Safe Haven, if possible without...

[cat fever]

You can draw $1000/month on a $100,000 investment and still be gaining in your fund. There will be downturns but just ride them out because THE MARKET ALWAYS COMES BACK.

RSKY, please send me a PM on how to achieve this. If I can get this kind of return I would make more than twice what I'm earning now. (working) I'll admit I have been a very good saver and live far below my means with some very good returns as of late. But I'm scared to death to retire, fearing I don't have enough. My whole portfolio is with Fidelity.

 

[ultrarunner]

I would like to learn more as I have never been able to get a 12% return to on value in rental property... even before expenses.

A 500k present value income property rents for 30k annual gross works out to 6% before expenses.

Over 35 years the income stream has never been reduced... sometimes flat but never less.

 

[Larry Caldwell]

...making a political statement, tell me were you would put your money in my scenario.

~4-5 years from retiring. Can take what I have saved now and what I can add to it between now and retirement and be okay. Won't be okay if my current savings take a hit. I imagine the advice of those already retired and funding it themselves are in a similar situation.

The worst ways your savings can take a hit is if you are forced to sell assets during a downturn, or the assets lose all value. Avoiding this is simplicity in itself. Get out of debt. Build an emergency fund. Diversify. Done deal.

Diversify is the big thing. My brother had a big hunk of his retirement tied up in Washington Mutual and Chrysler bonds, which turned into toilet paper over night. Corporate bonds are a good investment, but don't bet the farm on one or two companies, no matter how much they are paying. Corporate bonds pay better than government bonds, but don't put over 5% of your loot on any one company.

Companies providing bridge loans are a good place to stash part of your retirement. They provide financing to developers until the project is far enough along to qualify for bank loans, and typically return about 6%, unless the project falls through. Then you will be lucky to break even.

There are lots of investment possibilities that most people don't even know exist. Do your diligence, or hire someone to do it for you.

 

[RSKY]

[ RSKY, please send me a PM on how to achieve this. If I can get this kind of return I would make more than twice what I'm earning now. (working) I'll admit I have been a very good saver and live far below my means with some very good returns as of late. But I'm scared to death to retire, fearing I don't have enough. My whole portfolio is with Fidelity. ]

cat fever, I lost $1300 TODAY. I may loose that much tomorrow and the next day. The day after the election I made $3800, but I had lost $200-300 every day for a week or so before that. The money I lost today is 0.6% of my today investment. IN ONE DAY. That is why I don't usually look at it more than once every week or two. I would have a nervous breakdown. Just looked at my positions page again and every single fund lost today except for three. Thirteen losers, two made very little, and one broke even. SHEET.

It is not for the faint of heart or the person who gets upset easily. I get ticked off if I loose a quarter down a drain or if I buy something then find it a dollar or so cheaper the next store I go into. But then I can sit here and laugh about loosing $1300 in a day. The reason is that it really isn't money until you cash it out of the account. It's just figures on paper or a computer screen.

Also my wife is a retired KY teacher with thirty years service and a Rank 1 rating which is 30 hours over a Master's degree. And she only lost $40 a month in take home pay when she retired. So she draws a very good pension. More take home than my teacher daughter makes after 10 years service. I draw a pension, less than $1000/month because of my age when plant closed. And my wife has a 401K that we have not touched since retirement. What I'm getting at is that we could loose our entire IRA and still make it. Might have to quit eating out as much and quit taking two vacations a year but we could make it.

cat fever do you have a 401K with Fidelity or is it an IRA?

My 401K was very restricted in what I could get in to. The IRA is vastly different. It is easy to move money around into different funds. It takes a little while to figure out the research part but once you figure it out it is fascinating to look at the different types of funds, what they invest in, expenses, etc.. For my initial investment when I swapped to the IRA I even listed the main investment of each fund and changed some of my selections to keep from buying into two or three funds that had their major holdings in the same companies. It took two weeks of three to four hours a day to make my initial choices. Some were what my advisor had suggested but most were not. She thought it was funny that I had asked for her advice, then ignored it. According to her I have beat the experts every year since I retired in 2011. This year may not be so good. She also says that I am over extended in riskier investments than I should be for my age.

cat fever do you know the difference in a large cap, small cap, or medium cap fund? Do you know the difference between a growth fund and a value fund? Which country will you invest if you get International funds? Do you know what I mean when I say that I rebalance my funds two or three times a year? Can you stand to stop your withdrawals for six months to a year to let your investments recover after a downturn in the market?

