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Old 03-02-2009, 10:51 PM   #61
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I still have a stable job and keep telling myself that years of depressed prices will make up for it...but going through a couple of 40%+ corrections over 15 years is a bit difficult....I reset my allocations at the end of last year and upped my max contributions and not looking back...
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Old 03-03-2009, 09:18 AM   #62
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You are right on, CIF. Of course, it is harder to steal cars these days anyway.

My fall-back retirement position is to rob a bank here in Canada. The worst thing that can happen is that I get away with it.
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Old 03-03-2009, 11:09 AM   #63
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Nope, not discouraged. Keep upping my contributions as I am able. Just need to keep hubby and I employed so we can keep paying off debt and saving up money. If anything the crash made it much easier for us to a buy a home. We had good credit, cash and good work history so the 15 year mortgage was an easy move.
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Old 03-04-2009, 10:49 AM   #64
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I'm 34 and DW is 30. We have not stopped dumping money into our 401ks and IRAs that are all high risk, long term managed funds. The only thing we've changed, like most people, is that we are now saving more for our short term goals.

Am I the only one that believes this recession could accelerate our retirement date? I feel like we've been given an amazing opportunity to buy low,low,low,low..... If I end up wrong then o'well,.. but for those of us that have taken the higher risk road the payoff in the end could be amazing and allow us to retire much earlier.

If I am wrong and this nation goes to down the drain then there is always plan B. Move to an island of choice, forget health insurance, flip off the corporate world and live a simple life until the end comes.
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Old 03-04-2009, 12:22 PM   #65
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For the young'ns, time is on our side, it's our strongest ally. Really, you can never ask for a better partner.
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Old 03-04-2009, 12:32 PM   #66
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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...
No reason to be discouraged by short term events for a long term goal.

I am 36 and IMO this market is going to HELP me retire early, not prevent it. I lost 40%/80k in 2008. If my numbers are correct and the market stays this low for 18 months, It's possible I will have 3X as many shares going up as I did going down, meaning if market recovers to previous 2008 high in about 6 years, I will have 600k and a 200% increase in my assets over a short amount of time.

That should help early retirement, not discourage it.
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Old 03-04-2009, 12:42 PM   #67
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Am I the only one that believes this recession could accelerate our retirement date? I feel like we've been given an amazing opportunity to buy low,low,low,low..... If I end up wrong then o'well,.. but for those of us that have taken the higher risk road the payoff in the end could be amazing and allow us to retire much earlier.
If you are starting to invest today vs. 8 years ago, then yes, your retirement will be accelerated. It is less certain if you were already 1/4 to 1/2 on your way to FIRE.
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Old 03-04-2009, 01:15 PM   #68
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No reason to be discouraged by short term events for a long term goal.

I am 36 and IMO this market is going to HELP me retire early, not prevent it. I lost 40%/80k in 2008. If my numbers are correct and the market stays this low for 18 months, It's possible I will have 3X as many shares going up as I did going down, meaning if market recovers to previous 2008 high in about 6 years, I will have 600k and a 200% increase in my assets over a short amount of time.

That should help early retirement, not discourage it.
I guess it depends on how much skin you already had in the game. I had enough skin in the game already -- one year's new contributions was maybe 5% of my portfolio value before it all started to unravel -- that I could have done without the opportunity to buy cheaper shares for a few years. I would have been much better off had the other 95% not been slaughtered.

If I were just starting out and had very little "skin" in the game already, you bet you're boots that I'd be loading up as much as I could now. Though the 20-somethings shouldn't get too greedy for a prolonged period of depressed shares, because that means many of them would no longer have a job to enable them to buy cheap stocks...
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Old 03-04-2009, 01:26 PM   #69
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Though the 20-somethings shouldn't get too greedy for a prolonged period of depressed shares, because that means many of them would no longer have a job to enable them to buy cheap stocks...
True enough. I always knew depressed markets would be a great opportunity for buying shares. But the risk of job loss combined with very little in the way of pay increases could put a damper on future investments at some point.
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Old 03-07-2009, 07:33 PM   #70
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You mean things get worse! Next thing you're gonna tell me is that a 13 yr. old is worse than a 3 yr. old!

-CC
No, I mean they get better. Trivial pursuits of things such as downing 12 beers in one sitting or getting laid no longer rank as high. Therefore, you don't have to invest in a hot car, hot cloth, or even hot meals. Talk about extreme LBYM. Now, if I can only combine the income of a (still employed) investment banker and the lifestyle of a Shaolin Temple monk, I'd be able to ER in 1 year.
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Old 03-08-2009, 03:17 AM   #71
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30 year old here. I am not that discouraged, although it's certainly a little painful to look at current networth. I only check my accounts every other month to get an update. So far it has only shrunk a little, thanks to my continuing to put money in.

Since I pretty much live the way I want and don't really feel deprived, I am OK with continuing saving and buying mutual funds in my 401K. I don't really have much more of a lifestyle need than I currently have. (Born cheap, can't help it) But on the other hand, I am only saving about 25% of my income, so relatively non-aggressive compared with other young dreamers on this board.

As long as I don't get laid off (doesn't look like it), life is pretty good right now. As my horizon is probably 25-30 years out, a lot could happen between now and then, so I really don't have any reason to get anxious at all.

