Author Topic: Race from $2M to $4M...and Beyond!  (Read 549982 times)

Buffaloski Boris

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ysette9

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Re: Race from $2M to $4M...and Beyond!
« Reply #3101 on: May 25, 2020, 02:40:21 PM »
Iím very surprised at some of the conversation here also. I am one of those in the 2020 cohort. My last day of work was 13 March, three days before lockdown took place in my area. I am holding steady, though granted it is easier as my husband has one more year of work before also pulling the plug.

Clearly written in our investment policy statement is that we do not make changes to our investing strategy or AA based on what is happening in the markets, with the exception of rebalancing back to our target asset allocation. We did rebalance once when things were near the low. We make changes to our asset allocation based on our life events. Right now we have reached our FI number and are at 40% bonds because we are implementing a bond tent sort of strategy. As others have said, we can dial back the risk in a way because we have reached our number, though that is a temporary thing because inflation and portfolio longevity will still be a threat later down the line.

Yep, this totally could get a lot worse. I canít predict that nor when it may get better. I am notoriously awful at trying to predict what stocks will do. Which is why we have the plan that we stick to regardless of what the gut says.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #3102 on: May 25, 2020, 04:36:27 PM »
@ysette9  At 40% bonds, I don't think I'd be changing my AA either, but were you always at 60/40 or did you sell to get there?  I think most folks were at 80 - 100% equities and sold a bit after the rebound.  I put in some of my cash at S&P 2400 and had planned to put more in, but now that the market is back up in nosebleed CAPE territory, I'm happy to stay at 50/50 with an expectation risk / reward will be better and I can be more aggressive when others are actually panicked (and 2Q looks to be a doozy of an earnings season since it has the full lock-down effect, as opposed to last quarter) and offering some bargains...  And if there are no bargains, it's not like 1980-style double digit inflation is eating my cash.  I'm equally as worried about my bond funds losing value as cash losing value due to inflation. 
« Last Edit: May 25, 2020, 04:58:39 PM by EscapeVelocity2020 »

ysette9

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Re: Race from $2M to $4M...and Beyond!
« Reply #3103 on: May 25, 2020, 05:37:44 PM »
@ysette9  At 40% bonds, I don't think I'd be changing my AA either, but were you always at 60/40 or did you sell to get there?  I think most folks were at 80 - 100% equities and sold a bit after the rebound.  I put in some of my cash at S&P 2400 and had planned to put more in, but now that the market is back up in nosebleed CAPE territory, I'm happy to stay at 50/50 with an expectation risk / reward will be better and I can be more aggressive when others are actually panicked (and 2Q looks to be a doozy of an earnings season since it has the full lock-down effect, as opposed to last quarter) and offering some bargains...  And if there are no bargains, it's not like 1980-style double digit inflation is eating my cash.  I'm equally as worried about my bond funds losing value as cash losing value due to inflation.
We have been slowly getting closer to 40% over the past two years. We reached it somewhere around the end of last year as that coincided with when we reached our FI number. We sold stocks to buy bonds in order to do this. It was all in tax-protected accounts until we ran out of non-Roth space. Then we opened a taxable bond account and funded that with ongoing contributions until we reached the goal.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3104 on: May 25, 2020, 07:54:34 PM »
Iím actually surprised* that the conversation that weíre having on this topic isnít more widespread across the entire forum. Folks who are seeking FI are definitely following a road less traveled.

 I just find it very interesting that while most of us probably reject the prevailing consumption narrative, how many of us accept the prevailing buy-and-hold equities narrative.

*(well, not THAT surprised.)

ysette9

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Re: Race from $2M to $4M...and Beyond!
« Reply #3105 on: May 25, 2020, 08:19:50 PM »
Iím actually surprised* that the conversation that weíre having on this topic isnít more widespread across the entire forum. Folks who are seeking FI are definitely following a road less traveled.

 I just find it very interesting that while most of us probably reject the prevailing consumption narrative, how many of us accept the prevailing buy-and-hold equities narrative.

*(well, not THAT surprised.)
I donít think we reject common narratives for the joy of being contrarian. I would like to think that we are logical enough to see what the preponderance of data is pointing to and choose to follow that. So if psychological research shows that more consumption doesnít lead to more happiness, we stop to question bigger/better/more. If research shows that stock picking and timing the market are usually losing strategies, we can set our ego aside and listen to wiser voices.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3106 on: May 26, 2020, 09:01:54 AM »
Markets are way up.  Going to have to decide if I have the courage to sell stocks before the end of the day.  Asian markets were up big last night and closed big.  Greed is probably going to push me a little further up the mountain before bailing.  It's still about the virus right now.  Any news on the positive side right now is pushing markets ever steeper and narrow.  The worst thing in coming months may be the virus just going away.  When there is no more virus, then you have to actually look at the economic picture.  It's a thing that turns your head, like a motorcycle crash scene.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #3107 on: May 26, 2020, 11:10:44 AM »
Markets are way up.  Going to have to decide if I have the courage to sell stocks before the end of the day.  Asian markets were up big last night and closed big.  Greed is probably going to push me a little further up the mountain before bailing.  It's still about the virus right now.  Any news on the positive side right now is pushing markets ever steeper and narrow.  The worst thing in coming months may be the virus just going away.  When there is no more virus, then you have to actually look at the economic picture.  It's a thing that turns your head, like a motorcycle crash scene.

Not to single you out, but these are probably the posts us thread folk are being criticized for.  I certainly don't make daily decisions on if I'll buy or sell no matter what the market did that day.  The daily walk of the market is crazy, but just because it was up big so far today does not mean we won't be even higher by the end of June - if the Fed keeps up the stimulus, assets will keep soaking up the money in the form of higher prices.  Even bankrupt oil and gas companies are rallying today.  I just think that overall, the market fundamentals can not support current prices indefinitely and I have no idea when / if the Fed will pull back their support and just how far stocks will fall when that happens.

I'm guessing a lot of the excess money is going in the real estate investing because that is also holding up surprisingly well here in Houston, despite a dismal industry outlook.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3108 on: May 26, 2020, 01:58:44 PM »
Markets are way up.  Going to have to decide if I have the courage to sell stocks before the end of the day.  Asian markets were up big last night and closed big.  Greed is probably going to push me a little further up the mountain before bailing.  It's still about the virus right now.  Any news on the positive side right now is pushing markets ever steeper and narrow.  The worst thing in coming months may be the virus just going away.  When there is no more virus, then you have to actually look at the economic picture.  It's a thing that turns your head, like a motorcycle crash scene.

I put in a limit order to get rid of a stinker I shouldíve never bought. To date Iíve just hung onto it as a good lesson in humility. If someone really wants it though, they can have it.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3109 on: May 26, 2020, 02:06:12 PM »
Markets are way up.  Going to have to decide if I have the courage to sell stocks before the end of the day.  Asian markets were up big last night and closed big.  Greed is probably going to push me a little further up the mountain before bailing.  It's still about the virus right now.  Any news on the positive side right now is pushing markets ever steeper and narrow.  The worst thing in coming months may be the virus just going away.  When there is no more virus, then you have to actually look at the economic picture.  It's a thing that turns your head, like a motorcycle crash scene.

I put a limit order in for a stinker that Iíve taken a bath on. I kept it as a good lesson in humility. But heck if some fool investor wants it for more than I think itís worth, Iíll sell.

