riding out the storm - r u battening down the hatches?

[lazygood4nothinbum]

Quote:

Originally Posted by Coach lazy, it sounds like you are taking prudent steps to prepare for the worst while hanging on to a lifestyle that you'll be comfortable with. That seems smart and forward thinking. I'm not convinced that any of the pundits on the air are any better than you or me at predicting the financial future years out. Doom and gloom sells better and gets more media exposure. Coach

thanx coach. ya know, if worse comes to worst, i'll be either better prepared or i'll have hadn't lost a thing.

normally i'd agree with you on the pundits and all the doom and gloom, until today when the president of the united states (i rarely refer to him so respectfully, so ya know i'm referring to the office, not the person), in warning how important the bailout bill is to pass, sat in chair alongside a highly decorated military man. these guys are serious.

[JDARNELL]

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Originally Posted by haha My dates are cheap and enjoyable. ha

Just had to ask how you are using your adjectives No matter your answer I got a good laugh out of my interpretation

Tomcat98

[Gardnr]

Quote:

Originally Posted by Coach I'm not convinced that any of the pundits on the air are any better than you or me at predicting the financial future years out. Doom and gloom sells better and gets more media exposure.

And it's very contagious. It's really hard not to get pulled down by all this. I've tried to keep a good historical perspective on it all but I've found myself swinging back and forth a bit.

[lazygood4nothinbum]

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Originally Posted by CuppaJoe Two years ago I didn't realize I was FI; only realized it one year before pulling the plug.

that was pretty much my style and also that's my style now. i would have hated going through working life with the constant thought of a time when i wouldn't be working. i think that would have driven me nuts (and certainly distracted from the day at hand) just like i never thought about what would i do if faced with an economic disaster until now that the talking heads are telling me its here.

Quote:

Originally Posted by Dog Anyway, I'm very concerned with the financial meltdown. So, we have taken the following steps. 1) Cut back to basic landline at main house 2) Cut to basic cable at main house 3) Disconnected cable modem at retirement house 4) Renting out downstairs at main house (until January) 5) Stopped going shopping except for essentials (very effective) 6) Reduced eating out (couple times a month instead of couple times a week) 7) Stocked up on my recreation gear for ER (cycling, hiking, snowshoeing & kayaking) 8 ) Building cash & liquid assets to prevent tapping into equities 9) Started a vegetable garden (retirement house) 10) Consolidated to a family plan for wireless with my daughter and her SO

good details, dog. got me to think of the line items i can be cutting in my own budget. one that quickly comes to mind is my cell phone bill. i had extended the minutes on it because two people who i no longer associate with used to keep me on the phone for an hour or more at a time (one month i wound up with a $350 bill and freaked out). now that they've abandoned me i suppose it's pretty dumb that i'm still paying for minutes i don't use. will look in other places to cut as well.

Quote:

Originally Posted by ziggy29 I don't want to be the type of person who nails the wallet shut and helps all the doom and gloom talk become a self-fulfilling prophecy.

isn't that a little like blaming the rising water on the guy who sandbagged his house after all the tv meteorologists warned everyone about the upcoming 100-year flood?

the 11:00 pm advisory? hopefully we are not on the national hurricane center's center line, but certainly we are within the economic cone of death. maybe not time to board up, but seems a good time to know where your supplies are.

i did take a good deal of comfort from watching buffett last night and am scaling back at least to first do a two week trail run on the ranch before i commit to a longer term.

[Purron]

DH and I have re-thought our plans. We had planned on him joining me in retirement early next year, selling our two homes, and buying a much less expensive retirement home in a more rural setting. Our homes are both located in the Washington DC suburbs and I gotta tell you the market is brutal right now. Foreclosures have skyrocketed and prices are falling fast. On the one hand, we have thought we should sell before prices fall more, but the buyers seem to have vanished.

So, we are considering riding this thing out and staying put for awhile. I have thought about returning to work and he may stay on at his job longer than planned. We are financially secure, but keeping up two houses in the DC area is not cheap. On the bright side, we are lucky to have great renters in our second home who are very low maintenance. Plus, the job market is still very strong in the DC area and, hey, people gotta live somewhere, right?

