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View Poll Results: Passed a new $MM mark
will or have in 2007 39 45.35%
Did in 2006 33 38.37%
Dif in 2005 18 20.93%
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Old 07-15-2007, 08:34 PM   #41
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I've been retired since May 99, so clearly in the withdrawal phase. I had a large safety margin (~ $1 million) but it wasn't fun retiring at the top of the market.
I can imagine; it sounds absolutely terrifying. Still, you have reason to feel pretty great that you have made it safely back to where you were.

Actually, this is an eye-opener for me. I have been figuring that in the event of a market downturn right after I retire, that it would take as long as 10 years to recover at the very worst (so I am prepared to not withdraw for ten years, max). Since the scenario in 2000-2002 was not a worst case, maybe I should at least consider the possibility that it could take me longer than 10 years to recover.
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Old 07-15-2007, 09:06 PM   #42
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I can imagine; it sounds absolutely terrifying. Still, you have reason to feel pretty great that you have made it safely back to where you were.

Actually, this is an eye-opener for me. I have been figuring that in the event of a market downturn right after I retire, that it would take as long as 10 years to recover at the very worst (so I am prepared to not withdraw for ten years, max). Since the scenario in 2000-2002 was not a worst case, maybe I should at least consider the possibility that it could take me longer than 10 years to recover.
Well, the most conservative thing would be to move your money to more stable funds the closer you get to FIRE. Or, rebalance your portfolio to minimize risk... if you're over-exposed in a segment now because of fantastic growth, and you fear a correction to the mean, move some of your gains to another asset class. At some point, you need to be able to sleep at night.

Or, if you want to get really worked up, start believing the same things I do... Eventually you'll accept it all, save like crazy, and still be convinced at some level that none of it is really worth it
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Old 07-15-2007, 09:30 PM   #43
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Well, the most conservative thing would be to move your money to more stable funds the closer you get to FIRE. Or, rebalance your portfolio to minimize risk... if you're over-exposed in a segment now because of fantastic growth, and you fear a correction to the mean, move some of your gains to another asset class. At some point, you need to be able to sleep at night.

Or, if you want to get really worked up, start believing the same things I do... Eventually you'll accept it all, save like crazy, and still be convinced at some level that none of it is really worth it
Well, right now I have a diversified 60/40 allocation which I plan to maintain into retirement (in 2-3 years), which I think I have the stomach to stick with in a downturn, and I also plan to have a cash buffer large enough to provide me with bare bones minimum living expenses for 7-10 years. I guess that I just like quite a lot of redundancy because the unexpected is never, well, expected by anybody. So maybe I can work out a cash buffer to cover bare bones expenses for 10-12 years if necessary (though I was hoping this would not involve frequent reliance on Ramen noodles). I think that if I make it through the first ten years it should be smooth sailing.

But then, we can only predict on the basis of market downturns/events that have already happened. They didn't happen until they happened. Something much worse than has happened yet, could happen starting in 2010, my expected ER year. We could have a downturn worse than, or longer than any that has yet happened. Yes, I have SUCH joyful ideas. LOL My mother always said she never knew anyone who could out-worry me.
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Old 07-15-2007, 11:29 PM   #44
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No, and I don't intend to... but I am retired just the same.

I know it's hard to believe... judging from the majority of
posts on this forum... but not everyone lives... or wants
to live... an elitist lifestyle.
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Old 07-15-2007, 11:51 PM   #45
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Helena, I don't intend to save a million dollars before I retire, either! I think I will do just fine on a small amount from social security, a small pension, and a few hundred thousand in my retirement accounts, with a paid off house and car and no debt.

I think it's different for people living in high cost-of-living areas with no pension and a big mortgage payment, though. They probably need a huge nestegg compared with me.
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Old 07-16-2007, 12:21 AM   #46
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Yes, I am debt free and live in a less expensive part
of the country... but also my lifestyle is more simple
than most who post here.

It would be a shame for the average young person to
read this $MM topic then leave disappointed that they
will never be able to save $MM and retire.