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3110 on: May 26, 2020, 04:06:29 PM »
Markets are way up.  Going to have to decide if I have the courage to sell stocks before the end of the day.  Asian markets were up big last night and closed big.  Greed is probably going to push me a little further up the mountain before bailing.  It's still about the virus right now.  Any news on the positive side right now is pushing markets ever steeper and narrow.  The worst thing in coming months may be the virus just going away.  When there is no more virus, then you have to actually look at the economic picture.  It's a thing that turns your head, like a motorcycle crash scene.

Not to single you out, but these are probably the posts us thread folk are being criticized for.  I certainly don't make daily decisions on if I'll buy or sell no matter what the market did that day.  The daily walk of the market is crazy, but just because it was up big so far today does not mean we won't be even higher by the end of June - if the Fed keeps up the stimulus, assets will keep soaking up the money in the form of higher prices.  Even bankrupt oil and gas companies are rallying today.  I just think that overall, the market fundamentals can not support current prices indefinitely and I have no idea when / if the Fed will pull back their support and just how far stocks will fall when that happens.

I'm guessing a lot of the excess money is going in the real estate investing because that is also holding up surprisingly well here in Houston, despite a dismal industry outlook.

I hardly make any moves outside of the occasional rebalance.  I'm a bit emotional and confused with the nonchalant attitude of the entire country.  I don't want to see panic, but maybe some healthy concern for our current state.  I haven't made any moves yet.  I'll pipe down a bit.  I've been venting a few too many frustrations here.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3111 on: May 26, 2020, 04:17:54 PM »
Markets are way up.  Going to have to decide if I have the courage to sell stocks before the end of the day.  Asian markets were up big last night and closed big.  Greed is probably going to push me a little further up the mountain before bailing.  It's still about the virus right now.  Any news on the positive side right now is pushing markets ever steeper and narrow.  The worst thing in coming months may be the virus just going away.  When there is no more virus, then you have to actually look at the economic picture.  It's a thing that turns your head, like a motorcycle crash scene.

Not to single you out, but these are probably the posts us thread folk are being criticized for.  I certainly don't make daily decisions on if I'll buy or sell no matter what the market did that day.  The daily walk of the market is crazy, but just because it was up big so far today does not mean we won't be even higher by the end of June - if the Fed keeps up the stimulus, assets will keep soaking up the money in the form of higher prices.  Even bankrupt oil and gas companies are rallying today.  I just think that overall, the market fundamentals can not support current prices indefinitely and I have no idea when / if the Fed will pull back their support and just how far stocks will fall when that happens.

I'm guessing a lot of the excess money is going in the real estate investing because that is also holding up surprisingly well here in Houston, despite a dismal industry outlook.

I hardly make any moves outside of the occasional rebalance.  I'm a bit emotional and confused with the nonchalant attitude of the entire country.  I don't want to see panic, but maybe some healthy concern for our current state.  I haven't made any moves yet.  I'll pipe down a bit.  I've been venting a few too many frustrations here.

Youíre just giving voice to your concerns which happen to be shared by others.

libertarian4321

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Re: Race from $2M to $4M...and Beyond!
« Reply #3112 on: May 26, 2020, 04:25:55 PM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I think the nervous/panicky people are the ones posting.  Those of us who see this as just another of many "crises" we will face over an investing lifetime are just calmly doing what we've always done- steadily saving and investing for the long term.

COVID ain't the end of the world, folks.  Life will go on.  30 years from now, this "crisis" will a lot like the '87 crisis- a barely noticeable blip on a long term stock market chart.

FiveSigmas

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Re: Race from $2M to $4M...and Beyond!
« Reply #3113 on: May 26, 2020, 04:37:26 PM »
I put a limit order in for a stinker that Iíve taken a bath on. I kept it as a good lesson in humility. But heck if some fool investor wants it for more than I think itís worth, Iíll sell.

Never bathe with a stinker. In the end you both end up smelling a little.

Then again, what do I know? With index funds youíre virtually guaranteed to get a little pee in the water.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3114 on: May 26, 2020, 06:59:53 PM »
@Bateaux ,

It's not that I don't have concerns, I do.   I would have to be pretty darn clueless not to have some concerns.

The question is, what do I do about those concerns?

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).

What's more, smart as I am, even if I devoted 100% of my energies to trying to figure it out, I won't figure it out in time -- if ever.   

Should I buy "the right investment" instead of the very diversified investments I already have?  You bet!

Same problem!    I don't know what those investments are!    And I won't know in time for exactly the same reasons.   I'm just a hard working shmuck who saved a bunch of money.  What the hell do I know about exactly which companies are going to thrive and which are not?   Hell, I thought we were due for a major recession in 2012 and never changed my mind, and here we are 8 years later and we may or may not get a major one lasting a few years.

I don't know what's going to happen. 

I never knew what's going to happen.

And I'm pretty unlikely to ever know what's going to happen ahead of time.

So, I came up with a plan that I felt should get us thru most anything.

We have profitable rental house income in a town that's great for owning rental property.

We have rented farm land income in a different state so a major flood or earth quake or other natural disaster isn't likely to take them all out at the same time.

We have fixed income coming in from social security.   Maybe even a very tiny pension in a few years.

And we have a large stock and bond portfolio which we won't need for normal living expenses within 3 years, and barely need even now, with a bunch of extra expenses from owning houses we don't want to keep.  So we won't have to sell much, if any, when the market is down.

We did this asset allocation because we didn't want to depend on any one income stream.   Even our income stream categories have diversification in them:  4 rental houses, 2 rented farms, 3 social security checks, and VTSAX and the international equivalent whose code I forget, which together represent thousands of companies.

We also made sure that we could drop any one overall income stream and still be just fine if we tightened our belts a bit.  In less than 3 years we wouldn't even have to do that.

My biggest financial problem right now is that I don't have the mental or physical bandwidth to finish renovating a charity house we want to give away because we're too busy with our old and new homes instead.  I'll have to pay some taxes in cash if I don't donate the house before the end of the year, and if I don't renovate it before then, I won't get the extra value the house would be worth for reducing those taxes. 
And hell, if I just sold the house and got my money back out of it, I would get more money for it than I would save in taxes.   Such problems!   :)

My biggest social problem is not accidentally rubbing our financial situation in the noses of our friends and neighbors because some of them are really hurting.   That might include some of you, though I hope not.

It's the best I can do at this point in time.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3115 on: May 26, 2020, 08:09:06 PM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I think the nervous/panicky people are the ones posting.  Those of us who see this as just another of many "crises" we will face over an investing lifetime are just calmly doing what we've always done- steadily saving and investing for the long term.

COVID ain't the end of the world, folks.  Life will go on.  30 years from now, this "crisis" will a lot like the '87 crisis- a barely noticeable blip on a long term stock market chart.

Chaos is just another word for opportunity.

 Iím one of those who come off as a nervous Nellie. And I am. When it comes to US equities Iím about as nervous as they get. IĎm around a whole lot of folks who think US equities are the easy path to wealth while I think theyíre  a rotten deal. Try as I may, I canít reconcile myself to paying what I think are nosebleed valuations and then attempt  to  fool myself into thinking Iím somehow getting a deal.

