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The problem is, I hate the roller coaster. All it takes is Greece, another war in Russia, another Tsunami in Japan, another huge terror attack.. You name it.. A mouse farts in Egypt and market drops.
I like the idea of getting a nice, easy, calm 4%.. Which is like $3000 per month.. If you invest 1.5m you could get like 5k (before taxes) a month at 4%. I'll take that.
and decades from now when expenses and medical costs require 3x that income , then whats the plan ? 5000 in 1985 now takes almost 15,000 to pay the same bills and inflation had been falling lower and lower all that time ..
rising medicare and medigap costs have blown the old we will spend less as we age theory out of the water . any savings in the things we no longer buy or do which typically payed for the rising costs in things we still do have been eaten up by rising health care costs.
over 30 years you are far more likely to be hurt by inflation which has happened over and over sending retirees in to the failed retirement grave yard then you would be with a conservative portfolio which never happened .
and decades from now when expenses and medical costs require 3x that income , then whats the plan ?
And if decades from now his Stock portfolio has only averaged the same 4% that his fixed income portfolio has averaged, then what? He went through the additional headaches for nothing? Or let's say his portfolio is at a negative when he needs to actually start pulling money out, and he needs to hold onto it for a couple more years to get back to positive, then what? You keep talking about a 3% inflation rate and we are in a deflationary period right now. Nothing but scare tactics and propaganda coming from you to brainwash everybody to invest in the Stock Market under this "notion" that you are always going to come out ahead with the Stock Market, which is blatantly false. You keep saying nobody has ever lost money over 10-20 years in Stocks? I will submit to you a full report with links, stories, etc. about how totally WRONG you are. I'm a little busy right now but I will have this for you shortly.
5000 in 1985 now takes almost 15,000 to pay the same bills and inflation had been falling lower and lower all that time ..
rising medicare and medigap costs have blown the old we will spend less as we age theory out of the water . any savings in the things we no longer buy or do which typically payed for the rising costs in things we still do have been eaten up by rising health care costs.
over 30 years you are far more likely to be hurt by inflation which has happened over and over sending retirees in to the failed retirement grave yard then you would be with a conservative portfolio which never happened .
The guy said he would have $1.5 million invested, if it's at 4% (which he can get right now like I pointed out) and he leaves that sit and compound for 25 years, he will have almost $5 million at the end of 25 years. That's going to be more than the vast MAJORITY of the population and that's even before his Social Security kicks in. I think he's going to be okay and will be able to handle his personal expenses in retirement.
And again, why in the hell do you keep ASSUMING that the Stock portfolio is going to give him a higher return? Why do you keep assuming this like it's some guarantee, like if you aren't investing in the Stock Market for the next 30 years you are guaranteed to miss out? Where does this mentality and mantra come from?? I'm starting to wonder if you are a Stock Broker trying to sell something, because I have never seen an Investor this "sure" of the Stock Market ever in my life. I mean the way you present your ideas on the Stock Market on this Forum, you present it as if FAILURE is never an option, that is complete and utter hogwash and you KNOW it.
I mean I promote investing in yourself and starting a business, but I would never present that idea as if you can't FAIL, similar to how you are presenting Stock investing as a "no fail" and "no losses ever" vehicle. That's completely insane.
Last edited by jotucker99; 07-26-2015 at 07:20 PM..
So he is going to buy a 30 year treasury and reinvest the interest every 6 months? Where are you getting this compounding from? Lol, you are out of your comfort zone
So he is going to buy a 30 year treasury and reinvest the interest every 6 months? Where are you getting this compounding from? Lol, you are out of your comfort zone
Are you kidding me? There are Bonds that roll the interest over instead of paying them out twice a year.
So he is going to buy a 30 year treasury and reinvest the interest every 6 months? Where are you getting this compounding from? Lol, you are out of your comfort zone
my take was he was living off that money in retirement , not banking it
so lets suppose he was talking about using the bonds through his accumulation stage .
the real question is how much is enough ?
that determines how you need to invest.
heck , if i didn't need 3.50% inflation adjusted withdrawals i would just go with short term bonds ,cd's and TIPS .
but that is only bullet proof up to 2% inflation adjusted withdrawals.