You don't need $MM to retire.
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Old 07-16-2007, 12:39 AM   #47
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For those who have $MM, it would be interesting
to poll them to find out how much of their $MM
is in the stock market... but hey, like real estate,
the stock market always goes up, right ?
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Old 07-16-2007, 12:55 AM   #48
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We're pushing 4, incl home equity of about 1, and we may downsize the house after ER. Have 2 yrs to go for a few reasons, daughter in high school is one (meaning we don't want to move her...the school is too good) and a very nice pair of handcuffs made out of some yellow looking metallic material...
we first passed the 1 mark several years ago, but I think one of the reasons we passed it is because we paid off the mortgage (on our first home) long ago, and were able to build our new home w/o debt. We did this while the market was down (2000-2002), so we didn't miss anything from the market, but we did get to ride the real estate wave...in no hurry to sell, so the current downturn in RE is not bothersome. We also have a very frugal lifestyle compared with some of my peers/colleagues at work. Stll it is a very comfortable lifestyle. We probably could do the FIRE thing now, but why not wait for those handcuffs to come off, if there are other compelling reasons? ...only a couple more years and then financially speaking very very comfortable, but we will still live a rather normal lifestyle...that's just who we are...
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Old 07-16-2007, 12:57 AM   #49
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[quote=Rambler;536529]We're pushing 4, incl home equity of about 1, and we may downsize the house after ER. Have 2 yrs to go for a few reasons, daughter in high school is one (meaning we don't want to move her...the school is too good) and a very nice pair of handcuffs made out of some yellow looking metallic material...
we first passed the 1 mark several years ago, but I think one of the reasons we passed it is because we paid off the mortgage (on our first home) long ago, and were able to build our new home w/o debt. We did this while the market was down (2000-2002), so we didn't miss anything from the market, but we did get to ride the real estate wave...in no hurry to sell, so the current downturn in RE is not bothersome. We also have a very frugal lifestyle compared with some of my peers/colleagues at work. Stll it is a very comfortable lifestyle. We probably could do the FIRE thing now, but why not wait for those handcuffs to come off, if there are other compelling reasons? ...only a couple more years and then financially speaking very very comfortable, but we will still live a rather normal lifestyle...that's just who we are...
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Old 07-16-2007, 01:04 AM   #50
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Originally Posted by Helena View Post
For those who have $MM, it would be interesting
to poll them to find out how much of their $MM
is in the stock market... but hey, like real estate,
the stock market always goes up, right ?
We are about 60 stock, 40 RE & cash & small amount of bonds...heading for about 65-75 stock, 25-35 california munis & a few other bonds in our income producing investments, but the adjustments will take a few yrs. Tax bite on first home will be too high, so we will go back and live there (currently vacant while we are away on company assignment) for a couple years before we sell. For us, the 65-35 or 75-25 looks to be a pretty good target mix, and we can live off the yields that way.
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Old 07-16-2007, 07:46 AM   #51
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[quote=Helena;536515

I know it's hard to believe... judging from the majority of
posts on this forum... but not everyone lives... or wants
to live... an elitist lifestyle.[/quote]

Most of the posters on this forum do not live an elitist lifestyle. If anything I think most of us would never be picked out of a crowd for being wealthy because we live simply and frugally .Most of us started saving early and never stopped so the power of compounding made us rich. If you read the posts about annual budgets you'd see most of them are in a pretty low range .
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Old 07-16-2007, 08:01 AM   #52
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Excluding home equity and college funds, we hit .5M this year.

I know it doesn't compare to some others, but for us it's very exciting! It led to me finding this forum, educating myself with many of the books you guys recommend, and getting our investments in line with our semiER plans.

Thanks to everyone here for sharing so much with us!
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Old 07-16-2007, 08:42 AM   #53
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Most of the posters on this forum do not live an elitist lifestyle. If anything I think most of us would never be picked out of a crowd for being wealthy because we live simply and frugally .Most of us started saving early and never stopped so the power of compounding made us rich. If you read the posts about annual budgets you'd see most of them are in a pretty low range .
'You cheap SOB!' - was one her favorite terms of endearment. Cheap bastardhood is one of my favorite states of true bliss.

1993 - 350k his and hers including the duplex.

Time in the market(aka the 90's), not spending a lot - the cachet of a million seems to arrive somewhat automatically.

- have fun in ER! Drive that 10 year old pickup with rusty fender in your Salvation Army bib overalls with your trusty red haired dog chained in back.
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Old 07-16-2007, 08:52 AM   #54
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Originally Posted by Helena View Post
For those who have $MM, it would be interesting
to poll them to find out how much of their $MM
is in the stock market... but hey, like real estate,
the stock market always goes up, right ?
Helena, I agree that not everyone needs a million to retire, and I hope that lurkers reading this board do not believe they need to do so. That said, someone with a good company pension and cheap healthcare is probably better off financially than someone with $1m in the bank.

