Ain't that the GD truth!

I started saving pretty young compared to my fellow gen-x'ers and the first $100,000 seemed like it took FOREVER. I watch my money closely which I know some people say you shouldn't do but I like to, and that first couple years it would just creep up. 10 year down the road now and I put in more, but the compounding nature of the beast far, FAR out weighs anything I'm putting in now.

Of course, GE (one of my larger holdings) announcing yesterday they are selling GE Capital and giving $50 billion back to shareholders, thus causing a ~10% jump doesn't hurt!

I ***** about paying $25 for shoes now. :) But I will spend $100 on a torque wrench I may never use. :)

I'm in Canada so no worries about medical bills or medications. :)

Family history says I will only make low 80's and take a few years off that for my job history. I figure I only have to worry about cash till I'm 75, after that it won't matter. I have a group insurance policy that pays enough to plant me and the kid gets a new truck.

My FIL passed yesterday. He was 82. Alzheimer's. Two years from diagnosis to plant food. No one escapes. Laugh. Reduce your stress levels. Be happy.

You sound pretty well grounded and you've got a good philosophy going.

Absolutely. In the beginning it's about the company matching for 401k, and while that's never something to balk at, the compounding is the key. When I was younger I cashed out a couple of 401ks. I could kick myself for that, but what's done is done. I'm going like gangbusters now. I'm just bummed that I missed the compounding.

I think life insurance "investment" is prob the worst financial mistake many people make. It makes huge money for the people that sell it.

Do yourself a favor and look at all the fine print of the policy and vette it with somebody else besides the guy selling it to you.

My parents had several rental properties in the 80's and 90's which worked out very well for them. I am interested, but in the current market where I live (same town as Mom and dad) I feel like the Mortgage payment/Market rent disparity is huge and it would be tough to break even. I would have to go to a surrounding community, maybe an hour plus away to make this work I would think.


Yes my financial planner has been after me to dump it, which I probably will soon.

Last year, people at my company left over $27M on the table simply by not taking our 8% 401k match. Imagine what that would be worth on 30 years?

Wow, 8% is crazy to pass up. It's free money!

I wish I could find the exact numbers, but I read a study once about the effects of compounding interest over time and they took two people over a 30 year time frame starting in 1980. Person A started saving $10,000/year for 10 years invested in a market fund, then stopped completely. Person B waited 10 years then started putting $15,000/year in the same market fund for the next 20 years. After 30 years, Person A still had more money even though they invested less over half as many years.

Here's the comparison but it uses $5k per year as the investment:

http://forums.pelicanparts.com/uploa...1428805277.jpg

It came from here: http://www.darwinsfinance.com/start-investing-today-amazing/

An insurance statistic for most of the developed world.

95% Of us will be dead or broke at 65!

4% Well off

1% Rich.

My Dad retired at 44....Never had close to a million dollars...Knows how to invest and is smart with money...never worried. I will be fine if I can emulate him somewhat!

Most people are completely clueless about investing, compounding and 401K match. That's like getting an 8% raise every year (generally 3 times as much as most standard raises).

Most of my friends want new Harley Davidsons, and new pickup trucks, and honestly believe they will never be able to retire because of all the money they spend right now on toys. I guess there is something to be said for enjoying your money now, and living in the lap of luxury, but when they do stop working at 70 years old, they won't have 2 nickles to rub together....so sad.

Everyone here posting about the benefits of Compounding needs to look at their mortgage and realize how paying down your principal allows you to benefit both ways.........I used to kick this around all night over beer with college room-mates.......We vowed to pay of our mortgages in 5 years of less when out of school.....I was the only one that drank the Kool-aid......

I have mixed feelings about that. I'm not convinced a house is an asset... Some financial planners view it as a liability. Taxes, repairs and maintenance costs are liabilities that continue even if it's paid off.

