Can I retire early before age 60?

[F.I.R.E User]

For expenses, you can start with itemizing everything that you currently pay for and include 100% of the rent, not just what you are paying now. I think that there are calculators that will help you project how those will grow over time. You should not plan on paying your small portion of the rent long term. Don't forget to include utilities and insurance as well as money for maintenance if you choose to buy.

At some point you will have to pay the entire amount of your living expenses when your mother is no longer covering the majority of your rent. You might need to help pay for your mother's long term care to get her into a nice place or to pay for her funeral if she doesn't have life insurance or funds set aside for that. Those can drain your assets if you choose to fund them.

As for cash, that is dependent on how comfortable you are with waiting out a down market. For many people, that can mean 2-3 years of expenses. If your estimate of expenses is accurate, that would mean $100-150K in cash or cash equivalents.

The decision on when to take SS can be influenced by how much income your investments are generating when you retire and what your health looks like. If you find that you need more income, taking SS earlier than 70 might be the answer. If you end up with health issues, taking SS is probably better than waiting if you don't think you will survive past the break even age.
Unless your situation changes, you don't have a spouse or dependent kids to worry about so that makes it simpler. I wouldn't take SS before your FRA but I also don't know if I would delay until 70. That's a decision DH and I are still discussing but our situation is a bit different than yours. We use opensocialsecurity.com to help with this decision.

I pay $410 of the total rent. Why include 100%? I am not sure if I will ever buy a home. I don’t like the upkeep maintenance as I like small, simple cozy dwellings.

I do pay for all utilities now.

Electric average $100 a month.
Renters insurance $4.51 a month.
Water, Trash, Sewer $35 a month.

My mother doesn’t cover the rent at all. Her funeral is fully covered with private religious program. She pays for $55 a year for that. She has Medicare and Medicaid (long term care) so I am not sure how much would that be but it wouldn’t be all me covering it. I have 2 older Bros to help out. What is FRA?

So if my health is pretty good and I am expecting to survive say pass 90 then take SS at 70? Some say take it at 62 and invest that money to beat the ROI from the 70 payouts. My salary will increase as years go by so SS will be more.

I am hoping we get some kind of Health reform so early retirees can get Medicare before 65 because ACA is not cheap.

In retirement I assume my rent would be about $1k a month.

 

[Dtail]

I pay $410 of the total rent. Why include 100%? I am not sure if I will ever buy a home. I don’t like the upkeep maintenance as I like small, simple cozy dwellings.

I do pay for all utilities now.

Electric average $100 a month.
Renters insurance $4.51 a month.
Water, Trash, Sewer $35 a month.

My mother doesn’t cover the rent at all. Her funeral is fully covered with private religious program. She pays for $55 a year for that. She has Medicare and Medicaid (long term care) so I am not sure how much would that be but it wouldn’t be all me covering it. I have 2 older Bros to help out. What is FRA?

So if my health is pretty good and I am expecting to survive say pass 90 then take SS at 70? Some say take it at 62 and invest that money to beat the ROI from the 70 payouts. My salary will increase as years go by so SS will be more.

I am hoping we get some kind of Health reform so early retirees can get Medicare before 65 because ACA is not cheap.

In retirement I assume my rent would be about $1k a month.

Bolded by me - you see this type of question is what is annoying some of the respondents.
It is simple to just type in "Social Security FRA" in google and you can receive a simple explanation plus get some more details if you wish.

 

[RunningBum]

There is no reason for a 43 year old to keep asking when to take SS. Don't ask again until you are 60.

 

[LarryMelman]

In retirement I assume my rent would be about $1k a month.

You say you currently pay over $1300 in rent at age 43. You ask about retiring 12-17 years in the future. You should plan for a 30-40 year retirement. Please explain the thought process that led to your statement above.

You clearly lack the ability to process numbers in a meaningful way. No one cares about the expense ratios of your mutual funds to 2 decimal places, that you pay 4.51 for a certain expense or that your mother gets $796 from some agency. The big picture is what matters and you have shown no ability to look at the big picture. You obsess on low-level irrelevant matters. You have insignificant savings outside of qualified plans, which are essential for early retirement.

You claim to have a job in sales. Unless that's running the cash register at Burger King, I no longer believe that. There's a lot of detail you are hiding from the community here. We don't need or want to know it, but if we did I think it would be obvious to all that you need to find a good fiduciary planner and sign your affairs over. Your long-term future seems to require it.

