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View Poll Results: If you are FI and thinking ER, how did it happen
Careful planning, frugal lifestyle 164 71.93%
Windfall Inheritance 6 2.63%
Just plain lucky 22 9.65%
Other 36 15.79%
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Re: How many are simply lucky?
Old 04-22-2006, 07:08 AM   #21
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Re: How many are simply lucky?

Absolutely!

Born in America. Work hard, DCA over twenty years. God Bless the 90's Mr Market.

De Gaul was right.

heh heh heh heh heh heh - Oh yeah and Carpe Diem!

P.S. I'm using 7% total return ala 1955 - 1980 efficient frontier curve at 50/50 stock /bonds when I forward project via ORP.
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Re: How many are simply lucky?
Old 04-22-2006, 07:32 AM   #22
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Re: How many are simply lucky?

We LBYMed for all our adult life, fairly frugal, saved a great deal, no children (cuts way down on expenses), never bought a more expensive house, drove cars for 10 years, no debt, etc., etc.

Maybe with all that hard work and planning we could have retired at 55 or a wee bit earlier.

But we retired WAY earlier than that. So I have to attribute it mostly to good luck. It's very difficult to retire in your 40s or earlier without some considerable good financial luck.

Audrey
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Re: How many are simply lucky?
Old 04-22-2006, 07:50 AM   #23
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Re: How many are simply lucky?

To repeat

Circa 1992 - my plan was early retirement at age 63. Derailed via layoff at age 49 in Jan 1993 - took a mind shift but I made the religious conversion from unemployed to ER.

heh heh heh heh heh - being a really cheap bastard in those early years allowed Mr Market to work wonders - time in the market plus a good decade.
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Re: How many are simply lucky?
Old 04-22-2006, 08:25 AM   #24
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Re: How many are simply lucky?

That chart is somewhat misleading being plotted on a linear scale. It makes most of the gains look like they just happened in the las few years. A semi-log scale plot is a much much better way to examine timeline trends.

Also it goes without saying that the chart goes from 1950-2006, not the 1980 to 2000 that was quoted.

Also note that with the exception of a few "bumps" that the gains are nearly linear over time.

Per being "lucky" maybe to some degree. However I beleive that I have made my own "luck" in that I have been a saver and an investor for decades. Does that make me lucky or just smart. I'd like to think that I just did the right thing. People who didn't do what I did just aren't too smart.
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Re: How many are simply lucky?
Old 04-22-2006, 09:24 AM   #25
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Re: How many are simply lucky?

I have to agree with Nords that the harder a person works the luckier they become. That's what happened in our case.

Hubby and I both worked hard to get the jobs that we really wanted. We lived frugally, well as frugal as one can with kids, saved outside our pension plans, and accepted whatever life thru at us. As luck would have it we were able to retire early thanks to really good pensions and some nice savings/investments we made along the way.

Luck struck us again a few months ago. While browsing the internet I noticed a job that I knew hubby would like which consisted of an avg of 12 hrs a week at a decent hourly rate. He interviewed at 9am one morning and had the job by noon. And man is he happy!!
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Re: How many are simply lucky?
Old 04-22-2006, 09:31 AM   #26
 
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Re: How many are simply lucky?

We've had this conversation a few times:

DW: We sure are lucky to be in our situation.
Me: We are in this situation because we are smart.
DW: We're lucky to be smart.
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Lucky? Maybe some, but......
Old 04-22-2006, 09:48 AM   #27
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Lucky? Maybe some, but......

Similar to Kumquat, except my options went from $.19 to $40.

I started with computers in 1969, and the lucky part was that I really enjoyed the work that I did.

I can remember around 1970 when I was 23 I was the systems programmer working with an IBM 360/40. I was in the computer room at 1am because I was installing a new operating system and other software.

I thought to myself, here I am, with a multi-million dollar toy all to myself, installing and playing with all of this new software, having the time of my life, and THEY'RE PAYING ME FOR THIS?

The point is that no matter what you do, if you enjoy it to that level, then you're REALLY lucky. If it pays as well as my job did, that's an extra bonus.

I got my stock options because I took a chance in the late 1980's and went with a start-up software company.

Lucky? Well, I wouldn't have had that opportunity if I hadn't had all of the experience and work ethics from the years before. I was refered by a person I had worked with.

After a few years I took a chance by excersizing those options and later, when the company went public, I realized a 16000% increase.

Lucky? When I exercized those options I used most of my retirement money. The company was still private and doing well, but was far from a sure thing.

I sold the stock as soon as the company went public, just before the tech-bust in 2000.

Lucky? Just before I started selling, I calculated that if I sold then, IT WAS ENOUGH! I really thought the stock would keep going up, but I was willing to take the chance of forgoing that possibility of even more profit to guarantee my gain and diversify.