We just don't think the time is right to make big moves and hope the market finds a bottom soon and starts going up again. We are not down in the dumps about this. Why get worked up over things out of your control? Just gotta keep on keeping on and hope for the best. We've been together for about 34 years now and have seen good times and bad. This too shall pass.

[Achiever51]

I retired in Dec 06 and so far, the only thing that has me really concerned is the housing market (what housing market) here in SE Michigan.

Our plan was to sell this house -- waaaay too big for just two people and three dogs --- and downsize in late ''07 or early '08. Unfortunately the market didn't simply drop, it disappeared, and our house is now assessed for more than $100,000 less than we paid for it ten years ago. Had we sold in '06 --- when we actually had someone approach us and make a legit offer -- we could have sold for about $100,000 MORE than we paid for it! Bummer. I know. Woulda, coulda, shoulda.

And since we expected to sell our house by this point, we weren't terribly concerned about holding an adjustable rate mortgage. Well, if we don't sell this house by February, 2010 the ARM will reset to who knows what level so we are debating what to do and when to do it.

Except for the housing debacle, I am very very happy to be retired. IF I had stayed at MegaCorp (assuming I didn't die at my desk, that is), I probably wouldn't be employed today anyway as my former employer has cut more than 25,000 jobs since I left. And since I got out on a negotiated settlement that ultimately paid me much, much more than I would have received in ordinary circumstances, I know I made the right choice.

As for hunkering down, we are questionning our expenses a bit more before pulling out the checkbook. I have renegotiated lower rates for property and auto insurance and since I have more time to do so, I do shop for bargains more than I did while working.

I vividly remember the gas shortages/market problems in the early 70s; the market drop in '87; and the tech crash in 2000 -- and with parents who survived the Great Depression -- I know that this, too, will pass. Sooner rather than later would be nice.

[shotgunner]

I know I am in a good position and hope to stay in one. I have a part-time job that grosses about 30K for 20 hours a week. I have a commitment through 6/30/09. My home is paid off and the cost of living in it all tax and utilities is $800 a month. I can live nicely on a net of 30K a year. I am confident my vehicle will last another 5 years. My house was totally remodeled top to bottom in 2006. I am giving great thought to cashing out approx 11% or my outside retirement account equities. That will give me a cash/bond position that I can live off for a solid 10 years without any work at all. That will take me to age 62. Holding off on purchasing new Harley that I would have like to have bought this fall.

[REWahoo]

The REW household (living entirely off our nest egg) hasn't done anything significant in the way of expense reduction - yet. The one action I am seriously contemplating is starting my SS benefits in a couple of months when I turn 62. I had planned on waiting until I could draw full benefits at age 66 but the current market direction has given me incentive to reconsider. That $20,000 a year is becoming more and more enticing as I watch our nest egg melt away.

[Dawg52]

Quote:

Originally Posted by REWahoo The REW household (living entirely off our nest egg) hasn't done anything significant in the way of expense reduction - yet. The one action I am seriously contemplating is starting my SS benefits in a couple of months when I turn 62. I had planned on waiting until I could draw full benefits at age 66 but the current market direction has given me incentive to reconsider. That $20,000 a year is becoming more and more enticing as I watch our nest egg melt away.

Mine melted by 8% last month alone. After today's drop, I'm down 13.6% YTD. Sucks. But I do receive enough interest from cd's/bonds and stock dividends to live on. Hopefully the company's I own won't cut their dividend or worse, go out of business.

[Cattusbabe]

DH and I are in about the same situation as Cyclinginvestor. If anything we are padding the emergency funds a bit otherwise no real change.

[Moemg]

The only changes I've made is to ratchet down the remodeling to only necessary items . My tile from h--- will be staying covered by a new area rug . We've also cut back on travel , instead of a New England cruise we are doing a trip to Savannah .

