Anyone here retire with all their money in the bank (collecting under 1%)? (2013, states)
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 think we all know people who lost hundreds of thousands of dollars in 2008. We also know, or believe, that the financial industry is full of corruption. We have good reasons to distrust the whole system.
Burying gold in your backyard might be the only safe way to save.
We all know people who didn't panic and sell in 2008, and now have a much higher net worth than they did in 2007. Precious metals are quite volatile as well, so investing your portfolio in gold out of fear of market volatility makes no sense and it certainly isn't the only "safe" anything.
+1. I know no one with half a brain that lost hundreds of thousands in 2008 from investing. That is a statement based on ignorance. I'm sure there were plenty that lost fortunes buying homes they could never afford, and then blamed the banks for lending them the money, but they really have only their greed and ignorance to blame. I have been investing my retirement funds since 1994, and 2005 to present have been easily the best investment earning years of my working career where I actually had enough invested to matter. My net worth more than quadrupled in the last 8 years. The first 14 years from 1980 on were fraught with the usual too young ignorance to make smart decisions (besides company matches and years that counted towards my pension), saving to buy a home, followed by high interest mortgage and car payments and divorce that cost me half of everything which thankfully was not too much to matter. Had I bought and invested in gold from 2008 and on, I would have far far less. The gold coins I do have, I should have dumped when gold hit $1700, but instead we just cashed in old jewelry.
A group of us retired folks were sitting at the pool and the conversation turned to retirement and money. A number of the group said they had pulled out of the stock market and now have ALL their money in cash. (Money Market, CD, Checking Accounts, etc.) They said it allowed them to sleep at night.
I said that was short sighted because inflation would force them to pull out more and more money every year to support their lifestyle and they would lose money every year just playing it safe and putting all their money in cash. They needed to take some risk to allow their money to grow to cover inflation and future needs. They would not consider my argument. Is this thinking common?
No.
But there are a great many retired people who wish they had thought that way. I know several.
Consider:
You are 65.
You will die on your 100th birthday.
You get 1% on you money.
That means for every $100,000, you can draw 2,550 per year until you die on your 100th birthday. On top of that, you can give yourself a $50 raise every year.
Your last year - when you are 99 - you will draw $4,250 and you will die with 2,125.20 in the bank.
This whole fear of "losing money" every year because it is in cash is just nuts. Ranks right up there with "I can't spend the principle", which is nuts, too. It's your money and the only people that will "lose" anything are your heirs. Well, all those money managers are going to lose, too.
We all know people who didn't panic and sell in 2008, and now have a much higher net worth than they did in 2007......
Oh, yeah?
How about the people (retired) who died in 2009? It was a miserable last couple of years for those folks. Every one of them died wishing they had more cash.
I have 2-3 years' income in a savings account @ 1%, & another year in CDs at a little more. The rest is about 50/50 stock/bond funds, mostly index funds. I'm not collecting SS yet & have no income so I'm keeping my powder dry in case there is another prolonged bear market & my income won't be affected or have to pull out investments when they are down. When I start collecting SS somewhere around 68-70 I will rebalance & favor stock funds a bit more.
Lost $70 K in 1995 by buying options. Then another $20 K in my IRA btw 2006-8 based on ignorant bank advisors. Down $50 k by buying Swiss Francs right before they devalued their currency (still holding them).
Total profits from investing in my life time I estimate about $120 k. Pretty much a wash. So I should have kept my money in cash to begin with. I certainly do it now because I can not trust myself or advisors. Social security will probably run out when I am entitled to it in ten years.
I earn money and save it--that seems to be my talent. And will work in some way or another till I die.
Article in this morning's Los Angeles Times business section about the dismal results of the CalPERS portfolio over the past year - less than one percent! CalPERS is the largest public pension fund in the United States. So if that's all the result these highly paid professionals can get, it sure makes you wonder.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,101 posts, read 7,574,408 times
Reputation: 9835
Quote:
Originally Posted by Escort Rider
Article in this morning's Los Angeles Times business section about the dismal results of the CalPERS portfolio over the past year - less than one percent! CalPERS is the largest public pension fund in the United States. So if that's all the result these highly paid professionals can get, it sure makes you wonder.
Not to worry, Tier 1, Calper. Your retirement is backed by the full faith and credit and taxpayers of California.
i see, thought you were talking about CD or something to that effect.
I hope you remain cash covered, understand what cash covered means, and dont need that money. Selling naked puts is like picking up pennies in front of a freight train. You will be fine for months or even years taking those premiums, then all it needs is 1 blackswan for the option's iv to sky rocket and you blow up your account (08 lehman anyone? ). There are countless traders who blow up this way and there will be countless more newbies to come thinking this is easy money.
Just think about who is buying your puts, they are professional market makers. Do you really think they are clueless to offer free lunch and buying worthless contracts.
This is actually one strategy i will have trouble sleeping at night if it was active in my portfolio, even as i am still working making good money, nevermind if i was retired and more dependent on the savings.
It's in my IRA, I can't sell naked puts. But I closed out some contracts recently so I will be able to take advantage of the dip. The way I was thinking if I was assigned to it, I'm ok with it. What do you do when you have money in mutual fund and the market goes down? nothing. You buy and hold.
BTW, I didn't loose any money in 2008. None. However, I was too scared to take advantage of it in 2009. I sat on a pile of cash. Sigh!
Last edited by NewbieHere; 07-20-2016 at 12:39 AM..
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.
