Big mistakes in retirement

[MBAustin]

Wow. Reading all of these makes me very grateful for the good sense I got from some combination of the good Lord and my parents.

 

[nash031]

Former work colleague made $100 million in 1999 day trading. Stopped working, bought a boat, sailed around Mexico, met his wife. Continued day trading. Lost $100 million in 01-02. Joined the Navy.

When I asked him if he regretted continuing day trading, he asked me: "How many people do you know that made $100 million in one year?"

I said, "The same number of people I know who lost $100 million in one year."

I guess he had a couple of good years and met his wife. I wonder if he's still at it...

 

[athena53]

Wow. Reading all of these makes me very grateful for the good sense I got from some combination of the good Lord and my parents.

Amen to that. I actually saw my Dad demoted from a good job (the steel business, so industry on its last legs) at age 55. They'd worked and saved their entire adult lives and were fine. They moved to Myrtle Beach (LCOL), paid cash for a house and Dad tried his hand at a second career as a financial planner. Didn't work out, but he made some money and didn't lose any. They're in their early 80s and still doing well other than the expected old-age health issues and even there they've done better than most.

Seeing Dad edged out of a good job (and able to walk away from it) was a great lesson for me. I knew it could happen to me and it did, although I was 61. I'm grateful I didn't have to try and find another job.

 

[aim-high]

Thanks for sharing. Knowing what NOT to do is just as important as know what to do!

 

[Meadbh]

This happened years ago. A distant relative, a widow, moved into a high-end home with DS and DIL, investing her savings in the downpayment. Home was in DS's name. Grandma babysat two grandchildren. Initially things went well, until DS drowned at sea. DIL was the sole beneficiary of his estate and life insurance. She now had all the power. As the grandchildren grew, they no longer needed much babysitting. DIL began a new relationship. Grandma no longer felt welcome. She eventually moved out and went to live with her sister in straitened circumstances. DIL provided no financial support or compensation.

Morals of the story:
1. Never invest in a property without getting title.
2. Do not depend on the goodwill of one individual, because sh*t happens.
3. Don't give away your retirement savings. You might need them.

 

[robnplunder]

Former work colleague made $100 million in 1999 day trading. Stopped working, bought a boat, sailed around Mexico, met his wife. Continued day trading. Lost $100 million in 01-02. Joined the Navy.

When I asked him if he regretted continuing day trading, he asked me: "How many people do you know that made $100 million in one year?"

I said, "The same number of people I know who lost $100 million in one year."

I guess he had a couple of good years and met his wife. I wonder if he's still at it...

Wow, what a story. Reminds me of Kenny Roger's song, The Gambler. One needs to know when to walk away.



Day trading is like gambling. You start small and win a little. Every time you win, you get bolder & greedier (your bet gets bigger). One or two bad streaks later, you got no more money left to bet. Only dealer makes money over long run.

 

[Moemg]

Yes, for many professions, that is probably a reality. BUT.....if you can spell "Oil" (O..I..L) and show up sober, you can find decent work at any age in Texas, Oklahoma, North Dakota, Wyoming, Montana, New Mexico, Colorado, Canada, and Louisiana.

(If you have a commercial drivers license, you can sign on with a crude oil or water hauler and make near, at or over $100K per year.)

A nurse with a license & a few good references can always find work & pretty much name her or his hours.

 

[haha]

Subtract "We sold a good portion of our taxable investment account at the depths of the market low and" - and you have our situation. We bought the vacation rental in 2003 just as prices were heating up and mortage rates were going down. We've never gotten even vaguely enough in rent to pay for what the place costs to own, and we've never gotten to stay there ourselves. Plus, like all rentals, it is a perpetual worry. One of those "it seemed like such a good idea at the time" things. Also one of those "no risk, no gain" things, which are supposed to show you have confidence in yourself and all that!

Amethyst

I can't remember which billionaire investor made this observation, but he said that empathic people make poor investors. What is empathy? It means that you tend to feel others emotions. But an investor hopes to observe others' emotions, and take advantage of them. One who is habitually contrary and skeptical might think, if not say, "maybe" to many things that others might believe or identify with. When you said "Also one of those 'no risk, no gain' things, which are supposed to show you have confidence in yourself and all that!" it made me think how manipulative many of these sayings that get taken for granted actually are. Society has a stake in being sure that individuals do not figure out the sources of all the lines and levers and social moods affecting them. Remember Dylan and blowing in the wind? This is probably the single most important thing that anyone might learn. Most of what we are sold as progress is actually very likely to only be flux. What was taken for granted 10 years ago is cast out today, and much of what is taken for granted today will be cast out or even made illegal tomorrow .

Ha

 

[retire2020]

…...but were looking forward to a life of leisure and travel, once she retired.

