Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
No dividends, no cash comin' in
Old 03-08-2009, 05:14 PM   #1
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 242
No dividends, no cash comin' in

Here's a thread for the those of us who planned carefully and bought bank, insurance and financial stocks to live off the dividends and who are now screwed.

Seemed like a good idea at the time.

Now, we have taken eating out off the table, no new clothes, no vacations, no more organic food, no renovations, no taking our moms out to lunch, bottomshelf wine and liquor.

The worst part is the regret - if only we hadn't eaten out so much, if only we didn't buy all that expensive wine, if only I didn't get the quartz countertops...

The part of the country that is living on COLA pensions are going, "what's the problem, why can't we go out to lunch like we used to?"

We have no way of knowing if things are going to work themselves out, or if we are, as the WSJ says, inside a 20% chance of this turning into a depression. Causing me to wake every night about 3 a.m. wondering how we are going to make it.
__________________

__________________
Sparky is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-08-2009, 05:19 PM   #2
Recycles dryer sheets
Steve O's Avatar
 
Join Date: Dec 2007
Posts: 291
How long can they hold interest rates at 0?

It sure would be nice to be rewarded for holding cash
__________________

__________________
FIRED at 39 in 2008...
Steve O is offline   Reply With Quote
Old 03-08-2009, 05:21 PM   #3
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
I find myself with a bit of pension envy. I am sitting in an RV park and there are a number of pensioners here. I am glad I kept my law license and can scare up projects here and there from my old employer.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 03-08-2009, 05:34 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Oct 2005
Posts: 4,898
I'm sorry, Sparky, for your losses. I'm sure you have a lot of empathy here on the board.

For what it's worth: I have found myself having trouble sleeping lately but my remedy, hard exercise for about an hour, works great! Try it. Exercise will also keep those stress hormone levels down and keep you from gaining weight, if you are prone to.

Hope that interest rates rising in the next few years will help you out.
__________________
Zoocat is offline   Reply With Quote
Old 03-08-2009, 05:40 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Quote:
Originally Posted by Sparky View Post
Now, we have taken eating out off the table, no new clothes, no vacations, no more organic food, no renovations, no taking our moms out to lunch, bottomshelf wine and liquor.
It could be worse.

We are on a budget that doesn't allow the purchases we made when DH was working. However, planning a night out will bring us anticipation and fun as we are "saving" for it. We won't take the extras for granted anymore.
Quote:
Originally Posted by Sparky View Post
The worst part is the regret - if only we hadn't eaten out so much, if only we didn't buy all that expensive wine, if only I didn't get the quartz countertops...
We make the best decisions we can with what we know and should be able to enjoy the fruits of our labor. I will never regret enjoying myself on a vacation, purchasing something on a whim or giving to others.
Quote:
Originally Posted by Sparky View Post
The part of the country that is living on COLA pensions are going, "what's the problem, why can't we go out to lunch like we used to?"

We have no way of knowing if things are going to work themselves out, or if we are, as the WSJ says, inside a 20% chance of this turning into a depression. Causing me to wake every night about 3 a.m. wondering how we are going to make it.
We have a non cola'd pension...but will it always be there? Will our medical benefits and ss always be there? Who knows? But for me at 51, the years are going by at the speed of light it seems and I intend to remain happy and content with what I have right now.

Even when I was very poor, I had all I needed and some of what I wanted. For me, I couldn't ask for more.
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 03-08-2009, 05:42 PM   #6
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,322
Quote:
Originally Posted by Steve O View Post
How long can they hold interest rates at 0?

It sure would be nice to be rewarded for holding cash
You have been rewarded. Now you can buy 2.5 times as much stock as you could have in October 2007.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 03-08-2009, 08:06 PM   #7
Recycles dryer sheets
 
Join Date: Nov 2008
Posts: 131
"as the WSJ says, inside a 20% chance of this turning into a depression"

There's no good definition of a depression, but a recession lasting more than two years should classify as one. This probably won't end until sometime next year, so it probably counts.

