Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I already was very clear: because there's absolutely no reason to be so conservative. It shows a fundamental lack of understanding about how the economy works.
Why would anyone want to live with subpar returns for zero additional benefit? If one needs 50K a year, it would be safer to buy stocks and bonds with the $5M and draw the 50K/year rather than putting it in the bank. If the entire stock and bond market become worthless, the US dollar most likely also be worthless, as the value of the dollar is directly based on the value of the US economy. Hence why I hypothetically suggested buying raw metals, as that's at least something of a hedge if the dollar somehow loses it's value (the greatest risk of an investment in pure cash, even if a very small risk). Buying foreign currencies would be a similar hedge, though if the US dollar collapses foreign currencies would also be at risk.
So yes, I would not advise an all-cash portfolio in any case. Even with all-cash the risk of losing your investment is not zero. There is risk of higher than expected inflation making your all-cash investment insufficient.
I'm not sure how you determined it would be safer to be all stocks and bonds. You clearly don't understand the situation even though you say you do. Your suggestion of 5mm gold and silver was the worst possible advice but again you understand it all already.
Please model for me what inflation would have to be and when you would run out of money to make your 5mm insufficient
I'm not sure how you determined it would be safer to be all stocks and bonds. You clearly don't understand the situation even though you say you do. Your suggestion of 5mm gold and silver was the worst possible advice but again you understand it all already.
Please model for me what inflation would have to be and when you would run out of money to make your 5mm insufficient
Just ran cFIREsim. At 3% inflation 1% savings interest over 50 years with 50K annual spending (inflation adjusted) you succeed. At 3.5% inflation 1% savings over 50 years with 50K annual spending (inflation adjusted) you fail and run out of money. Are you going to say that inflation risk is non-existent? And with higher inflation rates you will get wiped out much sooner.
For long-term investing, you need to counter inflation. If you don't, there is the risk that higher-than expected inflation will wipe you out.
Just ran cFIREsim. At 3% inflation 1% savings interest over 50 years with 50K annual spending (inflation adjusted) you succeed. At 3.5% inflation 1% savings over 50 years with 50K annual spending (inflation adjusted) you fail and run out of money. Are you going to say that inflation risk is non-existent? And with higher inflation rates you will get wiped out much sooner.
For long-term investing, you need to counter inflation. If you don't, there is the risk that higher-than expected inflation will wipe you out.
Inflation risk is a risk however it's overblown if you have relatively no expenses. So if you are 60 and come into 5mm you don't have much need to invest it just because some kid on the internet thinks it would be dumb for you to think your plan sucks.
If your income need is only 25k you could survive a -2% real rate of return for 80 years
At -1% higher than your quoted rated 5mm would give you over 40k 80 years, 49k for 70 years, 61k for 60 years etc.
If calling ball game when your needs are met how is it that your idea of retiring in your 30s based on lots of assumption isn't stupid?
Inflation risk is a risk however it's overblown if you have relatively no expenses. So if you are 60 and come into 5mm you don't have much need to invest it just because some kid on the internet thinks it would be dumb for you to think your plan sucks.
If your income need is only 25k you could survive a -2% real rate of return for 80 years
At -1% higher than your quoted rated 5mm would give you over 40k 80 years, 49k for 70 years, 61k for 60 years etc.
If calling ball game when your needs are met how is it that your idea of retiring in your 30s based on lots of assumption isn't stupid?
So I got you to admit that inflation risk isn't zero. I'm going to count that as a win and move on, as your post seems to be descending to the personal level.
So I got you to admit that inflation risk isn't zero. I'm going to count that as a win and move on, as your post seems to be descending to the personal level.
I never said inflation risk didn't exist, maybe you should read and keep up
How can you call someone else's potential plan stupid but you can answer why your plan isn't? Maybe it's personal because your world only has one way streets
Well at 3% inflation over 114 years that would bring it to 17045.97. I'm not sure what your point is however
It proves that inflation for one thing isn't the only factor on purchasing power of the dollar. I never brought up inflation or 3%. And the point is completely obvious, $50,000 in 100 years will have virtually no purchasing power.
It proves that inflation for one thing isn't the only factor on purchasing power of the dollar. I never brought up inflation or 3%. And the point is completely obvious, $50,000 in 100 years will have virtually no purchasing power.
I'm talking over $5million. You don't want "financial advisors" sticking their noses and hands into your money since you already know what you're going to do with it. Big problem is, FDIC only covers $250K. TOTAL... so even if you have 10 accounts at one bank with $250K in each one, you'll only be covered for $250K in the event something happens. So, what do you do? Do you spread this money out over several banks?
I don't think FDIC insurance is a major concern for most people.
1) Assets are never 100% safe from losing their value, even if they are insured by the FDIC
2) Nobody with lots of money tosses it in a savings account
you should look into money markets, treasuries or other similar types of securities.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
