Dow over 28,000!

[jollystomper]

So wondering if all this extra money makes any of you change your thinking or budgets?
...
So does one recalculate their 2020 budget based on the new balance or do you stick with what it was when you started plus inflations as is suggested and keep letting it grow?

A related question, do you believe it is better to blow a fixed amount on something special, Trip, new car, Kitchen renovation, or adjust your lifestyle?

In retirement I do not so much budget and track cash flow out due to expenses. So far in retirement my outgoing flow has been less than half of what we expected, even with "Blow That Dough" items like using upgraded vacation travel options and buying a 3rd car. Couple that with the market gains this year and yes, I am looking at increasing our projected flow for next next, but not by a lot, maybe 10%.

We did a lot of major home improvement projects in the years before I retired as to not have to worry about them during retirement. We are happy with our lifestyle and most likely will end up being a bit more generous to family and charities. I am also looking at spending on additional items we planned to spend on in later years but may spending on them now when we can enjoy them more. For example:

- Replacing DW's 2011 Toyota Corolla, in solid condition, no issues, and 65K miles, with a new model to get additional safety features that did not exist on 2011 models.

- Paying off our mortgage now instead its planned payoff in 8 years. The rate, outstanding amount and monthly payment is low. But now we could pay it off without having to sell any equities and still have more than enough cash for our plans before we take SS(sometime in 2-7 years).

 

[GrayHare]

Yep, it's getting a bit scary.

Don't worry, there's air even at the top of Mount Everest (29,029).

 

[Andre1969]

I'm starting to think that if my portfolio exceeds $x that any excess is eligible for Blow That Dough! spending.

Does anyone else do this? If so, how has it worked for you.

I've thought about that from time to time. Right now, I'm flirting with a threshold that makes me feel FI. Like, I could lose my job tomorrow, and everything would most likely be okay. But, I've thought about another threshold, where if I hit that, all the stops would come out, and I'd have no trouble spending extravagantly. Well, extravagantly, by my measures.

That "Blow that dough" threshold is 1.5x my FI threshold, so it's a bit of a leap. But, if we have another period like 2012/2013/2014, or even 2017/2018/2019, it could get me there quite easily. Provided, the last few days of 2019 don't give us any nasty surprises.

 

[pb4uski]

... That "Blow that dough" threshold is 1.5x my FI threshold, so it's a bit of a leap. But, if we have another period like 2012/2013/2014, or even 2017/2018/2019, it could get me there quite easily. Provided, the last few days of 2019 don't give us any nasty surprises.

Yeah, we're currently at 1.3x what we had when we retired 8 years ago.. and a 36 year time horizon vs a 44 year time horizon (in both cases to age 100).

 

[audreyh1]

I'm starting to think that if my portfolio exceeds $x that any excess is eligible for Blow That Dough! spending.

Does anyone else do this? If so, how has it worked for you.

Yes, I tend to think that way too. But I don’t usually end up acting on it.

We are, however, gifting a considerably larger amount then we usually do at the beginning of next year. This is like an advance for our heirs. Both the size of our portfolio and the apparently high valuations of the markets encourages us to make this move now. It does mean a larger withdrawal than usual.

 

[CardsFan]

I'm starting to think that if my portfolio exceeds $x that any excess is eligible for Blow That Dough! spending.

Does anyone else do this? If so, how has it worked for you.

Yeah, we're currently at 1.3x what we had when we retired 8 years ago.. and a 36 year time horizon vs a 44 year time horizon (in both cases to age 100).

Retired 4 years ago, and have had a similar increase in portfolio value.

Since we currently spend about 1/2 of what FireCalc says we could spend (30 year horizon, 100% success). I consider that other half eligible for "Blow That Dough" in any given year.

Short of buying 2 new cars in the same year, however, I suspect we will never get to the FireCalc number.

 

[pb4uski]

Similar here... we spend about 2/3 of what FIRECalc says that we could spend safely... but we would be hard pressed to spend that much other than years we buy a new car or boat.

 

[HFWR]

I’m approaching the end of four years retired. After four yearly withdrawals of around 4% of balance, I’m up 22%, so I’m certainly satisfied. But, at 65 and change, it’s too early in my mind to reset.

