Did Your Interest in Investing / Saving Increase with Your Net Worth?

[Craig]

My wife and I were discussing this evening how I (in particular) now take a much greater interest in investing / saving. I'm sure some of that is seeing myself age, and recognizing some tough realities of life.

But I also think it has something to do with having enough set aside now to see real progress.

My first investing foray started in late 1987, and I saw my account dealt a hard blow by 10/19/87. Ironically, I 'saw' the crash coming, and bailed out very early in the morning of 10/19 ... after which I got a hard lesson in the fact that mutual funds close out at the end of the trading day ... not when I "sold". Scarred me for years, really. Obviously I'd have been much better off to just hang in there ... hindsight is certainly 20/20.

So, just wondering if it took others a little while to finally see some real savings progress, and when you did, was that a further impetus to help keep you going?

Thanks.

 

[unclemick]

Actually - I'm the exact opposite - never made real progress until I ignored my investments. Ironically it took over twenty years to figure out - dumb is better than smart (I was a legend in my own mind) - time in the market and that damn Bogle -- costs matter, hurry up just stand there.

The 1987 'crash' if you can call it that was my last act of brilliance - wiped out every fixed income investment, any loose cash, and all fixed reserves - (mortgaged the farm so to speak) went 100% stock. ??

Balanced index, low expenses, dollar cost average and time in the market.

History was kind also - even with the relatively flat DOW from 1966-1982.

I like dumb.

heh heh heh heh

 

[LOL!]

Since my first job I have always been interested in saving and investing. As I got older, my interest neither waned nor increased ... until the year I made more investing than through my W2 income. From that point on, I figured I should devote some time to investing since it was more important to increasing my net worth than my job. Whether that was a good move or not, is still open to debate.

As I get close to pulling the trigger on retirement, I am unfortunately obsessively interested in my investments. I try to convince myself that it's important because they will be my sole source of income for a while. That is, managing investments is just another job. Sigh!

 

[Helen]

So, just wondering if it took others a little while to finally see some real savings progress, and when you did, was that a further impetus to help keep you going?

Thanks.

My motivation to save came when my Father was in his late 80's.  He was starting to feel that his memory was slipping.  He asked me to educate myself in finance to help my Mother manage the investments.  I panicked.  I didn't know the first thing about investments.  So, I decided that I'd better learn and play with my own money before tackling their investments.

He past away a few years ago and the funny thing is that he had everything set up in trust funds (which I still don't understand).  I have had to do nothing to help my Mother out.

In the meantime, I am now set to have $1 million in stocks and bonds at the age of 56.  I will also have a pension as will my partner, plus something from social security.  We will both also have medical benefits.

The biggest motivation I have is my spreadsheet.  I have it calculated for the next seven years as to how much and which account to increment my savings.  We roughly bump our savings up by $2k per year for the next seven years.  My spreadsheet shows where the increment is deposited and projects the flat line savings as well as the savings with a 5% return.

I just past the milestone of paying off the mortgage.  I can't wait until we hit the point where our investments are higher than our incomes.

Now you have me thinking that I need to project my earnings exceeding my income on to my spreadsheet.  It's probably there, I just haven't looked for it.

-helen

 

[Spanky]

I just past the milestone of paying off the mortgage. I can't wait until we hit the point where our investments are higher than our incomes.

We still have about $8,000 left in the mortgage. Our return of the portfolio has been higher than our income (from work - may be we should get a higher paying job ) for the last 5 years.

We cannot call it quit yet since we still have two daughters for college support.

 

[Spanky]

I figured I should devote some time to investing since it was more important to increasing my net worth than my job. Whether that was a good move or not, is still open to debate.

I think your ROI (return on investment) of spending time on investment is much better than that of working overtime or devoting extra efforts toward career development in hopes of getting more pay.

 

[Andre1969]

I just crunched some numbers, and found that through interest/dividends/appreciation/etc, my portfolio went up around $40,000 last year. And that's NOT counting any additional contributions. Damn!!

No wonder I'm not so pressed about pulling overtime anymore! FWIW, after taxes and everything else they pull out, I figure each hour of overtime nets me under $13.00.

Now I have to admit, 2005 was a good year for me, and I'm not holding my breath for 2006 to be better...just don't want to get my hopes up too high. But I could be getting to the point soon where my portfolio makes more money than I do! Heck, last year it already made more than I bring home after taxes! I believe that's a first for me. I dunno if I'm ready to start singing the theme song to "The Jeffersons" just yet, though.

 

[Helen]

I just crunched some numbers, and found that through interest/dividends/appreciation/etc, my portfolio went up around $40,000 last year.  And that's NOT counting any additional contributions.   Damn!! 

Wow, what a feeling that has to be !!!!

 

[SteveR]

My motivation was suddenly being a single (divorced) father with a young teenager to raise and educate. All I had was some monster CC debts, no savings, no investments and a seriously negative net worth whie also desiring to retire in less than 15 years.

It that is not motivation to do something I don't know what would be.

Like Andre, I enjoy seeing my investment income rise each year. My IRAs are up over $100k in the past year. I could stop working today but I am greedy and want some additional layers in my safety net and we are still working on fixing up "this old house". So that takes money and I would rather not dip into my living expenses to pay for home upgrades.

My NW has gone up because I had an interest in investing; not the other way around.

