Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-01-2010, 10:51 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Kids are darn expensive, but IMO, worth every penny...........
__________________

__________________
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
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 07-01-2010, 11:05 AM   #22
Recycles dryer sheets
 
Join Date: Jun 2010
Posts: 100
Thanks for the comments, JBlack. Hopefully by the time we both reach 34-36 we'll have crossed our first milestone/goal: $100K in cash savings, with around 20K in investments (it's doable, at our current savings rate, and we are working diligently to achieve it). We'll see where we stand there as far as children go (I'd feel a lot more comfortable with twice that amount before even attempting to raise a child in today's world, but then again, what percentage of the population is lucky enough to even contemplate that prospect, specially on salaries like mine and my wife's?).

Regarding my original question... let me re-phrase it slightly: based on the numbers and conditions I described in my very first post, what would you guys do if you were in my shoes? Would you continue saving at our current rate to increase our cash/liquid funds? Would you save less cash and invest more? Would you withdraw and invest some of the money from our emergency fund? If so, where would you invest? How much? Again, any ideas or comments are welcomed. Thanks again!
__________________

__________________
Karloff is offline   Reply With Quote
Old 07-01-2010, 11:10 AM   #23
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by jblack View Post
That aside, you may also want to consider your timing. If you are okay with kids at 35 and are currently 32, remember that it may take a little bit of time to actually get pregnant (took us 11 mths....which I can't complain about given what is required...lol)
When your spouse is starting a pregnancy, it's always good to be there...
__________________
*
*

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 07-01-2010, 04:18 PM   #24
Recycles dryer sheets
Tigger's Avatar
 
Join Date: Aug 2008
Posts: 388
Quote:
Originally Posted by FinanceDude View Post
Kids are darn expensive, but IMO, worth every penny...........
Not so sure about their resale value.
__________________
Tigger is offline   Reply With Quote
Old 07-01-2010, 04:22 PM   #25
Thinks s/he gets paid by the post
IndependentlyPoor's Avatar
 
Join Date: Jul 2009
Location: Austin
Posts: 1,142
Quote:
Originally Posted by Tigger View Post
Not so sure about their resale value.

Or if the used-kid market is efficient! Might be a good opportunity for arbitrage.
__________________
Start by admitting
from cradle to tomb
it isn't that long a stay.
IndependentlyPoor is offline   Reply With Quote
Old 07-02-2010, 09:57 AM   #26
Recycles dryer sheets
 
Join Date: Jun 2010
Posts: 100
Just bumping this with the hopes of receiving more comments and/or ideas regarding my questions. Don't mind the jokes, guys, but any topic-specific feedback would be appreciated even more. Thanks!
__________________
Karloff is offline   Reply With Quote
Old 07-02-2010, 11:44 AM   #27
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 105
Quote:
Originally Posted by Karloff View Post
Regarding my original question... let me re-phrase it slightly: based on the numbers and conditions I described in my very first post, what would you guys do if you were in my shoes? Would you continue saving at our current rate to increase our cash/liquid funds? Would you save less cash and invest more? Would you withdraw and invest some of the money from our emergency fund? If so, where would you invest? How much? Again, any ideas or comments are welcomed. Thanks again!
Well if you are strictly asking about how to proceed financially with the assumption of having kids in a few years then I think several others weighed in with good advice. Know your goals & priorities, risk tolerance, and educate yourself with a lot of the basic reading to determine your strategy. One size doesn't fit all.

DW and I keep it pretty simple: emergency fund of 3 mths expenses in cash savings, DCA into 401k/IRAs & taxable accounts automatically from paychecks, 80-20 stock/bond mix, minimize taxes, and rebalance once a year. We plan ahead with spreadsheets and make adjustments to our expenses & savings as things change (such as having kids)....

Hardest thing I have had to learn is balance & renewed perspective to keep life's priorities straight and know when to make saving/spending changes.
__________________
jblack is offline   Reply With Quote
Old 07-02-2010, 12:02 PM   #28
Full time employment: Posting here.
cardude's Avatar
 
Join Date: Feb 2006
Posts: 599
Dude, if you love your wife and cannot bear to live without her, and if she really, really wants kids, then guess what. You will have kids!

