Does anybody want to be rich when they get old?

[NW-Bound]

Yes, but the point is that I want to be as rich as Danmar and our young friend FIREd, so that I don't care about the cost.

We have flown business class & first class courtesy of megacorps, but have not paid out of pocket for any. It hurts too much, because we are still poor.

 

[NW-Bound]

Someone once said

“A Conscience Is What Hurts When All Of Your Other Parts Feel So Good.” - Anon.

As all the money I have made came from working or investing which are all legal and ethical means, not even my conscience would hurt if and when I get rich. Please God, just one more stock bubble.

 

[ripper1]

Asset allocation and withdrawal rate are usually set according to one's risk tolerance.

It's not surprising to me that people are suggesting more equities and higher withdrawal when the market is surging as it is now.

However, I remember the fall of 2008, when so many of our members posted that they were selling. Some were even completely pulling out of the market, selling ALL of their equities low and essentially condemning themselves to many more years of work before ER. All this, because they had not originally set their AA to a level that they could stick with during bad times as well as good.

Sure, one could become wealthier in the long run by going all in, and that is not too tough during the accumulation phase (even I was 100% equities for a few years, despite my conservative stance now). But you know, it takes a lot more courage to stick with an AA this risky than most retired people have. Mistakes in these decisions can have horrific results.

Well said, W2R, I was going to let my equities continue to float up but decided to get back to my comfortable position of 50/50.

 

[robnplunder]

Someone once said

“A Conscience Is What Hurts When All Of Your Other Parts Feel So Good.” - Anon.

As all the money I have made came from working or investing which are all legal and ethical means, not even my conscience would hurt if and when I get rich. Please God, just one more stock bubble.

Meeeeeeeee 2.

bbbbubu ... but after dot boom crash, I wished for one more bubble and it came as housing one. I've got my wish but when the housing bubble burst, I could not take the money out of equity fast enough . So, wish for an investment wisdom while asking for another bubble .

 

[NW-Bound]

What you want is somebody to ring the bell at the market top, so that you can get out.

You are a newcomer here, so I will let you in on an open secret. We already have such signal. You will need to frequent this forum and watch out for the "Wh***" signal.

It all started with this thread: http://www.early-retirement.org/forums/f28/record-dow-whee-30317.html The OP was dated Oct 01, 2007. My record shows that my high back then was on Oct 31, 2007. I had all the time to get out of the market, but I did not know about this forum until 2008. So, I missed out.

That was the "Wh***" heard around the world. And just because you don't know about it does not mean you will not get hurt. I explained that in a post here: http://www.early-retirement.org/forums/f27/its-funny-joke-thursday-20756-34.html#post821393

Now, you will understand why people here are running scared like headless chicken anytime they see a "Wh***" posting.

 

[Spanky]

It all started with this thread: http://www.early-retirement.org/forums/f28/record-dow-whee-30317.html The OP was dated Oct 01, 2007. My record shows that my high back then was on Oct 31, 2007. I had all the time to get out of the market, but I did not know about this forum until 2008. So, I missed out.

I read this thread but stayed the course. In other words, I too missed out.

 

[Spanky]

Yes, but the point is that I want to be as rich as Danmar and our young friend FIREd, so that I don't care about the cost.

Agreed - the ability to choose what you really want without worrying the cost is definitely a good thing.

We have flown business class & first class courtesy of megacorps, but have not paid out of pocket for any.

I was only allowed to travel Economy+ class for a couple of international trips paid by a megacorp. The seat was pretty good - adequate leg room and a 10" LCD screen for movies. If I were a VP or higher, they (megacorp) may permit traveling on first class, I guess.

 

[NW-Bound]

My past megacorp allowed business class for flights longer than 5 or 6 hrs (can't remember). So, sometimes people would book a circuitous route to have a longer cross-ocean flight to have that leg on business class. Then, megacorp would not allow people to book their own flight, and have to go through the company channel.

I once traveled overseas for work with a long 11-hr leg on business class, then for the domestic leg that was 4-5 hr had to go back to coach. Good lord, that domestic leg was pure torture, and I swore I would not travel for work again.

