Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Anyone else a little frustrated with things right now?
Old 05-19-2016, 07:49 AM   #1
Recycles dryer sheets
 
Join Date: Feb 2015
Posts: 131
Anyone else a little frustrated with things right now?

I am referring to "income streams" specifically from investments. This eliminates things like rental income, income from a side business, annuity income, pensions and /or social security.

Where are you looking or better yet "generating" income from your investment portfolio. Stocks were essentially flat last year ( not including some random esoteric etf ) and YTD flat again; bonds in the 2-3% yield range unless you want to venture out on the yield curve and take on a lot of interest rate risk or junk bonds with their inherent problems. Cash and MM accounts are pathetic right now. What if stocks are flat throughout this year and again next year?

In light of this have you perhaps decreased your withdrawal rate if you use a total return approach or supplemented dividend income with cash to cover expenses? Curious to know what others think and if anyone is thinking "outside the box."
__________________

__________________
MrLoco is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-19-2016, 08:01 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,894
The 4% withdrawal rate accounts for flat and down years. You shouldn't have to do anything.
__________________

__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 05-19-2016, 08:03 AM   #3
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 994
Quote:
Originally Posted by travelover View Post
The 4% withdrawal rate accounts for flat and down years. You shouldn't have to do anything.
I guess that cover 30 years on average?
__________________
Proverbs 15:22 Designs are brought to nothing where there is no counsel: but where there are many counsellors, they are established.
rec7 is online now   Reply With Quote
Old 05-19-2016, 08:10 AM   #4
Full time employment: Posting here.
 
Join Date: Mar 2015
Location: philly
Posts: 876
Quote:
Originally Posted by travelover View Post
The 4% withdrawal rate accounts for flat and down years. You shouldn't have to do anything.
+1
__________________
bclover is offline   Reply With Quote
Old 05-19-2016, 08:10 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,869
I have had a slow but steady decline in my 7 years of ER in the dividends per share in the main bond fund which supplies me with the monthly cash to cover my expenses. I have done a few things to counteract that, though. One is to add shares to the bond fund so I earn pretty close to the same monthly dividends as I have had before. I do this in 2 main ways: (1) from reinvesting the cap gain distributions in the fund, and (2) from investing any excess bond fund dividends over my expenses back into the fund.


Another thing I have done in the last few years was to start taking as cash the quarterly stock fund dividend instead of reinvesting it automatically. These quarterly dividends happen to coincide with the occasional spikes in my expenses such as estimated income tax payments and semi-annual car insurance premiums. Of course, this means the stock fund isn't increasing as much from those reinvestments being diverted. I had always considered this option when I first ERed, like a Plan B.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is online now   Reply With Quote
Old 05-19-2016, 08:23 AM   #6
Recycles dryer sheets
 
Join Date: Mar 2016
Posts: 76
Inflation was 1.1% last year, so also flat in a sense
__________________
AboutThere is offline   Reply With Quote
Old 05-19-2016, 08:29 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,149
My divs (biggest source of cash flow) have been growing at about 7% per year. Not frustrated at all?
__________________
Danmar is offline   Reply With Quote
Old 05-19-2016, 08:42 AM   #8
Recycles dryer sheets
 
Join Date: Feb 2015
Posts: 131
in
Quote:
Originally Posted by Danmar View Post
My divs (biggest source of cash flow) have been growing at about 7% per year. Not frustrated at all?

Interesting. Mind if I ask do you pick individual stocks looking for those companies with a history of increasing dividends or a dividend growth/appreciation mutual fund?
__________________
MrLoco is offline   Reply With Quote
Old 05-19-2016, 09:34 AM   #9
Full time employment: Posting here.
 
