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I like the practice of a balanced portfolio of a variety of assets that are non-correlating to some degree, keep it simple, and just let it sit in great performing funds with a great risk/reward long term record(or index funds) with very little playing around. It has served us very, very well over the decades. Boring? Perhaps. Profitable? Oh yes. Plus it freed up my time to do more important/fulfilling things in life other than worrying about my crystal "guessing" ball that somehow never worked very well for me for any aspect of life. But if one can truly predict the future most of the time, more power to them/I'm envious!
I think switching in and out in at the "right" time is a fools game in my book(and the stats show that) and is why many people end up losing their shirt by selling low and buying high and never venture back into certain investments again after they get burned as they end up missing some great gains that always go on longer than many people think will go on. Or get in when they think the bottom is in and there are 4 more levels down and panic....well, you get the picture.
odds are switching in and out will not work well. it rarely does.
why?
it takes a nervous nelly type to leave the markets when every day is adding more and more in gains.
it takes nerves of steel to buy in when it looks like the markets are going to hell , when it reverses each up tick to you is jjust anothers suckers rally .
9 out of 10x you buy in higher than you bailed or it wasn't worth the effort.
you need the personality of 2 different people and few have that quality.
I like the practice of a balanced portfolio of a variety of assets that are non-correlating to some degree, keep it simple, and just let it sit in great performing funds with a great risk/reward long term record(or index funds) with very little playing around. It has served us very, very well over the decades. Boring? Perhaps. Profitable? Oh yes. Plus it freed up my time to do more important/fulfilling things in life other than worrying about my crystal "guessing" ball that somehow never worked very well for me for any aspect of life. But if one can truly predict the future most of the time, more power to them/I'm envious!
I think switching in and out in at the "right" time is a fools game in my book(and the stats show that) and is why many people end up losing their shirt by selling low and buying high and never venture back into certain investments again after they get burned as they end up missing some great gains that always go on longer than many people think will go on. Or get in when they think the bottom is in and there are 4 more levels down and panic....well, you get the picture.
if one is not not going to stay put and insist on timing things remember my golden words:
more money has been lost trying to buy low and sell high than any other mantra.
the reason is the trend is your friend and an object in motion stays in motion until it hits something.
we all thought low was when the markets fell 2,000 points. little did we know it had 4,000 more to go triggering stop losses and causing many of those who bought in at what they though was low off licking their wounds as they bailed.
buying high and selling higher has made more money for folks than any other mantra. in fact you can't lose unless you were the last guy at the end. you can always get out with profits .
on the other hand guess wrong in a down turn and there is no cushion , nexzt stop is loss land.
Sure, both me and my wife's pension has a portable lump sum option that we can transfer with us if we leave or are terminated prior to retirement age. This "portable amount" increases with time and i used our current balance for the calculation, roughly 270k. If we chose to take the portable amount we wouldn't receive further payments upon retirement age.
We pretty much maxed out our 401k mid to late 20s. Our company match is 4% and 7%. It took a lot of discipline and sacrifice, especially with 2 kids and a mortgage.
odds are switching in and out will not work well. it rarely does.
why?
it takes a nervous nelly type to leave the markets when every day is adding more and more in gains.
it takes nerves of steel to buy in when it looks like the markets are going to hell , when it reverses each up tick to you is jjust anothers suckers rally .
9 out of 10x you buy in higher than you bailed or it wasn't worth the effort.
you need the personality of 2 different people and few have that quality.
Very true on all.
While our retirement accounts are sitting in funds I rarely mess with(until time gets closer when we'll start withdrawing the money), I've played around over the years with individual stocks here and there. Being a deep value guy and very patient, even when a stock screams value and everyone is running for the hills, I'll jump in but it does indeed take some nerves to sit and wait, often for years, for the value to be discovered again(hopefully).
Sure, both me and my wife's pension has a portable lump sum option that we can transfer with us if we leave or are terminated prior to retirement age. This "portable amount" increases with time and i used our current balance for the calculation, roughly 270k. If we chose to take the portable amount we wouldn't receive further payments upon retirement age.
We pretty much maxed out our 401k mid to late 20s. Our company match is 4% and 7%. It took a lot of discipline and sacrifice, especially with 2 kids and a mortgage.
Nice job to be in your late 30's with that kind of money between your deferred and portable pension. Are you planning to exit the work world in the near future/have an age when you plan to leave the work world if you don't mind me asking?
My wife and I were also very disciplined investors in our deferred accounts and private savings/investing when we were working and were able to leave the work world when I was 45 and she was 42. Have a few small pensions we will collect on down the line. While we had decent jobs but nothing really that high in pay, our ability to leave the work world early had much more to do with staying out of debt, or in the case of our mortgage paying it off aggressively, and just saving/investing like yourself in deferred accounts and in our case private savings also.
I mention this to others reading that it's more than achievable to leave the work world early if one starts early and maxes out all your deferred retirement options and beyond(private accounts) and let the magic of compounding work for you and stay out of debt. I think it really comes down to discipline and a bit of knowledge that is not hard to grasp. I wish I learned the "secret" of compounding when I was in my teens but better late than never. And I probably wouldn't have listened to my parents if they told me this anyways.