 

[F.I.R.E User]

There is no reason for a 43 year old to keep asking when to take SS. Don't ask again until you are 60.

It’s part of FireCalc calculations.

 

[Out-to-Lunch]

It’s part of FireCalc calculations.

It won't matter much. Try it with your expected amount at age 62, and then again with your expected amount at age 70.

If you have Firecalc run until you are about 82 or so, it shouldn't come out much differently.

 

[F.I.R.E User]

It won't matter much. Try it with your expected amount at age 62, and then again with your expected amount at age 70.

If you have Firecalc run until you are about 82 or so, it shouldn't come out much differently.

Right but this will dramatically also help me with my SWR after 62.

 

[Exchme]

You say you currently pay over $1300 in rent at age 43. You ask about retiring 12-17 years in the future. You should plan for a 30-40 year retirement. Please explain the thought process that led to your statement above.

You clearly lack the ability to process numbers in a meaningful way. No one cares about the expense ratios of your mutual funds to 2 decimal places, that you pay 4.51 for a certain expense or that your mother gets $796 from some agency. The big picture is what matters and you have shown no ability to look at the big picture. You obsess on low-level irrelevant matters. You have insignificant savings outside of qualified plans, which are essential for early retirement.

You claim to have a job in sales. Unless that's running the cash register at Burger King, I no longer believe that. There's a lot of detail you are hiding from the community here. We don't need or want to know it, but if we did I think it would be obvious to all that you need to find a good fiduciary planner and sign your affairs over. Your long-term future seems to require it.

It's our fault. Back in April, when he first cast his shadow here and we thought he was someone who actually wanted to improve his financial future, we told him to quit EJ.

 

[F.I.R.E User]

It's our fault. Back in April, when he first cast his shadow here and we thought he was someone who actually wanted to improve his financial future, we told him to quit EJ.

I did quit EJ.

 

[F.I.R.E User]

You say you currently pay over $1300 in rent at age 43. You ask about retiring 12-17 years in the future. You should plan for a 30-40 year retirement. Please explain the thought process that led to your statement above.

You clearly lack the ability to process numbers in a meaningful way. No one cares about the expense ratios of your mutual funds to 2 decimal places, that you pay 4.51 for a certain expense or that your mother gets $796 from some agency. The big picture is what matters and you have shown no ability to look at the big picture. You obsess on low-level irrelevant matters. You have insignificant savings outside of qualified plans, which are essential for early retirement.

You claim to have a job in sales. Unless that's running the cash register at Burger King, I no longer believe that. There's a lot of detail you are hiding from the community here. We don't need or want to know it, but if we did I think it would be obvious to all that you need to find a good fiduciary planner and sign your affairs over. Your long-term future seems to require it.

Rent will be lower because I would be in a 1 bedroom instead of 2. ER matters because I was paying a lot more when I was with EJ.

I was responding to the other member about other income/expenses to get the big picture. What details would you like to know?

 

[F.I.R.E User]

Note: FIRECalc adjusts just about everything for inflation. Any exceptions will be noted prominently.

Use the following inflation assumption: PPI, CPI, or
3.0 % for inflation adjustments to the historical data.

Question: Should I select the 3.0%?

 

[jollystomper]

Note: FIRECalc adjusts just about everything for inflation. Any exceptions will be noted prominently.

Use the following inflation assumption: PPI, CPI, or
3.0 % for inflation adjustments to the historical data.

Question: Should I select the 3.0%?

That is the beauty of FIRECalc. Start with 3.0 and run it. Then run it using different values to see what the impact of different inflation rates will be. You are not looking for a single "answer", but a range. e.g. "if inflation is between 1.5 and 5.0 percent, my success rate with my current assets and allocation will be between X and Y. So lets see, with a different AA, or savings rate, how that will now impact things at different inflation levels". The beauty of FIRECalc is running it lots and lots and lots of times with very little effort (but be sure to donate to the author for their hard work ).

 

[F.I.R.E User]

A portfolio with random performance, with a mean total portfolio return of
10
% and variability (standard deviation) of
10
%. Assume an inflation rate of
3.00
%

This is what I chose. Is that the accurate?

 

[2177V]

Net Worth: $547,498.

Current retirement assets

Taxable:
$10,921, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX), Expense Ratio: 0.04% at Vanguard.
ESPP: $1,659. Megacorp (2% of paycheck), 1 year holding period before selling required, 15% per share discount. Using the profits to invest in VTSAX taxable account at Vanguard.