The common thread is that I took a chance. Doesn't that pretty much go along with the standard risk/reward concept?

HBH
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Re: How many are simply lucky?
Old 04-22-2006, 09:52 AM   #28
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Re: How many are simply lucky?

Thank you Master Blaster. If you hadn't changed the scale I would have. Lies, damned lies, and charts!
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Re: How many are simply lucky?
Old 04-22-2006, 09:53 AM   #29
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Re: How many are simply lucky?

I don't think luck was much of a factor in my case. I joined the federal workforce right after college. A big factor in my decision was the great benefits including excellent health insurance and Cola'd pension at age 55. It was my intention to retire at 55 from day one. We lived below our means. Bought a small house in one of the less upscale areas around D.C. Got our kids into great "magnet" schools in a county with mostly lousy public schools. Sent both kids through college and daughter through grad school. Drove cars til they died (DW drove her VW bug for 17 yrs.) and always paid cash. Never any debt except mortgage (paid off two years before I retired via extra principal payments). Max'd out contributions to tax deferred accounts (403B, TSP, IRA's). Used lowest cost investment vehicles (DRIPS, Vanguard, T.R. Price). Never got sucked into the dot.com craze so our portfolio survived Oct. '97 with a minimum of damage. I did financial management for a living. If I could keep the Hubble Telescope project solvent through a 40% budget cut, I could keep the family finances on track to early retirement. DW stayed home with the kids for 9 years and then went back to teaching. Her last four years before retirement were half-time. I had run the numbers and we could afford for her to downshift at that point.

Now we are in a new (paid off) house in a wonderful resort type 55 or better community and are loving our lives. I still tweak our investments just to keep my hand in but even if the market fell 50% we would see little impact on our life style as our SWR is quite low and only goes to pay the extras like travel and luxury items.

Did things break the right way for us? Yes, but we also have had our share of bad breaks but careful and conservative planning let us achieve our goal anyway. LIfe is full of choices. While our friends were buying the big houses and fancy cars we were sticking to our plan. They are still working and will be for many more years. They also seem happy with their lives but that is not the way we chose to do it.

I guess my conclusion is that bad luck can certainly derail ER plans, it doesn't require good luck to achieve ER, just careful planning, determination and making the right choices.

Grumpy
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Re: How many are simply lucky?
Old 04-22-2006, 10:40 AM   #30
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Re: How many are simply lucky?

As someone once said:

No amount of planning will ever replace dumb luck

Or if you prefer:

Luck: what happens when opportunity meets planning

Jim
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Re: How many are simply lucky?
Old 04-22-2006, 11:03 AM   #31
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Re: How many are simply lucky?

Thanks for posting the chart...... an excellent reminder.* Since I was primarily a DCA and buy and hold guy over that time period, things worked out.* I got "lucky."

Trying to understand what things will be like going forward, the unknown, is the root of many of our discussions on this board regarding SWR.* Will the future operate within the boundaries drawn by history?* Or will things rise to new highs or fall to new lows?* Will 4% continue to be a reasonable number?* IMHO, it's a crap shoot.
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Re: How many are simply lucky?
Old 04-22-2006, 11:06 AM   #32
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Re: How many are simply lucky?

It's an interesting thought. Of course we are all lucky to not be born in the Darfor region of the Sudan running from the "Dark Horsemen". But all around me at work are high income white males with educated parents who sent them to good University who got good degrees (Engineering, Finance, IT, CS) at these good Universities, and 90% say things like, "I'm goind to work until I'm 70." "I can't retire, what are you crazy?" and "Aw, income doesn't matter, whenever you get more, you always manage to spend more."

So yes, we got a "free ride" up to a certian point, but we do deserve some credit for taking advantage of all those, "advantages".
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Re: How many are simply lucky?
Old 04-22-2006, 11:08 AM   #33
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Re: How many are simply lucky?

Quote:
Originally Posted by youbet
Thanks for posting the chart...... an excellent reminder. Since I was primarily a DCA and buy and hold guy over that time period, things worked out. I got "lucky."

Trying to understand what things will be like going forward, the unknown, is the root of many of our discussions on this board regarding SWR. Will the future operate within the boundaries drawn by history? Or will things rise to new highs or fall to new lows? Will 4% continue to be a reasonable number? IMHO, it's a crap shoot.
In a way it's a crap shoot, but remember, that number survived retiring a month before the '29 stock market crash, and all the other horrible bear markets out there. If we have something worse than the great depression, you'll be worried about more than your withdrawal rate!
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Re: How many are simply lucky?
Old 04-22-2006, 11:11 AM   #34
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Re: How many are simply lucky?

