Retirement Planning - Lessons Learned

newbury

Super Star Member
Joined
Jan 8, 2009
Messages
11,344
Location
From Vt, in Va, retiring to MS
Tractor
Kubota's - B7610, M4700
I grew up as a farm kid with my Dad teaching me the value of a dollar.
<snip>
In contrast, I do believe one or two of my kids have held three different jobs in a single year.
Nothing wrong with multiple jobs in this "gig" economy. Good jobs have a "portable" retirement system".
My wife and I both worked for separate parts of the Army Corps of Engineers for 30+ years. But the jobs paid well, gave us plenty of travel and were more like play than work.
Now one of my sons works at Amazon and tells me that their policy is successful people don't work with them for more than 5 years.
 

Frankenkubota

Elite Member
Joined
Jun 11, 2020
Messages
2,827
Location
Carthage NC...Deep in the woods
Tractor
Kubota MX 5800, SkidPro 4 in 1, Ratchet rake, SkidPro pallet forks
This will kill a retiree's retirement planning pretty quick if interest rates do not follow along...

E-xMC-VXEAI-3cM
if they raise interest rates imagine what it would do to govt interest payments?

Although ......... they can keep printing money to pay the interest, just print a little more.
 

Frankenkubota

Elite Member
Joined
Jun 11, 2020
Messages
2,827
Location
Carthage NC...Deep in the woods
Tractor
Kubota MX 5800, SkidPro 4 in 1, Ratchet rake, SkidPro pallet forks
Bond values and interest rates work in opposite directions. If interest rates go up, bond values will go down.

In today's world, there is no better place to put money than a low cost index fund.
20 years ago i came to that conclusion.

initially i was in S&P index but have bounced around between nasdac and s&p. Charles Schwab.

my brother stayed with our "investment " guy.

virtually same returns. i do not know what his fees are
 

Snobdds

Veteran Member
Joined
Feb 22, 2016
Messages
1,397
Location
Wyoming
Tractor
MF gc1710, Cat 305C
?!?!?
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. View attachment 712796View attachment 712797
I don't understand the point you're trying to make here, other than relativity.

I get it, you're trying to justify todays prices to those of 40 years ago. Cool. However it misses how those prices rise and fall over time and the mechanism that drive those inflections. That is what a person needs to key in on, not just prices rose over a 40 year period.

If people can understand the drivers of why things do what they do, they can have a little bit of anticipation and make better financial choices now for the future. There is no doubt that baby boomers at the time thought they were getting a raw deal buying at low assets prices but high financing. However looking back, they had a lot of equity when interest rates fell and asset prices increase causing a lot of equity real fast. Do you think that can happen today? No. The only way people have the equity they do now is because of the Fed gaming the system with artificial low rates inflating the price. Nobody knows how this game ends, it may be ok and it may be really bad. The uncertainty in the Housing market is high, people are unsure how this ends...but demand is keeping things afloat.
 

Snobdds

Veteran Member
Joined
Feb 22, 2016
Messages
1,397
Location
Wyoming
Tractor
MF gc1710, Cat 305C
if they raise interest rates imagine what it would do to govt interest payments?

Although ......... they can keep printing money to pay the interest, just print a little more.

The US really can't afford to have 5% interest or yield on a 10 year t bill.

Interest on this 3.5 trillion new bill at 5% is 175 billion per year. LOL

The market will crater.
 

Snobdds

Veteran Member
Joined
Feb 22, 2016
Messages
1,397
Location
Wyoming
Tractor
MF gc1710, Cat 305C
The best financial advice I've seen is the simplest: Buy a S&P 500 index fund and your returns over time will exceed 85% of all retail investors.

Yep. Time and time again investing in low cost index fund with dollar cost averaging with a buy and hold strategy is the best way to make the best returns.

Don't. Try. To. Beat. The. Market. Be. The. Market.
 