 I should spend my energy on what I think are good purchases or investments and circle back some time in the future if the situation changes. That sounds like more fun anyway. Being the naysayer sucks.

ysette9

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Re: Race from $2M to $4M...and Beyond!
« Reply #3116 on: May 26, 2020, 08:48:31 PM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I think the nervous/panicky people are the ones posting.  Those of us who see this as just another of many "crises" we will face over an investing lifetime are just calmly doing what we've always done- steadily saving and investing for the long term.

COVID ain't the end of the world, folks.  Life will go on.  30 years from now, this "crisis" will a lot like the '87 crisis- a barely noticeable blip on a long term stock market chart.

Chaos is just another word for opportunity.

 Iím one of those who come off as a nervous Nellie. And I am. When it comes to US equities Iím about as nervous as they get. IĎm around a whole lot of folks who think US equities are the easy path to wealth while I think theyíre  a rotten deal. Try as I may, I canít reconcile myself to paying what I think are nosebleed valuations and then attempt  to  fool myself into thinking Iím somehow getting a deal.

 I should spend my energy on what I think are good purchases or investments and circle back some time in the future if the situation changes. That sounds like more fun anyway. Being the naysayer sucks.
So if you donít like the US stock market then just put your money all in a total international stock market index and call it a day?

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3117 on: May 27, 2020, 05:49:35 AM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I think the nervous/panicky people are the ones posting.  Those of us who see this as just another of many "crises" we will face over an investing lifetime are just calmly doing what we've always done- steadily saving and investing for the long term.

COVID ain't the end of the world, folks.  Life will go on.  30 years from now, this "crisis" will a lot like the '87 crisis- a barely noticeable blip on a long term stock market chart.

Chaos is just another word for opportunity.

 Iím one of those who come off as a nervous Nellie. And I am. When it comes to US equities Iím about as nervous as they get. IĎm around a whole lot of folks who think US equities are the easy path to wealth while I think theyíre  a rotten deal. Try as I may, I canít reconcile myself to paying what I think are nosebleed valuations and then attempt  to  fool myself into thinking Iím somehow getting a deal.

 I should spend my energy on what I think are good purchases or investments and circle back some time in the future if the situation changes. That sounds like more fun anyway. Being the naysayer sucks.
So if you donít like the US stock market then just put your money all in a total international stock market index and call it a day?

In a nutshell, thatís exactly what Iím doing with retirement accounts. DCAing into international.  For non retirement stuff Iím looking at other cost savings and investments. Less orthodox stuff.

LightTripper

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Re: Race from $2M to $4M...and Beyond!
« Reply #3118 on: May 27, 2020, 06:32:42 AM »
I am long cash so have been DCAing into the market over the last year.  Sped up since the crash, but now the market is so recovered now I am considering slowing down my rate of entry a bit.  If I carry on as I am I'll have rebalanced as much as I can with current resources by September.  If I slow down, I can carry on to year end (basically averaging in over a longer period), and then I have another chunk of savings maturing in January 2021.  When I initially conceived my plan I thought all the relevant information would be on the table within 6 months, so that seemed a reasonable time-frame.   But if there is another leg down in the autumn not only will I be miserable because it will mean that Covid is as horrible or more horrible than feared (or our ability to manage it worse than hoped) - but also frustrated because I won't have any spare cash to at least have some potential future upside to go with my misery.  If things turn out better than expected and the market soars away then yes, I guess I would have been better to get my money in faster: but the money I've already transferred over the last couple of months will be looking very good in that scenario, so I don't think I'll have too many regrets.  I'm generally very good at finding silver linings (particularly in a hypothetical world where we would all be feeling very relieved and happy!)

Is this panic?  I don't think so
Is it market timing?  Yes
Do I have the information or expertise required to judge whether the market is correctly valuing all the relevant risks?  Clearly not.
Do I know my own psychology well enough to have a sense of what situations I might find financially scary or frustrating?  Somewhat - and in the end that's the driver.  I am absolutely sure that my psychological needs have limited my returns over the years .... but meeting them has also allowed me to sleep well at night, and that's worth something.

The one thing I really need to get on top of is geographic asset allocation.  Mine is basically totally random.  I want to at least have a plan and a reason for it, even if the reasons are not particularly well founded!  The more I can become the "investing machine" and just follow my plan the happier I'll be, whatever happens to the market.


tooqk4u22

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Re: Race from $2M to $4M...and Beyond!
« Reply #3119 on: May 27, 2020, 10:02:14 AM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I think the nervous/panicky people are the ones posting.  Those of us who see this as just another of many "crises" we will face over an investing lifetime are just calmly doing what we've always done- steadily saving and investing for the long term.

COVID ain't the end of the world, folks.  Life will go on.  30 years from now, this "crisis" will a lot like the '87 crisis- a barely noticeable blip on a long term stock market chart.

Maybe, maybe not.   Some things are much different than '87

CAPE was 18 at peak, now 28 after correction and before drop in earnings
US Ten Year was 7%, now 0.7%
Debt to GDP was 40%, now >100% and climbing
Inflation was 2% in '86 and '88 was 4%), now <1%
Total Debt (personal, corp, gov't) was $11trillion, now $75 trillion. 

Basically there was so much more spread available whether in equities, bonds - inflation, levers to pull with Dept. 

We have had a > 30 year bull market in interest rates and explosion of personal, public and government debt - amounts owed have between 5-8% annually since then.  This obviously fuels economic activity.  Credit standards were far different back and large down payments or cash was required.   Now we are a payment society.   

Don't know that the growth will be as grand going forward,  should still be fine but my guess is that the retirement calculators that say you have a chance of having 10x of what you started with probably won't happen.   

All the inflation triggers that were caused by all that was moderated by offshoring overseas and technology/productivity improvements that were exponential over that period.

For the last several years and certainly now, the public speak has been that we are striving for growth and 2% inflation when in reality we are fighting dearly against deflation. 
« Last Edit: May 27, 2020, 10:05:53 AM by tooqk4u22 »

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3120 on: May 27, 2020, 06:15:19 PM »

- KER SNIP -

For the last several years and certainly now, the public speak has been that we are striving for growth and 2% inflation when in reality we are fighting dearly against deflation.

I had the opposite idea as all this money is being dumped into the money supply by the government.  However, upon a little further reflection I think most of it is not given to people who will be spending money on stuff like bread.  The upper crust has the money and so it is not really moving within the economy.  (Note how I stayed with the bread thing.)

You prompted me to read up on it a bit.

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

From the Wiki article:

During severe deflation, targeting an interest rate (the usual method of determining how much currency to create) may be ineffective, because even lowering the short-term interest rate to zero may result in a real interest rate which is too high to attract credit-worthy borrowers. In the 21st century negative interest rate has been tried, but it can't be too negative, since people might withdraw cash from bank accounts if they have negative interest rate. Thus the central bank must directly set a target for the quantity of money (called "quantitative easing") and may use extraordinary methods to increase the supply of money, e.g. purchasing financial assets of a type not usually used by the central bank as reserves (such as mortgage-backed securities). Before he was Chairman of the United States Federal Reserve, Ben Bernanke claimed in 2002, "...sufficient injections of money will ultimately always reverse a deflation",[39] although Japan's deflationary spiral was not broken by the amount of quantitative easing provided by the Bank of Japan.

This does look like what the government is doing at this time.

