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Re: Anyone here who blew it? Retired too soon?
Old 03-13-2006, 05:42 PM   #21
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Re: Anyone here who blew it? Retired too soon?

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Originally Posted by Cute 'n Fuzzy Bunny
I was well invested from 2000-2003 and except for that one screwup with the QQQ's when the market went into its slide, did pretty well with balanced funds and reits.
I'm going to own up to having been a Dirty Market Timer in late 1999. Moved half my portfolio to D&C Balanced and the other half to cash and bonds.

No claim to any real skill in my timing, just got very uncomfortable with equity prices and all the Y2K "the sky is falling" BS.

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Re: Anyone here who blew it? Retired too soon?
Old 03-13-2006, 07:13 PM   #22
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Re: Anyone here who blew it? Retired too soon?

I know some folks (can think of one couple in particular) who retired in 1999/2000, but severe hits to their portfolio in 2002 and returned to work in 2003.* I think these folks had a) never heard of the 4% rule and b) were mostly invested in high-flying growth stocks.* Many, many folks today still think you can retire and expect to pull 8 to 10% out of your portfolio and do OK.* Many, many folks don't understand about diversification, asset allocation, etc., either.* It's amazing.* Anyway - the good news is that these poor folks seem to have put their financial house back in order and are retiring again.

Gosh - so many folks see to get the WORST advice from financial advisors.* Such a ripoff, in SO many ways.....

I know of one guy who retired in his 40s.* In spite of having an apartment in Paris, and traveling between the US and Paris doing all sorts of cool stuff, he got bored and somewhat depressed without a job.* He went into a political consulting/attorney type position for the Texas senate and seems to be much happier now than when he was retired.* He is still financially independent.* He truly believes that one cannot be happy without some type of job.

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Re: Anyone here who blew it? Retired too soon?
Old 03-13-2006, 07:34 PM   #23
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Re: Anyone here who blew it? Retired too soon?

OUCH! http://www.s152957355.onlinehome.us/...num=1109786644
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Re: Anyone here who blew it? Retired too soon?
Old 03-13-2006, 09:32 PM   #24
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Re: Anyone here who blew it? Retired too soon?

I actually know a guy who experienced a busted ER. He ER'd in his late 30's after riding the bull market tidal wave. His portfolio dropped (heavy in large caps and other seedy non-cash producing companies), his health insurance shot up and he consequently returned to work full-time. Luckily his old employer accepted him back.

I spoke with him about his "experience" and he basically told me he had no plan, just figured he had enough and his portfolio would continue to grow. He also did not count on some of his health problems and medications he had to take as a result.

I don't mean to be the spoiler on this thread but it is a story that illustrates what can happen - poor planning, medical problems, concentrated portfolio, and flat/declining growth of a portfolio.
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Re: Anyone here who blew it? Retired too soon?
Old 03-13-2006, 10:02 PM   #25
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Re: Anyone here who blew it? Retired too soon?

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Originally Posted by Rich_in_Tampa
I know this might be painful, but is there anyone here who can take an honest look back and admit that they FIRED too soon?
If so, what warnings did you miss, and what lessons would you care to share?
A fellow naval officer retired at age 41 with plenty to live on for the rest of his life, but found that he couldn't handle the responsibility of his own entertainment. I think his symptoms were actually bordering on chronic depression, until he found solace in the structure of the workplace.

He's still working. He doesn't need the money, but he says he's happy.
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 12:27 AM   #26
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Re: Anyone here who blew it? Retired too soon?

I have a relative who retired in 2000 and recently went back to work ... think it was a combination of losing a bundle in the market and the middle generation sandwich -- ill parents and divorced children who both needed $$ help....
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 06:25 AM   #27
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Re: Anyone here who blew it? Retired too soon?

When I realized that my mother is taking 6% of her port to live on (plus Social Security), I had a moment of panic. Then I remembered that she's 80 years old! On the other hand, both of her parents lived to 93, and Mom's in excellent health so I expect she'll be around another 20 years--hmm, without LTC insurance. On the 4th hand, her port is 65% individual bonds, 25% small postions in ~40 individual stocks (mostly dividend-payers but some growth), and 10% CDs. She trusts her broker, who doesn't churn her account and doesn't appear to be ripping her off. And on the 5th hand, she spends a relatively high percentage on discretionary--should be easy to cut back, if necessary.
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 06:27 AM   #28
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Re: Anyone here who blew it? Retired too soon?