Nice job to be in your late 30's with that kind of money between your deferred and portable pension. Are you planning to exit the work world in the near future/have an age when you plan to leave the work world if you don't mind me asking?
My wife and I were also very disciplined investors in our deferred accounts and private savings/investing when we were working and were able to leave the work world when I was 45 and she was 42. Have a few small pensions we will collect on down the line. While we had decent jobs but nothing really that high in pay, our ability to leave the work world early had much more to do with staying out of debt, or in the case of our mortgage paying it off aggressively, and just saving/investing like yourself in deferred accounts and in our case private savings also.
I mention this to others reading that it's more than achievable to leave the work world early if one starts early and maxes out all your deferred retirement options and beyond(private accounts) and let the magic of compounding work for you and stay out of debt. I think it really comes down to discipline and a bit of knowledge that is not hard to grasp. I wish I learned the "secret" of compounding when I was in my teens but better late than never. And I probably wouldn't have listened to my parents if they told me this anyways.
If I can ask, when you say that you both had decent jobs but nothing that high in pay...what was the pay?
If I can ask, when you say that you both had decent jobs but nothing that high in pay...what was the pay?
Sure. 80-90k average I'd say was our salary(combined) for most of our working life, much lower in the early days of our careers, a bit higher in the last few years. And we worked/lived in a much higher cost of living state in the northeast at the time with the insane property taxes on our house at the time and all that fun. My wife started out as a bank teller for many years, and worked a 2nd job at a department store for some time to help pay off some debt she accumulated and a student loan, and I was an entry level computer programmer when I started out. During those early years, we made sure we still put away what we could afford into savings/investing/our deferred retirement savings accounts which ironically made the biggest difference in savings/our deferred plans given the compounding aspect.
Nice job to be in your late 30's with that kind of money between your deferred and portable pension. Are you planning to exit the work world in the near future/have an age when you plan to leave the work world if you don't mind me asking?
My wife and I were also very disciplined investors in our deferred accounts and private savings/investing when we were working and were able to leave the work world when I was 45 and she was 42. Have a few small pensions we will collect on down the line. While we had decent jobs but nothing really that high in pay, our ability to leave the work world early had much more to do with staying out of debt, or in the case of our mortgage paying it off aggressively, and just saving/investing like yourself in deferred accounts and in our case private savings also.
I mention this to others reading that it's more than achievable to leave the work world early if one starts early and maxes out all your deferred retirement options and beyond(private accounts) and let the magic of compounding work for you and stay out of debt. I think it really comes down to discipline and a bit of knowledge that is not hard to grasp. I wish I learned the "secret" of compounding when I was in my teens but better late than never. And I probably wouldn't have listened to my parents if they told me this anyways.
Hi stevek64, congrats on the early retirement! We haven't really given much thought to it mainly because our liquid assets wouldn't support retirement in the next decade with the current and upcoming expenses we will have. We live in a high cost area with 2 younger kids (preschool, full time childcare, summer camps, 529s, other misc activities is more than our mortgage) so hopefully when they're in college. By that time our mortgage will be paid off as well.
Do you have dead weights on net worth... I mean kids as well? =)
Time is definitely on your side when you're just starting out, sock away as much as you can. While that 1% day gain may not seem like anything now, wait until 10 years, thats when the fun kicks in.... until it goes down... haha.
Hi stevek64, congrats on the early retirement! We haven't really given much thought to it mainly because our liquid assets wouldn't support retirement in the next decade with the current and upcoming expenses we will have. We live in a high cost area with 2 younger kids (preschool, full time childcare, summer camps, 529s, other misc activities is more than our mortgage) so hopefully when they're in college. By that time our mortgage will be paid off as well.
Do you have dead weights on net worth... I mean kids as well? =)
Time is definitely on your side when you're just starting out, sock away as much as you can. While that 1% day gain may not seem like anything now, wait until 10 years, thats when the fun kicks in.... until it goes down... haha.
Ah yes, we all have to endure the "fun" roller coaster ride that some of our assets inevitably hit now and then.
hehehe.....no, we never had kids so that certainly was an expense/potentially large expense that we didn't have to contend with though we had dogs over the years and after some vet bills with no pet insurance, they can get a little costly now and then.
But yes, I understand with full time childcare and such, that's very pricey. Sounds like you have a well thought out plan to take care of all those items 1st. When the time comes to pull the plug on the job, sounds like you are going to be in wonderful shape financially. Keep up the great plan/strategy!
Sure. 80-90k average I'd say was our salary(combined) for most of our working life, much lower in the early days of our careers, a bit higher in the last few years. And we worked/lived in a much higher cost of living state in the northeast at the time with the insane property taxes on our house at the time and all that fun. My wife started out as a bank teller for many years, and worked a 2nd job at a department store for some time to help pay off some debt she accumulated and a student loan, and I was an entry level computer programmer when I started out. During those early years, we made sure we still put away what we could afford into savings/investing/our deferred retirement savings accounts which ironically made the biggest difference in savings/our deferred plans given the compounding aspect.
Thanks for the info. So when you say "private accounts" are you talking about brokerage accounts and investing with stocks?
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