So, what are we looking at in 2-3 years?

[NW-Bound]

Dollar is getting strong on the foreign currencies. Im pondering visiting Europe real soon.

The dollar strength may be short-lived. But it doesn't matter. Give me Dow 14,000 like last year, and I will gladly pay US$1.5 for 1 Euro, which I did.

Spain was and most likely is still less expensive than other Western European countries. Or we may try Iceland (in the summer of course) to help their economy. FireDreamer is going there soon, IIRC.

My goal in life is two European trips + two domestic trips per year. Will take Canada as substitute for domestic, Caribbean and South America as substitutes for Europe. I am not picky. Whatever the Web brings, I'll take.

Always plan my own itinirary, transportation, and lodging. Forces me to study up on the place, which is also lots of fun. Hey, I am ER'ed, what else do I do with my time? Frequent this forum?

 

[Moemg]

We do not eat out when not traveling, period. Nor do we go to the movies. Travel is all the pleasure we have left.

If that is your main pleasure I'd find a way to make it happen . Maybe trade Athens for something less expensive . I' m also a travelholic but lately I traded foreign travel for domestic and it has been great . Lots of interesting places to see in the US . As Dinah Shore said " See the USA in your Chevrolet or Toyota ."

 

[Notmuchlonger]

The dollar strength may be short-lived. But it doesn't matter. Give me Dow 14,000 like last year, and I will gladly pay US$1.5 for 1 Euro, which I did.

Spain was and most likely is still less expensive than other Western European countries. Or we may try Iceland (in the summer of course) to help their economy. FireDreamer is going there soon, IIRC.

My goal in life is two European trips + two domestic trips per year. Will take Canada as substitute for domestic, Caribbean and South America as substitutes for Europe. I am not picky. Whatever the Web brings, I'll take.

Always plan my own itinirary, transportation, and lodging. Forces me to study up on the place, which is also lots of fun. Hey, I am ER'ed, what else do I do with my time? Frequent this forum?

It might be short lived I dont know. But if you are retired. What are you waiting for. Grab it and go on the cheap..or well semi cheap

 

[FIREd]

Spain was and most likely is still less expensive than other Western European countries. Or we may try Iceland (in the summer of course) to help their economy. FireDreamer is going there soon, IIRC.

I did Spain this summer, I am doing Switzerland/France this winter. Looks like it will be Denmark / Sweden next summer. Iceland is definitely in the cards, maybe summer 2010? Or we can fly to Europe with Icelandair and make a stop over in Iceland for a few days... We'll see.

 

[NW-Bound]

I' m also a travelholic but lately I traded foreign travel for domestic and it has been great . Lots of interesting places to see in the US . As Dinah Shore said " See the USA in your Chevrolet or Toyota ."

We have been up/down the West Coast from San Diego to Vancouver.

On the East Coast, from KeyWest up to Maine, actually to St. John, New Brunswick.

In the interior, the usual spots like San Antonio, New Orleans, Chicago, etc... And historic places in Boston, Philly, Virginia, Kill Devil Hills (Wright Bros) etc... Niagara Falls, Toronto, Montreal, Quebec City...

Some places we liked, we returned multiple times, like Seattle (5 or 6), San Fran (5 or 6), Montreal (2), Boston (2), Chicago (2), NewYork (3), Orlando (2), etc... etc...

About the interior, I once had a chance to come to Dayton for a business trip, and tour the AirForce Museum at WrightPatt Airbase, which is probably where Khan used to work (Khan, are you there?). So, we made a trip to come back so my son who loved biplanes could see their collection. We made a trip out of it, traveling from Columbus to Pittsburg, then to Cleverland, and Sandusky.

In Cleverland, we happened to be there during a town festival with a parade of people in costumes (a park near Mt. Sinai Center, I think). Had a good time, and took lots of pictures. When I came back, had a chance to read "House, A memoir" by Michael Ruhlman about the history and restoration of his beloved house in his native Cleverland.

I do not recall having a bad trip, EVER.

But you see, as an Arizonan, I have seen so much of the West Coast already. And if I want to go elsewhere, then the thought is that may be a few more hundred dollars, a few more hours suffering in that coach seat, we can be in a place we have not been. Little by little, it becomes Greece!

