait until a good time to sell longer-term investments and top things off again.




BeanCounter

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Re: Race from $2M to $4M...and Beyond!
« Reply #3165 on: May 30, 2020, 10:40:24 AM »
@BeanCounter, if 5% of stash = 3 years of expenses then mathematically you're already at 60 years of expenses in total assets....sounds like any way you slice it you're going to die very very rich.

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My bad. Cash is 8% invested assets not 5%. I was not including our bank account in the call but was including it in the three years living expenses.
I estimate we’re closer to 37 years. But that expense numbers includes private school tuition and a mortgage that will go away at some point.

Regardless I hear what you all are saying overall. Expenses will go up and down as you raise kids and grow older but you can weather it fairly well if you’ve passed the $2M mark. Which makes sense. Most things can be covered with $20k which is an extra 1% of $2M.
We are well beyond that.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3166 on: June 01, 2020, 02:50:14 PM »
Y’all sure quieted down. Here are a couple of interesting things to look at. First, Credit Suisse puts out an interesting global investment returns yearbook. You can download a summary gratis.

(Scroll down past the ESG balderdash stuff and there’s a link for the .pdf)

https://www.credit-suisse.com/about-us-news/en/articles/news-and-expertise/esg-investing-a-trend-that-is-constantly-evolving-202002.html

Also, a really good interview with James Ferguson on inflation on the MoneyWeek podcast. The stuff on inflation starts about halfway through.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3167 on: June 02, 2020, 07:45:15 AM »
@BeanCounter, if 5% of stash = 3 years of expenses then mathematically you're already at 60 years of expenses in total assets....sounds like any way you slice it you're going to die very very rich.

Sent from my SM-N950U using Tapatalk

My bad. Cash is 8% invested assets not 5%. I was not including our bank account in the call but was including it in the three years living expenses.
I estimate we’re closer to 37 years. But that expense numbers includes private school tuition and a mortgage that will go away at some point.

Regardless I hear what you all are saying overall. Expenses will go up and down as you raise kids and grow older but you can weather it fairly well if you’ve passed the $2M mark. Which makes sense. Most things can be covered with $20k which is an extra 1% of $2M.
We are well beyond that.

So you are at a 2.7% WR with those.....and I imagine that if you are ponying up for private school there are probably other discretionary items in your spending that give you more flexibility.   

The only excuse then would be that you enjoy working, and there is nothing wrong with that.

Car Jack

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Re: Race from $2M to $4M...and Beyond!
« Reply #3168 on: June 02, 2020, 08:53:45 AM »
Well, the march up continues.  My trusty spread sheet is showing this in a couple ways.  First, the $$ to get to my next target, which was only dollars away before the bottom dropped out is in the $60k'ish area.  Well within striking distance.  The next is the percentages in the AA slots.  I rebalance at 5% excursions.  I'm over 3%, and I can see hitting 5% soon, which would trigger a sale of equities to buy bonds.  A potential negating factor is that we just signed my wife up to the 401k in her new job and all that money will go to Vanguard Total Bond for now.  She wasn't overly happy to hear that the % contribution is 67% of her pay.  With about half the year gone, and being over 50, $26k takes lots of the income away.  We're well into the 24% federal tax bracket now and even after both of our 401k's and my FSA, we'll still be there.  No Roth for us this year!  (and with way too much deductible IRA money...there will be no backdoor Roth either).

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3169 on: June 02, 2020, 02:18:10 PM »
I got a little more conservative today.. I pulled roughly another $200k from stocks to cash (short term money market within 401k).

Now running at roughly 65/14/21 stocks/bonds/cash.

Seems a reasonable allocation for an old retired guy like me..:)

2Birds1Stone

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Re: Race from $2M to $4M...and Beyond!
« Reply #3170 on: June 02, 2020, 02:25:29 PM »
Just goes to show you how hard it is to time the market.......whoever sold out of stocks in the past few weeks missed some really nice returns. June is also dividend month for many funds.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3171 on: June 02, 2020, 02:28:54 PM »
Just goes to show you how hard it is to time the market.......whoever sold out of stocks in the past few weeks missed some really nice returns. June is also dividend month for many funds.