Seems like after this Virus crisis lessens, it would be an ideal time for great investments in public works.  Interest rates are low, labor will be available and the need is there.  This would get the money moving again and increase demand for production.  It may have the added bonus of new technology development depending on the type of infrastructure investment.  It's a bit like WW2 and the great depression.

But, I am exposed to fake news, so my perception could be way way off.


Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3121 on: May 28, 2020, 06:09:04 AM »
Wow.   Simply wow.

I've been reading MMM since 2012.

I've never seen so many informed people lose their nerve.    Despite learning that the market has its ups and downs, despite the 4% rule working 95% and a host of things one can do to stave off that 5% defeat, I'm seeing gobs of folks cash out their portfolios.

At least learn the FDIC rules if you're going to keep it in cash so if the banks fail the government will be on the hook for the lost cash.

Me?    I'm not doing a darn thing financially that I didn't plan to do -- other than not travel as much for the obvious safety reasons.

My index funds are still were they were back in January and I expect they'll stay that way.   


Just make damn sure that you are acting out of real knowledge instead of panic.  Fear is the portfolio killer.

I think the nervous/panicky people are the ones posting.  Those of us who see this as just another of many "crises" we will face over an investing lifetime are just calmly doing what we've always done- steadily saving and investing for the long term.

COVID ain't the end of the world, folks.  Life will go on.  30 years from now, this "crisis" will a lot like the '87 crisis- a barely noticeable blip on a long term stock market chart.

Comments here had dried up.  If you see some of my previous posts, I was in kicking and proding you all for a reason.  I'd say nearly everyone here is better at this than me.  I miss Sol, RebelSpy and a bunch of others who were giving guidance here.  They have FIRED and gone.  But I got what I needed and stayed the course.  Tens of thousands better now.  My apologies for being a butthead.

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #3122 on: May 28, 2020, 07:41:34 AM »
I miss Sol, RebelSpy and a bunch of others who were giving guidance here.  They have FIRED and gone.  But I got what I needed and stayed the course.  Tens of thousands better now.  My apologies for being a butthead.
I miss @sol too, but @arebelspy is still here. He has three little kids now, so he's busier. If you need him, he responds to batsignals.

I have another thought, @Bateaux and since I'm an oldtimer like @SwordGuy, I'm just going to say it. I hated when the title of this thread was changed to "...$4M...and Beyond!" If you are waiting until you have that much money, you are not winning any race. No stoic "needs" that much money. Pull the trigger and get your life back already.

I will clarify that coasting to these huge numbers is different. If you get there post-FIRE, at least you knew you had enough and pulled the trigger. Those of you who are legitimately in this thread and are still afraid to RE are arguably not mustachian at all. You're not alone in this, Bateaux, but it becomes hard to root for people who have so much more than they will ever need but they just can't see it. General question, not just for Bateaux: If FIRE isn't your goal, why are you even here?

Sword Guy and I both remember what a hard time @Exflyboy got when he was hesitating to pull the trigger. Why nobody hasn't called you on this shit just shows how much things have changed. Or, perhaps they have, but they've lost interest, because you're not listening.

For anyone who is grappling with this, consider visiting the "Saving to $10k" (or any lower goal Race thread) or checking out some case studies. Maybe helping people who are just starting their FIRE journeys will make you see exactly what you are so stubbornly blind to. You have enough, you've won the race. Continuing to run laps when you say you want out is ridiculous. It's also sad, IMO. Time is fleeting and life is short. Get on with it.
« Last Edit: May 28, 2020, 07:43:08 AM by Dicey »

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3123 on: May 28, 2020, 07:57:46 AM »
I miss Sol, RebelSpy and a bunch of others who were giving guidance here.  They have FIRED and gone.  But I got what I needed and stayed the course.  Tens of thousands better now.  My apologies for being a butthead.
I miss @sol too, but @arebelspy is still here. He has three little kids now, so he's busier. If you need him, he responds to batsignals.

I have another thought, @Bateaux and since I'm an oldtimer like @SwordGuy, I'm just going to say it. I hated when the title of this thread was changed to "...$4M...and Beyond!" If you are waiting until you have that much money, you are not winning any race. No stoic "needs" that much money. Pull the trigger and get your life back already.

I will clarify that coasting to these huge numbers is different. If you get there post-FIRE, at least you knew you had enough and pulled the trigger. Those of you who are legitimately in this thread and are still afraid to RE are arguably not mustachian at all. You're not alone in this, Bateaux, but it becomes hard to root for people who have so much more than they will ever need but they just can't see it. General question, not just for Bateaux: If FIRE isn't your goal, why are you even here?

Sword Guy and I both remember what a hard time @Exflyboy got when he was hesitating to pull the trigger. Why nobody hasn't called you on this shit just shows how much things have changed. Or, perhaps they have, but they've lost interest, because you're not listening.

For anyone who is grappling with this, consider visiting the "Saving to $10k" (or any lower goal Race thread) or checking out some case studies. Maybe helping people who are just starting their FIRE journeys will make you see exactly what you are so stubbornly blind to. You have enough, you've won the race. Continuing to run laps when you say you want out is ridiculous. It's also sad, IMO. Time is fleeting and life is short. Get on with it.

Dicey you are correct and you guys are every bit as encouraging as former greats at MMM.  Wife is going to need knee surgery.  I've put her on notice to get it done asap.  We have pretty good insurance and we're going to try and take advantage of it.  Current plan is work till January 1st and use the 8 weeks or so of vacation time I'll be awarded then.  That gives us till March 1, 2021 on company insurance and keeps our 2021 income low enough for Obamacare.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3124 on: May 28, 2020, 08:37:41 AM »
For anyone who is grappling with this, consider visiting the "Saving to $10k" (or any lower goal Race thread) or checking out some case studies. Maybe helping people who are just starting their FIRE journeys will make you see exactly what you are so stubbornly blind to. You have enough, you've won the race. Continuing to run laps when you say you want out is ridiculous. It's also sad, IMO. Time is fleeting and life is short. Get on with it.

This is some good tough love for me too @Dicey , thank you!  I do have a clear "out" date, but I know I'll be tempted to keep saying "yes" to things I should be saying "no" to for my family and for my own sanity.  I hope you'll still be here to kick me up the bum when I start to wobble!

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Re: Race from $2M to $4M...and Beyond!
« Reply #3125 on: May 28, 2020, 10:34:49 AM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

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Re: Race from $2M to $4M...and Beyond!
« Reply #3126 on: May 28, 2020, 10:57:51 AM »
Interesting isn't it how we always compare ourselves to those of us we perceive as doing better than us. @Dicey made this point nicely.

the problem of course if we equate "size of stash" to how well we are doing then there will always be someone doing better than we are.

I often find myself wondering what it would be like to have enough money for money to be meaningless... Then just yesterday I had a buddy of mine stop by my shop and he spotted my Dewalt battery powered grease gun. He exclaimed that this tool must be awesome etc.

I then went into how I really can't justify a $120 grease gun because I hardly ever use it etc etc. Then said buddy said "EXFB, you're a multi millionaire, you can justify anything you want!"

And there we have it. He was comparing his financial position to mine and see's me as having so much money as it must be almost meaningless!

So I guess at some point we cross this magical line but we don't realise when we cross it.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3127 on: May 28, 2020, 11:11:22 AM »
Interesting isn't it how we always compare ourselves to those of us we perceive as doing better than us. @Dicey made this point nicely.

the problem of course if we equate "size of stash" to how well we are doing then there will always be someone doing better than we are.

