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It is still all relative . Bonds today are at zero to negative real returns after taxes. Some one buying a 25 year bond today which is what it takes to see even a hint of return will likely not average less than 1.50%. Odds are it will still average out at 2-3%
It is still all relative . Bonds today are at zero to negative real returns after taxes
You don't pay taxes on munis. All munis in Florida - various munis in other states that have a state income tax.
I've been thinking about moving out of Florida. But - after 40+ years in Florida - I've become rather addicted to not having to pay a state income tax. Robyn
P.S. One nice thing about living in a no income tax state is being able to put together a very diversified muni portfolio without worrying about the taxes.
Bonds are basically at zero real return unless you go out pretty far . Any rise in inflation which is very likely is still going to be a loss. The cpi is a price change index not an actual cost of living index. Personal cost of living can be up far more than the cpi.
Last edited by mathjak107; 11-08-2016 at 03:31 PM..
... I started watching stocks as a kid back in 1989... I saw tech companies, once traded at a discount due to the limited life of their product offerings go up like mad. I saw metals find action in chaos. I saw good economic news make the market go down in the early 90's. I saw acquisitions and IPOs.... I saw the tech bubble and the housing bubble. ...
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So anyway, my summary is that, by starting early, most people will gain enough confidence in themselves to find something to invest in better than CD's. It's a great lesson to learn.
Though I'm less voracious about absorbing information, I've observed what you've observed. I also saw the stock market crash of 1987, having started paying attention to stocks (also as a kid) in the early 1980s. When other children were watching Sesame Street, I was watching Wall Street Week with Louis Rukeyser. I thought that "elves" referred to stock-market prognosticators, who made high/low/medium predictions around Christmastime, for where the Dow would close after the following year.
And yet, the only thing that I've learned, is that I've learned nothing. Every dip is followed by a recovery, but how far does the ensuing recovery progress? A dip's a buying opportunity; but would one have profited more, by having bought-and-hold all along? Or is it better to oscillate in-and-out? What's a screaming bargain, and what's "cheap" numerically but still overpriced? And what if an overpriced stock (or an entire market) continues rocketing ahead, for years and years?
Yes, it is better to invest in the market, than in CDs. But how much better? Over what time scale? And in what conditions? History is a guide, but not a dispositive one. Mostly it just guides us to greater humility.
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Originally Posted by honobob
But then you give up the appreciation by not owning.
Or, if you're in the rural Midwest, you give up the depreciation.
Because one can live in retirement with as little as $30,000 per year or even quite a bit less. One does not need millions at all.
And people on Medicare often buy supplemental health insurance at a low cost to cover medical costs not covered by Medicare. (my supplemental health insurance is $74 per month)
Couldn't care less about appreciation since we will die there. It is about cash flow.
You don't have to DIE to get your appreciation. You do have to BUY tho. Cash flow? I'll be using my appreciation to turn future cash flow (age 70 SS) from a paltry $3,000+ a month into well over $700,000 in CASH. That is where you should care about your appreciation, or lack of it.
Really either way from our experience as we have started at one level and moved upward. My comments are not where you start out being the difference but how much more income you have coming in over the first decade or so. It depends on situations and sources of income. Many can't create income ladders as easily as folks with pensions, husband and wife SS benefits and investments with eventual rmd's. When you can you are more able to notice the difference simply because your income goes up in chunks.
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