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Advice and Tools for the long haul
Old 11-23-2020, 07:48 AM   #1
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Advice and Tools for the long haul

This is a 2 part question.

What quote or piece of advice has hung onto to you throughout your accumulation years and beyond ?

And

What tool, whether be a spreadsheet, app, website, etc. has helped you track and manage your finances and budgeting ?


Iíll answer first. The old saying ďItís a marathon, not a sprintĒ and Itís not what you make, itís how much you keep, have always stuck in my head.

Having all of my investments visible on 1 site(Vanguard for me) has made it easier to manage my total portfolio. Still looking for a good budgeting method, besides pulling out previous years statements.
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Old 11-23-2020, 08:09 AM   #2
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Track spending and keep it under control.

I use a spreadsheet monthly that computes portfolio size based on month end fund balances. Also takes checking acct info to compute monthly spending.

I use quicken also, but basically just to check cc and checking balances against bank info
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Old 11-23-2020, 08:27 AM   #3
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For me it was my Dad's stockbroker's recommendation to do a net worth statement when I was about 22. It did not take long after that to realize that wealthy people had high net worth (duh) and so i could view my financial decisions through that lens -- what would X or Y do to my net worth over time.

As for the tool part, for me it is Quicken and my various Excel spreadsheets.
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Old 11-23-2020, 09:08 AM   #4
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We never had a budget, we were both conscious of how our dollars were spent. I did start keeping track of net worth 6 years after we were married and started accumulating. We had $111,000 the first net worth statement. I did that for 9 years when we had a net worth of$330k. Then after a move, I didn't do another net worth statement again for 14 years. When I did, we had $936k. It only got better the next 9 years.
Lots of ways to do it, just keep saving and investing with a decent portion of your income. I suggest at least 20%, even more if possible or in good years.
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Old 11-23-2020, 09:23 AM   #5
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For some reason I like a messy desk. That in mind, in front of me everyday I have our SS benefits scribbled on a piece of paper 62, month/year benefit, 66.6 (FRA) m/y benefit and 70 m/y benefit so I can reach over and look at it immediately.

Also, in that mess, I have all monthly expenditures since 2015 then the year totals. Only total month, not divided out to specific expenses.

Then, I have the pension docs. All this in a nice messy pile.

VG has the main portfolio, we have EE and I bonds in a separate acct, then a MM in a separate acct.

I scramble different ways to achieve spending goals for a specific year. In 2020, we had a 3 week vaca in South Padre Island in Jan/Feb. The virus hit and this year will be the lowest spending year in recent history - probably going back 15 years.
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Old 11-23-2020, 09:27 AM   #6
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From my folks:

Save something every paycheck. (did that)

The numbers are only on paper, You haven't lost/gained any thing until you sell, so don't worry too much what the market is doing, it will go up in the long run. (it did)

We just kept working and saving. I didn't really think about retiring and spending budget until close to our 50's. Spent the next 10 years getting ready to make it happen.
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Old 11-23-2020, 09:30 AM   #7
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LBYM. This has the dual effect of leaving you more money to invest, and living a lifestyle that requires less of a nest egg to retire with.

Tools are only as good as the input you feed them. I used spreadsheets for everything. Quicken might seem more accurate since it accounts for all expenses if you set it up right, but it may not give you an accurate budget for your retirement. You might think that 5 years of tracking gives you what you need to know, but consider that those 5 years might not have covered:
- major capital expenses like replacing cars
- major home repairs like replacing a new roof, painting your house, repairing a furnace, etc.
- hobbies that you might take up in retirement
- vacations you might be foregoing while working, but want to take when you have more time in retirement
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Old 11-23-2020, 09:45 AM   #8
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I don't know that it's a quote, but I've always lived by the idea of spending less than you earn. I also view any kind of debt as the enemy. I want to EARN interest, not PAY interest. So, I always pay the credit card off in full each month (every couple weeks actually), and we always paid way more than the monthly minimum on loans (our last loan was over 30 years ago!).