(Generally in a good mood today. Maybe it's because of daylight savings time? I love daylight savings time.)
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Old 03-08-2009, 10:19 AM   #72
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I am trying to convert as much as I can within my tax bracket, and I continue to max Roth contributions while DW is still doing part-year work. And while I think a Roth is a good idea, I'm not really sure (we can't be sure to changes in tax law and our situation). So I look at it more as a tax diversification technique. I already have ~50% of my NW in a Trad, so I'm trying to get a good balance in Roth.
-ERD50
The best advise I have heard since this economic decline started is, "In a bull market, the object is capital appreciation. In a bear market, the object is capital preservation". This is true at any age - you want to minimize your losses right now. The way to do that right now, IMO is to stay in a major stock fund. I am not a stock picker, so you can choose the one that is right for you.

One thing you must remember is that any bond you buy right now which pays low interest (such as treasuries) will loose significant value if interest rates rise. Interest rates could rise rapidly if all the money the government is pumping into the economy causes inflation. You can loose money in T-bills if interest rates climb and you want to sell the bonds before maturity. That could happen if the market suddenly turns bullish and you want to get your money out of bonds to catch the upturn.

You can always pull your money out of a slow moving, but solid, mutual fund or ETF when the market turns around in the future.
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Old 03-09-2009, 10:30 PM   #73
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I'm not so much worried about the stock market. I'm more worried about my POS job not so much about losing it though that would suck in its own right but rather if it's going to put my career in a downward spiral. I took my current job with the assumption that I'd be making a series of move to move up the ranks. Now, that plans looks like to be on hold forever. I know more than I did 2 years ago, and I'm more focused, but I'm getting paid as if I'm a complete moron. I'm not talking out of the lack of information. I did the finances for my group, so I know what others are making for the same job.
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Old 03-11-2009, 12:43 AM   #74
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I'm certainly not. My short sighted friends don't understand in the slightest that I'm ok with losing $1000 here and there in the process of buying up shares in my roth in an effort to average down.

Last year I opened up my roth (at age 23) and I maxed it out. So far this year I dumped my tax return in and am priming to dump my secondary salary into it this summer. Overall I'm (only) down $1500. Could I have gotten better prices? Certainly. Will the market turn around and 30 years from now I will look back at the steal of a deal I got? You betcha. Could I have used $1500 elsewhere? you bet your ass, but I'd rather lose it in there while making an effort to set myself up for early retirement down the road than squander it on a new TV or something else I don't need.


I'm in school for ~3 more years(debt free and $ in the bank) before I'll be looking for a job. Until then it I'm counting my blessings for having been so lucky in my timing.
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Old 03-11-2009, 11:23 AM   #75
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I'm discouraged in the sense that I've given up on the stock market. I am no longer convinced that 8%+ returns are what we "should" expect. Why should stock prices outpace economic growth, or company growth? P/E ratios have been slowly inching up over the decades; even today's P/E ratio is still high by historical standards.

We pulled all our money out of stocks and going fully conservative -- CDs, government bonds, etc. We have good salaries and he a military pension that make it possible. If he keeps his pension, we'll be just fine to retire with 1.5 million in taxable accounts plus whatever's in the tax-advantaged accounts we've maxed out.
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Old 03-11-2009, 11:28 AM   #76
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I'm discouraged in the sense that I've given up on the stock market...

We pulled all our money out of stocks and going fully conservative -- CDs, government bonds, etc. We have good salaries and he a military pension that make it possible. If he keeps his pension, we'll be just fine to retire with 1.5 million in taxable accounts plus whatever's in the tax-advantaged accounts we've maxed out.
Nothing at all wrong with that approach if you can pull it off.
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Old 03-11-2009, 11:41 AM   #77
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I'm discouraged in the sense that I've given up on the stock market. I am no longer convinced that 8%+ returns are what we "should" expect.
I completely agree concerning the returns, for what it's worth. (That and $1.50 will buy you a cup of coffee).

Actually I don't think this is a pessimistic outlook or even the slightest bit of market panic. I have been thinking this would be the case for over 5 years.* I am hoping for average returns equaling inflation + 2%, and my financial plan takes this into account.

To be clear, I haven't given up on the stock market but simply don't expect 8%+ returns on average. If we get them, then in my 80's I'll be like Scrooge McDuck - - sitting on top of a huge pile of money, shouting "Mine, mine, it's all MINE!"

* If anyone is interested, I base my thinking on a subjective interpretation of demographics and the effects of the leading edge of the baby boom, right or wrong.
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Old 03-11-2009, 12:10 PM   #78
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I am hoping for average returns equaling inflation + 2%, and my financial plan takes this into account.
Well, heck -- you could get CPI + 2.5% by buying long-term TIPS, hold them to maturity and walk away from the stock market. The only problem is that they don't throw off enough current income.

Schwab currently shows the new-issue January 2029s priced to yield 2.58%.
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Old 03-11-2009, 12:15 PM   #79
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Well, heck -- you could get CPI + 2.5% by buying long-term TIPS, hold them to maturity and walk away from the stock market. The only problem is that they don't throw off enough current income.

Schwab currently shows the new-issue January 2029s priced to yield 2.58%.
Well, I don't like to put all my eggs in one basket, y'know? There are lots of investments that give off more than CPI+2% right at this moment. Doesn't mean that I could toss my money into any one of them and then go and snooze (at least, not IMO). Although I must admit that UncleMick's strategy (put it all in a target fund and forgetaboutit) is very appealing...
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Old 04-02-2009, 05:39 PM   #80
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Discouraged? Well, yes and no. The market stinks, but at least I didn't have a hug amount of savings invested! I was really annoyed when I did my taxes this year and was told that he state of California will give me my return basically when the budget is fully allocated - meaning never. If that is the case, of course, I do not see why those that owe the state (i.e., smart people) should have to pay.
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