Join Date: Apr 2014
Location: Houston
Posts: 639
Quote:
Originally Posted by MrLoco View Post
....In light of this have you perhaps decreased your withdrawal rate if you use a total return approach or supplemented dividend income with cash to cover expenses? Curious to know what others think and if anyone is thinking "outside the box."
(1) No decrease in allowable withdrawal rate of 4% + cost of living adjustments each year.
(2) In 2014/2015, shifted part of portfolio to allow for more dividend collections (VDIGX, CVX, XOM, T, EMR). Where individual stocks picked, focused on Dividend Aristocrats with P/E ratios I felt were reasonable
(3) Have a couple years of expenses covered by available cash and intermediate term bonds (VWIUX).
(4) Keeping good track of expenses so if we need to cut after awhile, know where that can be done easily and what impact it will have.
__________________
Whisper66 is offline   Reply With Quote
Old 05-19-2016, 10:45 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,705
I view the current stall as a temporary thing. (temporary: a few years or hopefully less)
Dividends, SS and occasional CGs pays the bills.

Not making any changes but have been quietly thinking about other options with a low-ish entry point (under $100K) like perhaps some sort of restaurant startup or property syndicate.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 05-19-2016, 10:58 AM   #11
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
I'm frustrated it has not gone down fast enough. Let's get it over with, the downturn, so other people can come in.
__________________
Fedup is offline   Reply With Quote
Old 05-19-2016, 11:02 AM   #12
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,053
Quote:
Originally Posted by MrLoco View Post
Interesting. Mind if I ask do you pick individual stocks looking for those companies with a history of increasing dividends or a dividend growth/appreciation mutual fund?
The S&P can do that without trouble. There is no need for stock picking. Even DVY will do that.



S&P 500 dividend growth is slowest since 2009 - MarketWatch
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 05-19-2016, 11:11 AM   #13
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by MrLoco View Post
What if stocks are flat throughout this year and again next year?
What if stocks are flat for the next ten years or more ?
__________________
MasterBlaster is offline   Reply With Quote
Anyone else a little frustrated with things right now?
Old 05-19-2016, 11:49 AM   #14
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,899
Anyone else a little frustrated with things right now?

Quote:
Originally Posted by MrLoco View Post
I am referring to "income streams" specifically from investments. This eliminates things like rental income, income from a side business, annuity income, pensions and /or social security.

Where are you looking or better yet "generating" income from your investment portfolio. Stocks were essentially flat last year ( not including some random esoteric etf ) and YTD flat again; bonds in the 2-3% yield range unless you want to venture out on the yield curve and take on a lot of interest rate risk or junk bonds with their inherent problems. Cash and MM accounts are pathetic right now. What if stocks are flat throughout this year and again next year?
My attitude is, so what if they are? The stock market is going to go up and down or stay flat or whatever, always has and always will. My strategy is to just hang on and wait when things are not to my liking. I'm not selling or buying, but I am still collecting dividends. As the saying goes, "pigs get fat, hogs get slaughtered"; in other words, excessive greed is a good way to lose money. For me, this means that absolutely no market timing is on my horizon.

Quote:
Originally Posted by MrLoco View Post
In light of this have you perhaps decreased your withdrawal rate if you use a total return approach or supplemented dividend income with cash to cover expenses? Curious to know what others think and if anyone is thinking "outside the box."
Well, I have dividends (which I receive in cash), pension, and social security, thank heavens, plus I have had a conservative approach to planning my retirement finances so I have a lot of "wiggle room" in my portfolio. Thank goodness for that. I had to withdraw more than usual last year and this year, due to buying my Dream House in cash, fixing it up the way I want it, the costs of selling my previous home, and unexpected high medical/dental expenses. Lately I have relied solely on my cash reserves for withdrawal money, and haven't had to sell for about a year.

My instincts are to kick up the LBYM to help, not in dealing with the market but in dealing with so many unusual expenses in the past year or so. Right now I am cutting back on my discretionary spending a little for the rest of the year, as a form of "damage control".
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 05-19-2016, 11:57 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,427
Quote:
Originally Posted by travelover View Post
The 4% withdrawal rate accounts for flat and down years. You shouldn't have to do anything.
+1

Quote:
Originally Posted by MasterBlaster View Post
What if stocks are flat for the next ten years or more ?
Ugh! I guess I may have to draw SS early.

