Re: Introduce yourself here - a Contrarian View?
Hi, I'm new to this board - my compliments to all, very professional, informative and entertaining! I've been searching for a constructive conversation about this thing called "retirement", and you folks have it.
I'd like to share some of my hard earned thoughts about what you'all are calling retirement. For me it goes like this, at age 62:
- I've run my own single owner consulting company since 1983, a sucessful venture that has provided income from $75 to more than $300k / year, say an average of $120-150/yr.
- I am fully exposed to my own ability to generate revenue, AND fully exposed to my expenses, namely insurances (medical, disability, life and business). Simply stated, what I kill is what I eat. In lean years we "eat" less, some years we "eat" a bit more and save more.
- I have consistently funded my tax deferred IRA/SEP account to the maximum each year, and now have about $600k in this account. A note: during the past two decades I decided to NOT invest these pension funds myself, but rather hire portfolio managers to do this specialized work (a matter of available time and recognizing what I'm not good at).
- Since 1983, the portfolio managers have made and LOST more than a million dollars for me (in excess of the current pension fund balance) - until 2001 when I pulled the plug on this crazy activity called "investing". I now have approximately what I've put into the accounts - without any return on assets. So much for hiring someone else to manage my affairs!
My conclusions from two decades of trying to make money in the "market":
- The stock market is a fools game - it is nothing more than legalized gambling. But it is even worse than gambling - there are no rules (or the rules are broken) and there are multiple levels of unscruplous people between your money and the actual "investment". At least at the crap table you know the rules, see the money and watch the dice.
- I'm sure there are those individuals who claim to beat the S&P/DJ, etc. Good for them. But for the average guy & gal trying to play the market in any form is, in my opinion, very risky. In fact I'll argue that the upside benefit of playing the market is far less rewarding than the potential to suffer the downside losses. Compared to fixed income instruments the equity markets frequently (not always, and not predictably) present a substantial non-symetrical investment position, i.e. you can loose much more than you have the potential to gain.
- Luckily (not smart, just pure luck), I purchased real estate in the 80's and will shortly have over $2 million available for income producing purposes (in addition to retained real estate assets of about $3 million).
So here are my thoughts as I now shift into a new phase of life (I suppose this is what you'all are calling "retirement"). First, I don't know how to define retirement. It seems to be a worn out term from a past generations. I look at life in stages, and now see an opportunity to "work" at life in a different, perhaps wiser, way. I plan on retaining some revenue generating business activities (only those projects that are fun and include interesting people). My non-revenue activities will include public service, charitable services and traveling the globe with my wife to explore other interesting ventures... all to be discovered as each day comes.
The other thought I have is that, at age 62, I have about 18 - 20 years of likely good active days ahead of me. After that, even with reasonable health, I'll likely want to slow down a bit. So, I need more funds for the next two decades than I need in the 3rd and, potentially, 4th decade.
So, I'm considering turning the "retirement" equation on its head and front end load my withdrawl rate in the early years, using the money while I can enjoy it - and only use fixed income (insured) investments. Sure, I'll "loose" money some years, BUT, I'll have a guaranteed return ON my money and not have to suffer the risk of not getting a return OF my money - and, I'll be able to sleep at night.
Regarding erosion of funds due to inflation, in my opinion that's simply "noise" in the forecasting analysis. The greater, and more prominent, risk is major market "corrections" (read manipulation), that can literally take all your money overnight. I'll never again will I let some so-called investment advisor get between me and my money.
... and I wonder... am I "retiring" too late in life? I don't think so, since I've defined my life as a journey with each stage (education, profession, family, wealth buidling, etc) being an endeavor in itself. This thing called "retirement" is simply one of the latter stages of life that offers a new set of opportunities to be invented by each of us in our own way.
It is really helpful to read the well written commentaries on this Forum, I've learned a lot. I'm interested in hearing any comments you'all may have about my thoughts.
Curly