That said, while we have generally always made good financial decisions (except for my early 20's when I had to have all the latest stereo gear), we didn't really start thinking about retirement planning until my early 40's.

As for budgeting, I managed fine for many years by making up a printed chart of our bills I kept on a clipboard. As I paid bills I would record it on my bill chart, so I always knew what had been paid and what was still waiting. While I no longer use a monthly chart (since all bills are automated now), I still keep a version of that chart in a notebook for annual bills like home insurance, car licenses, etc.

A few years ago I finally switched from the traditional paper check register to MoneyDance for managing our checking and savings accounts. It took a couple of months to adapt, but now I can't imagine going back. It has some annoying quirks, but generally works well.

At the end of each year, I download the transactions for all of our accounts, and load them into Alzex Finance Pro. I can then categorize the income and expenses to see where we spent our money. This gives me a good idea of where we're over spending and how much we will need in retirement.

As for retirement planning, the Flexible Retirement Planner is by far my favorite planning software. I occasionally use FireCalc to get a second opinion, but FRP is something I check in with at least once a week. It lets me see where we are at, try different scenarios, etc.
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Old 11-23-2020, 09:46 AM   #9
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"Spend Less than you Make"

That and a spreadsheet made FIRE possible.
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Old 11-23-2020, 09:46 AM   #10
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Put things on auto pilot. For example, we took out a 15 year mortgage before they were fashionable. I always contributed to my 401k at least as much as necessary to get the employer match but soon went into max out mode and kept it there. Auto pilot means you don’t have to think about it, which in my case tends to take me off track. Then there’s always LBYM’s. Those two things are my best advice especially for younger folks.

Tools - Quicken and Excel. Nothing fancy, but always had a good handle on what we spent money on and always did a year end NW and financial review. Have to keep score if you want to know how you’re doing.
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Old 11-23-2020, 10:00 AM   #11
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I use Quicken to track our accounts, except DW's checking (!!). So monthly I make sure Quicken ties out with Scwab and bank accounts. Maybe once every month or three I will look up something like "How much have we been spending on xxx?" Really the Quicken thing is not cost-effective payoff vs effort but I like to do it.

As far as "manage" there is not much to do and no tools needed. DW and I look at our investment accounts every year. Sometimes that will result in a trade or two but usually not.

When I was in accumulation phase I had an investment net worth spreadsheet that I updated every year so I could see the effects of our saving/maxing 401Ks and could see market effects. That was quite pleasant because the total was in the 13-15% range compounded.
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Old 11-23-2020, 10:26 AM   #12
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1) What is measured is managed.
2) Excel (1 investments workbook, 1 income/expenses workbook). Helps to have all payments go through one bank.
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Old 11-23-2020, 10:27 AM   #13
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The single most important tool that I have is my self-created Excel spreadsheet to track spending. My ability in Excel is rudimentary at best, but I found it to be not that difficult to create about 20 years ago. I run all of my spending (except the electric bill, property taxes and cleaning lady) through a single credit card. Every month, when I get the statement, I manually categorize each item, sum up everything in that category and enter it into my spreadsheet. I have 57 categories of spending. Each payday, I input all my income (now, my pension check). Every year, I estimate a yearly and monthly amount from the year prior for each category. I keep a running count of how much I am above or below the estimate.

That spreadsheet had and continues to have many benefits. First and foremost, it gave me the confidence to retire in 2019, because I knew my spending to the penny and could see precisely what would change in retirement. It also forces me to think every month about exactly where my money is going and to contemplate whether there might be something I could do to reduce or eliminate that expense.

It is not really a "budget" per se. We spend our money as and when we want and do not artificially constrain ourselves in any way. But facing that spreadsheet every month forces us to think more about what we really want and what we are willing to pay to get it.