I got serious about my retirement planning when I was 40. I had money in my 401k and a IRA, but I was just putting in enough to get the company match. I was putting in a lot of hours at the time and knew I didn't want to be working like that for the next 65 years. I was an engineer/construction manager for a large highway and bridge company. We had jobs going night and day and so did our competitors.

So I made up a spreadsheet and talked it over with the wife. Our plan was to be able to retire when I hit 55. We figure we didn't have to retire, but it would still be nice to not have to worry about it. We were both making good money for where we lived, Missouri, so we basically maintained our standard of living that we had that was good. We invested the majority of our raises and bonus money going forward. We had married right out of college and had our kids when we were young, twins, and paid for both of their college educations. Both got jobs and moved out while we were still in our 40's so that helped.

Then due to some unexpected events I decided to quit at 50, in 2007. I had sold some land for a very nice profit, and my boss passed away at 57 from melanoma. Things were changing at work and I had by that time enough money to not need to work.

At the time I quit I was making around 150k, and the wife was making about 100k. She worked for two more years, she is four years younger than me.

I do realize that I could have been putting 150k or so a year into investments and probably be worth a million or two more now. But I could also be dead, the last 8 years of having the time to do whatever I want is worth it to me. We regularly take trips, I like to golf so I joined the country club, I wanted to learn to fly and now I own a plane. We even moved to south west Florida so we had nicer weather during most of the year to enjoy things. We will take trips in the summer.

So plan early and save, it can be done.

I'm in the same boat....two in college and one more behind them. I've been told that you should not spend your retirement savings on college. You can borrow for college, you can't borrow for retirement.

But, I'm not (yet) following that advice. Footing the tab for the first two years for my oldest. He's planning to commission (GA Tech Engineering student), starting his junior year. My daughter and youngest son will get two years paid by papa...the rest is on them. At least that's the plan. I just struggle with letting them get into a hole before they even get started. We'll see.

That's tough. I'll be in the same boat in about 10 years with my two. My business partner is ready to retire at 55....no kids to put thru college.

I have already told my kids to plan on a state school or find scholarships. I think in this day and age affluent parents are smart to put boundaries around their college budget. A four-year college degree is basically meaningless these days....I refuse to spend $300K for my kid to get a liberal arts degree and a job at McDonalds. At least yours is in engineering, good field. Definitely begs the question is traditional college even worth it anymore? Very interesting article in Time magazine about this a couple years back. But that's a whole different thread.

Mike, I am with you on this..I'm not going to saddle my kid with college debt. My son did take out a $10K loan in his freshman year: he had to have skin in the game. He is finishing up his sophomore year and he is in good shape. He will study abroad for a year (very happy about that). My oldest, who didn't attend college, runs his own business - I don't worry about him any more: He just bought his first condo.

My best investment has been my boys.

Originally I managed mine, but now just pay a manager. It allows me to have rentals wherever I want and takes most of the pain of dealing with renters away. Farther away is better for me, especially if the earning potential is greater. Management expense, taxes, insurance, repairs, mortgage interest, travel to visit the home (hopefully in Hawaii. not Detroit), depreciation, etc. are all tax deductible, so it is difficult not to lose money on paper (depreciation is huge) and get a tax break while still approximately breaking even or making a few dollars. I am ok with not making oo much profit as my tax bracket is quite high now...and am setting myself up for retirement when it is a bit lower.

I lived in all my rentals but one (and it was a relative's home) so the entry costs were low and I know the areas very well. All are in very good areas for schools/families. If they do not increase in value one bit, I still win big when they are paid off as I have little invested. An FHA loan now only requires a 3% downpayment. Now that is leverage. For example, if you bought a $100K house for $3K down (lived in it a couple years) and only averaged a 2% inflation of the home price per year (typical)....you essentially are getting almost a 60% return which is not taxable until you sell the home. That does not even factor in the fact that the home would pay off in 15-30 years which essentially adds another $100K back. In fact, you could choose to never sell the home and pay capital gains and just collect rent after it is paid for or refinance to pull out a portion of your equity if you need a larger sum for kids college, etc..