Answer the above questions and I will PM you.

RSKY

 

[RSKY]

OMG! Just read thru everything I've posted on this thread and I sound like a super smart know it all financial wizard. I'm not.

I am not an expert of any type on financial matters. And according to my wife and daughters I am an incredible tightwad.

RSKY

 

[ultrarunner]

I'm frugal and a saver who happens to be able to coax or repair most things to maximize and lower overall cost... like driving the same $800 car I bought in school for 20+ years...

I say bless those that can tie fortune to the markets... it's just I've never been one for easy come easy go.

 

[cat fever]

[ RSKY, please send me a PM on how to achieve this. If I can get this kind of return I would make more than twice what I'm earning now. (working) I'll admit I have been a very good saver and live far below my means with some very good returns as of late. But I'm scared to death to retire, fearing I don't have enough. My whole portfolio is with Fidelity. ]

cat fever, I lost $1300 TODAY. I may loose that much tomorrow and the next day. The day after the election I made $3800, but I had lost $200-300 every day for a week or so before that. The money I lost today is 0.6% of my today investment. IN ONE DAY. That is why I don't usually look at it more than once every week or two. I would have a nervous breakdown. Just looked at my positions page again and every single fund lost today except for three. Thirteen losers, two made very little, and one broke even. SHEET.

It is not for the faint of heart or the person who gets upset easily. I get ticked off if I loose a quarter down a drain or if I buy something then find it a dollar or so cheaper the next store I go into. But then I can sit here and laugh about loosing $1300 in a day. The reason is that it really isn't money until you cash it out of the account. It's just figures on paper or a computer screen.

Also my wife is a retired KY teacher with thirty years service and a Rank 1 rating which is 30 hours over a Master's degree. And she only lost $40 a month in take home pay when she retired. So she draws a very good pension. More take home than my teacher daughter makes after 10 years service. I draw a pension, less than $1000/month because of my age when plant closed. And my wife has a 401K that we have not touched since retirement. What I'm getting at is that we could loose our entire IRA and still make it. Might have to quit eating out as much and quit taking two vacations a year but we could make it.

cat fever do you have a 401K with Fidelity or is it an IRA?

My 401K was very restricted in what I could get in to. The IRA is vastly different. It is easy to move money around into different funds. It takes a little while to figure out the research part but once you figure it out it is fascinating to look at the different types of funds, what they invest in, expenses, etc.. For my initial investment when I swapped to the IRA I even listed the main investment of each fund and changed some of my selections to keep from buying into two or three funds that had their major holdings in the same companies. It took two weeks of three to four hours a day to make my initial choices. Some were what my advisor had suggested but most were not. She thought it was funny that I had asked for her advice, then ignored it. According to her I have beat the experts every year since I retired in 2011. This year may not be so good. She also says that I am over extended in riskier investments than I should be for my age.

cat fever do you know the difference in a large cap, small cap, or medium cap fund? Do you know the difference between a growth fund and a value fund? Which country will you invest if you get International funds? Do you know what I mean when I say that I rebalance my funds two or three times a year? Can you stand to stop your withdrawals for six months to a year to let your investments recover after a downturn in the market?

Answer the above questions and I will PM you.

RSKY

Here is a slice of my life.
Been in the oil business for 24 years with 3 different flags at the gate. Amoco and BP being the largest. With my current employer I have a 401K and the vast majority of my portfolio resides there. I have a self directed IRA with the funds I had from Amoco and BP, it's about 10% of the whole portfolio. I will also get a sizable pension when I retire. (lump sum or annuity, my choice)
I can answer yes to all of your questions and trust me, I have a cast iron gut with some of the gains and losses I've had over the last many years. (in the last month I gained 100K, but I'm still short of where my balance was at this time last year)
I think my main concern is; I'm to cheap to pay a money manager (who may lose money) but I feel like I don't want to worry/fuss with it the rest of my life.
Sometime next year I'll be debt free with a ton of equity in my home. So I could downsize and pocket the cash. I think the reality of retirement is getting closer and I can't wrap my head around it. Last but not least, I'll be 54 next month.

 

[cat fever]

OMG! Just read thru everything I've posted on this thread and I sound like a super smart know it all financial wizard. I'm not.

I am not an expert of any type on financial matters. And according to my wife and daughters I am an incredible tightwad.