As to how much one has in the stock market, we have 45% of our holdings in cash even though we are mid 40s and that goes against everything you ever read about investing. However, it helps us sleep at night and we actually put 90% of our new money into cash deposits.
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Old 07-16-2007, 11:18 AM   #55
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Helena, I agree that not everyone needs a million to retire,
I don't think you need a million but I think you need assests worth a million and that includes the value of your pension and social security especially if you are younger .A million is only going to give you $40,000 a year not a real extravagant lifestyle .
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Old 07-16-2007, 12:00 PM   #56
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$1M should provide a decent life in Latin America including healthcare coverage. Think of it as a fallback plan.
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Old 07-16-2007, 03:55 PM   #57
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I don't think you need a million but I think you need assests worth a million and that includes the value of your pension and social security especially if you are younger .A million is only going to give you $40,000 a year not a real extravagant lifestyle .
$40,000 is more than some of us have ever lived on in our lives, though, much less in retirement. Do a little research on statistics of retirement incomes and I think you'll find that many retired people do not have that kind of income.

edited to add: I found an AARP article from 2005 at Women Age 65 and Older: Their Sources of Income that claims that the median income of men over 65 is $20,400 and the median income of women over 65 is $11,816. I'm not saying that we should aim for this, but it is what it is (whatever that is).
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Old 07-16-2007, 04:10 PM   #58
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No, and I don't intend to... but I am retired just the same.

I know it's hard to believe... judging from the majority of
posts on this forum... but not everyone lives... or wants
to live... an elitist lifestyle.
Helena, I don't know where you are getting the "elitist lifestyle" from on this board. It seems to me that most of us here live in a very low key, unostentatious way. I have a high net worth but it was totally through living below my means, saving, and investing. I never made more than $45,000---and that was only for the year before I retired. I come from lower middle class parents---mother a high school grad, father didn't even complete high school. I've always lived below my means. Haven't taken a vacation in ten years, a $20 monthly Netflix subscription is my major entertainment, up until last year I lived in a $100,000 1,000 square foot condo, get $13 haircuts from Great Clips, only switched to DSL last month, haven't bought clothes since retiring a year ago and didn't buy much more when working, driving cars like Honda Accords for years, etc.

We were only able to retire at 52 (DH, also) because we have lived so frugally and saved so much, even on low salaries. We did start investing at a young age and enjoyed some good returns at one point with the stock market. Now that we have millions, we're not living any differently, with the exception of moving to a 1700 square foot condo that cost twice as much as the old, solely because we were getting tired of living in a place that was becoming rundown, overloaded with renters, and filled with twenty somethings who were partying outside all hours of the night.

I do agree that not everyone needs millions to retire, but for those of us who don't have pensions, who never want to go back to work, and who are paying for our own health insurance at $1000 a month, it does seem more prudent to have a large nest egg to finance this. Over twenty yeasr ago I went on a cruise and the Israeli waiter was excited about how he would retire early once he accumulated $100,000. Not saying $100,000 isn't a good amount, but didn't think someone in his thirties could live off of it the rest of his life, especially in Israel.
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Old 07-16-2007, 04:33 PM   #59
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$40,000 is more than some of us have ever lived on in our lives, though, much less in retirement. Do a little research on statistics of retirement incomes and I think you'll find that many retired people do not have that kind of income.

edited to add: I found an AARP article from 2005 at Women Age 65 and Older: Their Sources of Income that claims that the median income of men over 65 is $20,400 and the median income of women over 65 is $11,816. I'm not saying that we should aim for this, but it is what it is (whatever that is).
If you add the $20,400 and the $11,816 together and add in inflation you have $40,000 .I was talking couples not singles though I don't think most single people could make it on $20,400 ( except Khan )
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Old 07-16-2007, 04:58 PM   #60
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I, for one, am convinced that 1MM is a large sum of money. To put it in context, consider a young college graduate today. This young engineer just got a job today, paying 50K a year. He wants to save 1MM in today's dollars. Here's his plan:

- Save 15% of his gross salary
- Increase his saving 5% a year. 7,500 this year; 7,875 next year...
- Inflation is 3%
- ROI is 11%

For those who think 1MM is not a lot of money, I challenge you to calculate the number of years it takes this engineer to reach his goal.
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