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Discussion in 'Non Surf Related' started by Zippy, Dec 25, 2016.
So is it wise for me to continue in this?
FREE FINANCIAL ADVISE traded for used 2xl wetsuit...
Breaker, breaker, BeachBreaker! Apologies for not getting right back with you. I was confined against my will in extended detention. Just catching up now.
So, if I'm correctly reading what you're doing you are:
Living off your savings.
Chunking your salary into your union retirement account, which is in an S&P index fund that has zero fees.
I need a bit more info before I venture an opinion, if that's ok?
Are you chunking your entire salary into your retirement fund?
And if so, is the amount that's going into your retirement fund after-tax or tax-free cabbage?
Or, are you living off your savings & chunking the max amount ($18k) plus catch-up ($6k) into the index fund?
I'm wondering if you perhaps should have considered leaving your savings in an index fund to generate the annual return, which is then compounded annually.
Because nothing really beats compounding over time. As we know, it's nearly impossible to 'catch up' financially later in life. Compared to the folks who chunked money away when in their 20's, 30's & 40's, took in that compound interest every year & are now sitting on a tasty pile of coinage.
For example, CAGR of the S&P the past few yrs looks like this:
That's what your savings would have pulled in the past several years in an index fund.
Not saying what you're doing is off-base, not at all. You'd need to stack up how much is going in to your retirement account, what you're saving in terms of fees by doing so vis a vis taking your savings & plunking that pile in an index fund that compounds annually along with chunking as much of the allowable ($18k and $6k) limits as you can into your retirement index fund.
I am not an expert in any of these matters but I will second to yankee's recommendation of vanguard. I have a portion of my 401k in a variety of their mutuals (i.e., index 500, windsor, morgan, explorer, etc.) and they have not disappointed, plus the low fees are a definate plus. I also have used T. Rowe Price (choice of employer) and they seem pretty good. Some have targeted retirement date funds which they automatically re-balance your allocation (stocks vs bonds, etc.) as you get closer to the target date.
I would also give same caveats regarding annuities. I have a small portion (less than 10%) in one as a part of my diversification strategy that has a guaranteed step up rate (& can do better if market does better) until I withdraw and locked withdrawal rate for life. Downside is that the nugget will have no further increase once withdrawals commence.
I found ths blog helpful http://www.caniretireyet.com and he had a list of retirement calculators http://www.caniretireyet.com/the-best-free-retirement-calculators-round-2/
Personally, I've been running my numbers through http://www.firecalc.com/ and also http://www.flexibleretirementplanner.com, but there are many others out there. These do "Monte carlo simulations" and firecalc gives scenarios using what the market has done over the last 100 years, and provide you a probability of reaching the goals (i.e., annual income) you set. What is important and what nobody knows is what the market will do as you approach retirement and enter a few years as they impact the nest egg you will be pulling from. Those years are critical, and running simulations using upswings or downturns will give you an idea of if your plan will work, and also if you need to put away more now.
Now if I were young and retirement was way off on the horizon, the market (i.e., using s&p index fund as yankee suggest) could say, yield 8 to 9% which will double your investment every 8 or 9 years. Pump in those pre-tax dollars and set it and forget it. 20 or 30 years down the road you will not regret it. And don't worry about downturns, crashes or try to time things.. the market eventually rallies and time is your friend.
One thing I'm starting to look at is large cap dividend funds, that are designed to give you both the potential for equity gains as well as a stream of dividends from blue chippers that have a history of success. Yankee may have insight into these particular funds. As that day approaches when I hang the "Gone fishing.." er, I mean "gone surfing" on my office door, these may be part of the strategy.
Again, I'm no expert but have seen the rule of 72 work in my favor, especially with the mutual funds that were in the market. Again, just set it, and forget it, you won't regret it.
What I've learned from this thread...
Rule #1: Only a fool would pay 4% for financial guidance.
Rule #2: Never under any circumstances expect sound financial advice from corpulent surfers who can not afford their own wet suit.
^^^ This! HAHA
Welcome back Yankers!
Kinda makes you wonder how public pension funds returned such dismal results.
"California Public Employees' Retirement System (CalPERS) today reported a preliminary 0.61 percent net return on investments for the 12-month period that ended June 30, 2016."