This point is so obvious but somehow hard to wrap your head around.

I remember when I was at University complaining to a friend about how badly I was doing at something and how stupid I was and he just said to me "Light, there will always be somebody cleverer than you.  Always.  At any given thing.  Lots of people actually."   Which sounds like a bit of a kick in the teeth but was such a gift really!  This is in itself going to sound stupid because it's obvious isn't it, but that was really a defining moment in my life. 

I took it to heart, and although I have been stressed and stupid about many many many things in my life since then, it has never been about comparing myself to somebody else.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3128 on: May 28, 2020, 11:39:05 AM »
I miss Sol, RebelSpy and a bunch of others who were giving guidance here.  They have FIRED and gone.  But I got what I needed and stayed the course.  Tens of thousands better now.  My apologies for being a butthead.
I miss @sol too, but @arebelspy is still here. He has three little kids now, so he's busier. If you need him, he responds to batsignals.

I have another thought, @Bateaux and since I'm an oldtimer like @SwordGuy, I'm just going to say it. I hated when the title of this thread was changed to "...$4M...and Beyond!" If you are waiting until you have that much money, you are not winning any race. No stoic "needs" that much money. Pull the trigger and get your life back already.

I will clarify that coasting to these huge numbers is different. If you get there post-FIRE, at least you knew you had enough and pulled the trigger. Those of you who are legitimately in this thread and are still afraid to RE are arguably not mustachian at all. You're not alone in this, Bateaux, but it becomes hard to root for people who have so much more than they will ever need but they just can't see it. General question, not just for Bateaux: If FIRE isn't your goal, why are you even here?

Sword Guy and I both remember what a hard time @Exflyboy got when he was hesitating to pull the trigger. Why nobody hasn't called you on this shit just shows how much things have changed. Or, perhaps they have, but they've lost interest, because you're not listening.

For anyone who is grappling with this, consider visiting the "Saving to $10k" (or any lower goal Race thread) or checking out some case studies. Maybe helping people who are just starting their FIRE journeys will make you see exactly what you are so stubbornly blind to. You have enough, you've won the race. Continuing to run laps when you say you want out is ridiculous. It's also sad, IMO. Time is fleeting and life is short. Get on with it.

Ooh. Great post Dicey!

In answer to your general question: Iím here because Iím interested in FI. Because you know what you get to do when youíre FI? Answer: pretty much whatever you darn well want. To me RE has not really been the goal. I like my job, and am generally fulfilled in doing it. Oddly enough, it does happen to some people. So for now I continue to work, realizing that Iím really just one crappy boss away from pulling the plug. It really is a bit like the movie Office Space. Work is a lot more fun when you choose to be there, not because you have to be. Or in my case, donít have to be there for long.



tooqk4u22

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Re: Race from $2M to $4M...and Beyond!
« Reply #3129 on: May 28, 2020, 12:12:19 PM »

- KER SNIP -

For the last several years and certainly now, the public speak has been that we are striving for growth and 2% inflation when in reality we are fighting dearly against deflation.

I had the opposite idea as all this money is being dumped into the money supply by the government.  However, upon a little further reflection I think most of it is not given to people who will be spending money on stuff like bread.  The upper crust has the money and so it is not really moving within the economy.  (Note how I stayed with the bread thing.)

You prompted me to read up on it a bit.

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

From the Wiki article:

During severe deflation, targeting an interest rate (the usual method of determining how much currency to create) may be ineffective, because even lowering the short-term interest rate to zero may result in a real interest rate which is too high to attract credit-worthy borrowers. In the 21st century negative interest rate has been tried, but it can't be too negative, since people might withdraw cash from bank accounts if they have negative interest rate. Thus the central bank must directly set a target for the quantity of money (called "quantitative easing") and may use extraordinary methods to increase the supply of money, e.g. purchasing financial assets of a type not usually used by the central bank as reserves (such as mortgage-backed securities). Before he was Chairman of the United States Federal Reserve, Ben Bernanke claimed in 2002, "...sufficient injections of money will ultimately always reverse a deflation",[39] although Japan's deflationary spiral was not broken by the amount of quantitative easing provided by the Bank of Japan.

This does look like what the government is doing at this time.

Seems like after this Virus crisis lessens, it would be an ideal time for great investments in public works.  Interest rates are low, labor will be available and the need is there.  This would get the money moving again and increase demand for production.  It may have the added bonus of new technology development depending on the type of infrastructure investment.  It's a bit like WW2 and the great depression.

But, I am exposed to fake news, so my perception could be way way off.


This is what the government has been doing since the great financial crisis (GFC, more than 10 years).   Since the financial crisis Interest rates were kept artificially low and the feds balance sheet got bigger. 

Prior to the GFC fed funds rate was 5.25% and the fed balance sheet was $900Billion, after fed funds rate went to zero and stayed there until 2016-2018 when it went up to 2.4% until it was brought back down to 1.5% before the pandemic.  Now with pandemic its back to 0%.

The fed balance sheet went from $900Billion to $2.2trillion right after the GFC and rose to $4.5Trillion until it decreased slightly to $3.9trillion at the end of 2019 - now with the pandemic its over $7 trillion and climbing.

There was also fiscal stimulus via the tax reform - should have been stimulative.

And because of the low interest rates and easy credit Total Debt Outstanding (Gov't, personal/household incl mortgage, corp, etc) since GFC went from $54trillion to $75trillion. 

And with all that inflation since the GFC was less than 2% - so yes I really believe we have been fighting the risk of deflation.

The fed and fiscal policies were completely irresponsible as each year went on after the GFC.


Sure, an investment in public works might help but I wonder how great the impact would be as labor, equipment and technology is far different today than it was back then.   

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3130 on: May 28, 2020, 02:28:25 PM »

- SNIP -


Sure, an investment in public works might help but I wonder how great the impact would be as labor, equipment and technology is far different today than it was back then.

It sure is different to think about deflation.  I've never seen that in my lifetime.  I still am thinking about it.  They (Uncle Sam) are making so much more money, but it's just damned up.  If they gave more of it to the rest of us, I can easily envision a stimulus.  People would buy new cars, boats, guns, lawnmowers, etc.  This, in turn would create jobs.  Of course, if all those products are imported, it wouldn't work.  The Wikipedia article noted that this sort of happened in Japan as the low cost of Chinese labor made Japan non-competitive.  Giving that money to big industries won't help.  They will only invest if there is a demand for a product or service and may invest it elsewhere.

However, if they invested in modern US infrastructure, it would be an investment in the future and the money would have to be spent here.  Each good paying construction job can create 5 other jobs in support services.  Just think what high speed trains could do.  An entire service industry would need to be created to support them.

Labor, equipment and technology have had some improvements, but you still need people to do the work.  Even today, machines cannot do everything.  The work needs to be planned.  The equipment needs to be purchased.  Products need to be shipped to support the project schedules.

I wonder how many "shovel ready" project designs are left sitting in some drawers from the Obama days.

That money given out by Uncle Sam  would be changing a lot of hands if major infrastructure projects were being done.  Right now it looks like it is just sitting with banks and corporations not doing the country much good.

We also have to wait out the Virus pandemic. 

