Personal Milestone !!

[David1961]

Yesterday, thanks to the stock market rally, my NW reached the $2M mark. Normally, I only calculate my NW about every couple of months, but I knew I was close, so I totaled it this morning. I was just as excited as when I passed the $1M. Now, if the market does not give back the gains today.... We'll see.

 

[travelover]

Congratulations.

Say, I'm a little short this week and I was wondering.......

 

[MasterBlaster]

David1961:

Is the $2M your investible assets, or does it include home equity ?

 

[audreyh1]

Well? Are you still working? LOL!

Audrey

 

[David1961]

David1961:

Is the $2M your investible assets, or does it include home equity ?

It is just investments. I actually don't own a house. - looking back maybe that was a mistake, but my investments have been very good to me

 

[David1961]

Well? Are you still working? LOL!

Audrey

Yes I am. Sometimes I wonder why. In about 2 years, I will be eligible for health insurance if I can retire early. So the cost of health insurance is the main thing keeping me from FIRE-ing now. Longevity runs in my family - most of my ancestors lived to their late 80s to late 90s - so I may need the money to last a long time.

 

[bright eyed]

Congrats David!

Will you tell us how long it took to reach the $1 mill and now the $2 mill?

 

[TromboneAl]

If you had 1.5 Million and free health insurance, would you retire now?

 

[David1961]

Congrats David!

Will you tell us how long it took to reach the $1 mill and now the $2 mill?

I reached the $1M mark in Nov. 1999. So it has doubled in a little less than 8 years. Not bad considering how the market has done over that time.

 

[David1961]

If you had 1.5 Million and free health insurance, would you retire now?

It's hard to say. At 4% withdrawal, that would allow me $60k to live off of. Might be do-able but I'd like to have a little more cushion. Plus, I want to be able to enjoy my life and travel more if I want to.

 

[FinanceDude]

It is just investments. I actually don't own a house. - looking back maybe that was a mistake, but my investments have been very good to me

I'm willing to guess you adopted the LBYM lifestyle??

 

[audreyh1]

Yes I am. Sometimes I wonder why. In about 2 years, I will be eligible for health insurance if I can retire early. So the cost of health insurance is the main thing keeping me from FIRE-ing now. Longevity runs in my family - most of my ancestors lived to their late 80s to late 90s - so I may need the money to last a long time.

Well that's prudent. Health insurance is extremely valuable. 2 years is not so long.

Audrey

 

[David1961]

I'm willing to guess you adopted the LBYM lifestyle??

Yes, with an occasional splurge.

 

[Spanky]

Well that's prudent. Health insurance is extremely valuable. 2 years is not so long.

Audrey

2 years is great. It's 5 years for us.

 

[mountaintosea]

If you don't mind me asking what is your asset allocation? I'm still struggling to get to the 1 mil mark. I think early 2008. I think it's taking me a while because
I'm around 35-40% equities. Health care is a concern.

 

[David1961]

If you don't mind me asking what is your asset allocation? I'm still struggling to get to the 1 mil mark. I think early 2008. I think it's taking me a while because
I'm around 35-40% equities. Health care is a concern.

I don't know it exactly, but it is approximately:

5% cash
20 % bonds (mostly bond mutual finds)
60 % equities (mostly mutual funds)
15 % international funds (mutual finds)

Most of my equities are in large cap. I'm trying to gradually put more in small and mid-cap funds and stocks. I'm also not one to buy and sell stocks and/or funds often. And I do periodically put money into my investments. In some ways, being 45, I think I may have too much in equities, but equities have done so well in the past 20 years it's hard to take that money out and put into bonds.
I'm not sure of your age, but 35-40% in equities seems low. Maybe others can chime in with their thoughts.

 

[audreyh1]

75% equities is aggressive, but if you can tolerate the volatility, it's a good ratio for long term portfolio survivability. Especially since you are currently working. You can always drop the ratio a little once you retire and need to draw on your portfolio.

35-40% in equities is indeed way too long for someone in their 40s who might be retired for a looooong time. 50% is probably a minimum.

Audrey

 

[Salaryman]

I don't know it exactly, but it is approximately:

5% cash
20 % bonds (mostly bond mutual finds)
60 % equities (mostly mutual funds)
15 % international funds (mutual finds)

Most of my equities are in large cap. I'm trying to gradually put more in small and mid-cap funds and stocks. I'm also not one to buy and sell stocks and/or funds often. And I do periodically put money into my investments. In some ways, being 45, I think I may have too much in equities, but equities have done so well in the past 20 years it's hard to take that money out and put into bonds.
I'm not sure of your age, but 35-40% in equities seems low. Maybe others can chime in with their thoughts.

A good rule of thumb that I've heard of is to subtract the age of the person from 100.
Since Mountaintosea is 52 years old, 100 - 52 = 48%.

 

[bigla]

David, Is the 2m all in tax qualified acounts and

when you said you would have 60k/yr with 4% withdrawal, was that after taxes - 4% of 2m is 80k.
Good luck, let the 2 yrs fly by and enjoy!
Larry

 

[MasterBlaster]

A good rule of thumb that I've heard of is to subtract the age of the person from 100.
Since Mountaintosea is 52 years old, 100 - 52 = 48%.

I don't know if I would call that a "good" rule of thumb. Some people subtract their age from 110 or 120 to get their bond allocation. The 100 rule is very conservative.

 

[FinanceDude]

I don't know if I would call that a "good" rule of thumb. Some people subtract their age from 110 or 120 to get their bond allocation. The 100 rule is very conservative.

So, back in 1999, everyone was 0-10 years old...........

 

[youbet]

I don't know if I would call that a "good" rule of thumb. Some people subtract their age from 110 or 120 to get their bond allocation. The 100 rule is very conservative.

And 110 or 120 would be even more conservative (greater allocation to fixed). No?

 

[MasterBlaster]

Parden my mis-articulation. It should have read ...

Some people subtract their age from 110 or 120 to get their stock allocation.

 

[youbet]

Parden my mis-articulation. It should have read ...

Some people subtract their age from 110 or 120 to get their stock allocation.

No problem. Personally, I never have a problem with mis-articulation. I just screw up what I say.

 

[Spanky]

Another way to determine bond allocation is to start with a percentage to your age and adjust it relative to your risk tolerance. For example, if your are 40 years of age, your initial bond allocation is 40%. Add or subtract to/from the 40% based on your risk tolerance.