Absolutely it is.. I have no doubt I am "wrong" to a degree with my latest move. Thankfully whatever I do or don't do won't make any material difference to our long term financial health.

So a little bit of dry powder in case we get the 2nd quarter plummet doesn't seem like a bad trade off.

2Birds1Stone

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Re: Race from $2M to $4M...and Beyond!
« Reply #3172 on: June 02, 2020, 03:10:39 PM »
I'm not judging anyone. Our total stock exposure right now is ~41-42%

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3173 on: June 02, 2020, 04:58:25 PM »
I'm not judging anyone. Our total stock exposure right now is ~41-42%

I’ll judge you if you want. 😆

You’re about twice where I am on stock exposure.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3174 on: June 02, 2020, 05:05:17 PM »
I'm not judging anyone. Our total stock exposure right now is ~41-42%

I’ll judge you if you want. 😆

You’re about twice where I am on stock exposure.

Hahaha.. Well your just chicken..:)

Mind you, from what I'm seeing in America right now I'm thinking you guys are more right than I am.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3175 on: June 02, 2020, 06:48:44 PM »
I'm not judging anyone. Our total stock exposure right now is ~41-42%

I’ll judge you if you want. 😆

You’re about twice where I am on stock exposure.

Hahaha.. Well your just chicken..:)

Mind you, from what I'm seeing in America right now I'm thinking you guys are more right than I am.

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #3176 on: June 03, 2020, 12:46:17 AM »
I have continued to be a buyer into the stock market. I think I will keep piling on in. Probably not US, but Australia and Asia.

I did convert some USD investments to AUD when the AUD tanked. The AUD has now climbed >20% and the ASX total returns index is up > 25% since then so that proved to be a winning move. I only wish I committed more to this move, but I am basically a set and forget investor, so not one to make big moves.

My Stockmarket returns for the YTD are still quite deeply in the red by a six figure sum (but massively better than was the case mid March), but thanks to spending a lot less in lockdown compared to 2019 and thanks to solid property returns in Jan/ Feb my NW has continued to grow at a good clip.

As of today my NW comprises
Stocks 43%
Realestate 47%
Defined benefit pension 7%
Cash 3%

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3177 on: June 03, 2020, 02:31:44 AM »
You look quite spread out to weather a storm Itchyfeet.


Our accounts are within 50K of our all time high and very much in the positive for the year. 

Car Jack

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Re: Race from $2M to $4M...and Beyond!
« Reply #3178 on: June 03, 2020, 09:05:59 AM »
I got a little more conservative today.. I pulled roughly another $200k from stocks to cash (short term money market within 401k).

Now running at roughly 65/14/21 stocks/bonds/cash.

Seems a reasonable allocation for an old retired guy like me..:)

To cash?

Why not to bonds?  That's the traditional rebalance step.  I tell ya....when the bottom was falling out of the stock market, my bond funds continued to climb.  To keep my emotions in check, I only focus on whatever is going up.  I was ready to scream "BONDS ARE AT AN ALL TIME HIGH!!!" with the runup.  Going to cash is certainly conservative, and if you need the money (since you're retired), then who can blame you.  I agree to go to cash to be sure you have living expenses....but I don't agree for traditional rebalancing.


You look quite spread out to weather a storm Itchyfeet.


Our accounts are within 50K of our all time high and very much in the positive for the year.

And the market continues to march.  My last post said I'm $60k away.  Today, I'm $48k away.  We are heading into all time high stock territory, at which point, I do expect a flurry of threads "Stocks are at all time highs.  What should I pull my money into to weather the obvious upcoming crash?". 