I was the same way when DW and I just started off. I wanted to save as much money as possible and didn't want kids because they would delay our "progress". Finally, when she was 30, she had enough and talked me into one kid, then a few years later, another. Now I can't imagine life WITHOUT kids.

You have to listen to your wife. Most wives (the good ones) are generally right about most things. Trust me on this...........
__________________
cardude is offline   Reply With Quote
Old 07-02-2010, 12:13 PM   #29
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
When your spouse is starting a pregnancy, it's always good to be there...
Or else your kid looks like the milkman or mailman...........
__________________
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 07-03-2010, 10:31 PM   #30
Recycles dryer sheets
 
Join Date: Sep 2009
Posts: 160
i'm not going to give any advice on whether or not to bring more life into our crowded world, but as far as investing goes, you sound like a perfect candidate for the various "lifecycle" style funds that change their allocation of stocks/bonds as you near your retirement date.

good luck! (where in south america are you from?)
__________________
stoutboy is offline   Reply With Quote
Old 07-04-2010, 09:32 AM   #31
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by cardude View Post
I was the same way when DW and I just started off. I wanted to save as much money as possible and didn't want kids because they would delay our "progress". Finally, when she was 30, she had enough and talked me into one kid, then a few years later, another. Now I can't imagine life WITHOUT kids.
I can't agree with this more. Our daughter came as an accident (otherwise, I'm sure my wife and I would have had "the talk" about whether to have kids). Now, I can't imagine life without kids. Expensive? You better believe it. But, like another poster said, worth every penny. What I learned is that flexibility is a really good thing; what today you see as undesirable may be attractive in a few short years.
__________________

Niko is offline   Reply With Quote
Old 07-04-2010, 11:52 AM   #32
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
Here's a suggestion that works for some people (though not for others). You might try it to see if it helps you make some decisions. Imagine you are 20+ years older than you are now. Look back on your life with children. Next, imagine you are 20+ years older than you are now. Look back on your life without children.

While raising kids can be expensive, in my experience the expense is proportional to the means you have available. Plenty of people spend more to raise their kid than you will. Plenty of people spend less to raise their kid than you will. You are perhaps obsessing about the financial aspects of your life right now as you try to get your investment and employment situations planned and organized, but really kids affect those plans but they are NOT the drivers of those plans, nor should having or not having kids be solely as a result of those plans. (Billionaires get big families, everyone else not so much. lol.)

Conceiving children, pregnancy and raising infants are increasingly more difficult as you age. Sometimes surprisingly so. Don't delay this decision too much or you may find you've made your decision by inaction. Even if you started a family now, today, you would be limited by age and time.

Long past are the days when part of having kids was the financial reward of having more farmhands and someone to support you in old age. You shouldn't be making these decisions based on financial consideration. The rewards of children are in the intangibles, love, family, relationships and so on. Clearly you say your wife desires children and clearly you say you love her and your relationship. I'm not suggesting that you have to do whatever she says or wants, but you do have to work this out as a couple and probably soon. What do you think you have or think you may have that is more important than your relationship with your wife (and maybe children)?
__________________
growing_older is offline   Reply With Quote
Old 07-04-2010, 12:18 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,014
Quote:
Originally Posted by Karloff View Post
Hopefully by the time we both reach 34-36 we'll have crossed our first milestone/goal: $100K in cash savings, with around 20K in investments (it's doable, at our current savings rate, and we are working diligently to achieve it). We'll see where we stand there as far as children go.
Don't forget to factor in the increased risk of high risk pregnancy and neonatal complications with advancing maternal and paternal age. If you are 36 before you decide to have a child, you may be 40 before the child is born. In between, you might be forking out signficant money for infertility treatments, which may lead to multiple pregnancy, with an increased risk of many complications, including prematurity - with all its associated risks. While the average age of mothers at delivery has increased in the past decade, most mothers in their late 30s do have healthy pregnancies and deliver healthy babies. But the risk of complications for both mother and baby is significantly increased. Some of the complications can be long term, including developmental delay and autism. The financial implications can be very significant.

On the other hand, having a healthy gaggle of kids can be a great economic investment that pays off later in life - assuming you all get along!
__________________
Meadbh is offline   Reply With Quote
Old 07-22-2010, 05:16 PM   #34
Confused about dryer sheets
 
Join Date: Jul 2010
Posts: 4
Completely agree with meadbh above, it took us 5 years before being blessed with our 1st kid. We didn't shell out too much for infertility treatments but I've learned from some couples who said they were spending amounts of a luxury car for it.

