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Finance

So I haven't been keeping up with the markets and finance stuff lately. Partly it is because the wedding took over my life. And my gazillion hobbies. And also I think because I don't have an online community of people to check in with every day. I think financial independence is an important thing. There are many people who have done it, but it takes time, commitment, and remembering not to live like a wage slave. Yeah, you get a good salary from your corporate job, but then you spend it all on a new car, a mortgage, vacations. And somehow you only save 5% of it.

Anyone of you wanna be my investment/market/finance/money talking friend?

I guess I should research some online investment communities. Hrm.

I wonder if it's possible to retire on 100k.

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( 19 comments — Leave a comment )
grinnellian2001
Aug. 30th, 2010 08:47 pm (UTC)
I will be a financial chat buddy but we have pretty different philosophies (I don't actively manage my stock portfolio, at least not much). But it would be nice to have someone to talk to anyway. You probably know more about non-401(k) investment options than I do and I need to save some of my business income. I'm really good at passive investment and creative money management.

It would be nice to retire on 100K. I'm 1/4 of the way there! I think it's more like 1Million, though.
ripresa
Aug. 30th, 2010 08:55 pm (UTC)
Yeah I haven't bought a lot of stocks recently, so I've been really passive. It's slowly trickling into my 401k and savings.

But there are a whole slew of finance things to talk about too.. like lowest credit rates, highest saving rates, frugal vacations, great deals, etc.

Yeah, my 401k guide say if I continue working at my job till I'm retired I may have 2 million dollars. That's a lot of years gone away just so you can have 2 million dollars when you're old and wrinkly. Not worth it I think.

I think I'm going to make my target lower, like 300k or 500k, but with part-time jobs here and there.
grinnellian2001
Aug. 30th, 2010 08:59 pm (UTC)
I have 10% coming out of every paycheck and now so does Josh!

I'm sorting now through interest rates. Should we plan on moving? Or should we refinance? I don't want to miss out on 4ish percent interest rates but I think we'll want to move soon.

So much to think about!
ripresa
Aug. 30th, 2010 10:48 pm (UTC)
moving? why are you moving?
grinnellian2001
Aug. 30th, 2010 11:13 pm (UTC)
Just to a bigger house a couple miles away. Part of me wants a house that would fit how we live much better, part of me likes my house and never wants to move again.
mlordslittleone
Aug. 30th, 2010 10:33 pm (UTC)
100k might work if you retired overseas. SW Asia, Central America, etc. It wouldn't work for here very well though in any way I can think of (given that this is not something I'm at all an expert in.)

I'm not so up on stocks, etc. I am a fan of living below one's means and finding satisfaction in things that don't require spending so much.
ripresa
Aug. 30th, 2010 10:48 pm (UTC)
it's possible, but you would have to live very frugally. or be really really hippie :)
mlordslittleone
Aug. 31st, 2010 03:48 pm (UTC)
True. I mean really though, you could retire on nothing and live like a bum. 100k could work, if you had a really low rent controlled apartment (so you didn't pay taxes on it, repairs or lawn stuff, etc.) and didn't have a car, and never needed healthcare.

Frugal, I am all about. But the idea of one life catastrophe making me penniless and without any relevant job experience for the last 10-30 years...not my cup of tea. I'd rather wait longer, retire with more, and live with the piece of mind that a fire or cancer wouldn't put me back to work miles below my previous paygrade with an unknown future.
ripresa
Aug. 31st, 2010 04:04 pm (UTC)
The funny and sad thing is, even if you and I do retire with 100k in the bank, we would still have much much more money then most Americans.

This is the retirement savings from the 2009 data:
age < 35: $6,306
35 – 44: $22,460
45 – 54: $43,797
55 – 64: $69,127
65 – 75: $56,212

http://www.bargaineering.com/articles/average-retirement-savings-by-age.html

mlordslittleone
Aug. 31st, 2010 04:20 pm (UTC)
I have much more of many things than many Americans. And much less. I also am not done climbing the "more" of "much more." Twice the average of pitiful is still kinda awful.

That is also, assuming it's accurate, only the numbers for IRAs. That doesn't include bonds, plain savings, real estate, non-IRA retirement funds, etc.

http://www.401kplanning.org/top-401k-planning-questions-and-answers/what-is-a-401k-plan/what-are-average-retirement-savings-for-different-age-groups/

Shows what the economy did to folks' retirement funds.