To which I would answer in advance, channeling Jack Bogle: "Don't do something.....just stand there".
« Last Edit: June 03, 2020, 09:09:39 AM by Car Jack »

lhamo

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Re: Race from $2M to $4M...and Beyond!
« Reply #3179 on: June 03, 2020, 09:48:15 AM »
I updated my spreadsheet over the weekend -- first time since Feb 1.  I usually do it monthly but didn't feel like it when things were bouncing all over the place.

Our NW is down about 50k since then.  But we have had more than 50 in spending if you include a substantial gift we made to DS so that he could fully fund a Roth account.  We also spent 20k+ on our sewer line issues.  And paid the first half year installment on our property taxes (5kish).  I've also donated more than I usually do.

I know we are very fortunate to be in this position while so many others are suffering -- financially and otherwise.


Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3180 on: June 03, 2020, 10:12:25 AM »
I got a little more conservative today.. I pulled roughly another $200k from stocks to cash (short term money market within 401k).

Now running at roughly 65/14/21 stocks/bonds/cash.

Seems a reasonable allocation for an old retired guy like me..:)

To cash?

Why not to bonds?  That's the traditional rebalance step.  I tell ya....when the bottom was falling out of the stock market, my bond funds continued to climb.  To keep my emotions in check, I only focus on whatever is going up.  I was ready to scream "BONDS ARE AT AN ALL TIME HIGH!!!" with the runup.  Going to cash is certainly conservative, and if you need the money (since you're retired), then who can blame you.  I agree to go to cash to be sure you have living expenses....but I don't agree for traditional  rebalancing.
OK. I’ll bite. Why bonds instead of cash given a ten year Treasury fetching a whole0.6%?  Seems to me like a whole lot of downside risk for a pittance in premium for a longer time horizon. Unless, of course, you expect negative interest rates.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3181 on: June 03, 2020, 01:40:43 PM »
I got a little more conservative today.. I pulled roughly another $200k from stocks to cash (short term money market within 401k).

Now running at roughly 65/14/21 stocks/bonds/cash.

Seems a reasonable allocation for an old retired guy like me..:)

To cash?

Why not to bonds?  That's the traditional rebalance step.  I tell ya....when the bottom was falling out of the stock market, my bond funds continued to climb.  To keep my emotions in check, I only focus on whatever is going up.  I was ready to scream "BONDS ARE AT AN ALL TIME HIGH!!!" with the runup.  Going to cash is certainly conservative, and if you need the money (since you're retired), then who can blame you.  I agree to go to cash to be sure you have living expenses....but I don't agree for traditional  rebalancing.
OK. I’ll bite. Why bonds instead of cash given a ten year Treasury fetching a whole0.6%?  Seems to me like a whole lot of downside risk for a pittance in premium for a longer time horizon. Unless, of course, you expect negative interest rates.

Well for me bonds mean "bond funds" and my go to is VBTLX (although I don't own much of it, I have similar funds in various 401k plans).

These funds did pretty well after the initial crash but seem to have stagnated. So rather than roll into bonds I decided to see which asset class pulls back.. And sure if stocks continue to climb and VBTLX takes a dump I might roll the excess cash into bond funds.

Similarly if the big stock crash we all expect happens when we get Q2 earnings well then I'll go that way.

I certainly don't need this extra cash.

I'm trying not to beat myself up for doing a conservative rebalance after I had lost some money...:)

JoJoP

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Re: Race from $2M to $4M...and Beyond!
« Reply #3182 on: June 03, 2020, 09:05:56 PM »
The last few pages made my head spin.  I'm glad you all are posting your plans.   We are plugging along.   I decided after loosing (ahem, rebalancing) that I will be Master of My Domain and stick with real estate.   We're buying, covid or no covid.  And, yes @Dicey, we are so so blessed that a loss in 2020 is a blip on the radar, but would have been catastrophic 15 years ago.  Like most of us in this thread, there were no silver spoons in my background.  I feel middle class even if the checkbook says differently.   