Well, about a year and a half ago, her husband up and died! So, there went their dreams of spending their golden years together.

Exactly the same story with my mom. My dad died in 1974 at the age of 55 and mom told me her story many times how they wanted to spend their lives in retirement. My dad died on his way back from work and did not even get a single moment of what they had planned. We took a good care of her and never let her felt alone til she died in 2012.

 

[robnplunder]

Exactly the same story with my mom. My dad died in 1974 at the age of 55 and mom told me her story many times how they wanted to spend their lives in retirement. My dad died on his way back from work and did not even get a single moment of what they had planned. We took a good care of her and never let her felt alone til she died in 2012.

Yup. Dying early during RE is the biggest mistake of them all. I will post on this thread if it happens to me.

 

[imoldernu]

Sheesh.. What haha said... yeah...

I can't remember which billionaire investor made this observation, but he said that empathic people make poor investors. What is empathy? It means that you tend to feel others emotions. But an investor hopes to observe others' emotions, and take advantage of them. One who is habitually contrary and skeptical might think, if not say, "maybe" to many things that others might believe or identify with. When you said "Also one of those 'no risk, no gain' things, which are supposed to show you have confidence in yourself and all that!" it made me think how manipulative many of these sayings that get taken for granted actually are. Society has a stake in being sure that individuals do not figure out the sources of all the lines and levers and social moods affecting them. Remember Dylan and blowing in the wind? This is probably the single most important thing that anyone might learn. Most of what we are sold as progress is actually very likely to only be flux. What was taken for granted 10 years ago is cast out today, and much of what is taken for granted today will be cast out or even made illegal tomorrow .

"someguy" asked me a similar question about 4 months ago here... http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251-2.html#post1444996... and I never got around to answering it.

I think haha hit it on the head... I'm not sure it was a mistake, but, likely one of the reasons DW and I are not "rich"...
Am thinking that I was plenty smart enough to earn/make/get more money for my retirement, but lacking the self preservation instinct.... and the words are definitely compassion/empathy... just too much of it. I would have survived quite well in my business start up... (cut short by cancer) but didn't have the chutzpah to double my prices like my competitors, trusting that value would build the business base.

We used to call it " the killer instinct". On that, I failed...

 

[NW-Bound]

Yup. Dying early during RE is the biggest mistake of them all. I will post on this thread if it happens to me.

Dying while at work is a lot worse, but then it does not fall under the premise of this thread: "Big mistakes in retirement".

So, that will have to be classified under "Big mistakes in OMY".

 

[aja8888]

Dying while at work is a lot worse, but then it does not fall under the premise of this thread: "Big mistakes in retirement".

So, that will have to be classified under "Big mistakes in OMY".

I suppose if you were thinking about being retired while at w*rk and died, it should count a little.

 

[NW-Bound]

I suppose if you were thinking about being retired while at w*rk and died, it should count a little.

No. It's better if you do not even think about it, then you would not know what you missed.

But if you talk about Wally, Dilbert's coworker, he's the BIG winnah! Wally retired while at work.

 

[athena53]

A nurse with a license & a few good references can always find work & pretty much name her or his hours.

One of my former HS classmates is a retired nurse (aged 60 or 61). She posts on FB and asks questions about how to use her iPhone and iPad, joking about her lack of technological smarts, and then once mentioned their "meager savings" in a discussion on out-of-pocket health costs. Umm, you're in a field where you could go back to work, you have meager savings and you're buying iToys? To be fair, she could be one of those nurses who had to quit after wrecking her back by moving too many heavy patients (happened to my SIL), but she hasn't mentioned that.

 

[Meadbh]

A nurse with a license & a few good references can always find work & pretty much name her or his hours.

I worked with many nurses who retired with pensions, enjoyed the retirement parties, and came back to work on a casual basis a couple of weeks later. After a while I stopped subsidizing the retirement gifts!

 

[aja8888]

During the last 10 years, at separate times, two young nurses (mid to late 20's) rented the house next to us. Both got jobs in California with signing bonuses. I heard they were going to start at around $100K.

If good nurses (top tier?) make this kind of money, I should have pointed my daughters into nursing instead of general business.

 

[rodi]

I thought of another one.

Parents of a close friend - worked for a government agency, overseas, for almost 20 years. Didn't like the new president (at the time) and got out of it - a few years before they qualified for federal retirement. Took the lump sum. A few years later that was gone. He tried to start several businesses that never got off the ground. She got a job writing/editing - which at least covered their rent. My friend ended up moving back in with them in her 20's because they couldn't cover the rent on their own.