"A luxury once sampled becomes a necessity." -- Andrew Tobias

PS. From my limited experience with first-class (on a 747), it was not a lot better than business class. There was more room between seats, but the seats laid out flat just the same. The food was the same, but with a bit more attentive service. Business class is plenty good for me, if I can afford it that is.

 

[Meadbh]

I've only travelled first class three times. I was upgraded when crossing the Atlantic to my father's funeral, and another time when delayed by weather crossing the Atlantic to be with my mother who had been admitted to ICU. The third time was on a business trip to the Middle East. Several different airlines and configurations were involved. Definitely a stress reducer, but the cost would be too high for me to pay out of pocket.

A year after I visited the Middle East, the organization I was working with (volunteering) decided that all flights would be Economy class, regardless of the distance. That was a deal breaker for me.

 

[Moemg]

What you want is somebody to ring the bell at the market top, so that you can get out.

You are a newcomer here, so I will let you in on an open secret. We already have such signal. You will need to frequent this forum and watch out for the "Wh***" signal.

It all started with this thread: http://www.early-retirement.org/forums/f28/record-dow-whee-30317.html The OP was dated Oct 01, 2007. My record shows that my high back then was on Oct 31, 2007. I had all the time to get out of the market, but I did not know about this forum until 2008. So, I missed out.

That was the "Wh***" heard around the world. And just because you don't know about it does not mean you will not get hurt. I explained that in a post here: http://www.early-retirement.org/forums/f27/its-funny-joke-thursday-20756-34.html#post821393

Now, you will understand why people here are running scared like headless chicken anytime they see a "Wh***" posting.

Actually I have used the Wh*** signal to market time and it has been extremly effective . Anytime the Wh*** is mentioned I harvest my gains .

 

[NW-Bound]

Talk about airplane seats, it should be noted that some airlines have done away with first-class, and only have business class. The Qantas 747 I flew on had both, and that was my experience with first class vs. business class. I have more often flown on smaller twin-aisle planes that had no first-class and only business class.

Planes for international flights always have more leg room even for coach, but some domestic commuter airlines are like cattle carriers. There were some flights that still cause me to shudder just remembering about the experience. I'd rather drive my lumbering motorhome for days than get squished in the middle seat, surrounded by two, er, large persons!

 

[Meadbh]

Planes for international flights always have more leg room even for coach, but some domestic commuter airlines are like cattle carriers. There were some flights that still cause me to shudder just remembering about the experience. I'd rather drive my lumbering motorhome for days than get squished in the middle seat, surrounded by two, er, large persons!

That includes the United red eye from Hawaii to LA!

 

[NW-Bound]

I do not remember flying United on our last trip to Hawaii or not, but as we usually book the two outer seats of the twin-aisle jets (777 with 2/5/2 seat arrangement), the flight was not too bad seating next to my somewhat petite wife, and having the aisle on the other side.

And then, there were a couple of times when we flew red-eye non-stop Phoenix/Frankfurt (route not offered anymore), I had the entire row of 5 middle seats by myself, so I could lay down and slept though. Pure heaven!

 

[daylatedollarshort]

Regarding the whee factor - one thing I have noticed lately is an uptick in posters on other forums with mostly equity portfolios saying "I have reached my number. I can retire now."

I think people who post here are more sequence of returns risk factor savvy, but I have noticed comments like this on other forums with a younger crowd.

Well, maybe they can retire, but if they keep the same percent in stocks and the market goes down the same percent in 2014 it went up in 2013, then they could quite easily be 30% below their number and unemployed as well.

 

[NW-Bound]

Supposedly, historical data shows that they would still be OK retiring at a market top, provided that the WR is 4% or less. However, there will be sleepless nights in the next roller coaster ride.

 

[Options]

...

For today's investor an overreliance on stocks in an attempt to get rich even with only a 2% portfolio withdrawl is missing the very real possibility of a deflationary spiral that would leave stocks suffering much more than other asset classes. Equities are the most likely way for many to become rich, but I think the percentages are far lower currently than many may feel or calculate base on past history.

Investors are overconfident because portfolio crashes have been limited in the most part to single countries, or to losing sides in war but never has the investing world ever been so connected world wide to each other.