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3183 on: June 03, 2020, 09:53:48 PM »
JoJoP - You remind me of a conversation I once had with my dad.  I was a little kid and was certainly noticing that we couldn't have what other people did.  So, I turned to my dad and asked him, "Dad - Are we poor?"

My dad paused for a moment before answering and finally retorted, "Son, we're lower middle class."

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Re: Race from $2M to $4M...and Beyond!
« Reply #3184 on: June 04, 2020, 08:59:52 AM »
Well, I'm up $150K since the great covid crash of February. Anyone else up since then? I feel like my money is getting increasingly divorced from reality. 2020 has been like the worst year ever. Being isolated for months has made me miserable, and I feel like my personal productivity has gone to the dumpster. But according to my financial accounts, I've never been more successful. Nothing makes sense anymore.

Spoiler: show
11/23/2012: $45,000.00
08/03/2013: $100,000.00
01/01/2016: $408,896.04
01/01/2017: $617,283.09
06/06/2017: $758,104.40
10/15/2017: $856,488.71
11/18/2017: $929,536.54
11/27/2017: $944,395.35
12/17/2017: $956,928.07
01/01/2018: $968,307.87
01/05/2018: $987,442.11
01/08/2018: $996,215.32
01/09/2018: $998,819.79
01/10/2018: $999,079.24
01/11/2018: $1,003,101.34
02/01/2018: $1,061,732.89
02/28/2018: $1,062,750.48
05/18/2018: $1,149,432.76
06/06/2018: $1,203,026.63
07/11/2018: $1,232,435.26
08/02/2018: $1,269,509.32
09/01/2018: $1,326,015.73
03/05/2019: $1,327,833.14
06/10/2019: $1,462,549.50
07/07/2019: $1,519,162.03
12/14/2019: $1,628,320.78
01/01/2020: $1,705,284.27
02/02/2020: $1,838,397.87
02/13/2020: $1,961,653.87
02/19/2020: $2,000,505.43
04/14/2020: $2,002,087.12
05/09/2020: $2,148,999.11


We both hit the $2M mark within a few days of each other back in Feb.  I'm still down slightly and today my liquid assets appear to be around 1.92M.  Significantly lower than yours.  If I recall correctly, you're a very high income earner, so how much of this would you attribute to new savings and how much to recovery/growth of equity?


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Re: Race from $2M to $4M...and Beyond!
« Reply #3185 on: June 04, 2020, 09:07:57 AM »
I feel middle class even if the checkbook says differently.
I struggle with where we 'fit' (not that it matters, I'll just 'do me').....it was pointed out to me in another thread that based on income I'm a 1%er (I just can't believe that, but I read it on the internet so it must be true), and based on net worth I'm in the 85 percentile (I can believe that - I'm here with you, after all).....I think of 1%ers as owning yachts and multiple homes and having 'staff'.....we do our own yard work and clean our own toilets.

Does everyone think of themselves as middle class?  Because I will always think of myself there....the closest I can come is defining myself as upper middle class.   By definition, if you're in the $2M+ thread, you are not 'middle class'

ysette9

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Re: Race from $2M to $4M...and Beyond!
« Reply #3186 on: June 04, 2020, 10:05:13 AM »
That is a bit of a weird mental dissonance that we have had to face these past few years. Our income was way up there before I quit. And honestly still is high compared to most. Our net worth clearly is high to even be posting on this thread. So yes, we are rich. But it is hard to square “rich” with how we live our lives, at least our material possessions. But that is fine.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3187 on: June 04, 2020, 10:10:37 AM »
I feel middle class even if the checkbook says differently.
I struggle with where we 'fit' (not that it matters, I'll just 'do me').....it was pointed out to me in another thread that based on income I'm a 1%er (I just can't believe that, but I read it on the internet so it must be true), and based on net worth I'm in the 85 percentile (I can believe that - I'm here with you, after all).....I think of 1%ers as owning yachts and multiple homes and having 'staff'.....we do our own yard work and clean our own toilets.