But that's just a name. It is what it is.
__________________
Architect is offline   Reply With Quote
Old 03-09-2009, 09:27 PM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Some of us COLA pension recipients feel adequately compensated for the risks we took to survive long enough to reach the payout. Many pensioners spent years on lower salaries while envying others for earning the big bucks.

The only effective financial antidote for pension envy is an annuity.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 03-09-2009, 11:20 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,440
Quote:
Originally Posted by Nords View Post
Some of us COLA pension recipients feel adequately compensated for the risks we took to survive long enough to reach the payout. Many pensioners spent years on lower salaries while envying others for earning the big bucks.

The only effective financial antidote for pension envy is an annuity.
I don't know. A raging bull market for 10 years would do it just fine too.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 03-09-2009, 11:32 PM   #10
Recycles dryer sheets
 
Join Date: Jun 2007
Posts: 183
Bottom shelf hooch?

Man we ARE having hard times

I'm in the total return investing theory camp - only down 50% or so. Stay the course!
__________________
innova is offline   Reply With Quote
Old 03-10-2009, 08:43 AM   #11
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by Nords View Post
The only effective financial antidote for pension envy is an annuity.
At least until someone invents the ability to go back in time and have a do-over about your career decisions.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 03-10-2009, 09:00 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,072
With all due respect to the OP, and not knowing his total asset allocation nor investing theory, isn't diversification important? Yes, dividends are part of that, but I thought that having 2-5 years in cash available for immediate living expenses was de riguer for the course, i.e. provide near-term stability to allow for the higher amplitudes of the longer term investments in effect insulating your living response to the perturbations. Heck, we will have pensions and will still have the cash aspect. I guess I am a belt, supenders and elastic waistband type of person....
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.” - George Orwell/Winston Churchill
deserat is offline   Reply With Quote
Old 03-10-2009, 09:10 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Nords View Post
The only effective financial antidote for pension envy is an annuity.
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 03-10-2009, 09:11 AM   #14
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by deserat View Post
With all due respect to the OP, and not knowing his total asset allocation nor investing theory, isn't diversification important? Yes, dividends are part of that, but I thought that having 2-5 years in cash available for immediate living expenses was de riguer for the course, i.e. provide near-term stability to allow for the higher amplitudes of the longer term investments in effect insulating your living response to the perturbations. Heck, we will have pensions and will still have the cash aspect. I guess I am a belt, suspenders and elastic waistband type of person....
Yes diversification is important.

However if one were to have a Norwegian widow type strategy, They must be feeling the pain about now.

Hence the OP's post.

Even without such (Norwegian widow) strategy I suspect that everyone is feeling a little glum. That's the fear part of the fear versus greed corundum.
__________________
MasterBlaster is offline   Reply With Quote
Old 03-10-2009, 09:14 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Sparky View Post
Here's a thread for the those of us who planned carefully and bought bank, insurance and financial stocks to live off the dividends and who are now screwed.

Seemed like a good idea at the time.
Sorry to hear that...did you put ALL your monies in that one sector, I hope not.........

Quote:
Now, we have taken eating out off the table, no new clothes, no vacations, no more organic food, no renovations, no taking our moms out to lunch, bottomshelf wine and liquor.
A lot of folks are belt-tightening, even those of us still w*rking......

Quote:
The worst part is the regret - if only we hadn't eaten out so much, if only we didn't buy all that expensive wine, if only I didn't get the quartz countertops...
Human nature,but would you REALLY change some of the "fun" things in life? Probably not......

Quote:
The part of the country that is living on COLA pensions are going, "what's the problem, why can't we go out to lunch like we used to?"
In this climate, a COLA'D pension seems like the Holy Grail. However, I am not one of those willing to take the crap the average govt employee has to take for 20-30 years to get the pension........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 03-10-2009, 09:16 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,072
Materblaster,

I don't discount the Norwegian widow strategy, and in fact intend to add a bit of that to my portfolio, however, that part of the strategy could be perhaps part of the two year pot of money or later....or sugar added to the base of the cash position for immediate living costs.