Fast forward 2 decades later. He never did much more than part time after his federal stint. What little Social Security he gets is paltry. She gets a bit more - but does free lance writing to supplement. They move in with their son (friends brother) to help babysit the kids. (son is divorced). Son gets new girlfriend with her own kids - and son and girlfriend basically kick them out. They have no place to move. My friend has to give her parents the stake to get a new apartment... they don't have enough for the deposit and first months rent. They are in their 70's. They end up living in my casita at a much reduced rent for a short period... before they move to my friend's vacation house in another state.

I can't imagine being in my late 70's with signficant health problems and not enough money to pay rent. My friend pays about half of their living expenses. This impacts her retirement savings, obviously. (Fortunately, her husband is the KING of LBYMs so she'll be fine.)

Not only did they make bad choices for themselves - they are dragging down their adult daughter with their poor financial/retirement decisions..

 

[rodi]

During the last 10 years, at separate times, two young nurses (mid to late 20's) rented the house next to us. Both got jobs in California with signing bonuses. I heard they were going to start at around $100K.

If good nurses (top tier?) make this kind of money, I should have pointed my daughters into nursing instead of general business.

My step mom is a retired PhD nurse educator, 2 cousins and a cousin in law are nurses. It definitely pays well here in CA. I would encourage my sons to go into nursing if they are considering the medical field. And there are nursing schools that will give you a full ride if you agree to work at their hospital for 2-5 years post graduation. My niece did this.

 

[daylatedollarshort]

We're just kind of shocked at how some of our former co-workers with two tech job income households went broke from overspending on luxuries. One couple, in addition to a pretty good household income, also made a huge amount in stock options from a start up that went public.

 

[ProspectiveBum]

Rodi, that last story hits a little too close to home. My Dad is 63, and in a similar situation. He had a good job in IT. He decided that since he was skilled in some software that's popular right now that he should strike while the iron is hot, and do some lucrative contracting. That worked out well for about 18 months, until he developed chest pains and needed a heart stent put in. He had less than ideal insurance, and ended up paying over $35K out of pocket (on an over $100K total bill). Then, his last contract ended, and it took nearly 6 months to find another gig in a city about 400 miles away. DW and I had to loan him $7,500 to cover his first and last months rent on his new apartment, pay moving expenses and buy groceries. This entire time, he's been supporting my 40yo drug addict sister, who is "attending some sort of online school", and not working.

He's always been terrible with money, and sadly has absolutely nothing to show for it (he's never owned a home, for instance). I actually have no idea where his money goes; it's certainly not to anything lifestyle related. He drives a junky old car, and has old clothes and furniture.

I'm hoping that he can work and save until he's 70 to get his maximum SS benefit, but I worry that even that won't be enough to cover his expenses in retirement. This is a morbid thought, but I think he was counting on an inheritance to fund his retirement. Unfortunately for him, his Mom is living in an assisted-living facility, and will probably burn through her assets. She has severe dementia, and is in her late 80s, but from a very long-lived family. She could easily live another 8-10 years. Anything left will be split between Dad and 2 other siblings, so it won't be much a windfall anyway.

It's all very sad and distressing. If nothing else, it's a close-up example of what not to do.

 

[razztazz]

Not only did they make bad choices for themselves - they are dragging down their adult daughter with their poor financial/retirement decisions..

This is why I left home at the earliest opportunity. I could see where that family was going by the time I was 7 years old.

 

[daylatedollarshort]

We had friends where we'd talk about what we did on the prior weekend. We'd just do things like go hiking and see a movie or maybe have gone camping. They would have flown to New York to see a Broadway play. It just seemed kind of nutty to us because we knew they had a similar income to us and we could not afford to live a jet set lifestyle like that. We could go to New York on vacation or stay extra days after a business trip, but not fly across country just over a normal two day weekend because there was some good play we wanted to see.

I don't know what they were thinking but it was no big surprise to us to hear they were going bankrupt. I don't know if it was a surprise to them or not.

 

[FIREd]

I have one relative who is 67 and lost her job last year. She has not been able to find another position and she is now is financial trouble because of years of overspending and lack of planning. I find the situation quite consternating, to be frank. That relative is a CPA after all, how could this happen? The family is trying to cobble up some financial aid to keep her out of the soup kitchen. I will be chipping in.

 

[LitGal]

Once Again, Cheers to LBYM!

Thank you for these dozens of posts, confirming some basic tenets that can help to make ER feasible:

1. Recognizing early on (at best, in one's youth) that a career should be carefully chosen and nurtured: for it is finite, can be rather fragile........and can make or break the life we end up living;

2. Once established in that career, we'd do well to follow my uncle's old advice and "make hay while the sun shines";

3. We'd do best to tend to the "hay" we have made, rather than letting it just blow away while we chase after whatever grass is newly green beyond the fence;

4. We then save as much "hay" as possible for the future: to support leisure, rest from our hard work, and years of enjoyment (while so many other folks are busy jumping those fences looking for greener pastures).

'Tis truly a gift to be simple.........and free.