Does everyone think of themselves as middle class?  Because I will always think of myself there....the closest I can come is defining myself as upper middle class.   By definition, if you're in the $2M+ thread, you are not 'middle class'

Hah - this is exactly the conversation that I was having with my wife this morning. We have really hit the jackpot in the recent years but decades of conditioning makes us still feel middle class at heart.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3188 on: June 04, 2020, 12:00:21 PM »
Our wealth has increased $1,000 a day on average since this time last year.  That's what we saved plus what our accounts have earned.  We were just above the nose of 2M and now 2.375M.  We'd just written a huge check for a new roof for the Florida house.  That's incredible.   Don't feel wealthy.
« Last Edit: June 04, 2020, 12:05:59 PM by Bateaux »

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #3189 on: June 04, 2020, 12:04:05 PM »
I certainly don’t see myself as rich. I wouldn’t mind being rich though. I’m talking 1%er. But I couldn’t be assed doing the work.

However, I am very aware that we are much better off than most. I am well paid and no doubt we have a comfortable life.

Still, we live in a rented apartment in need of a makeover and we own just one car (and it’s 9 years old).

We clean our own apartment and try and attend to most home maintenance ourselves (in our lease, minor maintenance is paid for by the tenant),

We still nearly always fly economy unless we can use points to upgrade at a good rate..... but we do fly a lot more than what could be considered middle or median or average, at least before COVID grounded us. Still I suffer business class envy big time.

DW is a primary school teacher, and other than frequent international travel our life doesn’t look any different to her teacher friends.

I sometimes feel like I just want to blurt out to our friends and family than we are multi millionaires, but I don’t want to be judged for that so I keep quiet and keep living our comfortable middle class life.

I have even become increasingly reluctant to share holiday pics on Facebook. Our jetsetting was looking pretty conceited. So now we mostly keep it to ourselves.

The more cash I have the more stealth I feel the need to become. Only here, hidden behind an internet veil, dare I whisper that next month we will prob tick over another million milestone (AUD).

Maybe we will be rich one day.....


Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3190 on: June 04, 2020, 01:00:57 PM »

Does everyone think of themselves as middle class?  Because I will always think of myself there....the closest I can come is defining myself as upper middle class.   By definition, if you're in the $2M+ thread, you are not 'middle class'

Middle class for where? We’re probably considered part of the “working poor” in Monaco or Lichtenstein!

I guess we’d consider ourselves middle class if we put any thought to it. I hadn’t even bothered to calculate NW until I added it up on the back of an envelope recently. The class awareness clearly isn’t there at our house.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3191 on: June 04, 2020, 02:47:09 PM »
I feel middle class even if the checkbook says differently.
I struggle with where we 'fit' (not that it matters, I'll just 'do me').....it was pointed out to me in another thread that based on income I'm a 1%er (I just can't believe that, but I read it on the internet so it must be true), and based on net worth I'm in the 85 percentile (I can believe that - I'm here with you, after all).....

Does everyone think of themselves as middle class?  Because I will always think of myself there....the closest I can come is defining myself as upper middle class.   By definition, if you're in the $2M+ thread, you are not 'middle class'

According to 2016 US data, a household income of about $870,000 a year is the top 1% mark and a household net worth of $750,000 is about the top 15% mark.

Which means you could personally bring a family to the top 15% net worth mark every year or two (depending on taxes), based on your income, and still live better than most in this country.    Thought that might be an interesting perspective.

Now, based on those numbers, it should take you no time to amass enough wealth to retire if you set your mind and budget to it.

www.shnugi.com



Dancin'Dog

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Re: Race from $2M to $4M...and Beyond!
« Reply #3192 on: June 04, 2020, 02:51:07 PM »
Remember the Beverly Hillbillies?  They had $63M in the 1960's and still weren't even middle-class. 