[Bestwifeever]

We battened down a year ago as sort of a trial to see how lbym and low-risk we could go in anticipation of ER. Not a lot left to batten, but should be okay. And if not, hey, we'll make the kids take care of us til they've reimbursed us for their college

[Bimmerbill]

Paying off my bills more aggressivly. Selling some of my firearms to do so, but may buy some more! They are money in the bank, or safe in my case. Plus, in case the world goes to hell, or zombies attack, I'll be ready...

Soon to pad my EF too.

[haha]

I came back this afternoon after being gone through the mid-day. Yikes! This is getting way more serious than I had anticipated. Buy something cheap? Oh wait, it just got a whole lot cheaper!

I am unfortunately low on cash, but what I do have I am spending buying some stocks wih 0 debt, for less than half of what I sold them for within the year! Doesn't matter, they jsut keep going down.

Maybe we are going to get a depression, but unless it is a really really bad one, a lot of these stocks seem like they are already there.

Ha

[Dawg52]

Quote:

Originally Posted by haha Maybe we are going to get a depression, but unless it is a really really bad one, a lot of these stocks seem like they are already there. Ha

Not really calm, just numb to the whole thing. I guess moving happy hour up to midday has helped. Oh yes, I hate the word depression. Give me another cold beer.

[Khan]

I had decided, before this debacle, to start taking money from my retirement accounts starting next year. After 20 or 30 years, things have to be replaced/renovated.

[Budman]

I am very concerned about the DOW being down by 26% since its high of 14198. It seems that most days are down days lately. I am contemplating delaying retirement for a short while until the market recovers. Retiring into a recession should be avoided. There is a lot of fear out there right now just like there has been in some of the recessions I have seen in the past. I am confident that the markets will come back after the uncertainty of the bailout is removed and the presidential election happens. But to be on the safe side, I may delay retirement that would otherwise begin on Jan 1, 2009. Dang I hate saying that.

[Purron]

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Originally Posted by Dawg52 I guess moving happy hour up to midday has helped. Oh yes, I hate the word depression. Give me another cold beer.

In the words of the great Jimmy Buffett, "It's always 5 o'clock somewhere"

[dex]

Lazy,
Let me know if you want me to start another thread on this.
++++++++++

All this talk about delaying retirement brings up the question:
Do those people have two years of spending in cash or cash equivalents?
Do those people have another two years of spending in a short term bond funds?

++++++
Planning for retirement should look something like this
2 years of spending in cash equivalents
2 years of spending in short term bond funds

The make up of investments should be guided by cash flow considerations
Spending needs
Less social security
Less pension
Less other sources - non investment income
Equals amount needed from investments*
*The lower the percentage of spending the higher the percentage of stock funds
*If it is a high percentage of spending then a conservative investing approach would be indicated

[FIREd]

After being really anxious earlier this week (I was ready to run for the hills), I am a bit more cool-headed today. Maybe it's the meditation, maybe it's the beer, I don't know. Anyways, I have done some reading and I am bit less pessimistic about the future. Sure the situation is still very serious, but I also realized that this is not 1929 America and that the great depression II is probably not in the cards (well if congress finally gets its act together and takes steps to unlock the credit markets that is). The run up in the dollar tells me that I am not the only one being optimistic about America's ability to get out of this mess. At least in America we know there is a problem. I think that Europe just got its wake up call on Monday. Europe will have to start cutting interest rates soon, which is bullish for the dollar, and I think that Europe has more budgetary constraints that will prevent it from intervening on a grand scale like the US is proposing to do. I believe that this could ultimately make their recession worse.

So I decided to take advantage of today's drop in the market to buy more shares of WVELX and VWINX. Last time they were so cheap was 5 years ago, nice dividends and lots of quality, American companies. I also harvested some tax losses on foreign funds. That's the offense. On the defense side, we are padding our EF and slashing expenses (about 10% YOY). We also checked with DW's company to see how much cold hard cash they have on hand. They seem to have enough liquidities (cash and ultra short bonds) to cover 4-5 years worth of operating expenses. They anticipated the credit crunch and got out of long term investments last year. It is a great relief to know that they don't depend on bank loans to make payroll. Fingers crossed.