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My own personal depression
Old 09-21-2008, 07:03 PM   #1
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My own personal depression

This is the worst financial year in my life. My house value is down about 100K, my investments down about 85K and I had a nearly 40K home repair bill.

I told my boyfriend it is a good thing my house isn't taller so jumping out the window would only injure me.

I think I will just give up after years of attempting to build net worth. Things have to get better. My job is good, they are making record profits so I will probably get a 15% contribution to my 401K and they give nice bonuses in good years last year was 15%. They are also talking pay raises since it has been two years it should be a good one.

I will just keep working and forget retirement, good thing I like my job. Maybe everything will be better next year or the year after.

I lost over 1/3 of my net worth this year but I can't really give up. I am able to save about half my pay but losing so much it will take me about 4 years to earn the lost money unless the housing and stock markets go up. I have been putting 20.5K in 401K and 6K in ROTH so can make up 100K in 4 years and pay down some of my debts or save outside retirement.

I still have money money saved than many people but no pensions so my life savings is all I have.

Should I go to a doctor and get some drugs for my depression or just wait for things to change? Things always change don't they?
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Old 09-21-2008, 07:18 PM   #2
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yes, things always change.

I don't know about drugs, but if things really are getting to you seeing a therapist might make sense.

I am glad you have a good job with an employer that is doing well, and you do realize that there is no giving up.
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Old 09-21-2008, 07:18 PM   #3
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The first year of a bull market often sees 30% increase in the stock market, sometimes the second year is just as good.
I can not tell you when the next bull market will start maybe it started Thursday and Friday maybe we won't see it for another year or so. I can tell you that l and people way smarter than myself who have looked at US stock market data for 137 year can tell you two things:

  • Bull markets follow Bear markets
  • There are more Bull market years than Bear markets.
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Old 09-21-2008, 07:21 PM   #4
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i know plenty of people that bought at the peak of the last housing bubble, around 1987 and were upside down until around 2000. now their house is worth more than they paid.
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Old 09-21-2008, 07:22 PM   #5
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OW,
There's no doubt you've had a rough spell, but try to keep everything in perspective.

- Your house: I don't recall your particular situation, but were you planing to sell it? If not, then the decrease in value should mean very little to you. Sure, on paper your net worth went down, but you've got to live someplace. Eventually real estate prices will rebound, and when they do you can sell or get a reverse mortgage to help fund expenses.

- The stocks: If you've lost 1/3 of your investment, you had very few bonds, mostly stock. You've been here awhile, and you know that this allocation exposes you to volatility. You've seen the downside of this volatility, and you can bet that you'll see the upside. Instead of thinking about your account value, think for a moment about the number of shares you own--have you got fewer shares of these companies than you had before? Unless you liquidated assets, you own exactly as many shares as you ever did. You'll continue to get any dividends earned by these companies, and you'll benefit from the increased share prices as they go back up. And, if you buy more stock with your bonus money, you'll be buying these shares "on sale", not at the inflated prices they were formerly sold at. Or, you could invest that bonus/savings money in something safe and steady so that you'd feel more comfortable having something to spend while you wait for the rest of your nestegg to re-appreciate.

Hang in there. You've got a backup plan (keep working), but you might not need it.
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Old 09-21-2008, 07:31 PM   #6
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The best thing to do is to set up a asset allocation and put it on auto pilot, and it sounds like you have done that.

You have a secure job that you like, you are very fortunate.

Find some hobbies and get on with your life. Focusing too much on your net worth isn't healthy. Ignore the market, it's going to do what it's going to do.

Have fun!

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Old 09-21-2008, 08:07 PM   #7
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The best thing to do is to set up a asset allocation and put it on auto pilot, and it sounds like you have done that.

You have a secure job that you like, you are very fortunate.

Find some hobbies and get on with your life. Focusing too much on your net worth isn't healthy. Ignore the market, it's going to do what it's going to do.

Have fun!

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+1. Hang in there OW. Many of us are suffering the same things...we need to hang together.
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Old 09-21-2008, 08:10 PM   #8
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How much are you 'up' in real estate, prior to the 'drop'? How much are you 'up' on investments prior to this 'drop'?

I'm living in a house that was totally paid for by real estate appreciation from my last four houses. I'm retired from investments in stocks and real estate in the 7 figures.