I think if more people tracked their expenses this way, more of them could FIRE.
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Old 11-23-2020, 11:38 AM   #14
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Quote:
Originally Posted by Yoheadden View Post
This is a 2 part question.

What quote or piece of advice has hung onto to you throughout your accumulation years and beyond ?

And

What tool, whether be a spreadsheet, app, website, etc. has helped you track and manage your finances and budgeting ?


Iíll answer first. The old saying ďItís a marathon, not a sprintĒ and Itís not what you make, itís how much you keep, have always stuck in my head.

Having all of my investments visible on 1 site(Vanguard for me) has made it easier to manage my total portfolio. Still looking for a good budgeting method, besides pulling out previous years statements.
Advicewise: Invest as often and as soon as you can.

Tool: Learning google docs and math skills... I created my own spreadsheet and with patience and time built it to something only firecalc can rival but still not meet, cuz mine is special to me

It has a progress meter vs life expectancy, workday counter, real-time updates to all my funds (that piece was the hardest to achive while maintaining my A/A as I had to consolidate and re-assess my positions)
...and my very own firecalc that kinda shows me how much I will have if I spend x,y or z in what-if scenarios. It's running the what-if scenarios coupled with me knowing how my folio performs vs index and y'all in one visible spot that helps me sleep at night. My wife doesn't bother with ANY of that hoopla and supposedly sleeps fine tho so YMMV.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 12-02-2020, 06:01 PM   #15
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Personal finance is personal.
My personal values, goals, wants, needs, life experiences, circumstances in life, likes, dislikes, personality traits, etc drive why I make the financial decisions I do.

I use google sheets to track my spend and an Excel workbook with various worksheets to track everything else. I'm not an expert with Excel but know enough of the common functions. So, I started out with a few worksheets with cells linking together and just iteratively expanded it as I wanted to track different things.
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Old 12-02-2020, 06:16 PM   #16
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Answer for # 2... EXCEL.... I'm pretty good at it (not an expert) and have high confidence in the answers/numbers since I built the spreadsheet and formulas. At least I know how it's getting the numbers which makes me feel better.
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Old 12-02-2020, 08:30 PM   #17
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For over 30 years, we never really had any kind of budget or tracked spending. We just were always conscious of what we made, watched what we spent, always did at least 10% in 401k type plans and maxed them out when incomes allowed as we got older. Once retirement started to come into focus, we used Quicken to start tracking expenses and confirm that there really no issues keeping us from doing whatever we wanted. Also gave a good way to gather together various investment plans and have a better way to watch our holdings and returns. We kept virtually all investments in equities up until we reached 55 and then slowly transitioned to near 60% equities by retirement - that has drifted up to 65% equities with the market moves and next year will bring some measure of rebalancing.
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Old 12-02-2020, 09:52 PM   #18
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To be honest, we did no planning nor budgeting.
Put money into tIRAs and 401(k)s.
At ages 72/63, happy with our $1.8M USD

For tools, I do recommend Stabila levels.
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Old 12-03-2020, 09:52 PM   #19
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Quote:
Originally Posted by Yoheadden View Post

What quote or piece of advice has hung onto to you throughout your accumulation years and beyond ?

And

What tool, whether be a spreadsheet, app, website, etc. has helped you track and manage your finances and budgeting ?
1. Consider everyone starting with a dollar. Then we pair off, flip a fair coin, and the winner gets the other person's dollar(s). Iterate about twenty times and the result is a bunch of millionaires that are no smarter than average. 2^20=1,048,576 (it only takes 20 iterations to get millionaires)

The point is that average is good enough... so low cost index investing

2. The only tracking was to maximize tax advantaged savings (IRAs etc.) and not spend what was not in my checking account. So, umm, the online bank account was my preferred tool.

Good Questions for this forum!
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Old 12-04-2020, 05:15 AM   #20
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Q1 Answer: LBYM
Q2 Answer: Quicken
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