Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-21-2009, 07:41 AM   #21
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,934
Quote:
Originally Posted by Sarah in SC View Post
Darn you old timers, just when we were getting ready for a nice big cry.
Well seriously, you never know what life will bring except that it probably won't be what you expected! At least, that is the way it seems to me.

I worked hard, married a handsome, intelligent guy and had a beautiful daughter and (I thought) "did everything right". But the marriage fell apart and I ended up divorced, 50, with nothing but a junker car, an old sofa, a temporary job, and zero knowledge or experience in personal finance or investing (plus the tech crash was about to slam us). I felt I did not deserve that fate!

I made plenty of stupid mistakes, including using retirement funds from my prior job to pay for a new Solara to replace my junker car. Still, I lucked out by investing during the good market from 2003-2006. I didn't deserve that either!! But between that good fortune and a big dose of LBYM I found myself in a great position to retire by the time I joined this board. Then later that year, I came into some money.

The point of all this rambling is that IMO we don't know or control the future. All we can do is our best to push things in the right direction, and be flexible in dealing with the surprises that life brings to us. I think living is sort of like surfing in that respect.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R 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 02-21-2009, 08:01 AM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Eh, yeah, its discouraging. But realistically I was going to be working for 10+ years before the mess started and that remains the case today.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 02-21-2009, 08:56 AM   #23
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
I am not discouraged about my situation.

A) I have time on my side
B) this is the cheapest I have ever seen stocks
C) I have a job

This is my reminder:

[moderator edit]
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Old 02-21-2009, 09:55 AM   #24
Thinks s/he gets paid by the post
Fireup2020's Avatar
 
Join Date: Feb 2007
Posts: 1,186
I agree with Wildcat & W2R. At age 38, I finally have no debt, max out on savings, have a good job (two of them that I can alternate between actually) and pensions provided I live long enough. If the economy continues to slide, well, that just means I get to buy a larger number of shares that will eventually increase (just based on historical evidence) and as long as I am having fun along the journey, it's all good! Sometimes you just have to work hard to get you where you need to be for the luck to start hitting you!
__________________
Make no mistake, my friend, it takes more than money to make men rich. - A. P. Gouthey
Fireup2020 is offline   Reply With Quote
Old 02-21-2009, 10:33 AM   #25
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Does it help to remember that you're buying shares -- lots of them, and cheap -- rather than a specific dollar investment or return?

FIRE becoming "FIR" and ESR turning into "SR" each year that passes, economy damn scary, but still putting half my new savings in stock funds. This is the part where I remember how fortunate I am to have a secure, decent-paying job that I like, even if I'd like to slow down.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 02-21-2009, 01:16 PM   #26
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 309
I'm in the latter part of the range and this has basically sickened me to equities. I was 100% equities given my 50 - 55 target retirement age, but I have lost some serious money that I worked very hard for in Canadian "blue chip" stocks that really shouldn't lose 50% or more, but they have. I don'[t want to repeat the experience so future contributions are going towards bonds. I personally have capitulated...not so much that I am selling equities, but I don't want to add anytime soon, or perhaps forever. I've been investing since 15 and actually am down over that time. I'm officially done with equities.

I'm reading Buffet's biography and it talks about him buying companies whose shares were trading at 1/3 their cash on hand balances. With the advent of the net and full disclosure easily accessible to anyone, these opportunities will never exist again. Since I don't have a gold plated gov't pension to look forward to, unfortunately I will have to likely work until 65 like the rest of the sorry masses.
__________________
accountingsucks is offline   Reply With Quote
Old 02-21-2009, 01:57 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
I wouldn't mind the share price decreases so much if the dividends were holding up...my main fund, VEIPX, went from 26 to 13, and you'd think the yield would have increased from 4% to 8%...instead it's about 5%. This fund outperformed the S&P by a bit last year, but has since accelerated its decline so they're about equal.

Until they stop slashing dividends, I'm not buying any more equities. We're only making the minimum investment in the 401k to get the match in a bond fund. The rest of the money is being used to payoff the mortgage early.

We've been wanting to buy a few things, sofa, TV, but with the way things are going who wants to spend $1000 on something that is totally discretionary? I can afford it with cash money, but I'm just not interested. And it presents a real problem for anyone who's trying to sell me stuff.

I looked through the stimulus package and noted that not one of the benefits would apply to us, despite the fact that one of us is a full-time student and the other has a ton of student loan debt. We would not even benefit from the "new car" provision, since we already itemize sales tax. I hope everyone else enjoys their new car/house that we (the responsible ones) helped finance.
__________________
soupcxan is offline   Reply With Quote
Old 02-22-2009, 09:36 AM   #28
Recycles dryer sheets
Hobo's Avatar
 
Join Date: Sep 2008
Posts: 274
I think it is important to remember that very little of actual tangible value has been lost in this economic downturn. For the most part, houses have lost paper value only - the land and structure are still in place. Unless the house is in foreclosure or must be sold in a hurry, hard cash has not been lost.