 

[barbarus]

A great deal of "money" (assets that people believed they owned at a certain value) disappeared in the past year. This may be the perfect time to "print" more money. I just hope we can bring ourselves to stop when the economy picks up, after deflation stops and before substantial inflation starts.

Printing more money IS ITSELF inflation Kwirk. Think about it. Each new dollar dilutes the value of all the dollars already in existence.

If you owe dollars, this is a grand thing, because when you eventually pay your debt, it will be with dollars that are easier for you to get(earn).

If you own dollars, each of your bucks is now worth less because it is not as scarce anymore. You can't buy as much with it because prices will have risen. (Alas, this possibility is MY fate.) Money loses value as more of it is created.

From the reaction to what I post, I believe most people on this board either overall owe money or have their funds in stocks because there seems to be a great enthusiasm for lower interest rates here.

 

[Kwirk]

Sorry, Barbarus, but inflation is when prices rise. In a period of deflation increasing the money supply, broadly defined, is not necessarily inflationary (though it may work against deflation).

I suppose somebody with most of their assets in cash could wish for serious deflation but that seems rather cold to me.

 

[Frugality_of_Apathy]

That's not the case kwirk. Inflation is expansion of the money supply above expansion of production. Raising prices can be one result of inflation but is really more related to liquidity than actual inflation. When there are a lot of dollars flying around and they are easy to get prices rise but people aren't spending money prices decline even though the money supply has been inflated.

Inflation and deflation are purely linked to supply. When supply increases faster than demand that is inflation. The prices of housing dropping is not due to deflation it is due to housing inflation. The supply of houses inflated much higher than demand driving prices down. Right now the number of dollars is increasing but no one is lending any money so the actual demand for dollars is low even while the supply is increasing faster than ever before. That's inflation.

Money didn't disappear from the system, the price of American business assets just lowered. All of the money that went out there went somewhere. You can't have a buyer without a seller. If I buy $10,000 worth of a stock and the stock price drops to zero no money has disappeared. The guy I gave the $10,000 to still has $10,000 I just can't get that money back from him. The problem isn't that money disappeared, the problem is that we gave all our money away in exchange for things that are now worthless. People with actual money didn't lose anything.

 

[lazygood4nothinbum]

My back up plan was if my liquid net worth dropped below a figure, I'd go back to work. I am slightly below that number now. What I forget about was the economic conditions that caused me to net worth to suffer also means it is really crappy time to look for a job.

i hear that. only i'm not considering a new career as a short term solution to my current money flow problem, but rather as longterm lifestyle. i might even have to sell low to finance retraining.

i'm 51, single and gay. not exactly the typical early retiree. if i had a partner to travel with, things might be different. i could sell out and vagabond on $3k/month (i'm assuming my partner would have similar cash for himself as i don't have enough for two) and, according to the online gambling calculators i've checked, be back up to speed in about 7 years.

but by myself i don't know if that life is worth it. sure, i'd open myself up to a whole new world. i'd learn a lot about myself in traveling. i'm still considering it. but as to a social night life, which still pleases me, it gives me pause. i'm not some single str8 guy into picking up young bar chics nor a gay chicken hawk looking to take advantage of developing country dudes seeking daddy. i've been checking online for pictures of the gay expat scene overseas and, frankly, it looks a little scary. maybe i'm just immature but i don't see myself as old as the expats in the pictures. i think maybe i'd fit in better with that crowd in 10 or 15 years from now.

i also checked calculators for two other possible lifestyles. working a job that just pays enough so that i don't have to tap investments gets me back to speed (ie, where i thought i was when i quit) in about 5 years. or selling out and joining the peace corp gets me back in about 4 years. so i'm not without options, short-, mid-, nor long-term.

thing is that i don't know where this economy is going and no one seems to be able to tell me. even if they fix this mess, it seems a temporary fix. we are forever distracted with some concrete 700 billion dollar figure but then i see here and there whispers that this is really a 5 or 8 trillion dollar problem. and then i hear that even that is nothing compared to what we might likely see in our lifetime: the 50 trillion dollar problem when social security & medicare kick-in. i was surprised a 100-year event occurred in my lifetime. seems silly to shut my eyes now to the possiblity of a 1000-year event as well. if i live into my 90s like a lot of my relatives do, that last 10 years might get very expensive. seems i should save for it as best i can.