Big whoop if they're temporarily on sale. I just wish I had more cash right now.
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Old 09-21-2008, 08:14 PM   #9
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I have been in my house since 1992 so it is worth more than I paid for it and more than my mortgage. I have allocated my investments all in equities mostly mutual funds pretty high in international. That is what is so depressing I don't time the market so stay fully invested, I made 50K in 2007 but lost 85K this year but made 15K in the last two days.
2007 I made money in the market and my house value went up so my net worth was soaring it was really fun. I was hoping the balloon would stay inflated and my net worth would get so high I could retire in style maybe wealthy. Another couple of good years and I could sell my house and pay cash for a new one and have more money to invest. Now I just have to keep working and home it changes back.
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Old 09-21-2008, 08:26 PM   #10
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So in other words, on the whole you're up and things are pretty good?
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Old 09-21-2008, 08:35 PM   #11
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I am so sorry about the drop in your investments sometimes life gets really hard . Why don't you go to your doctor and tell him what you are feeling ? Sometimes a anti depressant works wonders . After my son died I tried talking to a counselor but until I got that little chemical boost everything was grey . Good Luck !
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Old 09-21-2008, 08:36 PM   #12
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The fact that you are still working at a decent job that you can tolerate is huge in this situation. It means your worst case scenario is that you postpone retirement. No need to lose sleep or morale. While some might feel that postponing FIRE beyond the original plan is a failure or otherwise only for losers, I think a wisely made choice to continue as needed is just good common sense.

Imagine how those who already retired and can't/won't go back to work are feeling, esp if they unwisely planned to live off of stock gains and real estate sales.

DW and I were discussing this and agreed that if we had retired recently, we'd be nervous but not panic-stricken right about now. While the current situation will not likely change our plans for retirement in the near future, it is nice to know that in the event of a seismic economic melt down we still have the option to just keep on working in decent, rewarding, and nondegrading jobs.
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Old 09-21-2008, 08:54 PM   #13
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You haven't lost it money until you sell your investments or your house.

Are you counting these looses from the top or from what you paid for them?
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Old 09-21-2008, 09:09 PM   #14
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The fact that you are still working at a decent job that you can tolerate is huge in this situation. It means your worst case scenario is that you postpone retirement. No need to lose sleep or morale.
This is so true. While you are postponing (NOT giving up on!!!) ER, you need to be live a happy and fulfilling life. You could ask your doctor about antidepressants or counseling, and/or you could try this: Do something different and fun, that perhaps you had been putting off until ER. Go birdwatching, visit the library, take a cooking class, or whatever might be new, relaxing, and fun.

After a while that bull market will come, the housing market will recover, and this will all be behind us.
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Old 09-21-2008, 09:12 PM   #15
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I count the house value from what is on Zillow from the all time high and my investment on the calendar year. I have spreadsheets I update 5 days a week but start the totals new Jan 1. But I can look at where it was the last few years too. March of 2007 I hit investments totaling 400K but now after putting in more money they are only worth 360K. I am done for this year so starting the first of Jan I can quit looking at this mess. Then I will put in another 26.5K of my money in the first half of next year and the company will put in about 8K so someday I will get back to where I was in March 2007 except I got in debt about 26K on my home repairs.
My 401K started in 2003 and after maxing it every year I have put in 119K counting company money of about 8K and this week it was worth less than the total put in. But it went up about 9K the last two days so it is worth more than I paid for it. But still most people didn't put 119K into a 401K in 6 years so I am ahead of most people.
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Old 09-21-2008, 09:13 PM   #16
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You haven't lost it money until you sell your investments or your house.
With that logic, you haven't made any money until you sell your investments or your house at a gain. Everybody counts their gains on paper all the time. They might as well count their losses on paper as well.
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Old 09-21-2008, 09:20 PM   #17
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With that logic, you haven't made any money until you sell your investments or your house at a gain. Everybody counts their gains on paper all the time. They might as well count their losses on paper as well.
You might want to read my response in context of the OP.

This is a psychological issue. The word "depression" was the clue.

The reason I asked if the OP was calculating the loss from the high or the purchase price was to give a different perspective on the the size of the loss (if it is a loss versus the purchase price).
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Old 09-21-2008, 09:36 PM   #18
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zillow is a joke, so one shouldn't use the all-time zillow high for anything. I certainly wouldn't base my depression on it at all. As for the markets, they are about where they were in early/mid-July.
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Old 09-21-2008, 09:36 PM   #19
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I have spreadsheets I update 5 days a week...
I think vee haf found zee problem...
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Old 09-21-2008, 09:44 PM   #20
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I agree that you are kidding yourself if you have based your net worth on the Zillow valuations. From previous discussions here on Zillow I believe that it has been concluded that Zillow values have been wildly inflated, so based on that you haven't really likely lost $100k of equity.

Do not update your spreadsheet every day, the daily fluctuations will seriously mess with your blood pressure. Dial it back to once a month, that's all I do and even then that slips by. All I really care about is capturing the final number as at 31 December.

Take time out from looking at your financials and go and smell the roses. It's not all bad out there.
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