The obvious strategy in play today by ruling governments is a stealth savings tax by offering negative real rates on the debt issued and a circle of guarentees between "troubled" and secure nations, but the resolution of this problem has not yet actually manifested itself, either through inflation or deflation; both potential resolutions that hang unseen over the populations of the world and controlled by ongoing heads of finance in a fashion much like the Sword of Democles. We as investors continue on as the citizens of Syracuse, unseeing of either the thread that holds the finances together over which we hold neither sight nor a responsiblity of it's upkeep to keep the sword invisible to the populace.

Totally agree. Probably the greatest macro threat facing investors worldwide. We all know investors are run by the two emotions of greed and fear. Getting "rich" has led many right up the road to ruin, and the investment industry thrives on it.

After a certain point everyone realizes that nobody really needs to be "rich" but everybody needs to have "enough". Especially as your candle burns low and there are no second chances.

+1
After having lived in frugal mode for so long, and now having pent up spending demand, I am amazed at how unenthused I am at the prospect of having to go out and "shop". It's not the spending part, it's that spending no longer provides me fulfillment. Experiences, like the planned trip down the Amazon next year, do. Example, going to buy a new luxury car next year simply because I can (and need a new car), but am not at all as excited as when I did it when younger. Who knows? Maybe this will change after getting on the dealer's lot looking at the car.

 

[Nords]

Nords would say why are you running up the score?

It boils down to the perpetual questions: What do you do with money that you don't need? Do you put it in a safe-deposit box, or do you spend it on angel investing? Or should we buckle down and improve our poker & blackjack skills to really earn the big bucks? Once we've compounded our assets as much as possible during our lifetimes, we could turn it all over to the Gates Foundation for them to save more lives than our own philanthropy ever could.

I used to think that I knew the answers to those questions. "Running up the score" only applies if you're continuing to work at a job you despise solely to reduce your ER failure rate to 0.00%. What people should really do is get their ER success rate up to 80%-95% and then buy an annuity to insure against the failures (and against their longevity).

I understand rule #1 is don't run out of money before you die. Still I am surprised that there doesn't seem to be a lot of interest in moving from being affluent to the rich stage. I realize that those terms are vague and you can define them how you want.
So that means if your grandkids want to go to Harvard or Stanford you can send them.
If you kids needs a million dollar to start there dream business you can make it happen.
If you don't have kids or don't think giving them a lot of money is good idea.
It means you can make a $1 million gift to your favorite organization.
Book a round the world cruise, first class.
Dine at the finest restaurants
Hire the best doctors or nurses.
Hire the best cooks, yogi instructors or whatever.
Buy your dream car, plane, boat or in some places dream house.
Fly in outer space.
If you are widowed or single have a young cute companion

The first decade of ER has the highest sequence-of-returns risk. In our case it included two of the last century's biggest recessions, yet my annuity (military pension) and our investments (>90% equities) finished the first decade much higher than we started. Not only that, but (due to dropping interest rates) our mortgage payments ended up much lower. This implies that our net worth is going to compound at least 4x faster over the next decade unless we seriously ramp up our spending.

However we haven't found much pleasure in philanthropy (yet). We've offered to help a relative with medical school, but the kind of person who gets into medical school as they did is also the kind of person who might gratefully decline our assistance. We could buy another house, but property management is a hassle. We could fly business class, but it just does't seem to have enough value (even for me). I used to dream of flying in outer space (or at least buying a ticket on Virgin Galactic) but I've since learned enough to decide to let another couple million passengers be the beta-testers for that [-]zero-gravity nausea[/-] safety record.

Frankly our biggest crank on the hedonic treadmill has been hiring a weekly housecleaner. We can't even find it in ourselves to enjoy that-- instead we "leverage" the expense by doing our own yardwork and home-improvement projects while they're cleaning the house. We wouldn't make the time to do the housecleaning, but we still find a way to make the housecleaner pay off.

My question is there seems to be a strong preference (not from you) for the lowest possible equity. allocation once you get to the 95%+ level. I suppose the benefit is being able to sleep better at night during a bear market. The down side is the low equity position also mean you have a very slim chance of significantly increasing your standard of living and/or finding yourself rich at an old age.