By the way, it doesn't have to be much more expensive when you have kids. For example, we weren't eating out as much and are eating more of the healthier, cheaper home-prepared foods. I'm not going out as much to have fun with my buddies. And these are lifestyle choices we made and not forced into because we enjoy spending time with the little one.

Anyway, I apologize from delving more into that, can't help to share our experience. Going back to your question, when I decided to start investing I followed suggestion I heard from Clark Howard, i.e., 1st save into 401k as much up to employer matching, 2nd save up to max of Roth IRA, then any extra save up to max of 401k. As for specific investments, I was 90-100% equities mostly in vanguard index funds when I began investing during my late 20s/early 30s, subdividing it 45% large, 30% intl, 20% mid/small, 5% cash/bonds. Of course, this depends on your situation and risk tolerance. I would say that my risk tolerance at that time is above average to high.

Hope this helps.
__________________
windscorpion is offline   Reply With Quote
Karloff...something to consider
Old 08-04-2010, 01:40 PM   #35
Confused about dryer sheets
 
Join Date: Aug 2010
Location: Owasso
Posts: 5
Karloff...something to consider

Karloff, It's easy to understand why you're scared to invest. Between where you grew up, the things you dealt with, how hard you worked to save, and your conservative mentality. If you've been a lurker you've probably seen some threads talking about "opportunity costs" so I'm guessing that's not a new concept for you. But one thing that I believe could change your mindset a bit is to study and consider the effects of inflation or hyper inflation. You MUST start investing in something that can at least keep up with inflation. You mention being worried about what happened to your old country, and the currency. One way to protect against that is to get your money out of 'cash value' vehicles such as money market, savings, and CD's. If you your to scared to have it in stocks, I would advise at least getting some money into the form of a hard asset, so that it can at least keep up with inflation.

I'm afraid you're going to save save save only to find that in retirement, your money will only buy half, a third, or even a quarter of the goods and services that the money could buy today. That's inflation. When you consider this, you may realize that you aren't being conservative at all by keeping your money in cash value vehicles!!!! I consider it extremely risky. Something to think about.
__________________
owasso is offline   Reply With Quote
Old 08-04-2010, 02:06 PM   #36
Recycles dryer sheets
 
Join Date: Jun 2010
Posts: 100
Thank you, Owasso, for your reply. Every day I am more and more aware of the realities of what you just described. Back in 2001, right after I moved from Argentina to the US, my home-country experienced what was called "El Corralito", or "The Little Locker". The translation doesn't do it any justice, though. Basically, inflation was running (once again) so rampant, that the government confiscated all bank accounts and deposits for a a few months (in some cases a few years, depending on your investment and account types), only allowing you to withdraw a certain amount every month. By the time one was able to FULLY withdraw what was rightfully YOURS, the currency was so devalued that what little you had was now, in fact, worth even less. To make matters worse, if you were prudent enough to keep your savings in US dollars (very common back then in Argentina), the government would automatically give you the equivalent in Argentinian Pesos based on the then CURRENT exchange rate. In other words, if you, for example, had US 10K, and you were finally able to take that out of the bank, you would now have 10K in ARGENTINIAN currency, which was worth about THREE TIMES LESS.

I am educating myself when it comes to investments, the stock market, etc. My only experience so far, as stated in my original post, is a 1K investment in a mutual fund (Dreyfus GNMA Class C, to be exact, recommended by a broker... but I don't like the expense ratio of this fund now that I understand these things a little better) that's currently returning about 4%. I would love to hear any feedback about this or any other potential fund that might be appropriate for me, based on what we have discussed here.

My goal is to reach a few numbers when it comes to my CASH savings that, for whatever psychological reason, will simply give me some peace of mind. These are: $60K in my "retirement" account (a money market account, actually), and $25K in my "cash emergency fund" (a regular savings account). At our current savings rate of around 3K per month (if neither of us looses our jobs... knock on wood!) we should be there in as little as 2 to 3 months. Once those numbers are in place, I am thinking of hitting the brakes on the hard-cash savings and switching my energies into opening a portfolio with around 3K (a month's worth of savings), just to test the waters, and take it from there.

