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New Guy Introduction
Old 01-19-2010, 12:03 PM   #1
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New Guy Introduction

Hi everybody,

Long time reader, recent member, and a first time poster.

Here is a little background about me so youíll know a little bit about my situation.

Currently Iím in my mid forties, married with two children ages 14 and 12. My wife is a stay at home mom. So, I guess you can say she is already retired. However, she seems to keep herself pretty busy for being retired. Currently she spends over 20 hrs/week volunteering at our kidís school and their extracurricular activities.

My wife and I each grew up in middle class families in the Midwest. Both of us went to work at relatively early age helping with small family farms. This life style helped create a good work ethic and also gave us the desire for an easier life thru higher education. We each went to state colleges, paying most of the cost by working, student loans, and financial aid. We each got good paying jobs right out of college.

My wife and I meet and married soon after college graduation. We waited to start having children until we could afford for my wife to quite work and be a stay at home mom. She has been able to do some freelance work which brings in some income (less than 5% of our combine income). The work is sporadic enough we donít count on it for income, so it is mostly used for fun money or gets spent on her volunteer activities.

We both are savers and have pretty modest needs and wants. We worry more about giving our children too much stuff than not enough. This has led to us being able to consistently save and invest quite a bit of our income. I believe we are well on our way to being financial comfortable to retire within the next 5 to 10 year time frame. In fact, based on some of the posts in this forum, I could probably retire now if I had a strong desire to do so. But, I enjoy my job quite a bit, get to occasionally travel internationally, and donít really have a lot of outside interests. If I had a strong plan on what to do in retirement, Iíd probably retire sooner than later.

We currently have a net worth (without the house included) of about 12 times our current income. Pretty much all our retirement savings is in stocks, which over the long run has worked well for us. We continue to aggressively save and invest with about 30% of our gross income currently going toward 401K, 529, and company stock.

About 10% of our gross income is going to our house mortgage, property taxes, and house insurance. The mortgage has about 8 years remaining on the loan at a 5% interest rate.

We typically buy slightly used vehicles and drive them till they are only worth scrap metal salvage value. Weíll be buying a new to us vehicle in the next 6 to 18 months. The current family van has about 10 years/200,000 miles on it. Itís still mechanically reliable, but a lot of little things that just donít work quite right on it. So it will become my new work vehicle.

I have a couple specific issues I will be opening discussions on over the next couple of weeks. I look forward to your comments and suggestions.

Brian
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Old 01-19-2010, 12:18 PM   #2
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Welcome to the board!
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Old 01-19-2010, 12:19 PM   #3
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welcome to the forum Brian.

It looks like you are well on your way. My only suggestion would be to consider some uncorrelated assets other than just stocks in your portfolio. By adding other assets you can reduce the risk quite a bit while keeping almost all of the gains.

I suppose you have seen charts like these:

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Old 01-19-2010, 12:48 PM   #4
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Hi MasterBlaster,

Relooking at my retirement portfolio is one of the topics I would like to discuss.

When I say I’m invested in mostly stocks, I should clarify that the stock are diversified index type funds with Vanguard. So it’s probably not as risky as it sounds.

I realize conventional wisdom is that the portfolio should move to a blend of stock and bonds as you near retirement. However, since I’m planning to live 30+ years in retirement, it seems like I’m still a long term investor who should still be heavily invested in stocks.

Brian
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Old 01-19-2010, 01:04 PM   #5
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Brian:

Although stocks may have the best payout long term, they may not do so well in the actual time frame in which you need them to perform.

Or to paraphrase Keynes... "In the long run we are all dead"

What the mixed portfolio does for you is allow your portfolio to better sustain losses.

If you need to withdraw from your stash while stocks are in a down cycle then your portfolio may not last long. If it goes way down just before you need to draw on it then it also may not last very long.

What bonds and other uncorrelated assets do for you is to keep the portfolio from crashing by just giving up a small margin in long term performance.

