Retirement Planning - Lessons Learned

GMIslander

Silver Member
Joined
Aug 22, 2013
Messages
213
Location
Canada
Tractor
DK45SE HST
When I was 18, right out of high school I started a three month job as a temp diesel power plant operator. Forty seven years and three trades later I left. Their still paying me. No on call and no overtime=retirement.
 

newbury

Super Star Member
Joined
Jan 8, 2009
Messages
11,332
Location
From Vt, in Va, retiring to MS
Tractor
Kubota's - B7610, M4700
I became a legal adult in 1979. I've lived through worse. So have most of you.

View attachment 712741
"Lived through" and "experienced it as a mature individual" can be far different.
When my children (born after'81') complain about high interest rates I remind them we fought to get a home loan at 12% in 1984 so they could grow up in the $114K house we've lived in since then. Now valued at about $650K.

<snip>
From my stand point, I am cheering on inflation and hoping interest rates move up. This should cause asset prices to come down and later on down the road an opportunity to refiance to a lower rate to cash in on some interest equity. I know this sucks for current retirees', but you had you turn at the trough.
This current retiree is looking seriously at refinancing quite a bit at the 2% rate my mortgage holder is offering.
You don't need inflation and high interest rates to make assets cheap, all you need is for the economy to take a dump. Just 10 years ago you could have picked up houses at half price mortgaged at rock bottom rates. I was telling anyone who would listen to buy a house on a 30 year fixed, because they would look like financial wizards ten years later.
<snip>
Yup, picked up the 3 bedroom house in town for $25K cash. But "rock bottom" rates were still around 3.5%, WAY higher than todays rates. Was cheaper than a storage unit. Or so I convinced my wife. We needed a storage area for our furniture. We really need to fix it up. Zillow now values it at over $100K.

I've been planning on the economy taking another dump for years.
 

MossRoad

Epic Contributor
Joined
Aug 31, 2001
Messages
48,900
Location
South Bend, Indiana (near)
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Power Trac PT425 2001 Model Year
"Lived through" and "experienced it as a mature individual" can be far different.
When my children (born after'81') complain about high interest rates I remind them we fought to get a home loan at 12% in 1984 so they could grow up in the $114K house we've lived in since then. Now valued at about $650K.

...
We bought our first house in 1985. Paid 3 points to get it down to 12.5%. Paid it off in less than 5 years. Bought 20 acres of vacant land. Paid that off in about 4 years. Bought our current house around 1994 and paid that off around 1995. Been debt free ever since. We both put 15% of our income into IRAs and 401Ks as soon as possible. So 30ish years of investing 15% of our income with both of us making average wages coupled with compound interest... we're not complaining. Our houses were modest and the market here has never been for much growth in home prices (this year excluded). We never considered our houses as investments, just a way to get our rent money back if we sold. The house we live in has not doubled in price since we bought it in 1994. The value of our house makes up less than 10% of our net worth. So I think of it this way. We could have bought expensive real estate and had less cash or we could have bought cheap real estate and had more cash, and still probably ended up with the same net worth in this area. HOWEVER, if the poop hits the fan, we'd have to sell an expensive house to access cash, whereas the situation we are in now (and have been in since we said "I Do") is that we would never have to sell our house to access cash, and can pay all of our bills on two people making minimum wage (probably even less, now).

I'm 60 (and thankful).
 

kenmac

Super Member
Joined
Feb 13, 2005
Messages
9,245
Location
The Heart of Dixie
Tractor
McCormick CX105 Kubota MX 5100 HST, Kubota ZD1021, Kawsaki Mule 4010 trans 4x4
Great to hear all these war stories.. I inherited a bundle when my parents died.🤣 Never had to work very hard !😂

This year, I have begun to take some money out of the market, and invest in a few private equities. We shall see how it all goes
 

Fuddy1952

Elite Member
Joined
Apr 17, 2018
Messages
3,244
Location
South Central Virginia
Tractor
1973 Economy and 2018 John Deere 3038E
Trying to calculate nominal value at points in time is missing the point of interest rate movement and prices.

Don't try and outthink economic principles.
?!?!?
First, I mean no disrespect Snobdds.
I'm simply comparing a 1980 Macintosh apple to an 2021 Macintosh apple.
Economic principles would have to include dollar valuation and time.
I never took Economics but I'd like to believe I have common sense.
Gold is gold, same 2000 years ago as it is today...pure gold.
In 1980 an ounce of gold closed at $594.90 per ounce. Today it closed at $1,830.00 per ounce.
So let's say in 1980 my home mortgage was $500/month.
Today that's equivalent to $1,656.57/month.
Now look at my attachment. That's using today's current 2.864% mortgage interest rate, 30 year fixed loan which relates to a $400,000 mortgage loan amount. THIS is just a quick search example of what a $400,000 home is for sale near me.
Believe me...it's lightyears a far better home than the 1,000 sq.ft. 80y.o. home I bought in 1980...that needed well pump, all new wiring, all new plumbing, a "kitchen" with a sink cabinet, one bedroom one bath, and needed new shingles!
Now...it's your turn explaining my flawed logic. Again...no disrespect on my part...teach me economic principles.
2021_09_08_21.21.06.jpg
20210908_213151.jpg
 

Fuddy1952

Elite Member
Joined
Apr 17, 2018
Messages
3,244
Location
South Central Virginia
Tractor
1973 Economy and 2018 John Deere 3038E
We bought our first house in 1985. Paid 3 points to get it down to 12.5%. Paid it off in less than 5 years. Bought 20 acres of vacant land. Paid that off in about 4 years. Bought our current house around 1994 and paid that off around 1995. Been debt free ever since. We both put 15% of our income into IRAs and 401Ks as soon as possible. So 30ish years of investing 15% of our income with both of us making average wages coupled with compound interest... we're not complaining. Our houses were modest and the market here has never been for much growth in home prices (this year excluded). We never considered our houses as investments, just a way to get our rent money back if we sold. The house we live in has not doubled in price since we bought it in 1994. The value of our house makes up less than 10% of our net worth. So I think of it this way. We could have bought expensive real estate and had less cash or we could have bought cheap real estate and had more cash, and still probably ended up with the same net worth in this area. HOWEVER, if the poop hits the fan, we'd have to sell an expensive house to access cash, whereas the situation we are in now (and have been in since we said "I Do") is that we would never have to sell our house to access cash, and can pay all of our bills on two people making minimum wage (probably even less, now).

I'm 60 (and thankful).
Mossy=a smart fellow!
I bet Mrs. Moss is smart as well!
You did well.
 

ljjhouser

Platinum Member
Joined
Oct 25, 2018
Messages
500
Location
Midwest
Tractor
Kubota L4701
I have been retired 17 years. I guess I have learned that the amount of money you have monthly during retirement is important, but the amount you spend may be more important. It is important to pay off those bills before you decide to retire.
 
 
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