Traditional 401k: $380,199, Fidelity 500 Index Fund (FXAIX), Expense Ratio: 0.015% AND Vanguard Small-Cap Index Fund Institutional Plus Shares (VSCPX), Expense Ratio: 0.03%. 85% FXAIX AND 15% VSCPX.
6% Company Match $1 to $1.
Contributing $19.5k with True Up option available plus the match $3,600.

Roth IRA at Fidelity: $151,089 Fidelity ZERO Total Market Index Fund (FZROX), Expense Ratio: 0.00%. Contribution: $6k..

Can I retire between ages 55-60?

I can't answer your question because retirement is a personal decision and there is no formula. It all depends on what type of retirement you want. My own personal goal of retirement is to ensure my standard of living does not decline. I did my own calculations and closely examine my assumptions in order to assess my risks in those assumptions

Also, I noticed your portfolio is not inflation-friendly. I suggest reading the following link on what happens to stock during inflationary times:

https://www.investopedia.com/articles/investing/052913/inflations-impact-stock-returns.asp

Currently my own personal goal is to make sure my portfolio is consistent with this link and is inflation friendly: This means investing in value fund and not growth fund. Investing in commodities and housing also tends to do well in inflationary period.

As far as buying a house, the question should be "yes" but you should have done that last year before the prices of real estate has gone up. The reason why the prices of real estate has gone up is probably because old timers like me remember that housing do well during inflationary times and therefore investors are buying houses which drives up the prices.

My current portfolio is roughly 25% equities (value funds), 25% bonds (ST treasuries), 25% income producing real estate and 25% cash and commodies. Recently my equities and real estate have done well while my bonds and cash/commodies are flat. In the long term, this portfolio will likely under perform but if inflation hits, I should be well positioned. Your portfolio will do well in the long term but in the short term and if inflation hits, you may get hurt...in the short term.

Here is my analysis on why inflation is unavoidable: Government is in debt. The government has to pay interest on that debt so it is to their best interest to keep the interest rates low. The Fed is buying treasuries from the treasury department because if they don't, the lack of demand for treasuries decline and the treasury department will have no choice but to raise interest rates in order to increase the demand for treasuries.

However, the Fed has to print money to buy the treasuries to keep the interest rate low. This is manipulating the market which is dangerous. When the government prints more money, this cause inflationary pressures until the bubble burst. If you read up on how the Fed controlled inflation in the 1970's, the Fed raised interest rates! This is the opposite of what they are doing now.

This explains why I put my portfolio in a "capital preservation mode" in case the bubble burst. I could be wrong but I am age 70 so I do not have time for the market to recover like the younger investors. Since you are younger, you really do not need to put your portfolio in a capital preservation mode because in the long run the returns of a capital preservation portfolio are lower. However, there is nothing wrong in exchanging some of your "growth" equities to "value" equities. (not all but some) as noted in the link.

 

[Exchme]

Vchan:
I recommend not getting spooked by talking heads on TV, clickbait headlines and the like. They have been predicting doom forever, because fear makes you watch and gives them clicks - selling fear is their business model, but you don't need to buy.

Any information about inflation has been widely known for months, so there's no advantage in it, it's already priced in to the extent that others believe it will be real; plenty of folks already have driven up the prices of homes. Recognize that most professionals fall behind the market when they try to time it, hard to believe that amateurs like us have special insight, so I recommend not trying.

On a technical point, the Fed does not print money, only bank lending can increase the money supply. Banks have maybe $3 trillion in extra reserves with the Fed paying them 0.15%. The number is so high in part because folks like yourself are holding tons of money on the sidelines. Banks might or might not decide to loan it out which is when the money would be created - after all if they perceive inflation, they don't want to be stuck with a low interest loan. Even if you are right that inflation above what the market currently anticipates is in our future, there is no guarantee that any particular investment will be the right place to be. So your choice of a non-diversified stock fund is riskier than owning the whole market.

Do you know what real estate you own? Real estate returns are very specific to the market and asset type, buying what's hot right now may get you burned.

I don't even understand what you mean by owning commodities. You mean futures contracts, not actually buying a few thousand tons of pork bellies, right? I know little about it other than it's always been taught to me to stay far away -it's a game for professionals - too high cost, high risk for amateurs.