Yes, I truly understand the fear and glum aspect-truly - that's real money I've lost in the last 6-8 months, not 'paper' losses. Smarts, really smarts. Add into that my fear regarding an underlying fundamental societal change regarding our responsibilities individually versus that which we endow our government and there is amplification of the fear and glumness. The rules of the game are being changed precipitously and many of us may not have time to adjust to those rules changes.

Man, I look at the above and sense that WSJ's Best of the Web would cite me for a metaphor alert award :-)
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.” - George Orwell/Winston Churchill
deserat is offline   Reply With Quote
Old 03-10-2009, 09:32 AM   #17
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by Nords View Post
The only effective financial antidote for pension envy is an annuity.
Ignoring insurance insolvency/PBGC issues...

I have a much better appreciation now for the value of a pension/annuity to ride it out, albeit at perhaps a lower standard of living - No matter what. And the value of the - No matter what - is worth something.

For those with a cash-out pension option perhaps those big plans for that cash should be reconsidered. Perhaps you can use your other stash to snowball. But just in case it doesn't you have something that will always be there. Just maybe your dreams of living large should be weighed against the worst-case dog-food diet lifestyle.
__________________
MasterBlaster is offline   Reply With Quote
Old 03-10-2009, 09:36 AM   #18
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by MasterBlaster View Post
I have a much better appreciation now for the value of a pension/annuity to ride it out, albeit at perhaps a lower standard of living - No matter what. And the value of the - No matter what - is worth something.

For those with a cash-out pension option perhaps those big plans for that cash should be reconsidered. Perhaps you can use your other stash to snowball. But just in case it doesn't you have something that will always be there. Just maybe your dreams of living large should be weighed against the worst-case dog-food diet lifestyle.
I think this is why, depending on solvency and then-current interest rates, I might consider taking out an SPIA in retirement. There's certainly something to be said for a guaranteed lifetime income stream.

I wouldn't do it now because interest rates are so puny that the annuitized payments are too low. It would be nice to have some "floor" in terms of how bad things could get in terms of cash flow.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 03-10-2009, 09:40 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by MasterBlaster View Post
Ignoring insurance insolvency/PBGC issues...
I am less worried about large stable companies like Prudential or MetLife than I am about PBGC. FDIC is underfunded, and PBGC is 1-2 large pension failures away from blowing their line of credit at the Fed and will then grovel like the automakers in front of Congress.......

Quote:
For those with a cash-out pension option perhaps those big plans for that cash should be reconsidered. Perhaps you can use your other stash to snowball. But just in case it doesn't you have something that will always be there. Just maybe your dreams of living large should be weighed against the worst-case dog-food diet lifestyle.
My uncle went against my advice and took the lump sum option. Now he asked me what he should do.......
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 03-10-2009, 10:01 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by FinanceDude View Post
My uncle went against my advice and took the lump sum option. Now he asked me what he should do.......
I knew a lot of retired guys in the 70s. You can bet they wished they had taken the lump sum.

Out attitudes are almost always backward looking. It is hard to muster the imagination to realize that tomorrow may be vastly different from today.

My first guess would be that for anything but a full COLA governemnt pension, today it would be best to take the money and run. Discount rates are low, so cash-outs are often high. Prospective equity returns are high. An excellent combination.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How many years of cash/cash equilivents do you have now Florida FIRE and Money 70 03-10-2009 04:32 PM
Two Dividends? hellbender FIRE and Money 2 01-01-2009 10:16 AM
Q re Dividends Bram FIRE and Money 45 12-28-2006 02:32 PM
DIvidends ashtondav FIRE and Money 36 10-22-2006 11:29 PM
If you like dividends... Gonzo FIRE and Money 5 02-24-2005 10:22 AM

 

 
All times are GMT -6. The time now is 11:24 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.