California

Super Star Member
Joined
Jan 22, 2004
Messages
12,067
Location
Sonoma County
Tractor
Yanmar YM240, and now just one YM186D
I hope you all recognize the difference between legal and illegal immigrants?

The mainstream media and so many politicians are trying their best to fudge it the best they can...

:cry:
Hypocrisy runs deep. Politicians rant, while some 75% of farm produce is touched by the undocumented at some stage of production to your table. Meanwhile each administration kicks the can down the road because they would lose too much support if they proposed a practical solution.
 

Fuddy1952

Elite Member
Joined
Apr 17, 2018
Messages
3,314
Location
South Central Virginia
Tractor
1973 Economy and 2018 John Deere 3038E
I don't understand the point you're trying to make here, other than relativity.

I get it, you're trying to justify todays prices to those of 40 years ago. Cool. However it misses how those prices rise and fall over time and the mechanism that drive those inflections. That is what a person needs to key in on, not just prices rose over a 40 year period.

If people can understand the drivers of why things do what they do, they can have a little bit of anticipation and make better financial choices now for the future. There is no doubt that baby boomers at the time thought they were getting a raw deal buying at low assets prices but high financing. However looking back, they had a lot of equity when interest rates fell and asset prices increase causing a lot of equity real fast. Do you think that can happen today? No. The only way people have the equity they do now is because of the Fed gaming the system with artificial low rates inflating the price. Nobody knows how this game ends, it may be ok and it may be really bad. The uncertainty in the Housing market is high, people are unsure how this ends...but demand is keeping things afloat.
You don't understand my point so I'll try explaining it in a different way. This time using snippets of what you said:

"In Economics, there is a law that says interest rates and asset prices move in opposite directions."

I understand the see-saw effect analogous to stocks & bonds.

"Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates."

You must understand in 1980 I was 28 years old. I demonstrated to you I would love to be 28 now in 2021. I showed you the comparison of what kind of home I could buy NOW vs what I bought THEN. Simply pure common sense logic...apples to apples.

"Those baby boomers were then able to refinance to a lower interest rate and most reinvested the equity against the principle. This lead them to pay off their low priced house very quickly. Then they found themselves with a paid off house and a lot of earning years left. So they bought 2nd homes, condos, timeshares, or upgraded to a bigger house."

Not me!!!! I've lived in the same house for 41 years! You can't make that blanket statement about baby boomers! (Come on, man!). None of that applies to me! I never refinanced but simply paid it off in 3 years instead of 30. Actually...it was easy. Here's how: After a year I stopped by my bank to pay my monthly mortgage payment. I asked the banker what this dollar amount was in my passbook. That's what you owe he replied. I almost fainted. A year and I had only paid about $400 off of the original loan!
I had an extra $300. What if I pay this? That was then deducted from the loan. Hmmmm.
So each week I paid whatever I could extra, doing that for a year...as well as saving every dollar I could besides. Year three the balance was way down, so I paid that off. The point is work harder...a second job...whatever it takes to make that weight go away!
Now instead of mortgage payments I was able to invest that in mutual funds. Of course it waxed and waned over the years...but as with Vanguard's motto..."Stay the course".

"Now my generation will never have that same opportunity to build generational wealth, simply because of low interest rates. Every asset is super high and with low interest rates, they will never be able to refinance to a lower rate and reinvest the equity."

I've never thought of my home, property, cars, stamps, furniture...anything as equity. I know it is, but I could care less. I can't buy groceries with a sofa. We have to have a place to live, what it's worth I don't care. When young we drove old ratty cars, bought cheap furniture, cheap clothes, etc. We could care less about trying to impress anyone.

"I know this sucks for current retirees', but you had you turn at the trough."

The last raised my hackles . That's derogatory towards retirees, we're not pigs at a trough.

The bottom line is with low interest rates the younger generation can buy a better place with lower equivalent adjusted for inflation mortgage payments. Work hard, live well below your means, invest all you can. Remember...the IRA didn't start until mid 70s and didn't become popular until early 80s.
 
 
Top