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Originally Posted by Nords
...* but found that he couldn't handle the responsibility of his own entertainment.* I think his symptoms were actually bordering on chronic depression, until he found solace in the structure of the workplace.
Yep!* There really seem to be some folks who have to work in order to avoid depression!!

I think I remember one guy saying he couldn't really get out of bed in the morning, and then pretty much would get sucked into watching TV all day, every day. (That's depression, folks!)

Audrey
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 06:42 AM   #29
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Re: Anyone here who blew it? Retired too soon?

I suppose some people just cant live without external structure and 'entertainment' provided by work, and some people might really like what they're doing most of the time.

It makes me wonder though when people leave and go back a year later because they missed it or felt bored. I imagine heroin addicts feel the same pull...

Theres something inherently good about a healthy life. Filling an unhealthy or unhappy one up with stuff to keep yourself from dwelling on it isnt necessarily the best solution.
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 06:57 AM   #30
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Re: Anyone here who blew it? Retired too soon?

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Originally Posted by astromeria
When I realized that my mother is taking 6% of her port to live on (plus Social Security), I had a moment of panic. Then I remembered that she's 80 years old! On the other hand, both of her parents lived to 93, and Mom's in excellent health so I expect she'll be around another 20 years--hmm, without LTC insurance. On the 4th hand, her port is 65% individual bonds, 25% small postions in ~40 individual stocks (mostly dividend-payers but some growth), and 10% CDs. She trusts her broker, who doesn't churn her account and doesn't appear to be ripping her off. And on the 5th hand, she spends a relatively high percentage on discretionary--should be easy to cut back, if necessary.
Sounds like she is fine, even with a 6% withdrawal rate. Likely that she won't outlive her conservative portfolio.
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 07:29 AM   #31
 
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Re: Anyone here who blew it? Retired too soon?

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Originally Posted by bongo2
I know one guy in Minneapolis who ERd at 42 and is now back to work. I don't know him well enough to ask if he ran out of dough or just got bored.
Would his initials be C.K. by any chance?
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 11:35 AM   #32
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Re: Anyone here who blew it? Retired too soon?

Quote:
Originally Posted by astromeria
When I realized that my mother is taking 6% of her port to live on (plus Social Security), I had a moment of panic. Then I remembered that she's 80 years old!
Quote:
Originally Posted by brewer12345
Sounds like she is fine, even with a 6% withdrawal rate.* Likely that she won't outlive her conservative portfolio.
Boy, is she gonna be sorry when she's 122 years old!
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 12:07 PM   #33
 
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Re: Anyone here who blew it? Retired too soon?

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I'm going to own up to having been a Dirty Market Timer in late 1999. Moved half my portfolio to D&C Balanced and the other half to cash and bonds.

No claim to any real skill in my timing, just got very uncomfortable with equity prices and all the Y2K "the sky is falling" BS.
Same here, REW! That was my final real-life lesson about market timing.

Actually, it didn't turn out badly for me. I DCA'd to lower stock holding over the period of May-December 1999, then started DCA'ing back in early 2000. However, I stayed more heavily in long bonds that I might have otherwise, so I think I did better than I would have without any timing.

I sure was convinced that even if there wasn't a Y2K problem, people would fear it and sell stocks in December. I was 100% wrong, and that convinced me that you can't reliable guess what is going to happen in the market.

Wittgenstein said that you can't be cured until you have the disease, and I think that's true of market timing.

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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 12:24 PM   #34
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Re: Anyone here who blew it? Retired too soon?

I think there are two kinds of "market timers". The ones who mistakenly believe they can establish a high and low water mark on a stock or an asset class with the intent to get in and out of it and profit by "buy low, sell high", and the ones who look at a hideously overpriced market and get the hell out or see a hideously underpriced market (probably caused by some disaster or major event), take two courage pills and buy.