 

[pc95]

It's our fault. Back in April, when he first cast his shadow here and we thought he was someone who actually wanted to improve his financial future, we told him to quit EJ.

Mighty thanks to you and Larry for your thread responses.....comedy-supremo. Nothing better than crying from laughter.

 

[2177V]

Vchan:
I recommend not getting spooked by talking heads on TV, clickbait headlines and the like. They have been predicting doom forever, because fear makes you watch and gives them clicks - selling fear is their business model, but you don't need to buy.

Any information about inflation has been widely known for months, so there's no advantage in it, it's already priced in to the extent that others believe it will be real; plenty of folks already have driven up the prices of homes. Recognize that most professionals fall behind the market when they try to time it, hard to believe that amateurs like us have special insight, so I recommend not trying.

On a technical point, the Fed does not print money, only bank lending can increase the money supply. Banks have maybe $3 trillion in extra reserves with the Fed paying them 0.15%. The number is so high in part because folks like yourself are holding tons of money on the sidelines. Banks might or might not decide to loan it out which is when the money would be created - after all if they perceive inflation, they don't want to be stuck with a low interest loan. Even if you are right that inflation above what the market currently anticipates is in our future, there is no guarantee that any particular investment will be the right place to be. So your choice of a non-diversified stock fund is riskier than owning the whole market.

Do you know what real estate you own? Real estate returns are very specific to the market and asset type, buying what's hot right now may get you burned.

I don't even understand what you mean by owning commodities. You mean futures contracts, not actually buying a few thousand tons of pork bellies, right? I know little about it other than it's always been taught to me to stay far away -it's a game for professionals - too high cost, high risk for amateurs.

Investment is a personal thing and I based my investments on three things: (1) data (2) experience (3) my ability to take and accept risks. You should review the data at inflationdata.com and compare the recent inflation data from the last 3 months to the previous months of the last 10 years.

Of course there is no guarantee in investing. I accept the risks of my non-diversified portfolio. You have not cited any data that supports your own position so I assumed your post is just an opinion. I do not agree with your opinion since I have been successful. I defined “success” as buying houses with 100% cash and not borrowing money from the bank. I recently purchased two 1/2 million dollars houses in the SF Bay Area with 100% cash. This answered your question on the location of my real estate. I also been a landlord for over 25 years and I have a real estate license although my day job was an engineer who make decisions based on data.

I do acknowledge that the government does not print money but they do borrow money and put that money into our economy which can be inflationary. If you recall, LBJ did not want to raise taxes to pay for the Vietnam War in the 60’s and inflation hit us in the 70’s. Is the government increasing our taxes lately? Nope they cut taxes which is inflationary. There is a time delay but raising taxes is unlikely due to our political situation. Inflation benefit people who has debts because the debt is usually fixed. Inflation also benefit the government debt but does a number on the economy. You appear to believe the government can control inflation so it does not get out of hand. If inflation can be controlled then my portfolio will underperform which I already stated that an asset preservation portfolio will underperform but I accepted these risks. You have to understand that I already hit my financial goals so I am no longer in a “asset accumulation phase” but in a “asset preservation phase”. Those are two different strategies.

I do agree with you that commodity future contracts are high risk but I like the thrill of victory and the agony of defeat. Since I am financially secured, I like to gamble a little. Commodities are not for everyone and my last post I did not advise people to invest in commodities and I only disclose my own investment strategy and let people know how inflation affects stock. In my last post I only pointed out that some portfolios are not “inflation friendly” and cited a link to support my position. In the final analysis, readers have to decide whether inflation will increase or not and this is a personal decision. You should cite data or evidence that inflation will NOT occur to support your own personal decision so we can have a lively debate.

 

[Time2]

Oh ok. So 95% is the minimum threshold.

1966 and 1929 was mentioned in there too.

Yes, unless you are one of the 5%! Then all bets are off.


The period between Aug, 2000 thru 2012 was not good, the S&P took that long just to get back to even. (does not include dividends)

 

[Exchme]

VChan:

Inflation may well occur, that's not the question, the question is whether you can predict it and react to it faster and better than millions of other investors including rooms full of PhDs armed with supercomputers and better data. Study after study says on average active management doesn't work. You have to bet against the market and be right in multiple ways at multiple times - going in "capital preservation mode" at the right time and in the right way (maybe inflation doesn't show up for years, maybe value stocks are the wrong place to hide, maybe SF implements rent control on your properties or a hundred other possibilities) and then correctly guessing whatever is next after that and making those moves right too.

