Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Personal Finance
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-06-2010, 12:32 PM
 
Location: Chicago
1,953 posts, read 4,947,486 times
Reputation: 919

Advertisements

you have over 30 years until you retire, I would imagine that this has to be about the norm for your age group. Concentrate on getting a decent paying good job for the time being. After that conentrate on on stacking some paper away for retirement.
Reply With Quote Quick reply to this message

 
Old 08-06-2010, 12:35 PM
 
106,059 posts, read 108,015,953 times
Reputation: 79628
If anyone didnt profit the last decade its because they bet on 1 asset class equities or their related cousin corporate bonds and guessed wrong and got pummeled in 2008.
but if you did what you were supposed to do and thats rebalance and keep investing then you are pretty close to even or may even be ahead from before the drop and certainly ahead for the decade..

by the way large cap stocks went no where for the decade but mid-caps rose 50% and small cap were up as well.

i have always had
25% in equities -total index fund
25% in long term treasuries
25% in gold
25% cash

rebalance once a year

it has had an average annual return of over 9% a year for over 30 years...
no timing, no guessing....

it was actually up in 2008 as treasuries soared 30% from left field and gold rose. equities were down 45%.

even if you bought the gold part at the peak of 1,000 bucks decades ago, rebalancing once a year still left you with a 9.2% return on the gold vs 9.8 for the equities today.

Last edited by mathjak107; 08-06-2010 at 01:30 PM..
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 01:01 PM
 
Location: San Diego California
6,795 posts, read 7,265,210 times
Reputation: 5194
Quote:
Originally Posted by Miss Crabcakes View Post
So the husband and I were talking about retirement and he is starting to believe that won't be a reality for him and I wonder for myself.

Here are our stats and if you have advice on improving things, feel free to jump in:

- We are both 32 years old
- I have had a 401K for about 10 years, the hubby has not opened one for several reasons (job didn't offer it or he made too little to contribute anything)
- I have only been able to contribute 5% and my balance grew to a high of $19k before the financial crisis in early 2008. It has not gotten back up to that amount since.
- I lost my job in Dec 2008 and have not been able to contribute to the 401k since. I have only had part-time and temp jobs in the interim (no benefits)
-Hubby also lost his job in 2008, took one year to find a temp job and just went permanent this past January.
- the hubby plans to open a 401k but won't be able to contribute much (he doesn't earn much and has little leftover after bills)
- I still don't have a permanent job and don't know any other way to add to my 401K or any other retirement plan and as it stands only have about $17,000 in my current 401k. I also don't know much about stocks.

Are we just screwed and will never retire? Any other options or advice?
Not at all, in fact most people myself included do not start getting serious about getting ahead until their mid 30's. People always find a way to get what they really want, so if getting ahead is really what you really want you will achive it. Here are a few pointers that have helped me along the way.

- Pay yourself 1st. Bills and expenses will always be there, but make sure your goal is the most important thing. Priorities are the most important thing in life.

- Get your expenses under control. The best way to do this is to own your home. Buy something you can fix up in the best neighborhood possible.

- Find ways to make money besides a job. There are millions of ways to make money. The best ways are doing something you like. Buying and selling, side jobs, whatever it takes. I know someone who runs an EBay business just basically selling stuff for friends who do not want to deal with it themselves. They also go to garage sales and clean garages for inventory. It has become very profitable for them. When I was young, I used to buy and sell cars. Most private parties selling used cars really do not know what the market is for their car. Some are overpriced and some are under priced. If someone takes the time to know the market they can make money buying under priced and selling at market price. The same is true for everything, antiques, furniture, bicycles, etc.
Side jobs for cash are also a great way to make money, there is always someone looking for someone to do painting, cleaning, catering, and many other jobs.

- Always pay cash for everything. There is a feeling of loss when you pay cash that you do not experience with a credit card. It makes you think twice and really strive to get the best price on whatever you buy. Also the money you save on interest can be invested to work for you.