Stocks have taken a dramatic downturn based on psychological reactions. Yes, the earnings have been modestly lower recently - but not equal to the stock market losses. The dramatic fall in price to earnings ration (PE) are a reflection of people's perception of value (or price). You don't realize a loss (or gain) until the stock (or whatever investment) is sold.

With little lost but the confidence of the investor. With lots of money just sitting in T-bills and other "safe havens", this market could easily turn around and regain ground quickly. Contrast that to something like the fall of Communism in Russia where the whole economic system crashed - and manufacturing industries stopped production. That is real value lost.

If you are young and have your money invested for retirement, then nothing matters until you actually retire. You can't sit on the sidelines and wring your hands (or toast with champagne) with every bull or bear market. Patience is a virtue.
__________________
Hobo is offline   Reply With Quote
Old 02-22-2009, 12:29 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,288
Quote:
Originally Posted by soupcxan View Post
I
I looked through the stimulus package and noted that not one of the benefits would apply to us, despite the fact that one of us is a full-time student
I think the LLC was bumped up to $2,500 from $2,000 max?

That's @ 20% of tuition/fees though, so if those are already no more than $10,000 for you, I guess it would make no diff.

I guess the admin is saying " we only want to give more help people who chose go to expensive schools!".


-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 02-22-2009, 12:41 PM   #30
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by Rich_in_Tampa View Post
Does it help to remember that you're buying shares -- lots of them, and cheap -- rather than a specific dollar investment or return?
I agree. The most important things for someone under 35 are to stay employed and to put as much as they can afford into retirement investing while prices are low.

It's the folks over about 45 or 50, IMO, who should be feeling discouraged. They may have felt very close to retirement 18 months ago but now feel they have quite a few more years to go.
__________________
"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 02-22-2009, 01:45 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,972
Quote:
Originally Posted by ziggy29 View Post
I agree. The most important things for someone under 35 are to stay employed and to put as much as they can afford into retirement investing while prices are low.
That pretty much sums it up for me. I'm 29 and i'm not really discouraged. If I never looked at my account balances I wouldn't even now there was a recession/depression going on. As long as I don't get layed-off, it's all good.
__________________
aaronc879 is offline   Reply With Quote
Old 02-22-2009, 11:29 PM   #32
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 105
Quote:
Originally Posted by aaronc879 View Post
As long as I don't get layed-off, it's all good.
To be honest, aside from the 30-40% dip in our retirement savings this is prob the biggest thing that makes me and DW a bit nervous these days....despite being high peformers at (relatively) good costs for our companies.

The fire-sale on equities is great for us at 32....as long as we can keep buying.

In both our companies I've seen the baby thrown out with the bath water when times get rough.
__________________
jblack is offline   Reply With Quote
Old 02-23-2009, 12:09 AM   #33
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,753
Quote:
Originally Posted by soupcxan View Post
I know I am. Household conversation:

DW: How much of our income did we save in January (2009)?
DH: $2,000. We're doing a good job staying witin our budget.
DW: How much did our net worth increase?
DH: -$4,000.
DW: Uhh...how do things look for February?
DH: The budget looks great, we will have at least $1,000 left to save.
DW: And the investments?
DH: Uhh...
Try this thread and count your blessings.
Anyone else want to join the "Lost over a million" club?
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 02-23-2009, 10:52 AM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,531
At age 29, I'm feeling relatively good. We lost a ton (more than 2x my annual salary). But we are still investing. Our net worth went backwards to what it was 18 months prior. Not the end of the world. DW and I are both top performers at two fairly solid companies, so layoffs look like low probability events in the next 3-6 months. We can live easily on one of our salaries, and 46+ weeks of unemployment would be icing on the cake.

Worst case, one of us gets canned and then we get a nice long partially paid vacation courtesy of ole Uncle. May do some traveling. If it is me, I have a need for a lot of free time for a personal project I am working on this year.

I only do net worth statements and portfolio reviews once per quarter. So the pain is felt, just not too often. I know I am buying stuff much cheaper than it was in recent history (1/2 to 5/6 off). Long term this downturn is great news for the portfolio.
__________________
FUEGO is offline   Reply With Quote
Old 02-23-2009, 12:22 PM   #35
Recycles dryer sheets
 
Join Date: Oct 2007
Posts: 80
At age 26, almost 27, the stock market is depressing but I know long term it is probably great news for me. I upped my contribution to 12% in October and will be keeping it at that.

However, the change to housing prices(Bay Area) makes me ecstactic. So overall, this recession is probably great news for me, as long as I don't get laid off. It just doesn't feel like it as we go through it.
__________________
HornedToad10 is offline   Reply With Quote
Old 02-23-2009, 01:47 PM   #36
Full time employment: Posting here.
Lusitan's Avatar
 
Join Date: Jan 2006
Location: Boston
Posts: 620
I'm at the older end of that range, and trying not to dwell on the portfolio losses in my first decade of investing.

I monitor my accounts frequently just to make sure there are no fishy transactions, so I'm in tune with the balance of our FIRE stash on a day-to-day basis. But with my wife, I let her know how badly we're down (we're heavy into stocks in our AA right now given our age) but we don't dwell on the details.