Since you really are playing with commodities futures, I'm not sure why that fits with a "capital preservation mode". Risk is OK when it's compensated risk, but the unlike stocks, where there is an underlying growth trend, commodity futures are a zero sum game before costs and costs are high, so that is non-compensated risk. If you want to gamble with your "fun money", that's great, but just like a trip to Vegas, it's more likely than not to be a negative in your portfolio.

Overall, you have a very concentrated bet with upwards of 75% of your portfolio with non-diversified stocks, non-diversified real estate and some amount of commodity futures trading. If the current stock boom, real estate boom and commodity boom continues, I'm sure you will make bank, just realize there are also lots of possible scenarios where that won't happen. I'm hoping it works for you!

 

[Exchme]

Mighty thanks to you and Larry for your thread responses.....comedy-supremo. Nothing better than crying from laughter.

Hopefully OP is legit and we are not just his entertainment.

While his posting style of asking multitudinous duplicative questions without seeming to have done any reading is super frustrating, I will say that according to his posts, he has taken advice and made sensible choices in leaving EJ, going to Total Stock and Total Bond funds to suit his stated level of risk tolerance and has started to learn about retirement planning and tax management.

So assuming he's real, then he really needed help on his journey of learning about money management and the group here provided that, though we may have lost some hair doing it.

Hopefully he will continue to learn an eventually start answering the questions of newcomers as they start their own journey.

 

[2177V]

VChan:

Inflation may well occur, that's not the question, the question is whether you can predict it and react to it faster and better than millions of other investors including rooms full of PhDs armed with supercomputers and better data. Study after study says on average active management doesn't work. You have to bet against the market and be right in multiple ways at multiple times - going in "capital preservation mode" at the right time and in the right way (maybe inflation doesn't show up for years, maybe value stocks are the wrong place to hide, maybe SF implements rent control on your properties or a hundred other possibilities) and then correctly guessing whatever is next after that and making those moves right too.

Since you really are playing with commodities futures, I'm not sure why that fits with a "capital preservation mode". Risk is OK when it's compensated risk, but the unlike stocks, where there is an underlying growth trend, commodity futures are a zero sum game before costs and costs are high, so that is non-compensated risk. If you want to gamble with your "fun money", that's great, but just like a trip to Vegas, it's more likely than not to be a negative in your portfolio.

Overall, you have a very concentrated bet with upwards of 75% of your portfolio with non-diversified stocks, non-diversified real estate and some amount of commodity futures trading. If the current stock boom, real estate boom and commodity boom continues, I'm sure you will make bank, just realize there are also lots of possible scenarios where that won't happen. I'm hoping it works for you!

I am a market timer. Does that shock you? Yes I understand that study after study indicates active management does not work but I am an "individual" investor and not a "manager of a actively managed mutual fund". There is a difference. I started out as a passive investor but I discovered you learn almost nothing as a passive investor.

I was a passive investor for 90% of my portfolio and I used 10% of my portfolio in active investments in order to go thru my learning curve so 10% involves less risk. Just like a smart gambler at the casino, I only bet what I can afford to lose. My objective is to acquire knowledge which I could not acquire as a passive investor. Later the 10% became 100% but only AFTER I became confident and successful. You must learn and acquire knowledge and experience first before becoming a full time active investor.

For example: In 2019, I changed my entire 60/40 portfolio to 100% treasury bonds because the yield curve inverted. In 2020, the market crashed, my VUSUX treasuries made 30% in 1st quarter 2020 so I started buying equities after the equity market declined so I made a killing. I was nearly a whole year too early in 60/40 to 0/100 reallocation but better to be early than to be late. Some passive investors stated that I was "lucky". That does not matter because I am laughing about it when I am buying houses with 100% cash which they could not do. I am currently working to buy my 3rd house with 100% cash.

Playing commodities is risky. However, I control that risk by limiting the amount of money. I do not put 100% of my portfolio into commodities. Just enough for me to feel comfortable. Some of the commodities are in precious metals like gold. Gold is consistent with an asset preservation strategy. Finally, I can never recommend to anyone to become a active investor without going thru a learning curve. If you do not have the knowledge and experience, then I always recommend people to be a passive investor. However, if you want to make a killing, you need to acquire the knowledge and experience first and ignore other people that state active investing fails 100% of the time. That statement is only true for people without knowledge and experience.