 

[GravitySucks]

I reset my Max withdrawl number at year 5. I did increase spending since but have not come close to spending the new number in either 2018 or 2019.
It was always a planned reset though and not due to hitting a new high. Next reset will be at 65, followed by 70, followed by 78 - unless the SHTF.

I'm starting to think that if my portfolio exceeds $x that any excess is eligible for Blow That Dough! spending.

Does anyone else do this? If so, how has it worked for you.

 

[Golden sunsets]

DH has been "suggesting" that we take money off the table, given valuations, YTD gains and length of the current bull market. My response has been, how will we know when to get back into the market. I argue the we stick to our agreed upon investment philosophy of Buy and Hold Index funds, rebalancing regularly and stay true to our ISP. It's an uncomfortable position to be in.

I recall vividly his similar suggestion in October 2007. I argued the same position as stated above. We all know what ensued after October 2007. After experiencing large losses, we did grit our teeth and rebalance in March 2009 and have reaped huge rewards.

So we have proven to ourselves that we can stick to a plan and not succumb to panic, and the plan works. But it's uncomfortable nevertheless. We're up over $500,000 YTD as of 11-30 and we would hate to see that disappear.

 

[SoReadyToRetire]

DH has been "suggesting" that we take money off the table, given valuations, YTD gains and length of the current bull market. My response has been, how will we know when to get back into the market. I argue the we stick to our agreed upon investment philosophy of Buy and Hold, rebalancing and stay true to our ISP. It's an uncomfortable position to be in.

I recall vividly his similar suggestion in October 2007. I argued the same position as stated above. We all know what ensued after October 2007. After experiencing large losses, we did grit our teeth and rebalance in March 2009 and have reaped huge rewards.

So we have proven to ourselves that we can stick to a plan and not succumb to panic, and the plan works. But it's uncomfortable nevertheless. We're up over $500,000 as of 11-30 and we would hate to see that disappear.

Similar situation in our home. Hubby is convinced Trump will be re-elected and things will continue to fly because of that alone. I on the other hand sold half of my holdings in one of my 3 retirements accounts recently (the largest one) because I'd rather conserve gains than lose a whole bunch at this point (when I'm retiring in 31 work days!)

Even though I did that and it made sense to me, it still hurts on days when his gains are twice mine. And it makes me wonder if that bird in my hand was really worth it.

 

[Dtail]

Well a contrarian view for me.
We are only 2+ years into retirement and the portfolio is only up a net 7% with a projected 35 years to go.
Thus using a form of % of remaining portfolio concept, we will raise the budget for next year, but not in a true RobbieB blow the dough concept.

 

[samclem]

I've been slightly underinvested for the last year or two, since circumstances changed and we didn't need as aggressive a mix any more. Add to that my general feelings that valuations are a little too high, and it led us closer to a 55/45 allocation. .

Much the same story with us. Since I started investing 35 years ago, I've always been at about 90% equities, but we've pulled back considerably. The high valuations are a big reason, but also the recognition that less volatility is appropriate for us at this point. So, we are at about 50% equities now. DMT? Maybe, but for some time I've been a fan of using CAPE10 to adjust allocations.
A worry I have now is inflation down the road. . .

 

[street]

After 3.5 years in I have over 1 million more in portfolio then the day I started. My WR is .5% per year and spend on what ever we need. My spending has went up in dollars but my .5% WR stays the same because my total portfolio goes up each year.

 

[tmm99]

I sold 10K of VG Total Market (VTSAX) from my after-tax account today. It's not much, but I feel like I did it at the good time. (Only time will tell.)

 

[unclemick]

Started investing in 1966 with the DOW under a 1000 and the stock market was NOT the place to be. Psst - Real Estate.

Been up and down a few times since then. Including when 'stay the course' was a tad chewy. 60/40.

26 years of ER. I suppose some 'might' think DOW 28000 is important.

Well er - Yes!

heh heh heh -

 

[NW-Bound]

I just made a mistake of making a spreadsheet to see how much more I would have at this point, if I had gone 100% invested, and put it all on the S&P 500.