"You can't buy class."  ;)

JoJoP

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Re: Race from $2M to $4M...and Beyond!
« Reply #3193 on: June 04, 2020, 03:54:17 PM »
Remember the Beverly Hillbillies?  They had $63M in the 1960's and still weren't even middle-class. 


"You can't buy class."  ;)

That's hysterical!  I teasingly call my husband "Jed" sometimes because he will load up his truck in such a way that all it's missing is Granny in the rocking chair on top.   We can be an absolute embarrassment to the 1% with our frugal ways and middle class attitude. We seriously shop for what's on sale at the store.  Always have, always will.  I'm not buying $15-20 cocktails, like some of my friends do.  Never!   I'd say we're more Green Acres then Beverly Hillbillies. 

 Like you, @itchyfeet , I'd love to share the great news but somehow our numbers are never spoken out loud.  It's just that I'm so proud to have made it here in this club that I'd love to tell someone, but... I doubt I will.  There's no one to tell but you people.    I guess my family will figure it out when we die.  We travel a lot (did) and I don't go into the details for fear of invoking envy.  I tell people we travel on points, which is mostly true, but that only mitigates the business class airfare and sometimes hotels. 

  I have 2 best friends, one is supporting a frugal family of 5 on a modest income and the other lives the typical HCOL lifestyle and racks up debt in shocking numbers.   The HCOL friend guessed "millionaire", then "self made multi millionaire".  I didn't confirm or deny.   Our new tax guy made a very accurate guess, and the Hubs discounted it, but I think because Hubs keeps forgetting that the number is so high.   I'm the obsessed one in the family and Hubs doesn't keep track at all.   
So how much is the 1% bracket in NW? How about the 3%?  We'll never make $870,000 a YEAR, so we need to claw our way up through some other door!

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #3194 on: June 04, 2020, 04:07:59 PM »
I'm guessing our neighbors think we're 'just getting by'.  I bought a middle class car new last weekend (a 2020 Corolla SE for $25k cash) and (assuming the car is now worth $0) my net worth is higher already!  Maybe I should've bought something fancier?  Maybe I'm not actually middle class like I think I am, since I seem to be winning without even trying anymore?  Or maybe the stock market is bonkers, that could be it too...

I certainly never thought I'd be in my 40's with no house debt, no car debt, and millions in investments!  I had a dream to hit one million when I was in my 20's, which seemed to fizzle when the tech bubble burst...  Nice to take the time now to reflect on all of it and cultivate gratitude.  I'm at a position where being able to give back gives me more joy than watching the numbers go up, but still have to be stealthy about that too. 

Like @itchyfeet , I'd be horrified if family, neighbors, or acquaintances got a whiff of our situation.  Living my 'normal' life could get awkward and people generally don't seem to understand the point of (or how to go about) living below ones means.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3195 on: June 04, 2020, 04:34:22 PM »
Hah.. I "threatening" my Wife to go out and buy 'his & Her' Corvettes.

Wifey is horrified at the idea and I'm sure it would ruffle some feathers in DW's family.. Come to think of it one day I just might..:)

Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #3196 on: June 04, 2020, 05:32:20 PM »
Well, I'm up $150K since the great covid crash of February. Anyone else up since then? I feel like my money is getting increasingly divorced from reality. 2020 has been like the worst year ever. Being isolated for months has made me miserable, and I feel like my personal productivity has gone to the dumpster. But according to my financial accounts, I've never been more successful. Nothing makes sense anymore.