Finally, thank you for your comment of "I hope it works for you!" . The big takeaway from this: Impossible to time the market to the exact day. However, it is easier to time the market for one or two years prior. I am betting that inflation should hit one or two years from now in 2022 or 2023. If you review inflationdata.com you should note that in the 1973, inflation started to creep up just like it is doing right now. The double digit inflation did not occur until 1974. I re-allocated my portfolio with the assumption that history may repeat itself. If it does not repeat itself and inflation is less than 2% which is the Fed's inflation goal, then my portfolio will "under-perform" which is OK in my position. I also understand that "under-performance" may NOT be OK with other people.

Under-performance does not mean that I will lose everything. For example, I made a bet that the market will crash in 2019. I knew equities made an average of 10 to 12% while LT treasures made an average of 5 to 7%. This is an under-performance of 5%. I gave up the 5% in 2019 and in 2020, I made my killing.

 

[F.I.R.E User]

I can't answer your question because retirement is a personal decision and there is no formula. It all depends on what type of retirement you want. My own personal goal of retirement is to ensure my standard of living does not decline. I did my own calculations and closely examine my assumptions in order to assess my risks in those assumptions

Also, I noticed your portfolio is not inflation-friendly. I suggest reading the following link on what happens to stock during inflationary times:

https://www.investopedia.com/articles/investing/052913/inflations-impact-stock-returns.asp

Currently my own personal goal is to make sure my portfolio is consistent with this link and is inflation friendly: This means investing in value fund and not growth fund. Investing in commodities and housing also tends to do well in inflationary period.

As far as buying a house, the question should be "yes" but you should have done that last year before the prices of real estate has gone up. The reason why the prices of real estate has gone up is probably because old timers like me remember that housing do well during inflationary times and therefore investors are buying houses which drives up the prices.

My current portfolio is roughly 25% equities (value funds), 25% bonds (ST treasuries), 25% income producing real estate and 25% cash and commodies. Recently my equities and real estate have done well while my bonds and cash/commodies are flat. In the long term, this portfolio will likely under perform but if inflation hits, I should be well positioned. Your portfolio will do well in the long term but in the short term and if inflation hits, you may get hurt...in the short term.

Here is my analysis on why inflation is unavoidable: Government is in debt. The government has to pay interest on that debt so it is to their best interest to keep the interest rates low. The Fed is buying treasuries from the treasury department because if they don't, the lack of demand for treasuries decline and the treasury department will have no choice but to raise interest rates in order to increase the demand for treasuries.

However, the Fed has to print money to buy the treasuries to keep the interest rate low. This is manipulating the market which is dangerous. When the government prints more money, this cause inflationary pressures until the bubble burst. If you read up on how the Fed controlled inflation in the 1970's, the Fed raised interest rates! This is the opposite of what they are doing now.

This explains why I put my portfolio in a "capital preservation mode" in case the bubble burst. I could be wrong but I am age 70 so I do not have time for the market to recover like the younger investors. Since you are younger, you really do not need to put your portfolio in a capital preservation mode because in the long run the returns of a capital preservation portfolio are lower. However, there is nothing wrong in exchanging some of your "growth" equities to "value" equities. (not all but some) as noted in the link.

I want a better QOL in retirement. $50k-$75k a year expenses. I don’t have Bonds now. Is there a need to at my age?

I don’t like the labor that comes with owning a house and all the maintenance and repair costs. My rent each year never goes up.

Why does my short term losses matter? I am not withdrawing.

 

[2177V]

I want a better QOL in retirement. $50k-$75k a year expenses. I don’t have Bonds now. Is there a need to at my age?

I don’t like the labor that comes with owning a house and all the maintenance and repair costs. My rent each year never goes up.

Why does my short term losses matter? I am not withdrawing.

My two cents:

Your retirement is 12 to 15 years away if I read your post correctly.

Therefore a portfolio of 100% equities is very aggressive but marginally acceptable because you are at least 12 years from retirement. However, the closer you are to retirement, you should start considering buying bonds as a hedge. Reason: Worst thing you can do is have a 100% equity portfolio and then retire or be close retirement.....and then the market crashes and now you need an additional 3 to 6 years for the market to recover. Bonds can act as your parachute against a hard landing. Bonds can also diversify your portfolio which is a good thing.