No, I did not go back all the way to Day 1, when I started working. Only since 2011, the time when I started to track expenses and incomes to have data to account for all the inflow/outflow to do a backtest.

Mucho mucho money that I could have had. It's a bit short of $2M additional money! And how much more I would have, if I were still working and had fresh money to throw into the market.

Oh, it could have been a lot worse. Like I could be dead for example. I need to remind myself of that.

 

[DrRoy]

For this year we had a WR of 2.4% plus a modest pension. Due to the market run, for next year the plan is 2.8% of the new amount, plus a small reduction to the AA. We plan to do a few extra projects to the house with the $.

 

[Amethyst]

Boeing's stopped making the Max 737. Could make a few ripples.

 

[street]

I just made a mistake of making a spreadsheet to see how much more I would have at this point, if I had gone 100% invested, and put it all on the S&P 500.

No, I did not go back all the way to Day 1, when I started working. Only since 2011, the time when I started to track expenses and incomes to have data to account for all the inflow/outflow to do a backtest.

Mucho mucho money that I could have had. It's a bit short of $2M additional money! And how much more I would have, if I were still working and had fresh money to throw into the market.

Oh, it could have been a lot worse. Like I could be dead for example. I need to remind myself of that.

Right there is what is important! We can talk about all the money and that but I would give mine all away for health. Money is just money and is not a guarantee to make you happy.

 

[dixonge]

I just made a mistake of making a spreadsheet to see how much more I would have at this point, if I had gone 100% invested, and put it all on the S&P 500.

No, I did not go back all the way to Day 1, when I started working. Only since 2011, the time when I started to track expenses and incomes to have data to account for all the inflow/outflow to do a backtest.

Mucho mucho money that I could have had. It's a bit short of $2M additional money! And how much more I would have, if I were still working and had fresh money to throw into the market.

Oh, it could have been a lot worse. Like I could be dead for example. I need to remind myself of that.

Imaging how much *we* would have had if I hadn't spent years dabbling in options, etc.? LOL *sob*

One thing we did early in our retirement planning was to total up how much money we had made (using SS info). We had read somewhere that most people earn over a million in their life, and that seemed silly. And yet there it was, we had in fact done that. And what did we have to show for it? Not much, especially when factoring in loans. That was an early motivator. It was pretty sobering to play 'what if' but at least we still had time to make a change.

 

[ckelly78z]

Another record high for me this year (I've made 3 years worth of future 4% WR since January)...up $60,000 so far.

 

[NW-Bound]

Imaging how much *we* would have had if I hadn't spent years dabbling in options, etc.? LOL *sob*

I was not talking about wishful thinking as putting all you have on a single hot stock.

But "merely" going 80% or higher on stock AA, and just buying the S&P is what a lot of people do, and it is not such an outrageous thing. Some of those are even on this forum.

Anyway, at this point after a decade of very nice market return, I am not going to let greed take over my mind and go hog wild into the market. Two wrongs do not make it right.

And speaking of options, having my covered call options getting exercised and having my stocks "stolen" from me, I am sitting on mucho cash (a 7-figure number), and having been selling out-of-the-money put options to buy them back. For 2019, I make roughly the same amount on option premium as I did in 2018. This money is more than my living expenses. I am waiting for the market to drop a bit to sell more puts.

 

[NW-Bound]

Right there is what is important! We can talk about all the money and that but I would give mine all away for health. Money is just money and is not a guarantee to make you happy.

I keep reminding myself of that, but the human nature is that when you are not hungry or cold, not in any immediate danger, nor in pain, you tend to think about the "nice" things to have.

While I do not have any desire for more "stuff", I still like to make more on the market. It's a game that's a lot more challenging than some computer games. The winning and losses are real. And differently than going to Las Vegas, the game is on-going, and does not end in seconds with a hand of cards or when the ball drops.

 

[street]

^ true, a never ending game is right. Today we have it, tomorrow we might not but games rolls on. I continue to want my bucket to grow for reason other then for me. If I would loose it all, it still won't be the end of the world for me. Life will care on maybe in a different stride but people everyday live a good life on little and are happy. I was brought in the world with nothing and may go out with nothing, time will tell.