Are these new stresses financially related?

financial, social and situational. financially, had i only the money i have now, i might not have made the decision i made to quit working when i did. socially, i don't have enough people in my age group to play with. situationally, see above response.

If so, in a few years, when the economy recovers, and your houses are worth something again, you may yet change your mind once more. It's OK.

and you'll be writing me a guarantee on that? sorry, not buying it. this might not recover for 10 years. this might even get worse after that. i don't understand a lot of this. i'm reading as much as i can. i'm listening as well as i can. i haven't heard a single pundit speculate without caveat. nothing i read or hear or see gives me much confidence. and that confidence is the substrate of this economy scares me even more.

I never intended to retire early. I used to love my work, and still do. But I cannot fit inside a megacorp environment, and have failed at being part-owner of a couple of business ventures. If I need to work, I will. But so far, belt-tightening still works for me.

i also never intended this. i quit working based upon conditions in my life which no longer exist. at the time i'd been caregiver for 13 years and was watching my mother in her last days of alzheimer's. i was grieving for my best friend and for my amazing wolfpuppy. early retirement was a welcomed escape from a life that had become too stressfull and depressing. but now is not then. things change. i don't have those problems any more. so much of that pain has subsided. but now i'm down 30-40% financially and i'm facing a whole new set of problems. that's life.

Money didn't disappear from the system, the price of American business assets just lowered.

splitting hairs

All of the money that went out there went somewhere. You can't have a buyer without a seller. If I buy $10,000 worth of a stock and the stock price drops to zero no money has disappeared. The guy I gave the $10,000 to still has $10,000 I just can't get that money back from him. The problem isn't that money disappeared, the problem is that we gave all our money away in exchange for things that are now worthless. People with actual money didn't lose anything.

um, that's a little delusional because the guy who took your 10k invested in the very same indexed fund where you just lost 30% so his money is gone too. sure the money went somewhere, back into the smoke and mirrors where it never existed in the first place. this entire system is an agreed upon scam. the only value intrinsic to life is life. everything else is a construct. this economy is nothing more than a social contract drawn with disappearing ink on paper woven from wisps of ether. so do not be surprised as it shreds and vanishes before your eyes.

 

[Kwirk]

Inflation is expansion of the money supply above expansion of production.

Many things can be inflated including, perhaps, my ego. But if you Google inflation you'll find that the common economic definition is "price" inflation.

Expansion of the money supply beyond expansion of production is certainly the most common cause.

The meaning of "money" is less firm. The most basic definition might be bills and coin (throw in gold?) but that clearly is not what drives our spending. We have bank accounts for which bills and coin do not exist (if we all tried to withdraw at once). Then there are less liquid assets that still help to drive our spending (how many people here are planning reduced spending because their stock or property values have plummeted?). In a sense, available credit is also a form of money because it certainly affects the willingness of many to spend (credit cards).

Money is not created only by the government. If Alice has $10 in the bank and the bank loans it to Bill who gives it to Charlie for a haircut then both Alice and Charlie think they have $10, for a total of $20. The fact that Bill owes $10 does not affect the willingness of Alice and Charlie to spend money. If Charlie puts the money in the bank and the bank loans it to Dick who buys something from Eddy then there is $30 to encourage spending. The government didn't do a thing. The requirement for banks to maintain reserves keeps this from going on forever but many of our current financial players are not banks and have maintained very low reserves (expanding the money supply and inflating the price of assets). Recently we've all seen the effects of low or nonexistant reserve requirements.

I think I've tried to say too much.

 

[Zoocat]

I'm single with a 30% diminished portfolio and trying to figure out what to do. The next 1-3 years really frighten me. I've decided to downsize by selling my townhome which is really sad because I thought this was where I would live foreever. But through a combination of circumstances, not just the stock market downturn, it looks like the best solution right now.