Oh wait. After 10 years, I will be at the end of SS delay period anyway, so will have to draw no matter what.

That also coincides with RMD on IRA. The question is how much will be left there for RMD anyway.

PS. If I can manage to stay even with inflation, my WR times 10 years should still leave me with roughly 2/3 of the stash in 10 years.

So, flat market is good. Down market, now that's a whole 'nother story.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is online now   Reply With Quote
Old 05-19-2016, 12:13 PM   #16
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
I wonder why I'm too chicken. I don't plan to use my retirement money until 15 more years or RMDs. And only then do I need to withdraw 2.5 %. Right now I have other income to cover my expense, all COLA except my pension. And my liquid asset is a lot less than my non liquid asset.
__________________
Fedup is offline   Reply With Quote
Old 05-19-2016, 12:17 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,427
You can always move from SoCal, and convert that non-liquid asset into cash.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is online now   Reply With Quote
Old 05-19-2016, 12:24 PM   #18
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
Quote:
Originally Posted by NW-Bound View Post
You can always move from SoCal, and convert that non-liquid asset into cash.
I don't have to move. I just need to sell one of my houses. But I think it's deeper than that. More pain when it goes down for some people.
__________________
Fedup is offline   Reply With Quote
Old 05-19-2016, 12:38 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quite frankly, I'm surprised this discussion is even taking place (perhaps I shouldn't be??). If you've constructed a well thought out investment policy statement it would have accounted for the very worst of outcomes (least of all the current one) and you should still be able to sleep well at night. In other words, if you've done your homework well and well in advance the market's gyrations of the day should be of little interest.

There is just too much literature out there for this concept to be new news at all (e.g., why people continually mention Buffet and other "gurus" and then proceed to ignore the very advice they so liberally give to ordinary investors is beyond me; Buffet has stated in a myriad of ways that he has no idea what the market is doing or where it's going nor does he care. He invests for value, never speculation. Regarding portfolio balances, there's John Bogle's consistent warning of "Don't Peek!"). Larry Swedroe just posted regarding investor overconfidence. and it goes on and on and on...

"Cheating" off another's "test" and hoping for the best has always been easy. Doing the hard homework of thinking this stuff through before it's needed is the hallmark of investment wisdom.

Here are Dirk Cotton's most excellent recent and timely (as well as sequential) posts on this very topic:

The Retirement Café: A Model of Retirement Planning, Part 1

The Retirement Café: Adding Risk to the Model, Part 2

The Retirement Café: A Random Walk, A Sequential Game, Part 3

The Retirement Café: What Would A Good Retirement Plan Look Like?, Part 4

The Retirement Café

Reading these posts caused me to review my ISP, question my assumptions (once again), review literature on risk, bear market history, etc., and it was time well spent.
__________________
Options is offline   Reply With Quote
Old 05-19-2016, 03:46 PM   #20
Full time employment: Posting here.
 
Join Date: Jul 2013
Posts: 568
I for one am in the accumulation phase and the last 5-8yrs before ER or ESR so a critical accumulation phase. So I want the market to be either up or down, flat market is a waste of time for me.
__________________

__________________
Target FI age /year: 50/2025
dvalley is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Frustrated in Health insurance seach Billx1 Health and Early Retirement 3 10-05-2008 08:06 PM
Very frustrated with Amazon.com modhatter Other topics 6 09-25-2006 10:15 PM
Frustrated! John Galt Other topics 15 12-27-2004 05:44 AM
Frustrated trying to copy a DVD! Help? soupcxan Other topics 4 12-06-2004 11:29 AM

 

 
All times are GMT -6. The time now is 03:58 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.