-Buy used instead of new when possible. I learned a long time ago that I could purchase high end items slightly used for the same price or less than low end new merchandise. Let someone else take the beating on depreciation for you.
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 01:06 PM
 
106,059 posts, read 108,015,953 times
Reputation: 79628
interesting article

Why It Wasn't a 'Lost Decade' for Investors - CBS MoneyWatch.com
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 01:14 PM
 
8,263 posts, read 12,166,827 times
Reputation: 4800
Quote:
Originally Posted by Oildog View Post
You have 30 years.
Yup! Possibly 40 depending on how the whole social security thing shakes out. Do what you can, control what you can control, as someone else mentioned you're already ahead of the game for even having a 401k with a real balance in your early 30s.

Also = be real careful on rolling anything into a 401k, generally speaking you can get much lower costs and much wider range of investments in an IRA thru a companies like Vanguard. If the thought process is piling your investments into one place then keep a rollover IRA and as jobs change keep dumping the 401ks into it.

Good luck!
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 01:27 PM
 
106,059 posts, read 108,015,953 times
Reputation: 79628
good point about not leaving the money with your old employer when you change jobs.. put it in your own rollover ira and have control over it yourself.

only caveat here is 401k money can be hit at 55 if you retire early if in the employers control but a rollover ira stays at 59.5 as far as i know.
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 02:29 PM
 
13,811 posts, read 27,349,266 times
Reputation: 14244
Quote:
Originally Posted by mathjak107 View Post

i have always had
25% in equities -total index fund
25% in long term treasuries
25% in gold
25% cash

rebalance once a year

it has had an average annual return of over 9% a year for over 30 years...
no timing, no guessing.... .
A DJIA index fund returned 9% a year y/y over the past 30 years too. No need for fancy stuff.

This time of year in 1980, DJIA @ 900
9%/year
= 10900 points, just a few hundred from where it sits now.

1980 900 points
1990 2800 points
2000 10500 points
2010 10500 points

If the DJIA performed like it did back then, the stock market would be at 30,000 points from 10,500 from 2000-2010. And 120,000 in 2020. Don't see that happening anytime soon.

If it were, I would be done saving for retirement now and I just turned 29.
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 02:41 PM
 
106,059 posts, read 108,015,953 times
Reputation: 79628
only problem is equities alone are a bet only on 1 economic outcome, prosperity.... while history used to have the markets up 2/3 of the time and down only 1/3 for over a decade that hasnt been the case anymore.

there are still 3 other economic out comes, recession,deflation,inflation.

anyone of those can leave equities devasted again.

as un-certain as our future looks going forward my plan is to cover all 4 economic outcomes ,then i dont have to worry about only 1 playing out.

good diversification is never saying im sorry.
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 02:48 PM
 
13,811 posts, read 27,349,266 times
Reputation: 14244
Quote:
Originally Posted by mathjak107 View Post
only problem is equities alone are a bet only on 1 economic outcome, prosperity.... while history used to have the markets up 2/3 of the time and down only 1/3 for over a decade that hasnt been the case anymore.

there are still 3 other economic out comes, recession,deflation,inflation.

anyone of those can leave equities devasted again.

as un-certain as our future looks going forward my plan is to cover all 4 economic outcomes ,then i dont have to worry about only 1 playing out.

good diversification is never saying im sorry.
Right, you are playing it safe. You have the nest egg. Those that don't (like me) have to put an extra large portion of their income into savings (I've saved an average of 50% of gross income since graduating college) to play it safe moving forward.

It was all about timing and those that were in it from 1980 thru 2000 did really well. NO ONE could lose.

America is done. That same acceleration will happen elsewhere in China and Latin America. Fortunately, I see it coming.
Reply With Quote Quick reply to this message
 
Old 08-06-2010, 02:51 PM
 
Location: Baltimore, MD
3,879 posts, read 8,364,003 times
Reputation: 5179
Quote:
Originally Posted by wheelsup View Post
A DJIA index fund returned 9% a year y/y over the past 30 years too. No need for fancy stuff.

This time of year in 1980, DJIA @ 900
9%/year
= 10900 points, just a few hundred from where it sits now.

1980 900 points
1990 2800 points
2000 10500 points
2010 10500 points

If the DJIA performed like it did back then, the stock market would be at 30,000 points from 10,500 from 2000-2010. And 120,000 in 2020. Don't see that happening anytime soon.

If it were, I would be done saving for retirement now and I just turned 29.
I have no idea what this means. I am stock illiterate.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Personal Finance
Similar Threads

All times are GMT -6. The time now is 10:32 PM.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top