My plan is to start with a handful of quality stocks, adding also money to the mutual fund I currently have. My bank (Bank Of America) is currently offering no-fees trades for stocks and ETF's now that they have merged with Merryll Lynch, so I am thinking of opening an investment account there in order to save some $$$ in fees and to have the ability to view all my accounts in one single website (and move money around the investment and traditional accounts).

What do you think?
__________________
Karloff is offline   Reply With Quote
Old 08-08-2010, 06:43 PM   #37
Confused about dryer sheets
 
Join Date: Aug 2010
Location: Owasso
Posts: 5
Quote:
Originally Posted by Karloff View Post
Thank you, Owasso, for your reply. Every day I am more and more aware of the realities of what you just described. Back in 2001, right after I moved from Argentina to the US, my home-country experienced what was called "El Corralito", or "The Little Locker". The translation doesn't do it any justice, though. Basically, inflation was running (once again) so rampant, that the government confiscated all bank accounts and deposits for a a few months (in some cases a few years, depending on your investment and account types), only allowing you to withdraw a certain amount every month. By the time one was able to FULLY withdraw what was rightfully YOURS, the currency was so devalued that what little you had was now, in fact, worth even less. To make matters worse, if you were prudent enough to keep your savings in US dollars (very common back then in Argentina), the government would automatically give you the equivalent in Argentinian Pesos based on the then CURRENT exchange rate. In other words, if you, for example, had US 10K, and you were finally able to take that out of the bank, you would now have 10K in ARGENTINIAN currency, which was worth about THREE TIMES LESS.

I am educating myself when it comes to investments, the stock market, etc. My only experience so far, as stated in my original post, is a 1K investment in a mutual fund (Dreyfus GNMA Class C, to be exact, recommended by a broker... but I don't like the expense ratio of this fund now that I understand these things a little better) that's currently returning about 4%. I would love to hear any feedback about this or any other potential fund that might be appropriate for me, based on what we have discussed here.

My goal is to reach a few numbers when it comes to my CASH savings that, for whatever psychological reason, will simply give me some peace of mind. These are: $60K in my "retirement" account (a money market account, actually), and $25K in my "cash emergency fund" (a regular savings account). At our current savings rate of around 3K per month (if neither of us looses our jobs... knock on wood!) we should be there in as little as 2 to 3 months. Once those numbers are in place, I am thinking of hitting the brakes on the hard-cash savings and switching my energies into opening a portfolio with around 3K (a month's worth of savings), just to test the waters, and take it from there.

My plan is to start with a handful of quality stocks, adding also money to the mutual fund I currently have. My bank (Bank Of America) is currently offering no-fees trades for stocks and ETF's now that they have merged with Merryll Lynch, so I am thinking of opening an investment account there in order to save some $$$ in fees and to have the ability to view all my accounts in one single website (and move money around the investment and traditional accounts).

What do you think?
That bit about your country converting your currency to the depreciated currency is crazy. I don't think things will get that bad in the U.S.A but you never know.

My biggest advice to you is keep learning, reading, and studying. If you come across someone or something talking about beating the market, stop reading immediately. Focus on asset allocation, diversification, and as you've already stated, minimizing fees. You also need to figure out how to overcome the psychological aspect of investing. Knowledge is going to be the best thing to get you over the mental 'hump'. Retirement is a race, not a sprint. It doesn't matter what your investments are returning right now. Up 4% down 10%...doesn't matter. If you start investing in a diversified portfolio, I can almost guarantee that every time you reach a milestone (such as the 60K that you referenced), at some point you will probably go below those milestones. BUT, all that matters is the long run so don't worry about it. Now, your EF is different. I would encourage you to save as much as you need to feel comfortable. If 25k is the magic number than good for you.

Now for my investment advice. As of right now I would take your EF and invest it in the money market fund. Your retirement...invest it in a target fund. Not sure if you are familiar but they are funds set up to represent an entire portfolio and they are specific to a retirement date. They do the reallocating for you so that you are properly diversified. They are cheap. And it's easy. I would go thru Vanguard or Fidelity. Read up on it and see what you think. After you've done more studying, reading ect, if you feel more comfortable branching out to individual stocks/ETFs/etc, then go for it.