 

[NYCGuy]

I always regarded investing as beyond my abilities and decidedly beyond my interest. I worked for years in equity investment firms and thought the analysts/money managers were insufferable bozos who had all reverted to the mean. However, I was always terrified of financing retirement since my father had worked most of his career for a company with no pension before 401k's came into being. During the 90's on the advice of a smart friend I parked my new 401k in an S&P index fund and forgot about it. Then, in 1999, another friend pointed me to a paper by William Goetzman on the "market timing" advantage of stale pricing by trading in and out of foreign mutual funds. I quadrupled my, by now, two 401ks with that trick until Spitzer made the mutual fund managers plug the leak. I still wasn't interested in investing and left my retirement accounts in money markets for several years. In the meantime, the housing bubble intruded on my consciousness with the sudden realization that the apartment above me had sold for forty time earnings. At that multiple I am a seller. So the shocking amount of equity in my home suddenly became T-bills in my Fidelity account.

Now things are different. I have never wanted to work and didn't start a career until it seemed unescapable at thirty-five. At the moment I am making my first concerted effort to understand investing and develop a strategy that I can live with. The Asset Allocation model is attractive because it is so well thought out, but I can't bring myself to forswear timing definitively. Security selection has no appeal for me. Markets that to me appear overvalued at this point include: housing, US equities, Japan & Korean equities, gold, oil, USD, AUD, NZD, and US bonds. I have read both Bernsteins, Swensen, and Ferri, but also Mandelbrot who points out that markets are riskier than they look and, in particular, riskier than MPT suspects. I am currently reading Darst's "Art of Asset Allocation" and he includes tactical AA, which may provide a framework that I can work with. I am willing to spend years if necessary to develop a plan before moving out of T-bills with its < .5% real rate of return.

So, in summary, I became interested in investing really only after stumbling into my little pile along the way, which leaves me a little chagrined. I plan now to transition from working to managing my money as my next, and I hope, last career. These days I find it very absorbing.

 

[getoutearly]

I became much more interested as the value of the accuont got larger. During the mid 90's I was actually making about twice as much in my investments (mainly 401K) accts than I was at my job. Granted, it wasn't a real high paying job. And I wasn't spending the investment earnings, but letting it compound.

I thinkk you reach a critical mass in your investments, where they almost perpetuate themselves. Then, the trick is not to try and get to smart, and think you are a better investor than you really are (mostl likely, picking some basic index funds, and letting them ride contributed more to the Net Worth than reading the WSJ or IBD and trying to act on your new found stock market "savvy")

 

[Delawaredave]

What's helped me is incresed efforts on INVESTMENT ALLOCATION more than individual investment decisions.

Years ago, I dwelled on individual stock decisions and did not pay enough attention into overall asset allocation.

I'm spending a lot of time now on diversification...........

 

[work4beer]

The 2000-2002 bear market is what really got me interested in investing. My 401(k) balances were just above my total contributed for my portion, and below what my employer had contributed for the match portion. I figure I had to have been cheated, or there was a computer error, or something fishy going on!

I had been good about investiong, but not paying attention to returns. I ended up building a rather large spreadsheet, so I could figure out the returns I was actually realizing, across all my investments. In turn, I pay more attention, and my investment returns have improved maybe ~1-2% annually because of it.

 

[kz]

Definitely.

First it started with putting aside extra money hubby and I were making working overtime. (mandatory/optional) We had a good plan for retirement (457s, IRAs, pensions) so we invested the extra for the boys' educations.

Once we realized we had enough college stash we decided to add some stocks and mutual funds to our portfolio. Now that we are retired we're adding more stocks and some bonds also.

 

[Mr._johngalt]

I pretty much ignored it (saving-investing) right up until I quit. Now, I am very interested; have to be on top of it---no choice. The exception was the stuff I controlled directly; i.e. my real estate investments, house, and the small businesses I owned. Truly, there wasn't a whole lot outside of those things for me to follow. Where others saved and invested for FIRE, we just earned and spent right to the end. Of course, the RE and my business bailed us out.

JG

 

[mathjak107]

well now that we have a large amount invested we have become overly interested...in fact my wife who knew nothing about the markets until the last 2 yrs or so has developed a real interest....i wish we could stop looking every day and cringing on the down days but we are addicted i think...we actually declared sunday a day of no money or investment talk to force ourselves to stop being obssesed with the markets......

 

[BUM]

well now that we have a large amount invested we have become overly interested...in fact my wife who knew nothing about the markets until the last 2 yrs or so has developed a real interest....i wish we could stop looking every day and cringing on the down days but we are addicted i think...we actually declared sunday a day of no money or investment talk to force ourselves to stop being obssesed with the markets......

Hi mathjak,

Talking daily about market ups and downs has to be nerve wracking. How about declaring sunday as the only day to talk about the market. Assess the week in review and how that might effect the upcoming week. THEN graduate to monthly....THEN annually...

 

[Nords]

How about declaring sunday as the only day to talk about the market.

Imagine if the American stock markets were open all weekend when you have plenty of time to do something about it instead of just checking things from the cubicle's computer network.

Imagine if you could buy & sell homes with just the click of a mouse and an $8 commission, move all your possessions, and register the kids for their new schools on Saturday or Sunday.

Maybe it's better that we don't have these "technology improvements"...

 

[cute fuzzy bunny]

Its only a matter of time...