I was lucky that I joined the military in 1960 and stayed 21 years. *That brought a pension and medical insurance. *I was lucky that I joined MegaCorp in 1981 and stayed 22 years. *That brought another pension, and they had/have a very nice 401k (which I was lucky or smart enough to use). *I am/was smart to LBYM. *Now, if I'm really lucky, I will outlive all those supervisors and corporate climbers and carpe diem while I'm doing it. *
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Re: How many are simply lucky?
Old 04-22-2006, 11:15 AM   #35
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Re: How many are simply lucky?

Most startups are not brilliant, lucky, or obviously smart choices. My husband worked at 3 startups: 1 of them went under, 1 of them is coasting, and the 1 where he made significant dough was one of the most miserable jobs he ever had--worse than the loser startups. I was smart & hard-working enough to impress a director of engineering and doc architect so when they went to a startup, they recruited me. Couldn't've been the bonus the architect got for my hire--nah. I took a pay cut to go there--very wise of me. Anyhow, several friends went to startups about the same time I did (late 90s), and very few made any money from their equally smart decisions.

I think drive has more to do with financial success than hard work or brains. I've seen hard workers laid off while (relative) slackers kept their jobs. I've seen smart workers ostracized while yes-men got rewarded. But people with strong drive to achieve their goals are not often thwarted over the long haul.
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Re: How many are simply lucky?
Old 04-22-2006, 11:28 AM   #36
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Re: How many are simply lucky?

Quote:
Originally Posted by Laurence
that number survived retiring a month before the '29 stock market crash
Indeed it did Laurence. *And I have no issue with your outlook for the future, it's as good as any other, and certainly as accurate. *Just remember that the '29 crash era was not the worse time to retire. *The worse time was the early 70's. *And the new "worse time" could be sometime in the immediate future. *Or, the new best time could be in the immediate future.

The rate of change in how the world operates is accelerating. *Our economy, lifestyle and well being could change as much in the next two or three decades as it did in aggregate since our country was founded. *So I try to keep my eyes open for things to possibly operate outside of the historically conventional bounds we're all accustomed to.

Having said that, I'm definitely not postponing my ER which will begin in six weeks. * But I am operating with the assumption that I'll likely see things change dramatically, perhaps outside of historical bounds, even though my life expectancy is under three decades.
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Re: How many are simply lucky?
Old 04-22-2006, 12:21 PM   #37
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Re: How many are simply lucky?

right, I'm completely open to the idea that "things will be different this time", but after accepting that and realizing it wouldn't change my plan, I've excluded it from my thinking. So if you are still planning on retiring in six weeks and are just planning on keeping your eyes open, we're on the same page.
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Re: How many are simply lucky?
Old 04-22-2006, 12:46 PM   #38
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Re: How many are simply lucky?

Quote:
Originally Posted by kumquat
I'm glad you had the disiplne to do it.* I probably could have done it alone (nothing like the teaching of depression age parents),* but DW..........* *If you are my age, I hope you enjoy the next 58 years.
Thanks! Part of the disipline came from the fact that I grew up on a farm and did not have a lot of extras as a kid. My parents had to make the money last. Once I entered professional life, the frugality came with me.* Took some effort to get DW on board early on, but it worked out quite well.
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Re: How many are simply lucky?
Old 04-22-2006, 12:57 PM   #39
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Re: How many are simply lucky?

Quote:
Originally Posted by jrwooden
As someone once said:
No amount of planning will ever replace dumb luck
Or if you prefer:
Luck: what happens when opportunity meets planning
Jim
I agree. For me, a lot of what has happened to me was luck (or meant to be) mixed with a bit of moxie.
I join the legit workforce in my late 20's and didn't have any retirement plans. I went from being a classically trained musician making very little money to a self taught commercial photographer again making little money. I was looking for photography jobs in the NYT and happened to notice billions and billions of stars computer jobs. Being cheap frugal, I probably would have never paid for an expensive computer course but "luck" would have it , I found a FREE 3 month intensive computer course in Spanish Harlem listed in my unemployment claims office. The course was sponsored by IBM and other top computer corporations and the rest of my "luck" was history.
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Re: How many are simply lucky?
Old 04-22-2006, 01:03 PM   #40
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Re: How many are simply lucky?

I think the comments up to this point pretty much sum it up for all of us. *

Fate or random chance put us in a place with opportunity. *Some of us had more "opportunity" than others but we all know people that grew up with the same opportunities that will work until the day they die (not by choice).

For some of us that was the ability to make a decent income and save. *Some of us received windfalls from employers or in selling a business. *All of us benefited by the "luck" of the 1982 - 2001 bull market. *

However, all of us know people that made more than we do/did, received more in stock options than we did or sold their business for more than ours. *They were around during the same bull market. *Many of these people are dead broke or worse because they spent it all.

Make intelligent choices and you too can be "lucky."
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