Too bad Sol isn't around any more.  He always had the smart answers.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3131 on: May 28, 2020, 03:04:25 PM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

THAT would be awesome for us.    We pulled out about $130,000 for a down payment for our new house and for flip expenses.   Not having to pay taxes on that would be really nice for us.

Not sure that it's good for America, though.

I would prefer the option that's best for our country, whatever that is.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3132 on: May 28, 2020, 03:31:29 PM »
There's actually being rich and there's feeling rich.

We all know people that feel they are rich because they have a big paycheck, but are really just living paycheck to paycheck.

I was raised solidly in the middle class, my wife was raised in a lower class working family.  Our first six years of living together were in poverty before we broke into the middle class.    From then on we were solidly in the middle class.

But sometime in the last 5 years we realized that although our heads were still solidly middle class, our finances meant we were now rich.

Not super-rich, but anyone qualifying for this thread is definitely rich.

The realization came when we were looking at this wonderful old mid-century modern house which at one time had been an architectural jewel, thinking, "Someone should save this house before it's torn down!".  We looked at one another and realized we could do just that.

We could spend $100k in cold hard cash to buy it, another $20K to have it totally re-roofed plus a lot of repair, and then another $80k in cash to renovate it for sale --- and it really wouldn't make a difference to our finances.   

There are not many people in this country who could do that, much less afford to do that.   That's when we realized we truly were rich.

And doing something good for our community made us happy.   

I suggest setting aside a portion of your stash and use it when looking for opportunities to help people.
But you don't have to just give it away (nothing wrong with that!).

I've re-used the same $200k multiple times.

$140k went into the mid-century modern restoration before we sold it.   Got back about $148K.

$90k went into funding a flip for a buddy to jump-start his real estate business.   I'll see that money back in about 3-4 years.

$65k went into funding a fixer-upper for our daughter's adopted grandma.   She's fixed it up and will be  buying it from us in July.  If her mortgage comes thru, $62,500 of that will go back into the kitty for helping others.

Plus we've bought a house to renovate and donate.   Hopefully we'll get that done this year.

Was re-watching "Hello, Dolly!" this week.   "Money is like manure, it's not worth anything unless it's spread around to help young things grow."





Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3133 on: May 28, 2020, 06:32:41 PM »
Went out on the bike for the first time in over a month.  I  was looking to clear my head and sweat out some toxins.  The heat in Southern Louisiana has arrived and I certainly struggled a bit over the 40 miles.  Showered and had some food.  The soreness actually feels welcome.  It's all good

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3134 on: May 28, 2020, 06:48:01 PM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

@GreenEggs , where did you hear that?   I can't find it anywhere.

secondcor521

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Re: Race from $2M to $4M...and Beyond!
« Reply #3135 on: May 28, 2020, 07:05:34 PM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

@GreenEggs , where did you hear that?   I can't find it anywhere.

I'm not GreenEggs, but I do know from other threads that the President has mentioned the idea once or twice.  That's a long way from becoming law, and I sincerely doubt it will happen.  If it does, I'm sure you'll see plenty of posts and articles discussing it.

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Re: Race from $2M to $4M...and Beyond!
« Reply #3136 on: May 28, 2020, 07:06:20 PM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

@GreenEggs , where did you hear that?   I can't find it anywhere.

https://www.nytimes.com/2020/05/05/business/economy/trump-tax-cuts-coronavirus-stimulus.html

Itís what Pres. Trump would like to see. I sorta doubt it, but who knows?

YHD

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Re: Race from $2M to $4M...and Beyond!
« Reply #3137 on: May 28, 2020, 07:47:42 PM »

I'm here because I wanted to FIRE desperately at 42 cuz work sucked. Worked at at the stash until 49.  Had breast cancer.  Competed for my dream job while on chemo.  Got the job.  Now I don't want to FIRE even though I can.  Funny that.

But y'all are so much fun.  I can't quit ya.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3138 on: May 28, 2020, 08:10:44 PM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

@GreenEggs , where did you hear that?   I can't find it anywhere.

https://www.nytimes.com/2020/05/05/business/economy/trump-tax-cuts-coronavirus-stimulus.html

Itís what Pres. Trump would like to see. I sorta doubt it, but who knows?

I don't see this passing the house unless the senate gives regular people a bunch more help.

Damn near no one but the rich owns much stock outside of a 401K or IRA.

GreenEggs

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Re: Race from $2M to $4M...and Beyond!
« Reply #3139 on: May 28, 2020, 09:15:53 PM »
News flash:


I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 


I have mixed feeling whenever we receive handouts...

@GreenEggs , where did you hear that?   I can't find it anywhere.




I heard it a couple of places yesterday.  First was in a YouTube pod cast from Cathie Wood of ARK funds, which was a few days old.  Then I heard it again on a daily news show, maybe it was CBS or CNBC? 


Neither said it was a sure thing, but you know how things work in DC.


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Re: Race from $2M to $4M...and Beyond!
« Reply #3140 on: May 28, 2020, 09:21:18 PM »
News flash:
I just heard that Capital Gains taxes may be cancelled this year to help stimulate the economy. 
I have mixed feeling whenever we receive handouts...
@GreenEggs , where did you hear that?   I can't find it anywhere.
https://www.nytimes.com/2020/05/05/business/economy/trump-tax-cuts-coronavirus-stimulus.html
Itís what Pres. Trump would like to see. I sorta doubt it, but who knows?
I don't see this passing the house unless the senate gives regular people a bunch more help.
Damn near no one but the rich owns much stock outside of a 401K or IRA.

This would be the most ridiculous, blatant handout to the rich I can imagine - even more blatant than repealing the estate tax.  I, personally, would reset the cost basis on all of my taxable investments and would see how much it would help me with converting an old 401k and traditional IRA to Roth and maybe even home gains, as fast as humanly possible.  Don't get me wrong, this would be a phenomenal tax break which might trickle down a bit, but there are much more sensible policy measures to gin up spending immediately and boost the economy.

But I'm not spending much time planning on this one surviving the light of day.

markbike528CBX

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Re: Race from $2M to $4M...and Beyond!
« Reply #3141 on: May 28, 2020, 11:28:55 PM »
I miss Sol, RebelSpy and a bunch of others who were giving guidance here.  They have FIRED and gone.  But I got what I needed and stayed the course.  Tens of thousands better now.  My apologies for being a butthead.
I miss @sol too, but @arebelspy is still here. He has three little kids now, so he's busier. If you need him, he responds to batsignals.

I have another thought, @Bateaux and since I'm an oldtimer like @SwordGuy, I'm just going to say it. I hated when the title of this thread was changed to "...$4M...and Beyond!" If you are waiting until you have that much money, you are not winning any race. No stoic "needs" that much money. Pull the trigger and get your life back already.

I will clarify that coasting to these huge numbers is different. If you get there post-FIRE, at least you knew you had enough and pulled the trigger. Those of you who are legitimately in this thread and are still afraid to RE are arguably not mustachian at all. You're not alone in this, Bateaux, but it becomes hard to root for people who have so much more than they will ever need but they just can't see it. General question, not just for Bateaux: If FIRE isn't your goal, why are you even here?

Sword Guy and I both remember what a hard time @Exflyboy got when he was hesitating to pull the trigger. Why nobody hasn't called you on this shit just shows how much things have changed. Or, perhaps they have, but they've lost interest, because you're not listening.