For the latter, no calculator or spreadsheet or ratios are required. Its usually something pretty obvious, like stocks with no earnings and no business plan that are worth more than general motors, or after someone flies a plane into a building.
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 05:15 PM   #35
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Re: Anyone here who blew it? Retired too soon?

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Originally Posted by Cute 'n Fuzzy Bunny
I think there are two kinds of "market timers".* The ones who mistakenly believe they can establish a high and low water mark on a stock or an asset class with the intent to get in and out of it and profit by "buy low, sell high", and the ones who look at a hideously overpriced market and get the hell out or see a hideously underpriced market (probably caused by some disaster or major event), take two courage pills and buy.

For the latter, no calculator or spreadsheet or ratios are required.* Its usually something pretty obvious, like stocks with no earnings and no business plan that are worth more than general motors, or after someone flies a plane into a building.
That's why I like the Asset Allocation approach to market timing.

A lot of people I know got out of REITs in 2003, because they were "ridiculously overvalued". Same in 2004. 2005 - well now EVERYONE knew that there was now way - time to sell REITs. Well - 2005 was still a positive year!

Well, each of those good years I kept trimming back to my original allocation percentage. And darn it - the REIT funds kept going higher.

Yes, there are times an asset class is overvalued. But you can't predict WHEN it's going to correct - so it's extremely easy to be WAY TOO EARLY as several of my buddies noticed on their REIT predictions. I guess I prefer to let an asset class run, keep trimming back to "neutral" when it gets "hot", and wait for the asset class to correct so that I can BUY MORE.

Personally that's why asset allocation appeals to me. It's a rational way to "market time". There is no guessing involved.

Audrey

Oh yeah - you can repeat the above story with bonds. How many people have gotten out of bonds expecting them to crater 2 years ago? I mean EVERYONE knew that 10-year treasury rates were going to go way up. It was obvious - right?
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 06:06 PM   #36
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Re: Anyone here who blew it? Retired too soon?

Audrey - point taken...although I'll bet people who sold their tech stocks in 1998 feel a lot better than the people who sold in 2001.

REITS dont meet the criteria of "HOLY **** THATS WAY TOO #$^%#ING HIGH@!". Not yet anyway.
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 09:22 PM   #37
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Re: Anyone here who blew it? Retired too soon?

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REITS dont meet the criteria of "HOLY **** THATS WAY TOO #$^%#ING HIGH@!".* Not yet anyway.
There are a lot of people who disagree with you! The word "bubble" is thrown around WAY too casually.

Audrey
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Re: Anyone here who blew it? Retired too soon?
Old 03-14-2006, 09:39 PM   #38
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Re: Anyone here who blew it? Retired too soon?

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There are a lot of people who disagree with you!
Wow, thats a freakin' shock...


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Re: Anyone here who blew it? Retired too soon?
Old 03-15-2006, 11:43 AM   #39
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Re: Anyone here who blew it? Retired too soon?

There are undoubtedly localized residential re bubbles around, but I don't see a commercial/industrial bubble anywhere, so REITS don't seem terribly overvalued to me...
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Re: Anyone here who blew it? Retired too soon?
Old 03-15-2006, 11:59 AM   #40
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Re: Anyone here who blew it? Retired too soon?

I havent looked at the vanguard REIT fund since I sold it some months ago. The PE is in the mid 30's. That may fall into the "stupidly overvalued" category. However, looking at the chart below, it hasnt had the steep run-up that made the nasdaq "stupid", and its value increase has been fairly measured and steady.

Looking at that chart, it looks like something that didnt really go anywhere for a while then about when people started getting interested in reits it turned up sharp. Taking the full 10 years into consideration, its not ringing all three alarm bells. Maybe people just put more money into them and they started putting it to work and creating value.

I probably wouldnt be a buyer right now though, and I would consider being a seller. I still think it falls more into the "uh oh" category than the "stupid" category. I thought it was peaky when I bought it a couple of years ago, as I did with Energy. Made good money on them.

Templetons thesis that he got rich by "selling too soon" is well taken here. Or we could see 5 more years just like the last 5. I wish there was a lot more historical data on reits than there is...

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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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