Some FA suggest a equity portfolio of 110 minus your age. Since you are 43, this is 110-43=67 which is portfolio of 67% equities/33% bonds. However, this may be conservative IMO. Here is your dilemma: Be aggressive or be conservative?

I can not answer that for you. If you are aggressive, the likelihood of reaching your $2M goal is higher but you have higher risks. If you are conservative, the likelihood of reaching your $2M goal is less. As I stated in a previous post, there is no guarantee in any investment.

OK, You do not want to own a house. That is your choice.

Short term losses generally do not matter since you are 12 years away from retirement. However, avoiding short term losses means your portfolio will likely grow higher than a portfolio that has short term losses. However, this means you have to be an active investor. It does not appear that you have the knowledge or experience to be an active investor.

 

[F.I.R.E User]

Vchan:
I recommend not getting spooked by talking heads on TV, clickbait headlines and the like. They have been predicting doom forever, because fear makes you watch and gives them clicks - selling fear is their business model, but you don't need to buy.

Any information about inflation has been widely known for months, so there's no advantage in it, it's already priced in to the extent that others believe it will be real; plenty of folks already have driven up the prices of homes. Recognize that most professionals fall behind the market when they try to time it, hard to believe that amateurs like us have special insight, so I recommend not trying.

On a technical point, the Fed does not print money, only bank lending can increase the money supply. Banks have maybe $3 trillion in extra reserves with the Fed paying them 0.15%. The number is so high in part because folks like yourself are holding tons of money on the sidelines. Banks might or might not decide to loan it out which is when the money would be created - after all if they perceive inflation, they don't want to be stuck with a low interest loan. Even if you are right that inflation above what the market currently anticipates is in our future, there is no guarantee that any particular investment will be the right place to be. So your choice of a non-diversified stock fund is riskier than owning the whole market.

Do you know what real estate you own? Real estate returns are very specific to the market and asset type, buying what's hot right now may get you burned.

I don't even understand what you mean by owning commodities. You mean futures contracts, not actually buying a few thousand tons of pork bellies, right? I know little about it other than it's always been taught to me to stay far away -it's a game for professionals - too high cost, high risk for amateurs.

So my funds are ok for me compare to what he is recommending?

 

[F.I.R.E User]

Investment is a personal thing and I based my investments on three things: (1) data (2) experience (3) my ability to take and accept risks. You should review the data at inflationdata.com and compare the recent inflation data from the last 3 months to the previous months of the last 10 years.

Of course there is no guarantee in investing. I accept the risks of my non-diversified portfolio. You have not cited any data that supports your own position so I assumed your post is just an opinion. I do not agree with your opinion since I have been successful. I defined “success” as buying houses with 100% cash and not borrowing money from the bank. I recently purchased two 1/2 million dollars houses in the SF Bay Area with 100% cash. This answered your question on the location of my real estate. I also been a landlord for over 25 years and I have a real estate license although my day job was an engineer who make decisions based on data.

I do acknowledge that the government does not print money but they do borrow money and put that money into our economy which can be inflationary. If you recall, LBJ did not want to raise taxes to pay for the Vietnam War in the 60’s and inflation hit us in the 70’s. Is the government increasing our taxes lately? Nope they cut taxes which is inflationary. There is a time delay but raising taxes is unlikely due to our political situation. Inflation benefit people who has debts because the debt is usually fixed. Inflation also benefit the government debt but does a number on the economy. You appear to believe the government can control inflation so it does not get out of hand. If inflation can be controlled then my portfolio will underperform which I already stated that an asset preservation portfolio will underperform but I accepted these risks. You have to understand that I already hit my financial goals so I am no longer in a “asset accumulation phase” but in a “asset preservation phase”. Those are two different strategies.

I do agree with you that commodity future contracts are high risk but I like the thrill of victory and the agony of defeat. Since I am financially secured, I like to gamble a little. Commodities are not for everyone and my last post I did not advise people to invest in commodities and I only disclose my own investment strategy and let people know how inflation affects stock. In my last post I only pointed out that some portfolios are not “inflation friendly” and cited a link to support my position. In the final analysis, readers have to decide whether inflation will increase or not and this is a personal decision. You should cite data or evidence that inflation will NOT occur to support your own personal decision so we can have a lively debate.

What funds do you have in your non diversified portfolio? If the interest rates are at historic low why pay cash for it? That cash could be put to use elsewhere for another ROI.