For anyone who is grappling with this, consider visiting the "Saving to $10k" (or any lower goal Race thread) or checking out some case studies. Maybe helping people who are just starting their FIRE journeys will make you see exactly what you are so stubbornly blind to. You have enough, you've won the race. Continuing to run laps when you say you want out is ridiculous. It's also sad, IMO. Time is fleeting and life is short. Get on with it.

@Dicey Thank you for saying exactly what I was hoping to say in a previous post:
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-from-$2m-to-$3m/msg2632309/#msg2632309

I have no problem in people saying (especially at a rebound from a bottom) that " My asset allocation (AA) won't let me sleep at night, this last drop proved it, I'm changing my IPS (Investment Policy Statement)  to have a different AA."
I do have a problem in people saying  "this or that external, non-controllable factor*** makes me fearful of the future,  therefore I'm changing my AA on the fly to do what I think will make me feel better now, no matter what my IPS did say."
I have a minor problem with early retirees dropping down to sub 50% equities.  If they have a 10 year horizon (terminal diagnosis at this time), then sure.   But are all those people hoping to die in 10 years? Even if you have "won the race"? 
To paraphrase Monty Python " you're not dead yet!"

@Bateaux@Exflyboy got a lot of grief for being in this thread and stringing us along on his non-retirement.   He eventually got the message, given in good humor, and I hope you will too.


***(CAPE, Trump-this, Pelosi-that, covid-19=death, covid-19=vaccine (but timing), unemployment scary, unemployment temporary, China + or -, gold this, gold that,   etc etc).  Life is unpredictable, if it wasn't we'd all be millionaires.  Oh crap we ARE all millionaires. :-)

@Dicey  I think the change to "4M...and Beyond!" happened because another thread (of 3M+) was started and we wanted to be inclusive and realized the high thread would get lost via low participation.  I do agree as previously mentioned with your sentiments.

2Birds1Stone

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Re: Race from $2M to $4M...and Beyond!
« Reply #3142 on: May 28, 2020, 11:58:39 PM »
I always feel a combination of sadness and relief when I read this thread. It's by far the most fascinating "Race from $X to $X" thread on these forums.

One of the concepts that's truly resonated over the past half decade of frequenting this community (and others like it), is the notion that;

standard of living = skill* X cost of living, where skill for the average wage slave consumer = 1

Skill being more clearly defined as skill leverage, efficiency factor, etc.

In order to increase ones perceived standard of living, they could spend more money, or increase their skill/efficiency of spending the money/income they have.

This thread seems to skew to the side that is focused on more money = higher standard of living, with very little emphasis on skill. Due to the high income/high earner lifestyle trappings, many appear to have a skill = <1

This is very bad, if your goal is freedom from wage slavery.

Here is an excerpt from one of my favorite books;

"The disenchanted grumble about "the system" or "the man." The analogy of "the system" is
the people walking around behind the chained slaves, keeping them going. However, it's mainly
the slaves themselves who keep themselves going. We don't realize that we maintain this system
by lack of imagination and questioning. Like birds, which never seem to have a flight plan, yet
always seem to fly together in a swarming flock, we don't question. We obediently pick whatever
options are handed to us, often choosing based on what our neighbors have chosen. We make
the best of the shadows on the wall, but we do not question the wall. The best prison is the one
with invisible bars.

Perhaps one reason for this complacency is the large quantity of material goods available to
the chain gang. Material goods are often used as compensation. Frequently, when someone is
depressed, the advice is "Go out and spend some money. Buy yourself something nice. Treat
yourself. Try a little retail therapy." People don't seem to realize that this attempt to feel good is
exactly what propagates the problem. Compared to people just 50 years ago, modern wage
slaves live a life of material abundance. They're consumers. They have big-screen TVs, movies
on demand, microwave ovens, food processors, and 24-piece flatware. They own multiple pairs of
shoes and enough clothes for more than a week without doing laundry. They have carpeted
floors, matching furniture, and vacuum cleaners. They have expensive toys. They have car
payments, college degrees, five-bedroom/three-bathroom mortgages, laptop computers, cell
phone contracts, power tools with 108-piece bit sets, premium cable, air conditioning systems,
blenders, food processors, pool tables, DVD players, and granite countertops. They redecorate,
attend sporting events, go on vacations, and occasionally play with their toys.

Society has made it very easy to spend money. Shopping centers line every street. Many
creative means of spending money have been devised. Instead of spending 30 seconds opening
a can of tomatoes with a traditional can opener, it's now possible to spend 30 minutes working to
pay for an electric can opener that can open the can in the same amount of time. Similarly, many
of the ways we used to do things have been redesigned to ensure that instead of doing it
ourselves, we can buy some gadget or some service to have it done for us. This is convenient,
because we're usually too busy working to pay for it to do it ourselves. This is the gist of the
service economy; presumably, if we didn't create enough problems to spend time solving them,
the economy would collapse.

To speed up consumption, it's possible to obtain loans and spend money that's yet to be
earned. All it requires is a promise of increased amounts of work in the future, and a commitment
of up to 30 years to pay the money back--plus twice the amount in interest. Lots of personal
finance gurus are willing to charge you money (some will do it for free) to advise you as to exactly
how to distribute your money into retirement plans, college savings plans, mortgages, credit
cards, etc. to maximize your lifetime consumption. Success and power are equated with spending
money.

It usually starts with toys for the children and quickly evolves to cell phones and fashionable
clothes. Many realize that demonstrating their personal values through the color and build of their
cell phone is perhaps inadequate and then move on to bigger and more expensive propositions
like large cars, redecorating, or kitchen renovating. Not that there's anything wrong with such
creative outlets, but the scale of these "projects" is often mind-boggling, with tens of thousands
being spent on marginal increases in functionality. The old but typically fully functioning items are
discarded, especially if they have those ugly 1970s earth tone colors, or that bland 1980s beige,
or whatever we had in the 1990s, etc. Try for a moment to envision the large pile of abandoned
yet functional telephones, TVs, furniture, toys, old clothes and shoes, LPs, CDs, and packaging
material that you have discarded so far in your life. Such stuff doesn't magically disappear. It goes
somewhere, typically a landfill. Now multiply that by several hundred million people--not cool! In
the same vein, tally up the sum total of your earned income so far, subtract your savings, and
compare the difference to your pile of stuff. Was it really a good deal?

Is spending the most productive years of your life chained to the job market to collect a lot of
rarely used stuff that gathers dust in the closet or takes up space in junkyards a wise choice?
Were you really born just to die, leaving a large pile of discarded consumer goods? Probably not.
I realize that not wanting a house full of things makes me look weird and recently even
"unpatriotic." After all, more is better, and who doesn't want to be better? But perhaps conformity
is not the only way to live. In fact, by taking the other end of the bargain, saving as much as other
people are spending on wants, it's possible to retire and live on invested savings after just five
years of full-time work. Rather than increasing the amount of work to acquire more stuff, reducing
this superficial need reduces the amount of necessary work. It's possible to reduce the amount of
work all the way down to zero: financial independence. Indeed, playing the shadow game for five
years provides a permanent way out of the cave. Alternatively, it's also possible to return to the
cave for a few months every year to earn money for the next adventure out of the cave. This is
living on the economy, so to speak, rather than living in the economy."