The way I try to look at it is that this mess was bound to happen sooner or later (the days of living off the spoils of WWII are over for good) and I'm glad we got it out of the way sooner rather than later.

I try not to think about how my 401k balance has barely changed in the past 6 months ... despite continuous bi-weekly investments!
__________________
Lusitan is offline   Reply With Quote
Old 02-25-2009, 04:29 PM   #37
Full time employment: Posting here.
CCdaCE's Avatar
 
Join Date: Apr 2006
Posts: 887
At 31, starting to wonder if it pays to take 100% equity risk. Seems like it has in the past, but I don't know how long the orgy will last. On the other hand, (see my avatar), the "sound of inevitability", which is inflation, is going to cream any non-equity investments I'd think. Unless you wanna buy TIPS and play cards with a deck of 43 using the gov't inflation magic black box.

So, still dutifully sockin' away 4% to get the match and maxing out my Roth every month, though.

Going to open a Roth for the wife with the tax return. Apparently our withholdings are all screwed up with a couple deductions under our belts. With the stimulus, that's getting to be quite the moving target for me to chase.

Reeking with cynicism.

-CC
__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   Reply With Quote
Old 02-25-2009, 07:15 PM   #38
Full time employment: Posting here.
 
Join Date: Sep 2007
Posts: 514
I have mixed emotions about it, honestly.

I'm 33, my wife is 32. We both graduated university in 1999 and began careers in the high-tech industry.

In many ways, I feel cheated. I've followed all the usual sage advice about "paying ourselves first," saving and investing 20% of our wages, choosing mutual funds instead of trying to pick stocks, buying and holding, dollar-cost-averaging it, the whole bit. All the books I read told me that by sticking to this plan, I could expect 10% return over the long term. I did all the calculations, and figured we'd be on easy street, retiring early at 55 as millionaires.

However, as we all know, reality didn't play out that way. The markets have been on a wild ride since 1999, and currently, the numbers sit at almost exactly the same level they were when we started investing. We haven't achieved a 10% rate of return - we've achieved 0%. When you factor in inflation, we've been losing 2-3% per year. What's going on? We played by the rules, we did all the smart things we were supposed to. Yet retirement seems just as distant as ever. All along, we've been told to trust in the "magic of compound interest," but I haven't seen any compounding at all. My money isn't "working for me," it's just sitting there. Every month, we invest another $3,000, and every month, our net worth stays stationary, or even retreats a little. When exactly is this magical compound interest supposed to start amazing me?

On the other hand, I'm trying to remain optimistic. I'm still hopeful that we can achieve an average of 8% for the next 20 years. If so, we can still achieve our goals. The past decade of 0% returns is bolstering this hope. I guess my reasoning is, "after 10 years of 0% returns, the market must surely be primed to deliver above-average returns, so averaging 8% for the next couple of decades should be a cakewalk!" Wishful thinking? Could be, but it's what keeps me from panicking about dying penniless.

I'm still looking at this and telling myself that we have plenty of time to ride this out, and that this is just an opportunity to go back in time and buy all those investments we couldn't afford back in 1999, but at 1999 prices. It's (hopefully) the deal of a century. I'm hopeful that 20 years from now, when we look back in history, we'll realize that my generation was in fact perfectly positioned to capitalize on probably the most spectacular market roller-coaster of our lifetimes.
__________________
kombat is offline   Reply With Quote
Old 02-25-2009, 07:45 PM   #39
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
Kombat - you described my situation to a tee, except I started working five years after you, so my investment returns are not just 0%, they are negative (before you factor inflation, which reduces them even further). It is quite frustrating to do what you are told is responsible and be punished for it.

Meanwhile, a lot of people either lied on their mortgage applications to buy a house they couldn't afford, or got underwater on the house they bought because they used its equity as an ATM to buy flat-screen TVs and BMWs. Those people still have their fancy toys and their big house - now they are getting an extra reward for bad behavior through tax breaks, short sales, and bailouts that I'm not eligible for.
__________________
soupcxan is offline   Reply With Quote
Old 02-25-2009, 09:49 PM   #40
Full time employment: Posting here.
CCdaCE's Avatar
 
Join Date: Apr 2006
Posts: 887
These last two posts have really expanded on the last sentence of my post. Thoroughly expanded on what I was trying to get at, but too lazy to put it into sparing readers a lengthy post.

Being on the cusp of the instant gratification generation crowd, it seems like I've/we've done everything right, and now we'll get punished for it; leading to "don't get me started on the politics of the last 8, 16? and the next 4". Rome is crumbling?

-CC
__________________

__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   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
New and discouraged investor Sadstate Young Dreamers 36 09-10-2008 06:16 PM
1 Of 2 93-Year-Olds Charged In Manatee County Sex Sting Wags Other topics 18 03-28-2008 07:23 PM
OK, How Many 5 Year Olds Could You Take In A Fight poboy Other topics 24 12-25-2007 08:45 PM
Shouldn't Handshaking be Discouraged? TromboneAl Other topics 23 12-17-2007 10:14 PM
Kind of discouraged accountingsucks FIRE and Money 12 02-21-2006 01:12 PM

 

 
All times are GMT -6. The time now is 04:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.