We moved and I bought a home abot the time each of our children wee born. I kept both as a rental to help pay each of my two children's college, In the 15-17 years before they went to college, both were paid off. I told them that I would help them, but did not explain that there was a bunch of money to waste and they would have to be frugal and work some if they did not get scholarships. One kid chose not go to college and the other went too med schoool, but had scholarships all the way through. Darn, now I am stuck with the houses to help fund my retirement. The are pretty much all profit now which is taxable, but I have a few more that are losses on paper that I can write off the income against...so it works out pretty good.

I hope you have a fee-only financial planner. I made the mistake of listening to a "financial planner" who was really an investment seller. I wasted tons of money on life insurance and fees before I wised up. I went to a fee-only planner who got me on the right track for $800. I go back every three years or whenever something big happens in my life for a $500 "tune-up." In 12 years she's cost me way less than the guy who worked for "free."

That's a good strategy...move into the house, pay down some of the mortgage, let the average rents in the area climb, then turn it into a rental. Where I live just buying outright to rent will not cash flow b/c the mortgages are high and the rents are low.

Mom and Dad did the same, they had 8 years of college for me and my little sister. They sold one rental property each year of college and funded tuition, etc with it. Worked out beautifully.

+1000
Whole or Universal life insurance can be part of an investment strategy IF you need life insurance AND are in a high tax bracket. There is a limit to how much "investment" money you can put in them.

Middle class and lower middle class homes have done the best for me. They just need to be where there are great schools and good jobs.

Every time we moved, the wife got a little nicer house. I got a couple of years to fix things, etc. The only small problem is that your final house will probably be quite nice and not paid for going into retirement. On the other hand, with several paid for homes rented out, you need the tax write off...and might as well get a 30 or even a 40 year mortgage as you really don't care if you ever pay that one off. If you die at 80 with a mortgage that is not paid off, it is no problem as your heirs will probably sell your home for the equity anyways. Obviously, if it makes you more comfortable, you can refinance some of the rentals to pay off that home (or sell them and do the same).

As the home increases in value and as you pay down the mortgage, it changes some of the math. Although you have invested only $3k of your own money in that $100K home, if you have a 15 year mortgage, in 15 years, you may have $150K or more in equity (even though you still invested only the $3K of your own money), yet your rent may have only risen from $800 per mo to $1000 per mo. On the other hand, when the mortgage pays off, your expenses go way down (although repairs may slightly increase). So, while a $800 mo return on your initial $3K seems like a lot, $1000 mo on your $150K equity may not. For me, I still like the diversification and the cash flow nature as current income as opposed to capital gains (as I will already have a large part of my portfolio in the stock market via 401k...and if I sold a long-term rental, paid the capital gains and realtor fees and invested the remainder; I would have a hard time getting similar return in a relatively safe instrument/investment.

$175,000,000,000,000.00 USD and COUNTING
 

Ahhh..that 1M retirement stash will just about cover the life style you tout...and not the high fashion one either...

The dirty little secret is that even Billy Gates and Warren the "the profit of Omaha" Bufett don't have enough of money either... it is all the high and fast game of Macro economics that is going to wipe you clean. NEVER and let me repeat NEVER EVER before have the powers that be in the USA fked with the very economic (fiscal & monetary policy) ground that you stand on. What makes the dose even more deadly is the preeminent position of the USA in the Global economy. That just wipes everybody clean...

So fk all your retirement plans...I find them to be delusional.

You are all dealing with what was and not with what is now the new reality. Do not feel so all alone, most of the Wall Street types, Monetary policy makers, Fiscal Boyz in DC and States, and most of all the Media hucksters are all operating under the same delusional perceptions. However bit by bit they have to give up their notions as the policies that they have believed to be solutions are non operative anymore. In reality their policies never worked as the wealth of the nation was the true magic of their policies.