-JLF


markbike528CBX

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Re: Race from $2M to $4M...and Beyond!
« Reply #3143 on: May 29, 2020, 12:51:42 AM »
..... HUUUUGGE clip.... :-)

 ....This is living on the economy, so to speak, rather than living in the economy."

-JLF


OK, I   grew ups Fundamentalist Christian, it still flavors my worldview, but I've come to accept that even as I wildly deviate from that.

RE:  in and not OF the world:

John 2:15-17 King James Version (KJV)
15 Love not the world, neither the things that are in the world. If any man love the world, the love of the Father is not in him.
16 For all that is in the world, the lust of the flesh, and the lust of the eyes, and the pride of life, is not of the Father, but is of the world.
17 And the world passeth away, and the lust thereof: but he that doeth the will of God abideth for ever.

So I  always felt that I could accept or reject any outside consensus. "Be in the world but not of it"

I also grew up in "Amish Country."   
Amish or Old Order Mennonites are people that essentially live as my great-grandfather did prior to 1915.  No cars, no electricity, basically no consumerism.
There were constant reminders that the "modern way" was not accepted by some people. And those people were alive and reasonably happy. 
I've personally seen a young guy behind a single horse and single plow. (on a Sunday, God only knows what he did to irritate his elders on Saturday night).

We  (not Amish) did not have a TV, which engendered the question "Are you Amish?"
We had 8 or 9 radios, from AM, ShortWave (1.5-29MHz, world wide from Voice of America to, BBC to Australia to Radio Moscow) and FM. 
I found that I knew more of the world situation then my classmates (Central Pennsylvania USA, 6th grade). 
Remember the 1975 Indonesian invasion of East Timor?  My wakeup radio and news was Radio Australia.

Again I realized that I didn't have to march to the beat of the common drummer or in fact the beat of any drummer I didn't like or any drummer at all.


Many of you have gotten here by analogous means.




@2Birds1Stone could you provide the precise reference?  I don't recognize the initials.

2Birds1Stone

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Re: Race from $2M to $4M...and Beyond!
« Reply #3144 on: May 29, 2020, 03:40:58 AM »
Jacob Lund Fisker, the excerpt is from the beginning of the ERE book. I highly recommend giving it a read

Bateaux

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Re: Race from $2M to $4M...and Beyond!
« Reply #3145 on: May 29, 2020, 04:56:53 AM »
Wow guys.  Great posts the last few days.  I know there are many people reading this thread who never post.  Very inspiring.

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #3146 on: May 29, 2020, 09:27:48 AM »
All that consumer oriented stuff quickly becomes obvious when you lose a job and have to move.  You end up boxing up all of your stuff, making repeated trips to Good Will or contributing to the dumpster.  Many times you ask yourself, "Why the he** did I buy this?"  Then you start to figure all the unnecessary money you spent on the stuff. 

Your posts about stuff and being independent make a lot of sense.  Thanks

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #3147 on: May 29, 2020, 09:44:09 AM »
Did I mention I been offered a job?...:)

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Re: Race from $2M to $4M...and Beyond!
« Reply #3148 on: May 29, 2020, 12:51:09 PM »

@Dicey Thank you for saying exactly what I was hoping to say in a previous post:
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-from-$2m-to-$3m/msg2632309/#msg2632309

I have no problem in people saying (especially at a rebound from a bottom) that " My asset allocation (AA) won't let me sleep at night, this last drop proved it, I'm changing my IPS (Investment Policy Statement)  to have a different AA."
I do have a problem in people saying  "this or that external, non-controllable factor*** makes me fearful of the future,  therefore I'm changing my AA on the fly to do what I think will make me feel better now, no matter what my IPS did say."
I have a minor problem with early retirees dropping down to sub 50% equities.  If they have a 10 year horizon (terminal diagnosis at this time), then sure.   But are all those people hoping to die in 10 years? Even if you have "won the race"? 
To paraphrase Monty Python " you're not dead yet!"

@Bateaux@Exflyboy got a lot of grief for being in this thread and stringing us along on his non-retirement.   He eventually got the message, given in good humor, and I hope you will too.


***(CAPE, Trump-this, Pelosi-that, covid-19=death, covid-19=vaccine (but timing), unemployment scary, unemployment temporary, China + or -, gold this, gold that,   etc etc).  Life is unpredictable, if it wasn't we'd all be millionaires.  Oh crap we ARE all millionaires. :-)

@Dicey  I think the change to "4M...and Beyond!" happened because another thread (of 3M+) was started and we wanted to be inclusive and realized the high thread would get lost via low participation.  I do agree as previously mentioned with your sentiments.

I think there is hope for @Bateaux,  looks like he's joined the best cohort year for retiring. He may well beat me out the door. 

One of the things I've learned here at the MMM forums is that my investment horizon is a lot longer than I thought.     

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #3149 on: May 29, 2020, 01:05:29 PM »

- SNIP -


Sure, an investment in public works might help but I wonder how great the impact would be as labor, equipment and technology is far different today than it was back then.

It sure is different to think about deflation.  I've never seen that in my lifetime.  I still am thinking about it.  They (Uncle Sam) are making so much more money, but it's just damned up.  If they gave more of it to the rest of us, I can easily envision a stimulus.  People would buy new cars, boats, guns, lawnmowers, etc.  This, in turn would create jobs.  Of course, if all those products are imported, it wouldn't work.  The Wikipedia article noted that this sort of happened in Japan as the low cost of Chinese labor made Japan non-competitive.  Giving that money to big industries won't help.  They will only invest if there is a demand for a product or service and may invest it elsewhere.

However, if they invested in modern US infrastructure, it would be an investment in the future and the money would have to be spent here.  Each good paying construction job can create 5 other jobs in support services.  Just think what high speed trains could do.  An entire service industry would need to be created to support them.

Labor, equipment and technology have had some improvements, but you still need people to do the work.  Even today, machines cannot do everything.  The work needs to be planned.  The equipment needs to be purchased.  Products need to be shipped to support the project schedules.

I wonder how many "shovel ready" project designs are left sitting in some drawers from the Obama days.

That money given out by Uncle Sam  would be changing a lot of hands if major infrastructure projects were being done.  Right now it looks like it is just sitting with banks and corporations not doing the country much good.

We also have to wait out the Virus pandemic. 

Too bad Sol isn't around any more.  He always had the smart answers.

Yeah, @sol had the smart answers.  I still have a lot of the dumb ones.

Here's my dumb answer: stimulus (i.e. infrastructure) would be an OK idea. And it would help things in the short term. And so long as the infrastructure is things that make the economy run better in the long term, its notsobad.   It's not the big problem with the economy, though.  That's actually demographics. Once people stop having kids, it causes a real problem in that it shifts the average age of the population upward.  Older folks from middle age on just don't spend all that much as a part of their income compared to younger folks.  Of course there are exceptions, but that's the general rule.  You've probably noted that in your own life. You're likely comfortable, already own what you really want, and couldn't care less about having the latest sneakers. And even if you do, you tend to wait until they go on sale. That just continues until late old age when you suddenly spend a lot of money (on medical) right at the end of life. Deflation happens in aging societies like Japan and most of Europe and soon the US. A lot of people who wait on making purchases, who don't have young kids to spend a lot of money on (such as for a house) and who are more interested in extinguishing debt than ramping it up are not going to grow an economy.