There is quite a bit of literature out there on so called "optimal" portfolios.

for fun, you might want to read Bernsteins articles on "The Retirement Calculator from Hell"

(FAQ archive): Bernstein's "Retirement Calculator from Hell" articles
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Old 01-19-2010, 01:43 PM   #6
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Welcome to the boards.

Feeling that you could retire today (if you had to) must be wonderful.
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Old 01-19-2010, 03:01 PM   #7
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Hi Bestwifeever,

It is nice not to have to worry about what I’d do if I lost the job I've had for the last 20+ years.

But to actually choose to retire at this time is still a little too scary for me.

First, I’m not convinced we really have enough saved for all the future what if scenarios.

Second, there are a lot of additional costs (cars, college, food, etc) with kids hitting high school age which we probably don’t fully appreciate at this time.

Third, I just don’t know what I’d do with all the time I’d have since most of our close friends are still working.

Brian
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Old 01-19-2010, 04:57 PM   #8
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Quote:
Originally Posted by Brian View Post
Hi everybody,

Long time reader, recent member, and a first time poster.

Here is a little background about me so youíll know a little bit about my situation.

Currently Iím in my mid forties, married with two children ages 14 and 12. My wife is a stay at home mom. So, I guess you can say she is already retired. However, she seems to keep herself pretty busy for being retired. Currently she spends over 20 hrs/week volunteering at our kidís school and their extracurricular activities.

My wife and I each grew up in middle class families in the Midwest. Both of us went to work at relatively early age helping with small family farms. This life style helped create a good work ethic and also gave us the desire for an easier life thru higher education. We each went to state colleges, paying most of the cost by working, student loans, and financial aid. We each got good paying jobs right out of college.

My wife and I meet and married soon after college graduation. We waited to start having children until we could afford for my wife to quite work and be a stay at home mom. She has been able to do some freelance work which brings in some income (less than 5% of our combine income). The work is sporadic enough we donít count on it for income, so it is mostly used for fun money or gets spent on her volunteer activities.

We both are savers and have pretty modest needs and wants. We worry more about giving our children too much stuff than not enough. This has led to us being able to consistently save and invest quite a bit of our income. I believe we are well on our way to being financial comfortable to retire within the next 5 to 10 year time frame. In fact, based on some of the posts in this forum, I could probably retire now if I had a strong desire to do so. But, I enjoy my job quite a bit, get to occasionally travel internationally, and donít really have a lot of outside interests. If I had a strong plan on what to do in retirement, Iíd probably retire sooner than later.

We currently have a net worth (without the house included) of about 12 times our current income. Pretty much all our retirement savings is in stocks, which over the long run has worked well for us. We continue to aggressively save and invest with about 30% of our gross income currently going toward 401K, 529, and company stock.

About 10% of our gross income is going to our house mortgage, property taxes, and house insurance. The mortgage has about 8 years remaining on the loan at a 5% interest rate.

We typically buy slightly used vehicles and drive them till they are only worth scrap metal salvage value. Weíll be buying a new to us vehicle in the next 6 to 18 months. The current family van has about 10 years/200,000 miles on it. Itís still mechanically reliable, but a lot of little things that just donít work quite right on it. So it will become my new work vehicle.

I have a couple specific issues I will be opening discussions on over the next couple of weeks. I look forward to your comments and suggestions.

Brian
Do you have a budget you follow??
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Old 01-19-2010, 05:09 PM   #9
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Hey Brian,

Welcome here.

You seem to be a great fit for this gang. But I suspect that you already know that. Your informative OP indicates that you have firm control on your life and family.

Jump into the frey at your leisure.

That's about all you can do.
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Old 01-20-2010, 10:14 AM   #10
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FinancialDude

No, we really don't have a budget.

Our monthly out of pocket spending is pretty consistent. We pretty much use our credit card for most of our purchases and pay it off at the end of the month. This helps me see generally what we are spending our $ on.

I know we could reduce our spending if we had a budget and tracked our expenses. But since we already seem to live pretty frugally in comparison with our friends, I don't want to go to the trouble of budgetting/tracking expenses. In fact, I'm trying to loosen up on the saving for the future and spending more now.

Brian
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