I worry that I'm making permanent decisions based on a short term problem. I've never experienced an economic catastrophe as a single person, and relying on my own knowledge and instincts feels like flying by the seat of my pants.

If I had a lucrative career, I would feel very differently. Even if I had some regular part time work things would look more promising. But I haven't been able to earn much at all in the past 4 years. The problem with employment, as I see it, is that if I base my lifestyle around the "job" what if it goes away? And how long can I anticipate an employer wanting to keep me at my age?

In one sense, this financial craziness exhilarating. What a ride! But when I seriously look around myself, it's quite sobering. I don't want to wreck my financial situation and be destitute. So for me the remedy is to be ultra conservative. Still, I worry about unintended consequences too. Frankly, I am just plain worried.

 

[Frugality_of_Apathy]

um, that's a little delusional because the guy who took your 10k invested in the very same indexed fund where you just lost 30% so his money is gone too. sure the money went somewhere, back into the smoke and mirrors where it never existed in the first place. this entire system is an agreed upon scam. the only value intrinsic to life is life. everything else is a construct. this economy is nothing more than a social contract drawn with disappearing ink on paper woven from wisps of ether. so do not be surprised as it shreds and vanishes before your eyes.

The money did go somewhere, it didn't disappear into smoke an mirrors The guy who decided to take his money and run made out. Markets don't lose money because the stock prices went down. The lose lose money when people decide not to do anymore trades with them. The only money that disappeared is the assumed money from people thinking debt is as good as gold. All that happened is the banks running 90% deficits saw the results of trying to run that way indefinitely. Not that they learned anything except that if you get a big enough market share you'll get FREE MONEY FROM THE GOVERNMENT TO PAY YOUR BILLS!!!?!

You'll get no argument from me that fiat currency is a fiction and trying to run on a fractional reserve is a Ponzi scheme(by definition). But physical objects do have intrinsic value. The fiction is that a $100 bill is worth more than a $1 bill. They are both just a little bit of linen and have that amount of value. if society collapsed it would still have value as fuel or toilet paper or as insulation. metals have much more intrinsic value as there is a limited supply and makes high technology possible.

Life has no value but the potential that it contains. It's just like counting debt as value. If the debt is repaid then it did have value, if not then it had a negative value. Someone who does not create anything valuable, lives off someone else's money, and spends all their time creating death and mayhem I'd count that life as a liability and not an asset.

 

[chinaco]

I'm single with a 30% diminished portfolio and trying to figure out what to do. The next 1-3 years really frighten me. I've decided to downsize by selling my townhome which is really sad because I thought this was where I would live foreever. But through a combination of circumstances, not just the stock market downturn, it looks like the best solution right now.

I worry that I'm making permanent decisions based on a short term problem. I've never experienced an economic catastrophe as a single person, and relying on my own knowledge and instincts feels like flying by the seat of my pants.

IMO - Selling property now is probably the worst time to do so. I expect the market and economy will come back.... but some say it will not begin to improve for 12 maybe to 18 months.


Do a fairly careful analysis of the cost of your alternatives (short-term and long-term). Identify your short-fall and the period of time that the short-fall may exist.


If your financial problem is short-term (1 - 3 years)... consider spending less (in areas other than your home) for a while and possibly getting a full or part-time job for a year or two.

If you believe your financial situation to be temporary... Consider the alternatives to moving. Moving has an expense also.

 

[lazygood4nothinbum]

The money did go somewhere, it didn't disappear into smoke an mirrors

well then, perhaps you might be able to locate it because the world could sure use some now.

The guy who decided to take his money and run made out.

just what percentage of greedy flippers would you say saw the light and invested conservatively before the crash? perhaps they can fund the recovery with that hidden stash.