What the Central Bankers have accomplished is a stabilization of an unstable situation. However they are doing it at a cost, of digging the original hole even deeper. They see no other solution, for the devil you know is better than rolling the dice and meeting the devil that you do not know. The result is slow grinding process of change from a affluent society to a poor society.

Figure it out, with 175T in total US debt against 115T in total US assets everything you (Billy and Warren tooo) own doesn't belong to you...not only that but your future earnings are not even your own....nor are your children's or grandchildrens...is this a sustainable situation or does the system at some point throw a rod right through the block causing the engine of monetary, fiscal and economic policy to seize right up....in that you had better have a good pair of shoes cause you are going to be walking and not riding on down to the bread line. Or will the system just keep on grinding you down, where as you give up a bit of your American Dream a bit at a time until you find yourself walking on down to the modern equivalent of a bread line.

Probability says that it is not an either or situation, but a third alternative. which would be a combination of both scenarios. One where a monetary crisis does occur, which irrevocably changes the perceptions under which you operate but leaves you with a semblance of your previous life. Here one thinks that those who think that they can afford both a Ferrari and a Porsche will have to settle for posters of them on the wall.

In conclusion, and AGAIN let me reiterate, it is a hard thing to get your head around but the thing that destroys absolutely is that the powers that be are fking around with fiscal and MONETARY POLICY of the RESERVe CURRENCY for the Global economy... That in of itself is a game changer..

Ladies and Gentlemen and other assorted punk azz mtherfkers. I keep on working the equation, adding in new data all the time to see if the conclusions I have arrived at are still an accurate assessment...if ones conclusions are still operative?

The one factor that one inescapably can not get around is that 175T USD in debt. Sooner or later, the biggest bubble of them all is going to POP! Unless of course GRAVITY does not prevail and we are in an alternative universe after all. Since the advent of Keynesian economic theory, the magic bullet of economic rectification has been government stimulation of the economy and or and inflationary economic policy. This has been the operative norm since the the 1930's and with certainty since the end of WW2. During the succeeding decades it seemed to work like a charm providing for an ever expanding economy. However now with the current debt levels not only are the edges of that policy becoming frayed but the center is no longer holding. Here we see massive and increasing geopolitical and domestic instability along with ever more variations on a theme of stimulation through provisions of liquidity. Yet after 6 years of trying one thing after another the center still does not hold requiring yet another round of juicing the system.

George Will recently said, "2% economic growth is not going to provide the income needed in order to pay the bills coming due." when the back loaded SS unfunded liability becomes front loaded interest bearing debt and thus "the current system is unsustainable."

What we have here is a massive and ever expanding debt that is sky high with a deflating economy as the consumers who have propelled an inflating economy are tapped out. Thus the bills to be paid are getting higher (debt) while the income to pay them is shrinking.

The inevitable solution is a cut in lifestyle whether forced or through attrition. If the government reneges on it's promised entitlements it will be the same as a default on it's obligations. The result will be massive civil unrest as everything that you have known to be true will be thrown right out the window. In effect the ground under your feet will shake.

Which brings us to another question.

What to do if in the case of the apocalypse as described herein actually occurs?

There are as many scenarios of survival as there are people. Most are pipe dreams and prognostications. Story-telling. Spin.

If the dollar goes to zero no number of lucrative rental properties, no 401k balances impressive as they appear, not even the fanciest of financial instruments is going to matter one bit. Survival will come down to whomever is the smartest, strongest and most ruthless at garnering for himself and his clan three things: Food, shelter and fuel.

^Exactly. If the "one" is so GD smart, why doesn't he stop speaking in riddles and offer up some actual thoughts or advice so all of us "Ladies and G/\entlemen and other assorted punk azz mtherfkers" can make some sense of the coming apocalypse?

Tabs, we're all quite a bit worried about you, old fella.

W O W !

I feel sorry for TABS, he has no hope, and spouts off about having no future and only doom and gloom in the forecast. How do you get up in the morning and go to work, and why haven't you shoved a pistol in your mouth yet.