3% is iffy and 4% would be playing a very risky game that has failed historically over ,over and over .
i can tell you if i invested in 30 year bonds over my life time my retirement now would be very different or in fact i would not be retiring at 62 where we are .
it is that equity investing over my accumulation years that now lets us retire right here in queens in nyc where our kids , grand kids and friends are part of our daily lives .
so no one here can speak for anyone else as far as what they need .
we can tell them what likely will not work as if it failed often in the past it will likely fail again . but how much is enough is going to determine how they have to invest to stand a chance to meet those goals .
it would be quite tough for a pigmy to be a great basket ball player and it can be quite difficult meeting savings goals using just bonds unless your needs will be in line with that amount and you won't wish for a better lifestyle down the road if that portfolio is your means of support .
Last edited by mathjak107; 07-27-2015 at 04:15 AM..
There are zero coupon bonds that have a compounding interest effect, also I consider Brokered CDs to be on the same "par" as long term bonds because to me, a CD performs the same as a long term bond. Brokered Long Term CDs are going for 3.15% right now, I even seen a non-Brokered CD going for 3.25% right now Long Term. By 2018 when the Fed rate increases, the CDs will be at over 4% and that's guaranteed money.
MathJak you are correct, the amount of money you "need" at retirement really determines what your strategies should be. Here's some information about me:
- I'm not getting married (ever)
- I'm not creating any kids (ever)
- I'm making a solid middle class level of total income in a low COL
- Every penny of my expenses are efficiently managed, including the very small debt payments
So let's do some math here. Using today's COL numbers, because we don't know what they will be in 33 years when I'm 65, but using today's COL numbers and assuming the Social Security program will remain in the SAME fashion that it is today when I'm 65 in 2048:
- My goal would be to have at least $500,000 saved within my fixed income portfolio of Long Term Conservative Bonds and FDIC-Insured CDs pulling at least 4% per year which is $20,000 per year in interest.
- My SocialSecurity.gov account says if I keep paying the same amount into SS like I'm paying for the next 30 plus years, I will be getting about $2,000 a month at age 67 which is $24,000 a year.
- Again, using today's COL expense dollars, I would say my expenses would be no more than $35,000 a year which includes personal and the increases in insurance premiums (including supplemental policies).
- I would have $44,000 a year to play with and only $35,000 worth of expenses for a "savings cushion" of $9,000 in which I could just leave that $9,000 in the fixed income portfolio.
- The $500,000 saved by age 65 is pretty simple, all one needs to do is make $55k a year in a low COL and keep his expenses managed to put away at least $7,500 a year starting at age 30 (the age most of us Millennials can start investing/saving) until age 65 at a conservative 4% per year. That will give you over $600,000 at age 65.
- This plan is very conservative and is PREDICTABLE. Would I like to be making 7%, 9%, 12% or 15% per year on my passive portfolio? Of course! But those figures aren't guarantees, the 4% is a guarantee, you can take that to the bank in terms of what I will have down the line in 30 years in terms of growth. I can't take the 7% - 15% per year number to the bank because I have no clue what the Stock investments will appreciate to. That's the point I'm making here.
Quite honestly, I'm open to LEARN. If you guys have a way of taking the unpredictability out of the Stock Market where I can FORECAST a 7% - 15% per year return over 20 - 30 years, of course I will do that investment, I would be foolish not to do it. But from what I have gathered, you can't make any predictions or forecasts on this unless you are using prior decade performance reports which do not correlate with the next 20 - 30 years at all.
Are you kidding me? There are Bonds that roll the interest over instead of paying them out twice a year.
Can you post a link to these bonds?
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I'm starting to wonder if you are a Stock Broker trying to sell something, because I have never seen an Investor this "sure" of the Stock Market ever in my life. I mean the way you present your ideas on the Stock Market on this Forum, you present it as if FAILURE is never an option, that is complete and utter hogwash and you KNOW it. 