In many cases this is preference for people who also have large pension or other secure source of income. I guess it just comes down to a risk tolerance and just wonder what risk they are really guarding against?.

I agree about sleep-at-night comfort. I can do math but I still find volatility upsetting. Loss aversion is much worse than the dubious value of more hedonism.

Ironically the value of our investment portfolio is very small compared to the present value of our pension & Social Security. Logically we shouldn't even waste our time rebalancing it, let alone tweaking the asset allocation as we age.

 

[NW-Bound]

I have often thought that I would not want more material stuff because it usually comes with some trouble. I do not need bigger houses or fancy cars. Fancy and expensive food does not necessarily taste better with me. Even Buffett eats food staples of the common man. So, why do I want more money?

Money will buy more comfort all right, and the thing I often thought about is nicer airplane seats, and that's because I love to travel. But I also thought that two international trips a year would be all I could handle. Let's say that the cost is $20K/yr (4 tickets at $5K each), and that means I would need an additional $570K to pay for that at 3.5%WR. That is reasonably within reach, within a few years if the market cooperates.

But I think I will still want more. Why? I think it's because money is attractive.

"Money is much more exciting than anything it buys." -- Mignon McLaughlin

A poster who has quite a bit of money and a large secure pension is so frugal compared to anybody here. Yet, he also wants more money. I guess he is like Picasso.

"I'd like to live as a poor man with lots of money." -- Pablo Picasso

 

[robnplunder]

But I think I will still want more. Why? I think it's because money is attractive.

"Money is much more exciting than anything it buys." -- Mignon McLaughlin

A poster who has quite a bit of money and a large secure pension is so frugal compared to anybody here. Yet, he also wants more money. I guess he is like Picasso.

"I'd like to live as a poor man with lots of money." -- Pablo Picasso

To me, money is a tool that can get you more convenience, pleasure, etc.. But accumulating wealth for the sake of it is greed. We are greedy in nature, some more so than the others. I'd like to have enough to last, enough to enjoy life in comfort and a bit of luxury. Beyond that, I don't care much.

Hmm, I never liked Picasso's paintings. There!

 

[NW-Bound]

Ah, that's just wistful thinking on my part, as I do not see how I can get to the point of being "filthy rich". If I really wanted it, I would have worked harder to get it instead of ER. But if that money could come easy ("Please god, one more stock bubble!"), would anyone here refuse it?

We all want some safety too. But how safe is safe? If I can get another 40%, then my 3.5% WR would become 2.5% WR, provided that I do not succumb to lifestyle creep. That 2.5%WR would be a lot safer than 3.5%, would you not say?

In short, more money cannot hurt, from what I can see. So, I want more!

 

[Spanky]

.. But accumulating wealth for the sake of it is greed. We are greedy in nature, some more so than the others.

Agreed. Greed (or desire to be rich) motivates people to lie, cheat, or gamble.

 

[Spanky]

In short, more money cannot hurt, from what I can see. So, I want more!

More definitely will help. The more you get, the more you want however. There's no end. We will never feel secure.

 

[NW-Bound]

Agreed. Greed (or desire to be rich) motivates people to lie, cheat, or gamble.

I will not use myself as an example because I still do not have much excess wealth for my expenses (quite reasonable, I might add), but have you read an earlier poster on this thread who likes to accumulate much more money than most people would say that one prudently needs for his expenses? I certainly would not call him greedy, as greed implies undesirable behavior towards others. If one likes to accumulate wealth in an ethical and legal manner, how is that greedy?

More definitely will help. The more you get, the more you want however. There's no end. We will never feel secure.

If I get to 2% WR, I will feel secure.

If and when I get there and still not feel secure, I will make another post.

 

[robnplunder]

In short, more money cannot hurt, from what I can see. So, I want more!

Yes, it can hurt, more ways than one. I was in a court for a hearing and saw two family members fighting over a money left by their mom. Money can attract parasites, schemers, robbers, .... In many countries, you can be kidnapped for having too much, senor. Greed can bring .

 

[Spanky]

Yes, it can hurt, more ways than one. I was in a court for a hearing and saw two family members fighting over a money left by their mom.

I can definitely relate to this as it happens to our family - 5 children fighting over my dad's assets. Money brings out the evil side of all of us.