I'll keep you in my prayers that you can find some peace in the world, and can start enjoying the life that you are currently living, and can see some bright spots on the horizon rather than the apocalyptic view.

When this economic apocalypse actually happens, we will all bow to your superior knowledge, acknowledge that we know nothing, name you supreme leader, and put you in charge of the recovery.

Even if Tabs is one quarter right then there are storm clouds ahead. Blame it on the politicians. So Tabs what do you do to assure your financial security?

It is really simple, do ya think that this music can go on forever? The numbers do not lie to you. How in the world are they going to rectify those numbers?* I look realistically at the possibilities,without the blinders on. I know things can turn in the blink of an eye.

Your best option is to get a small piece of land where you can grow some vegetables, chickens, fruit etc and have it paid off. Have a few shekels in precious metals, some stocked away food stuffs and some armaments. Go solar, have a well for water and some wood for heat. Even in a Suburban setting this can largely be accomplished.

This is not really different than what my Grand parents did back in the Depression.


*Bolles Simpson committee came up with a plan which was DOA. There is NO WILL to fix or ameliorate anything...

What I posted above is what is REAL and it is the truth. Anything else is a delusion. The numbers do not lie. First QTR GDP 2015 estimated at ZERO PERCENT GROWTH...chew on that one for awhile.

Sooner or later you all will have to face the music.

That's my place!

I'm buying something remote with room out back for a potters wheel and a kiln. ;)

Absolutely everything but the solar part of description above, I already have...a paid off house on a wooded 10 acre lot with a creek, fruit trees and bushes, well water, rural setting, garden, 20 chickens, armaments, wood heat exclusively for the past 20 years, and stocked away food stocks.

I guess this is why I misunderstand how much money it takes MOST people to live, especially those that don't have any of the criteria listed above.

I do realize this is a Porsche bulletin board, but geeze guys... y'all do realize that the average earning in the USA is $36k, right? $50k is considered a good salary in most places. Assuming you can put away 1/2, which would be mighty hard unless you were w/o kids, you'd be lucky to make your million in 30 years. Me, I had a sick wife. Drs told her at 18 she wouldn't make 30. Had her till 45. Wouldn't trade dollars for love, that's for damn sure. I think we all over think the retirement thing...

All I want is to get the house paid off. IMHO, this is 'the key' (along with any infrastructure you want...shed, barn... After that its all gravy. If I've got a roof over my head and some space under my feet, I can make the rest work. Its actually way more fun to make my own whatever (booze, car, plane, chair, etc.) than to buy anyways...

I also don't believe that Ill ever be totally without some earning.

My last catastrophic expense spread sheet was just under $1k a month without the mortgage. That's cell phone, 4 dogs, $15 a day food, insurances, ect. $33 a day doesn't seem so bad. Of course I live 'out' so no water bill (well) or sewer bill (septic), which is not cheap. Heat is wood, so just the electric bill. If all goes well I'll zero that out with PV panels I'm slowly adding in every year.

Even at stupid Maryland property tax rates, I can collect $5k in aluminum cans in a year :D.

You can either make ****you money, or stay under the radar...

From my prospective I see the high cost of living areas are for instance the lower mainland of BC which includes Vancouver and to a lesser extent Victoria. In the US it would be California particularly the coastal areas. Add the hight cost of property purchase plus the high property taxes for instance and once you get used to the lifestyle and great climate then your cost of living is high over the years. If you make big money then than offsets that but not everybody does.

It is not so much how much you make but how much you spend. I would think those that live in States such as Montana, Ohio etc the cost of living would be much lower.

Tabs is right in that you have to batten down the hatches. I would have a rainy fund. For now your US $ is strong but the next recession it could go the other way and there will be another recession.

Guy

Flyover states are good for something.

Ok, I have 2 million :rolleyes: in my 401k and all I want is 3-5% a year. Let's hear the plans.

If you want me to stick my neck out then I need a commission. All in green font LOL:D
Guy