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Re: Scott Burns nails it
Old 08-11-2006, 12:45 PM   #21
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Re: Scott Burns nails it

Scott Burns did a good job with that one. *I'm eternally grateful for Scott Burns - he turned me on to the Trinity Study along with a very good history/overview of it's origins. *His financial advice is truly written for the layman.

Downsizing the home and car was VERY VERY good advice. *I hope they take it.

Audrey
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Re: Scott Burns nails it
Old 08-11-2006, 12:56 PM   #22
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Re: Scott Burns nails it

This couple's situation is very similar to what my parent's situation would be if they were to retire today. *But fortunately, they are both still working, mostly because they enjoy it. *In five years, they may be unable to work. *I cannot imagine them being able to have a reasonably comfortable retirement unless they sell their home and move to a mobile home park or out of state, and they will be very unhappy having to do either.
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Re: Scott Burns nails it
Old 08-11-2006, 12:58 PM   #23
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Re: Scott Burns nails it

Must be the new math
I know people like this living in expensive homes in south florida. One has the husband that has gone back to work full time. The wife now works part time. If you discuss money its all because of the stock market decline. No mention of the leased camry in the driveway.The fees for there expensive home in a place with the golf course and the 5 star dining. Which I dont even thing they use or care about
* * * * * * *One of the things Suze Orman says about financial problems is it often starts with a lie. Or is it just plan denial ?
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Re: Scott Burns nails it
Old 08-11-2006, 02:00 PM   #24
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Re: Scott Burns nails it

The idea that these folks did not do the math or really think about the numbers made me think of the couple in the Frontline report on retirement last year. That couple simply cashed in their 401(k) and moved it somewhere else. They actually withdrew the whole thing, paid lots of income tax on it and (I think) invested it in a not-so-good way. The husband had to go back to work to make end meet. Was this the fault of the plan at EDS (his orginal employer) or his own fault for unwise decisions?

Every day, folks leave companies and take their 401(k) money and give it to a financial advisor who immediately skims off 5.75% and a percent or two every year thereafter.

That's life.
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Re: Scott Burns nails it
Old 08-11-2006, 02:07 PM   #25
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Re: Scott Burns nails it

Quote:
Every day, folks leave companies and take their 401(k) money and give it to a financial advisor who immediately skims off 5.75% and a percent or two every year thereafter.
Good point LOL. Of course that is after thay have already paid fees, commissions etc when it went into the 401(k). Fees on top of fees, on top of fees,eon top...
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Re: Scott Burns nails it
Old 08-11-2006, 02:12 PM   #26
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Re: Scott Burns nails it

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Originally Posted by mickeyd
Good point LOL. Of course that is after thay have already paid fees, commissions etc when it went into the 401(k). Fees on top of fees, on top of fees,eon top...
When people do stuff like this, it makes ME feel like a genius.

This sounds like stories from my bro-in-law or a mother-in-law. You try to steer 'em away from this behavior, but they still make lobotomized decisions. Back to "you can't fix stupid".

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Re: Scott Burns nails it
Old 08-11-2006, 02:57 PM   #27
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Re: Scott Burns nails it

"The probability of success"
http://www.efficientfrontier.com/ef/103/probable.htm

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Re: Scott Burns nails it
Old 08-11-2006, 03:08 PM   #28
 
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Re: Scott Burns nails it

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We are a minority here! - When you think about we have around 2,000 members. Pretty small group for something that I would consider as essential as breathing.
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Re: Scott Burns nails it
Old 08-11-2006, 03:15 PM   #29
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Re: Scott Burns nails it

Actually, a 25% drop in the first year may be pretty difficult to recover from, even with a 4% withdrawal rate. It's the drops right at the beginning that hurt you most and 25% must be pretty close to the historical extreme!
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Re: Scott Burns nails it
Old 08-11-2006, 03:16 PM   #30
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Re: Scott Burns nails it

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Originally Posted by Cut-Throat
We are a minority here! - When you think about we have around 2,000 members. Pretty small group for something that I would consider as essential as breathing.
Being that my DW/me are going to ER within the next 4-8 months (age 59), I keep on thinking we must be doing something wrong. *The numbers "work" using 5+ forecast tools, and I don't consider us (at least me) "smart"....

Why can't others do the same?

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Re: Scott Burns nails it
Old 08-11-2006, 03:23 PM   #31
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Re: Scott Burns nails it

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Originally Posted by Ron'Da
Why can't others do the same?
Here is one reason according to Bernstein: "Take a look around after every bubble and you'll find that the only investors left reasonably intact have gray hair."

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Re: Scott Burns nails it
Old 08-11-2006, 03:25 PM   #32
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Re: Scott Burns nails it

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Originally Posted by REWahoo!
Here is one reason according to Bernstein: "Take a look around after every bubble and you'll find that the only investors left reasonably intact have gray hair."
Darn, U saw my picture!

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Re: Scott Burns nails it
Old 08-11-2006, 03:30 PM   #33
 
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Re: Scott Burns nails it

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Originally Posted by jerryo
Actually, a 25% drop in the first year may be pretty difficult to recover from, even with a 4% withdrawal rate. It's the drops right at the beginning that hurt you most and 25% must be pretty close to the historical extreme!
Not even close! Stocks dropped in the Depression about 80% from 1929-1933.

Then lost about 50% in 1973-1974

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Re: Scott Burns nails it
Old 08-11-2006, 03:33 PM   #34
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Re: Scott Burns nails it

Others can and do - going back to one of my favorites - Benjamin Franklin.

But as CT mentioned a distinctly small minority.

heh heh heh - and he didn't even have index funds!
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Re: Scott Burns nails it
Old 08-11-2006, 03:42 PM   #35
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Re: Scott Burns nails it

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Originally Posted by REWahoo!
Here is one reason according to Bernstein: "Take a look around after every bubble and you'll find that the only investors left reasonably intact have gray hair."
Yep, or who have virtual gray hair from hanging around places like this forum.

This doomsday scenario came up in another thread and convinced me that I would put together my cash bucket ASAP before I FIRE while the gettin's good or at least decent, just in case I need it sooner than expected.
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Re: Scott Burns nails it
Old 08-11-2006, 04:27 PM   #36
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Re: Scott Burns nails it

Why would 68 year olds still owe $75 000 on a $200 000 home.

That debt should have been gone years ago.

Buy your first house at 30.

Move to the best you can afford at 40.

Pay it all off by the time you are 50.

Retire mortgage free.
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Re: Scott Burns nails it
Old 08-11-2006, 04:48 PM   #37
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Re: Scott Burns nails it

Quote:
Originally Posted by Zipper
Retire mortgage free.
I won't accuse them of being savvy enough to analyze the options, but it's a choice.

We won't pay off our mortgage until I'm 74.

And if a better interest rate comes along in the next 29 years, we'll get another one.
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Re: Scott Burns nails it
Old 08-11-2006, 05:43 PM   #38
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Re: Scott Burns nails it

Mine will be paid off at age 92 in 29 years also.

heh heh heh heh heh
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Re: Scott Burns nails it
Old 08-11-2006, 05:49 PM   #39
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Re: Scott Burns nails it

A couple of reasons why Canadians rated #10 and the U.S. #23 on the happiness scale.

#1 Mortgage payments are not deductible on income tax in Canada so anyone with a brain kills the mortgage before they retire.

#2 Universal Healthcare.
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Re: Scott Burns nails it
Old 08-11-2006, 06:00 PM   #40
 
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Re: Scott Burns nails it

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A couple of reasons why Canadians rated #10 and the U.S. #23 on the happiness scale.
Bigger trout too! 8)
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