Markets don't lose money because the stock prices went down. The lose lose money when people decide not to do anymore trades with them.

splitting the imaginary hair you just mime-plucked off a bald head.

physical objects do have intrinsic value. The fiction is that a $100 bill is worth more than a $1 bill. They are both just a little bit of linen and have that amount of value. if society collapsed it would still have value as fuel or toilet paper or as insulation. metals have much more intrinsic value as there is a limited supply and makes high technology possible.

it is easy to get caught up in the mythology of the day. physical objects only have value as we assign value. it is not intrinsic. your gold watch has no value to me as i do not care for jewelry. to me it is no different than crap. a diamond to me is just shiny crap. that you might say, oh, but you could sell the watch for some food is also not indicative of intrinsic value because that is also simply the value that the person with food has assigned to the watch. if i have food, you can not buy it with a gold watch.

a watch has intrinsic value only for telling time, not for buying food. just like a house only has intrinsic value as shelter. that is not to say that in a constructed economy, you can not buy and sell houses for watches and watches for houses. but buying and selling does not by itself affix intrinsic value. it is a construct.

Life has no value but the potential that it contains. It's just like counting debt as value. If the debt is repaid then it did have value, if not then it had a negative value. Someone who does not create anything valuable, lives off someone else's money, and spends all their time creating death and mayhem I'd count that life as a liability and not an asset.

if you think that life is a debt, then i suppose saying life has no intrinsic value is not completely pathetic or at least it is consistant with your apathy. but if you ever have the inkling that perhaps life is a gift, then perhaps you will find intrinsic value in living, in sharing freely, in love and yes, even in "creating death and mayhem" for where else will you find better opportunity to practice your compassion.

IMO - Selling property now is probably the worst time to do so. I expect the market and economy will come back.... but some say it will not begin to improve for 12 maybe to 18 months.

didn't they say 12 months 12 months ago? my hope is that by selling a house low now i can buy low into the stock market which i then hope might go up faster than housing. (or at least if the market goes down some more, at least i missed the portion that it went down already.)

 

[Zoocat]

IMO - Selling property now is probably the worst time to do so. I expect the market and economy will come back.... but some say it will not begin to improve for 12 maybe to 18 months.


Do a fairly careful analysis of the cost of your alternatives (short-term and long-term). Identify your short-fall and the period of time that the short-fall may exist.


If your financial problem is short-term (1 - 3 years)... consider spending less (in areas other than your home) for a while and possibly getting a full or part-time job for a year or two.

If you believe your financial situation to be temporary... Consider the alternatives to moving. Moving has an expense also.

Thanks for the input. I've done all that. My condo complex is looking at a construction defect suit in one year (which I really doubt will be successful). If that doesn't work out then big assessments and/or fees are in order. I don't want to be around for that eventuality.

 

[NW-Bound]

Lzg4nb, it seems to me that even if the market did not crash, you would still be despondent. With what you've been through, going back to work may work out for you. I do not see that your disappointment with ER could be avoided with more money. Cheer up.

 

[lazygood4nothinbum]

oldbabe. a very dear friend of mine lives in a condo undergoing major renovations, new water pipes, air conditioning, hurricane-resistant windows and more, multi-million dollar project which started in the heyday.

obviously it is an older building as are many of its residents who have been there for many years, living well, on the beach, but on fixed incomes which are now dwindling.

so the condo assessment has become a two edged sword. on one side they need to maintain the condo so as to keep value in their property. but on the other edge sits residents who might be forced to sell right when the market is in the toilet, driving down prices further. the board is currently discussing if they can offer some relief to anyone who might otherwise be forced to sell but that issue has yet to resolve so they still have quite a few scared residents.

nw-bound, i didn't think of myself as despondent, in fact, i am very much engaged on thinking how i will successfully survive this downturn. though i might come across as a bit more melancholy than how i prefer to go through life, it is only because there is not a whole lot to be enthusiastic about when our economy has become so sobering. besides, it would be a little like singing and dancing on graves. perhaps it is not even appropriate now to be too happy, or at least not to flaunt it out of respect for the suffering of others.

also i don't think of myself as being greatly disappointed with e.r. as i really had no great expectations for it. er isn't anything i worked my entire life for. it just happens that i always saved for a rainy day, never lived in debt and then, besides that, came into some money. i hadn't spent my working life thinking about retirement. i retired out of depression and tears due to circumstances which developed, not out of anticipation and baited breath of having reached some long-sought goal.

if anything, i am appreciative to have woken up to some realizations i hadn't had before. for instance, even though i originally thought i'd have my buddy to sail the world with, i figured i'd find someone new when he died. now i realize there's not a whole bunch to chose from who are both compatible and capable. and given the downturn of the economy, what available pool there was would be even less now and likely into the future.

would more money make things better? maybe it wouldn't hurt. but you are right that money is not the ultimate determining factor of my happiness as it only helps to hide the pain with the distractions it buys. but it is not the things that money buys, rather only people are the balm. and the good ones can't be bought.