Spoiler: show
11/23/2012: $45,000.00
08/03/2013: $100,000.00
01/01/2016: $408,896.04
01/01/2017: $617,283.09
06/06/2017: $758,104.40
10/15/2017: $856,488.71
11/18/2017: $929,536.54
11/27/2017: $944,395.35
12/17/2017: $956,928.07
01/01/2018: $968,307.87
01/05/2018: $987,442.11
01/08/2018: $996,215.32
01/09/2018: $998,819.79
01/10/2018: $999,079.24
01/11/2018: $1,003,101.34
02/01/2018: $1,061,732.89
02/28/2018: $1,062,750.48
05/18/2018: $1,149,432.76
06/06/2018: $1,203,026.63
07/11/2018: $1,232,435.26
08/02/2018: $1,269,509.32
09/01/2018: $1,326,015.73
03/05/2019: $1,327,833.14
06/10/2019: $1,462,549.50
07/07/2019: $1,519,162.03
12/14/2019: $1,628,320.78
01/01/2020: $1,705,284.27
02/02/2020: $1,838,397.87
02/13/2020: $1,961,653.87
02/19/2020: $2,000,505.43
04/14/2020: $2,002,087.12
05/09/2020: $2,148,999.11


We both hit the $2M mark within a few days of each other back in Feb.  I'm still down slightly and today my liquid assets appear to be around 1.92M.  Significantly lower than yours.  If I recall correctly, you're a very high income earner, so how much of this would you attribute to new savings and how much to recovery/growth of equity?

My wife just asked me what has happened to our accounts during all this, as she doesn't follow at all but the recently retired neighbor was talking about how it sucked that he retired and a month later his investments had tanked.

I told her our NW is down.... from $4 M to $3.8 M.  She stared at me and asked...um, so what's the difference?  I knew what she meant...but couldn't come up with anything other than "$200k?"  Maybe its good she doesn't keep up with it, as she missed the point at which the answer was $3.25M....but I doubt that would have been viewed any different either given neither of us would have imagined we'd ever be worth over $1M not that long ago.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3197 on: June 04, 2020, 05:49:40 PM »

I'm the obsessed one in the family and Hubs doesn't keep track at all.   
So how much is the 1% bracket in NW? How about the 3%?  We'll never make $870,000 a YEAR, so we need to claw our way up through some other door!

DW is the same way.  She is completely indifferent to where our finances are. So long as there's enough to support our relatively frugal lifestyle, it's just not relevant to her world.  The running joke is I have 30 seconds to talk about anything financial before the eyes glaze over.   

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3198 on: June 04, 2020, 05:57:06 PM »
Hah.. I "threatening" my Wife to go out and buy 'his & Her' Corvettes.

Wifey is horrified at the idea and I'm sure it would ruffle some feathers in DW's family.. Come to think of it one day I just might..:)

Yeah, but then you'd have to get rid of a perfectly good truck to make room.  That's most of why I haven't bought a newer truck.  My ancient $2000 SUV works and I'd have to get rid of it if I bought a newer truck.  And why would I want to do that?  Pffffthpt!  I'll just keep my SUV.  Even though the AC conked out.  What kind of wuss needs AC?  95 degrees is good for the sinuses. 

You can see where this is going.  I'll be pushing the SUV before I get rid of it.   

itchyfeet

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Re: Race from $2M to $4M...and Beyond!
« Reply #3199 on: June 04, 2020, 08:45:07 PM »
My DW also has absolutely zero interest in our financial position and investments. She never evens asks where our money is, or how much we have invested.

Thankfully she does have an interest in spending less and watches my spending like a Hawke. I don’t think she will ever let me blow money on toys irrespective of how “rich” we become, I worry that after I am gone she will be scared to spend even one penny of our savings, which really defeats the purpose of saving in the first place.

Meanwhile I am determined to spend what we have over the remainder of our lives and once I FIRE the plan is a 5% drawdown rate and only to spend less if I really must.

One thing COvID has shown me is how little it costs to stay at home and do nothing. We could really spend very little for an extended period if necessary.

So I think we will be very flexible in our spending. Some years it will be a 2% drawdown or less and some will be 8% plus I suppose.

Given long term real Stockmarket returns are around ~7%, I imagine at some point we will need to spend more than 8% a year to chew through some excess accumulation.

I don’t see his and her Corvette’s in my future, but maybe a 911 will one day grace my garage (although convincing DW will prob be an impossible task).

 

Wow, a phone plan for fifteen bucks!