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That little voice...
Old 11-14-2018, 06:54 AM   #1
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That little voice...

I met my buddy John a few years back when We were both deep in post knee replacement therapy. He’s a year or 2 younger then me, is a hard worker and owns several little businesses (at the time, to me, they sounded more like side hustles)- He is a real deal entrepreneur. As a corporate guy I was fascinated and peppered him with questions. Johns a good natured fellow and answered them all. Actually he admitted that one of his business had started doing well and he was on the bit of a high. We’ve stayed in touch, exchange emails and chat every now and then. The nitch business has continued to grow exponentially. I have the sense that John is careful with money but hasn’t seen any real money until now. I do know he does not have a big pile for retirement.

John called 2 days a asked for my advice. Apparently the lucrative business attracted the attention of some investors. John got a lawyer friend who researched the investors and it is a legit all cash offer. Big money, retirement money, without a care money. “Ray what do I do? This thing is really flying but if I cash out now we are set. Marge wants to sell too” I said “John you are 62 you deserve retirement, your wife deserves retirement - dont let Greed steer you.” John’s selling the business.

I been thinking about John’s predicament - You know the stock market is 4 times what it was a few years ago - Im not a market timer -heck before I converted the 40 to cash equivalents Ive held for 30 years. A voice said hey “Ray you are 64 you deserve retirement, your wife deserves retirement - dont let Greed steer you.” I am converting more self directed IRA stuff to cash equivalents.
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Old 11-14-2018, 07:16 AM   #2
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Originally Posted by rayinpenn View Post
I met my buddy John a few years back when We were both deep in post knee replacement therapy. He’s a year or 2 younger then me, is a hard worker and owns several little businesses (at the time, to me, they sounded more like side hustles)- He is a real deal entrepreneur. As a corporate guy I was fascinated and peppered him with questions. Johns a good natured fellow and answered them all. Actually he admitted that one of his business had started doing well and he was on the bit of a high. We’ve stayed in touch, exchange emails and chat every now and then. The nitch business has continued to grow exponentially. I have the sense that John is careful with money but hasn’t seen any real money until now. I do know he does not have a big pile for retirement.

John called 2 days a asked for my advice. Apparently the lucrative business attracted the attention of some investors. John got a lawyer friend who researched the investors and it is a legit all cash offer. Big money, retirement money, without a care money. “Ray what do I do? This thing is really flying but if I cash out now we are set. Marge wants to sell too” I said “John you are 62 you deserve retirement, your wife deserves retirement - dont let Greed steer you.” John’s selling the business.

I been thinking about John’s predicament - You know the stock market is 4 times what it was a few years ago - Im not a market timer -heck before I converted the 40 to cash equivalents Ive held for 30 years. A voice said hey “Ray you are 64 you deserve retirement, your wife deserves retirement - dont let Greed steer you.” I am converting more self directed IRA stuff to cash equivalents.
If you have enough, there is no shame in dialing back the risk and moving more to fixed income. Some have enough to not even worry about inflation. You may need to keep just enough in equities to keep up with inflation depending on your stash.

Best to you,

VW
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Old 11-14-2018, 07:16 AM   #3
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If I were "Marge," presumably John's spouse, I would be annoyed that John felt he needed to get some friend's approval, before doing what I already told him I wanted. Unless the friend was a lawyer/CPA specializing in business sales, or something similar.
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Old 11-14-2018, 07:24 AM   #4
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Every investment decision relating to retirement comes with that uncalculable issue of ‘how long are you going to live?’ All the calculations in the world aren’t going to solve the answer to that one needling question. Plan well, live well, share well, love greatly. The end will take care of itself.
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That little voice...
Old 11-14-2018, 08:15 AM   #5
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That little voice...

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If I were "Marge," presumably John's spouse, I would be annoyed that John felt he needed to get some friend's approval, before doing what I already told him I wanted. Unless the friend was a lawyer/CPA specializing in business sales, or something similar.

I suppose at 64 with an MBA in finance, MS in tax, 30 plus years diverse of banking experience and FI for a long time I suppose I could offer some hopefully sound financial counsel.... but thats not why he asked and thats not the advice I offered. You the missed the point entirely I believe it might be boiled down to “when is it enough?

Funny but when I make big decisions i ask as many as i can for advice.. often the best advise comes from the least expected sources.
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Old 11-14-2018, 08:31 AM   #6
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I hear that little voice. DH disagrees with my little voice and is certain his little voice is right. If CD's hit a solid 4% return, I'd feel better in laddering CD's than having bond funds as a hedge. As volatility grows my little voice gets louder. POTUS is encouraging more tariff's and market is looking shaky over the next few years.

