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I've got a long way to go...
Old 04-23-2014, 07:58 PM   #1
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I've got a long way to go...

27 years old, I have a mediocre job, no real college education (2yr degree) and quite frankly, have underperformed to my potential my whole life. Given my absolute lack of a work ethic, I don't see that changing any time soon either.

However, I feel confident that early retirement isn't that improbable for me, even on my mediocre wages, provided I find the right opportunities to attain growth, and yes, take certain risks. My goal is to retire in 30 years... at the age of 58.

At this point, I put about $6k a year into my 401k and personal stock holdings, and have holdings of around $40k. Year over year, I have been able to create about a 15% total return on my investment, and expect to continue that approximate rate of return going forward. Provided I can stay within 2-3 percentage points of that 15%, I should have around 2.5 to 3 million inflation-adjusted dollars by time I am ready to retire.

Of course retirement, for me, will just be quitting my day job and focusing on stocks full-time. So there is no reason I cannot continue to generate those kind of returns going forward from retirement, especially considering I will have picked up an additional 30 years of market experience in the meantime as I manage my own money.

So, long story short... I'm just another rat in the rat race grinding towards the distant light at the end of the tunnel... someday I'll get there.
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Old 04-23-2014, 11:46 PM   #2
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Bummer on the work ethic, apparently this underperformance is continuing with your stock picks as over the last 5 years the total stock market has averaged over 20% per year. Going forward though I wouldn't plan for any more than the historical average of 9 or 10%.
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Old 04-24-2014, 12:49 AM   #3
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I know how the market has performed in recent years, and I kind of missed the boat by sitting on my hands back in '09. I really didn't start paying attention to my portfolio until about a year and a half ago, and had some bad losses (-$7k) while I was learning how to invest and play options properly... but now that I have that down, I've been doing great. I've managed 14% in the past 6 months, for example, and 26% over the past year. I'd be pumped if I could beat the market by 6% every year, and I think it's certainly feasible with a smaller portfolio that requires less diversification during accumulation phases.

Like I said, I know I'll have to take risks, but when my portfolio is relatively small and I am relatively young, why not? The only long-term holdings in my portfolio at this moment are ARCC (yield), PSEC (yield), CVX (growth) and UNH (growth). I'm up nicely on each of those without factoring in dividend payments, and the rest of my portfolio (~40%) is a mix of option positions and speculative 3-6 month plays based on technical charts. My long-term plan is to use the profits from the speculative side of my portfolio to add at least one long position per year, then channel the rest of the profits back into speculative positions. Yield stocks are DRIP'ed.
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Old 04-24-2014, 10:30 PM   #4
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I agree your returns may be a bit optimistic and you may fall short. However, keep saving and stay in stocks for the long term and you will still increase your nest egg and be able to retire. The key is what your expenses are now, in future while working, and in retirement. Keep up the 401k and try to increase that to the max pre-tax. Then LBYM, and work on saving more. As you get more salary, put more into savings. Understand your expenses in retirement and you will know when you have enough to retire.
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Old 04-25-2014, 03:45 AM   #5
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Your post makes me sad.
Lots of people believe that they can become FI by flowing with the market. Later they realise that they just flow with inflation.
Lots of people believe that they can have 2 digit performances year after year. I did at your age, too, after some good years.
Let me know about that 10 years later.

Please find out what made/makes you underperform and how to change that. In which area is your ethic better than at work? Are you in the wrong field?

You are not old enough to give up on at least 8 hours /5days per week for the next 30 years. It will become harder and harder to drag yourself to work.
Look at the unhappy older people around you. Look here into the threads about what members would recommend to job starters, like this:
Career advice to a young worker


My best investments have been those I made in myself, like education + trainings.
I invested time and money (without going into debt) and it was so worth it.
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Old 04-25-2014, 05:13 AM   #6
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At 27 I am not sure why you are persisting in a pretty negative attitude. Are you healthy mentally and physically? I'd recommend making a concrete plan to 1) complete a college degree in an area that excites you intellectually; 2) work toward professional employment in that field. There's more to life than saving money for retirement. Think about preparing yourself to give back, to make a difference--in your life and in the life of others.
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Old 04-25-2014, 06:22 AM   #7
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Hi Fade,
Welcome to the forum. Achieving a double digit return "year over year" is not sustainable; don't use it for your planning. I suggest that you plan on a 3-4% real return (starting with a 70-75% stock/25-30% bond mix), continue to contribute to your 401k and increase it annually with each pay raise. This should provide a nice nest egg someday.
Good luck!
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Old 04-25-2014, 09:22 AM   #8
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However, keep saving and stay in stocks for the long term and you will still increase your nest egg and be able to retire.
There is a problem with this suggestion in that OP's idea of investing is options and speculative plays. This is NOT the same as a long term equity investment.
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Old 04-25-2014, 10:41 AM   #9
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Originally Posted by growing_older View Post
There is a problem with this suggestion in that OP's idea of investing is options and speculative plays. This is NOT the same as a long term equity investment.
I should have been specific, that long term equity investment is what I meant, i.e. buy and hold quality companies or diversified mutual funds. Thanks for the clarification. I did not want to encourage options trading and similar highly speculative investments in the stock market.
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