+1 and #wetsuite
Standard SI Investment disclaimer:
Past performance does not guarantee future results. You should not rely on any past performance as a guarantee of future investment performance. Unit values and investment returns will fluctuate. Investors are cautioned that data based on less than five years’ experience may not be sufficient to establish a track record on which investment decisions can be based. Therefore, apply the surfing metaphor of diligent and wise sandreconne so that your investing will not be bogus and/or disappointing.
They were probably concerned about protecting the equity due to looming payouts thus had in bonds and other income based investments that are paying a very low rate. Perhaps there was legislation restricting the amount of risk they were allowed to take with the $$.
Nevertheless, one would think that a strategy where they could have put some money that is not required for payout for a while (a percentage based on the ages of the beneficiaries) could have been invested in the market. Who knows, maybe they are underfunded and have limited cash and need it in unrisky liquid assets, the rest they will pillage from the taxpayer.
I have no idea, this is all speculation.
Gracias, Z hombre.
Yah, saw that thing about CalPERS screwing the pooch on its ROI. Those fund managers people s/b summarily fired, maybe used as chum.
How about Harvard, the wealthiest school on planet earth, shiiiitcanning half their in-house investment trader hedgies as well as other in-house financial management personnel due to 'poor performance' of their $35 bln endowment fund.
Yank, your point about some of the buffoonery (poor performance) going on with pensions plans, advising/encouraging our fellow swellers not to completely rely on one source of future income (i.e., SS, defined benefits plans) and to start stashing some away in an IRA or 401k is important. I realize and can be hard for some, since some people have limit income vs. expenses, but if one is fortunate they will get older and @59.5 it will be nice having the option of working or not.
"US stocks rose to fresh records Thursday and government bonds pulled back after President Trump signaled he would advance campaign promises to lower taxes."
Having noted the above, I always say do not read the financial headlines, and don't listen to the financial entertainment machine, epitomized by dingbats like Jim Cramer.
Just sock your money away, keep your debt low to no, have a budget that you (and your family) stick to & just stop buying stuff from the nasty marketing machine. You'll eventually be able to cash out at some point, instead of working because you have to, paying taxes til you drop in the traces.
Sound advice... in harmony w/ ancient wisdom in the good book:
The plans of the diligent lead to profit
as surely as haste leads to poverty.
It's amazing how the basics of successful financial existence do not change over the eons....
'The borrower is slave to the lender.' - - Proverbs 22:7
This one is awesome:
'Going to bed without dinner is better than waking up in debt.' - - Jamaican proverb
Attributed to Albert Einstein:
'Compound interest is the eighth wonder of the world. He who understands it, earns it...he who doesn't... pays it.'
Thanks, Yankee. Your numbers are dead-on, except the 18k+6k per year is doubled, since they allow two accounts, 403c/457b, all coming out of the paycheck before it is taxed, and going into the s&p 500, no fees, ever, plus protections against great loss in case the sky starts falling.
I am a careful person with money, and just starting to learn.
I realize i should also put some of that savings in an index fund, too.
USAA a safe place to go for this? I am a member.?
hahah yea yea
well my track record speaks
NVDA sell recommendation price $120.00
current trading price 113.00
super bowl pick-New England patriots
USAA financial services is tits. Free advice, excellent analysis services.
They have some good, low cost funds too, available only to members.
Brokerage fee starts out high, I think it's 8.95 a trade; but after a certain amount of assets/trades it scales down.
Time to get in the water...
a truly diversified portfolio should include lots of booty
"well my track record speaks
NVDA sell recommendation price $120.00
current trading price 113.00"
Sell recommendation was pretty easy considering the stock is up 100%. Reality on a recommendation is relative..this thing saw 119 and tested 100 during the last Q. I really did not want to unload a position with a $12 cost basis (taxes) heading in to a strong earnings report so I took 20% of the position off (per your recommendation!). The stock is 5-6% off the high and they crushed earnings. I have put in a new order to stop loss at $101. I am going to watch it close but not worry to much about it. Frost, you should get back in the game man...you are on fire right now
So, a trade I am looking at now is QCOM. I would like to get in this one at 48 and have been trying for a couple weeks now. It's looking like it might not get there this go around....
Two others to ponder in the Cyber world...RPD and FEYE.
qcom- sift the bad news forst..but looks like if it gets below 50 youd be safe..good target at 48..dunno if it gets there though
rpd- extremely low float only 42 mil shares out..this thing can go anywhere at anytime..might be fun for a short term trade..
don't like FEYE at all turmoil cfo gone, missed earnings stock was once $75 now mired for a year under 15$
that one reminds me of those govt contract firms who just burn through govt money...