Just because what people have currently is so low, doesn't mean that it will work. Nor does it mean that that's what they wanted to have, or actually saved.

100k, for 50 years, is $150 a month? That's food. Without inflation. Without anything fancy to eat. No clothes, no trips, no gifts, no anything really.

I could toss my 100k at a commune and cross my fingers. I'm not that kind of risk taker though, as much fun as a commune might be for awhile =)
ripresa
Aug. 31st, 2010 11:44 pm (UTC)
Wow. That is a crazy graph about the lowering of retirement accounts.

It's also something to remember.. like people say, well the market is back up again, but you still gain a loss. So if you have 100k, and the market goes down 50%, you are left with 50k. So if it goes back up 50%, you are at 75k now. So you're still at a loss.

Anyways, I'm hoping to not touch my 401k till I'm 60, and with compound interest I should be set... at 60. I would like to figure out ways to be financially independent earlier though.
bellatrixamici
Aug. 30th, 2010 11:26 pm (UTC)
Roy and I have a financial adviser that we really like. We have a plan in place now where if we start saving next year, in addition to not touching Roy's retirement or pension from IBM we can retire at 48 and 58 with 2 million. And this is without him having to work for a corporation, and without me putting in a whole lot. Of course, I have plans to ramp up in the extreme in the next few year, so who knows what we can achieve?
ripresa
Aug. 30th, 2010 11:28 pm (UTC)
Wow, that sounds awesome.

How many % of your guys income were you thinking of saving each year?
bellatrixamici
Sep. 1st, 2010 04:22 pm (UTC)
Hmm. I'm not quite sure of the number. I'll have to look at it again. Maybe 10%, 12%? I don't have a good head for numbers...hence the planner...heh
(Anonymous)
Aug. 31st, 2010 02:11 am (UTC)
I want to learn from what you learn, but not sure if much to contribute.
-Ullearn
dnivie
Aug. 31st, 2010 07:34 am (UTC)
moneybuddy
I'll gladly discuss personal finance, investments and the like with you. But my financial philosophy is more like grinnelian2001s than yours. Then again, talking to someone who thinks exactly the same, risks turning into navel-gazing.

I think you need atleast $500K to retire, but it depends hugely on assumptions, like what level of consumption you envision after retiring, and in which country you're going to live and so on.
emaymcnicks
Sep. 1st, 2010 01:38 pm (UTC)
i'm interested.

we've largely farted around on the savings train until the last few years, and now we save the maximum allowable, pre-tax amount for 401 Ks. we also save 50% of my after tax salary for vacations, new AC units and cars, so we can pay that in cash.

we also plan to refinance our house to a 15 year mortgage (with the rates being what they are, its a diff of $100 a month, and we will own our home outright by the time we are 50 and 52).

i have VFINX too (since 1997 actually), and it's not performed well, even for a longer period of time. def not historical.

let me know if you get a group together or something. my brother in law is a financial advisor, so we are thinking of giving him the entry amount to manage, but i have been interested in getting an investment sandbox and trying my hand at individual stocks too.
ripresa
Sep. 1st, 2010 03:30 pm (UTC)
Sounds like you guys are definitely on the right track!

So there are actually very few women personal investors in the world, so if you're going to make a little sandbox, I definitely want to grab coffee with you and just talk money and goals and such. It's such a taboo subject it's nice to just talk to people without judgement and share info.

I decided to personally invest when I realized that most financial investors don't know crap, and most importantly: very few of them beat market returns, which is why a lot of people recommend index funds. In general, personal investors on average, beat the market, and *women investors* have an even higher success rate. Not sure why, maybe since there's so few of us, the ones that do it are a special breed?

If you start with a sandbox, I would recommend investing in shares of $1000 - $3000 per trade. Not too small that if it goes up or down you don't care, but not too big that you cannot stand to lose the money. And to have no more then 3 or 5 stocks owned at once.



preservationgal
Sep. 2nd, 2010 12:26 pm (UTC)
I'm always interested in long-range financial planning. I might not contribute much, but I'll read for sure.
( 19 comments — Leave a comment )

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