Also, If you are not familiar, check out TIPs. I wouldn't advise tips but its something you'd probably feel comfortable with and it would be way better than staying in MMF's and other cash like vehicles.

These are just suggestions. I am by no means a pro. I suggest Target funds because I believe the investment managers at Fidelity and Vanguard can do a better job at asset allocation then I can
__________________
owasso is offline   Reply With Quote
Old 11-17-2010, 10:55 AM   #38
Recycles dryer sheets
 
Join Date: Jun 2010
Posts: 100
It's been a few months since the start of this thread, and now that the year is coming to a close, a quick update feels only natural.. Hopefully, this "bump" will also allow for more users here to comment on our particular situation. Any advice from folks here is always greatly appreciated...

- Cash savings increased to 90K total, which, I am very happy to say, has surpassed our goal for 2010. This includes 70K in what I consider my "retirement" account, and 20K in our "emergency fund" account.

- My goal is to continue to add to the retirement account, and leave the emergency account as-is, at least for now.

- Wife has activated her 401K option. Her company only matches 5% of her contributions. As of right now, she's only contributing $100 per month. I realize this is negligible, but we did have mayor expenses this year due to our wedding, move to our house, renovations, etc., and we paid CASH for all of them. Additionally, we are saving for a vacation for our 1-year anniversary that will end up probably costing around 5K, so every penny counts when it comes to our incomes and maximizing our cash retirement and emergency fund savings. Also, unlike hers, my own job security gets weaker by the second, so that was another factor to maximize her take-home pay. My goal is to increase her contribution amount to around $250 a month for 2011... if I don't loose my job, that is.

- Still undecided about traditional forms of investments (stocks, mutual funds, etc), even though I appreciate what you folks have advised so far. Here, my third-world paranoia comes into play (please see previous posts for an explanation). However, I do feel that cash in the bank is not safe, either...

- ...and that is why I have began to buy precious metals instead. Only wetting my toes as of now, but their historical "anti-inflation" hedge properties are what attracts me the most. I am not into metals to make a killing, but to "preserve" what little I have instead. For that reason, I have been buying about $3K worth of silver (NOT gold), since it is still very much affordable, very much undervalued (in my opinion), and very much in use in multiple industries (unlike gold, which is mostly hoarded and used for jewelry). I started to buy when it was going for around $17 an ounce. It is now around $26 an ounce, down from a high of almost $30.

- Other than that, we are still debt-free, and luckily our condo fees will not go up in 2011!

Any comments, as usual, are greatly appreciated.
__________________
Karloff is offline   Reply With Quote
Old 11-17-2010, 10:59 AM   #39
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 Karloff View Post
Additionally, we are saving for a vacation for our 1-year anniversary that will end up probably costing around 5K, so every penny counts when it comes to our incomes and maximizing our cash retirement and emergency fund savings. Also, unlike hers, my own job security gets weaker by the second, so that was another factor to maximize her take-home pay. My goal is to increase her contribution amount to around $250 a month for 2011... if I don't loose my job, that is.
WHY would you take a $5000 vacation when your job security is so weak?
__________________
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 11-17-2010, 11:05 AM   #40
Recycles dryer sheets
 
Join Date: Jun 2010
Posts: 100
Agreed. But the answer is simple: we have not had a honeymoon yet, and the vacation/honeymoon plan is to travel to my home country, which I haven't visited in 3 years. That number includes $2500 worth of tickets, and the rest is just a worst-case scenario guess. Knowing me, it might end up costing us 3K total. We currently live on one income alone and save the rest. I feel that worse-come-to-worse, if I loose my job we could still continue to pay our bills with my wife's salary while I look for another job, and we also have our emergency fund in place as a last resort.

Besides, what's the point of all of this if I can not even enjoy a honeymoon with my wife in my own country and visit my family at the same time, whom I deeply miss?
__________________

__________________
Karloff 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
My Story shootnstar Hi, I am... 5 07-10-2007 06:46 PM
FI@35 - My Story FI@35 Hi, I am... 9 05-29-2006 03:06 AM
hello, here's my story NYCGuy Hi, I am... 21 12-06-2005 04:35 AM
Our story ejlog Young Dreamers 15 08-15-2004 11:06 PM
Our Story So Far SDY888 Young Dreamers 10 07-22-2004 09:52 AM

 

 
All times are GMT -6. The time now is 09:48 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.