It's not so much greed as it is saving our A_ _ so we can continue to live a comfortable life without going totally gray.
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Old 11-14-2018, 09:02 AM   #7
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No, I didn't. Your post contained more than one "point," and I responded to the one which I happened to find interesting.

As a forum member, I can do that.

Anyway, maybe "Marge" wasn't a spouse after all. I mean, the Castaway had a soccer ball called "Wilson" whom he consulted on everything.

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You the missed the point entirely

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Old 11-14-2018, 09:05 AM   #8
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No, I didn't. Your post contained more than one "point," and I responded to the one which I happened to find interesting.

As a forum member, I can do that.

Anyway, maybe "Marge" wasn't a spouse after all. I mean, the Castaway had a soccer ball called "Wilson" whom he consulted on everything.

Do you know how many people john asked for advice? I dont.
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Old 11-14-2018, 01:45 PM   #9
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If I were "Marge," presumably John's spouse, I would be annoyed that John felt he needed to get some friend's approval, before doing what I already told him I wanted.
Just re-read the OP and I don't see that John asked for "approval". I see that he asked for advice.
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Old 11-14-2018, 01:56 PM   #10
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If I were "Marge," presumably John's spouse, I would be annoyed that John felt he needed to get some friend's approval, before doing what I already told him I wanted. Unless the friend was a lawyer/CPA specializing in business sales, or something similar.



Sounds strange to me.... I would want to get as many opinions as possible with a big decision like that... and one from someone who is already retired with money that has no stake in what I do would be a good opinion IMO...


Edit to add.... I see this has gone back and forth a bit... but to add, I would be annoyed at you for being annoyed for going out and getting more opinions... except for being a wife what knowledge do you have in the decision? Not saying the opinion of a wife is not important, but I do not see it as the ultimate one...
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Old 11-14-2018, 02:06 PM   #11
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Old 11-14-2018, 04:33 PM   #12
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If CD's hit a solid 4% return, I'd feel better in laddering CD's than having bond funds as a hedge.
I'd feel better having CDs too, or maybe 2 year treasuries. But how might bond funds make much of an hedge? Seems to me that with these funds one might pick up a lot of risk for very minimal return.

Ha
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Old 11-14-2018, 04:37 PM   #13
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I think we decided to hire a FA from VG. .3% on 1.5M, $4500/yr
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Old 11-14-2018, 06:11 PM   #14
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I think we decided to hire a FA from VG. .3% on 1.5M, $4500/yr

Why? Read JL Collins book.
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Old 11-14-2018, 06:37 PM   #15
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John seems to have made the right choice. At his age, good health is an uncertainty, and any drop in his business value could tank his retirement. Cashing out was the financially safe thing to do, regardless of whether he really wanted to, or enjoyed running the business. Especially, since it sounds like he was otherwise not prepared financially to retire...
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Old 11-14-2018, 07:27 PM   #16
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I’m that age .... and, if I was having fun with company and partners and work associates - and no major medical issues - knee replacement is NOT a major medical issue, btw ....

I would so ride that company fun horse ....

This isn’t about your spouse - it’s about the OP!
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Old 11-14-2018, 07:37 PM   #17
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Sometimes, a guy asks another one for advice, and knows his answer already.
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That little voice...
Old 11-15-2018, 05:18 AM   #18
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That little voice...

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Sometimes, a guy asks another one for advice, and knows his answer already.
I suspect this is true in this instance. John is otherwise healthy but mentioned longevity isn’t a trait his family shares.
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Old 11-15-2018, 09:11 AM   #19
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New here, but what I'd say to John is: "proceed with haste." All I have to do to convince me of that is look at Crocs and Jibbitz. Croc shoes were the biggest things since sliced bread. Jibbitz was a company that made charms that allowed you to customize your Crocs. Jibbitz was a hit, and Crocs bought them for millions. Where is Crocs now? They're a joke in bad fashion, have been subject to class action suit, had to change their design due to injuries to children, and I'm certain they're not worth near what they were when they bought Jibbitz.

Long story short: the Jibbitz folks were smart to sell when they did; their product would have been worth nowhere near $10 million if they had waited.

http://www.nbcnews.com/id/15121346/n.../#.W-2LTfkwjDc

Update: I’ve been corrected on the stats but stand by the OPs recommendation to not be greedy. Enough is enough. I work in healthcare and I see so many mid-50 patients whose health precludes any (what I would consider) enjoyable retirement.
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Old 11-17-2018, 09:45 AM   #20
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Well, I didn't see any indication that John was being "greedy." I think fear and uncertainty are big motivator in these situations. Fear of the unknown, fear of not doing the right thing, uncertainty about letting his creation go, and a resistance to change the status quo. I DO think OP gave John the correct advise.
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