RSKY

Funny, my wife and sons think I'm an incredible tightwad.

 

[CurlyDave]

I know I am late to this thread, but I have experience.

I am 71 and have been retired for a few months short of 10 years.

At about 61 I realized that I was selling my days to the company for less than they were worth to me and retired a few months later. Took SS at 62, as soon as I could. I am very happy with this decision. Whatever "break-even" age you calculate form most of the calculators out there is very much biased towards taking SS later. The reason is that they leave out what economists call the "time value of money". Essentially, a dollar income today is worth more than a dollar income in a year and a lot less that a dollar income in 10 years. The higher the interest rate you can get on your money, the longer the break even point becomes. Plus, I would far rather be master of my own financial destiny than have the government be master of my financial destiny.

Funny thing is that the government knows all about the time value of money when they want you to pay them. If you are late on a tax payment, they charge interest. But when they calculate what your best age to take SS is they develop amnesia on that point.

Make no mistake about this point: there is no such thing as a safe haven. There are at least two types of risk with any investment (and just putting money in a bank account is an investment). If you buy stocks or any other asset there is market risk. If you put your money in fixed income investments, or a savings account there is inflation risk. Annuities are almost always a bad idea. The return on your money is paying a whole raft of people at the annuity company before you ever see a cent.

If you need a financial advisor because you do not feel qualified to manage your own money, get one who charges a fee, not one who charges a percentage of assets. Interview several before you choose a financial advisor. If you have SS and/or a pension ask him how he treats them in your asset allocation. If he does not count them as the equivalent of a fixed income investment, move on until you find someone who understands this concept. An advisor who does not understand this will subject you to much more inflation risk than you should take on.

Do not believe the fiction that SS is inflation-protected. The inflation numbers the government uses leave out a lot of things we all have to have, like food, medical care and energy, but include a lot of things we don't need to buy all the time like TVs, which keep getting better and cheaper. I got a letter from SS last week telling me that inflation increase in my payment would be O.3% for 2017, which was about $5 per month, but that the deduction from my check for medicare will increase by a little over $125 per month. This means that I lost $120 per month. Now I can probably afford this, but people who are more reliant on SS are going to be negative effected.

For us, a safe haven is having all (as in 100%) of our investable assets in stocks (mostly very low fee mutual funds) and rental property. We withdraw a fixed percentage of the stocks each month. Not 1% like RSKY, but I think 0.5% is OK. As the market fluctuates the amount can go up or down. Cash flow from the rentals is spendable income also. This is not for the faint of heart, but it works for us.

* * * * * * * *

One last point. We do not have paid-off mortgages. We have fixed rate mortgages between 3 and 4% on our home and on our rentals. Why? When lenders are willing to give this old geezer a great big, non-callable loan at 3 to 4% at a time when real inflation is at least that high, I am going to take it. Our pensions and SS will more than cover the loan on our home, and allow us to live frugally. We would have to take money out of stocks where we are getting 8 to 10% to pay off the mortgage. IMHO paying off the mortgage is not safe, it is dangerous. It subjects us to excessive inflation risk which is very real.

 

[square1]

OP here. I want to thank you all for the great discussion and for being so very cordial in questioning and making counterpoints. I have learned some things that never would have crossed my mind.

A little background, about a year ago I decided to reduce my exposure to the risk of equities. After that choice was made I jumped out and back into the market a couple times at some opportune points before forcing myself to stick with my decision to get out & stay out. That has not been easy, but as indicated in the original post, with what I have and what I can add over the next few years I can retire. If I lose what I have, it does not matter what I do over the next few years, there will be no retirement.

House is paid for, has been for ~6 years. Kids are making it on their own. Have one credit card that gets paid off monthly (will be looking into that cash back on purchases card someone suggested!). Just bought (financed) my first new vehicle in ages with the idea it will be a low mileage, well cared for, and most important paid for vehicle at retirement.

I have managed the bulk of the retirement portfolio on gut instinct, really wish I knew more about investing, within the confines of funds offered through a 401k and by dumb luck have generally outperformed a separate fund that is professionally managed. This is attributed to having more latitude than the professional manger due to his being governed ed by the fund's prospectus.

But all in all, capitol preservation is not a game I've been in and as a result I'm struggling with setting goals and managing my expectations. Your discussion has been most helpful in helping me come to terms. I'm not there yet, but you have certainly helped! Thanks