"if suffering can be corrected, then there's no need to be despondent. and if it cannot be remedied, there is no benefit even if one becomes unhappy."~~shantideva

 

[kyounge1956]

(snip)

"if suffering can be corrected, then there's no need to be despondent. and if it cannot be remedied, there is no benefit even if one becomes unhappy."~~shantideva

I once read something like that philosopy expressed in a little poem:

For every problem under the sun,
there's either a remedy or there is none.
If there's a remedy, try to find it.
If there is none, then never mind it.

It's easier said than done.

 

[Dennis]

How will it effect you?

& Less Importanly Me? LOL

Well IAD.. On what your Financial Situation is? Do you have twice as much or more than you need per FireCalc? and won't run out til your 90?
Than Your doing fine..

Hyperinflation? I sure Hope so... Bring the Carter Yrs back!
Loved to see those 15% -30 yr LT treasuries...
I'll sell just about everything and buy them with Baby's Shoes..!

My Dad and His CPA Brother did back then and even 2nd Mortgaged their Homes to buy more.. I think they even had some 16-17% one's...

Am I worried the next Generations of Kids will have to foot the Bill for what's going on? Not really.. They have Jobs/Businesses that are making them 3-5x as much as I ever did, they can well afford it.. So they Lease or buy cars EOY instead of Every yr and Go to Disneyworld on 1 x yr vs 3..

They, like me have 50/50 Portfolio's, SuperPension Plans and their $1 Million+ Homes on 15 yr Mortgages about half paid for by now..

Even Divorce won't jeopordize either one..

I'm more concerned about What to do with The EXTRA $ I expect to make in this Recovery yrs comming up.. I made over +50% in 03' and +35% in 04' on my Portfolio and if do this again or better? I guess more goes into my Chartible Trust and to Charities..

That's one of the Benefits of being Able to retire early and take some extra risks and get More Rewards from the fruits of your Labor and Good Fortune.. and Karma Plays a Big role too.. Give back to the society that helped you succeed is the name of the game..

Just don't Give to a Beggar to help them Remain a Beggar..

The next few Months thru the next Yr or so, is going to be quite exciting.. as far as the Market and for us Upper Income Class goes... For the rank and File? Maybe Not so much.. Been there, done that..No thanks..

 

[Zoocat]

oldbabe. a very dear friend of mine lives in a condo undergoing major renovations, new water pipes, air conditioning, hurricane-resistant windows and more, multi-million dollar project which started in the heyday.

obviously it is an older building as are many of its residents who have been there for many years, living well, on the beach, but on fixed incomes which are now dwindling.

so the condo assessment has become a two edged sword. on one side they need to maintain the condo so as to keep value in their property. but on the other edge sits residents who might be forced to sell right when the market is in the toilet, driving down prices further. the board is currently discussing if they can offer some relief to anyone who might otherwise be forced to sell but that issue has yet to resolve so they still have quite a few scared residents.


"if suffering can be corrected, then there's no need to be despondent. and if it cannot be remedied, there is no benefit even if one becomes unhappy."~~shantideva

Lazy, that story is really really sad. And I am more than annoyed for those resident owners. I get the message. And I'm going with my gut instinct to sell now while I still can.

I appreciate the quote too. I'm reading a lot of Buddhist philosophy these days.

 

[barbarus]

Lazy, that story is really really sad. And I am more than annoyed for those resident owners. I get the message. And I'm going with my gut instinct to sell now while I still can.

I appreciate the quote too. I'm reading a lot of Buddhist philosophy these days.

One of my more major life regrets was that I was not taught Zen Buddhism as a child.
Second best would have been no religion at all,( not that I consider Zen to be religion), but alas, I was not even that lucky.