Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
So, is this a sign that I've "made it"?
Old 04-03-2018, 07:16 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Location: Crownsville
Posts: 2,557
So, is this a sign that I've "made it"?

So, I'm adding up my figures this morning, and completely non-plussed about the recent market turmoil. I figure hey, it goes down; eventually it'll go up again. The Dow Jones is off around 11% from its peak, so...correction territory. Well, we've been over-due for one.

Anyway, I get my totals added up, and initially, it looks like I'm down about 4.6% for the year. Eh, no biggie. But then, I started looking at some previous numbers, and noticed the ones I just entered, while lower, didn't seem *that* much lower. Not enough to account for as big of a drop as it was. Then I saw the glitch. One number that I should have entered as $55,XXX was only $5,XXX. Oops.

So, it turns out, I'm really only down around 1.3% for the year. Inconsequential. But, it got me worried a bit, about my own attitude. Here, I just "misplaced" $50,000, yet it seemed like nothing. Now, if I physically lost the money, and couldn't get it back, I'm sure I'd feel sick to my stomach. But I guess I've gotten used to the ups and downs of the market that a momentary loss like that, which I can get back over time, just doesn't seem like a big deal.

So maybe, this is a sign that I really am financially independent, and I'm getting comfortable with that fact? Hopefully it's not a sign that I'm going to get fast and loose with money in my old age!
__________________

Andre1969 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-03-2018, 08:39 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 5,946
Quote:
Originally Posted by Andre1969 View Post
So, I'm adding up my figures this morning, and completely non-plussed about the recent market turmoil. I figure hey, it goes down; eventually it'll go up again. The Dow Jones is off around 11% from its peak, so...correction territory. Well, we've been over-due for one.

Anyway, I get my totals added up, and initially, it looks like I'm down about 4.6% for the year. Eh, no biggie. But then, I started looking at some previous numbers, and noticed the ones I just entered, while lower, didn't seem *that* much lower. Not enough to account for as big of a drop as it was. Then I saw the glitch. One number that I should have entered as $55,XXX was only $5,XXX. Oops.

So, it turns out, I'm really only down around 1.3% for the year. Inconsequential. But, it got me worried a bit, about my own attitude. Here, I just "misplaced" $50,000, yet it seemed like nothing. Now, if I physically lost the money, and couldn't get it back, I'm sure I'd feel sick to my stomach. But I guess I've gotten used to the ups and downs of the market that a momentary loss like that, which I can get back over time, just doesn't seem like a big deal.

So maybe, this is a sign that I really am financially independent, and I'm getting comfortable with that fact? Hopefully it's not a sign that I'm going to get fast and loose with money in my old age!
This. Definitely different than "losing" 50k.
This is my first correction experience in retirement and overall okay with the ups and downs.
__________________

__________________
TGIM
Dtail is offline   Reply With Quote
Old 04-03-2018, 08:46 AM   #3
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 2,778
At some point, when you have 'enough', money is just the configuration of a bunch of bits in a computer somewhere with your name attached to it.

It only matters when you don't have enough for what you want/need.

-gauss
gauss is offline   Reply With Quote
Old 04-03-2018, 08:50 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,401
Congratulations on having reached a state of equanimity.
Attached Images
File Type: jpg 31B5325F-8025-4452-84E0-298CFD511609.jpg (90.3 KB, 153 views)
Meadbh is offline   Reply With Quote
Old 04-03-2018, 09:21 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,051
Send a message via Skype™ to kcowan
I think that market turmoil is only important is it makes you rethink your assumptions AND you financial plan no longer provides the buffer you need. Given the real market growth beyond inflation in the 15 years of our retirement, our buffer provides us with plenty of sleep at night peace.

In fact, we are stepping up our discretionary expense and those could easily to ratcheted back if needed.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 04-03-2018, 09:24 AM   #6
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 2,475
It also is an emotional difference between a paper loss that is not realized, vs a real loss of money. There are many people that can't separate those two, they feel as if they lost real money in their account, even though no shares were actually sold.

I do agree it is a sign of financial independence that you are not worried about the current correction.
__________________
The advice we're giving you is invaluable, that's why it's free
Experience is a good teacher, but the tuition can get expensive real fast

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 04-03-2018, 10:09 AM   #7
Full time employment: Posting here.
YVRRocketSurgery's Avatar
 
Join Date: Dec 2015
Location: Vancouver
Posts: 650
There's so much psychology and emotions at play.
On the surface, corrections/swings of around $50k don't freak me out, particularly since I'm still in accumulation mode. It does make me kind of "sad" but I try to remind myself that these are accumulation opportunities. What I'm concerned about is the whole sequence of return thing and taking a large six-digit hit early in retirement. For me not to sweat it, I'd like to build up a portfolio yielding close to our annual spend. That may not be the most optimal strategy but it'd probably be better in some ways for my mental health.
__________________
Target April 2022
"You don't save me. I save me."
YVRRocketSurgery is offline   Reply With Quote
Old 04-03-2018, 10:13 AM   #8
gone traveling
 
Join Date: Nov 2011
Location: The Deep South Bay
Posts: 744
Quote:
Originally Posted by YVRRocketSurgery View Post
There's so much psychology and emotions at play.
On the surface, corrections/swings of around $50k don't freak me out, particularly since I'm still in accumulation mode.

Thatís the key thing to consider, what mode are you in?
97guns is offline   Reply With Quote
Old 04-03-2018, 12:30 PM   #9
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 4,612
Quote:
Originally Posted by YVRRocketSurgery View Post
There's so much psychology and emotions at play. ...
Yes. I find myself "rooting" for down days, wanting to see the 20-30% (or more) drop that history would say is inevitable. I think this is because I'd like to see it over and done with instead of feeling that it is hanging over our heads. We're completely able to ride out a drop and a 3-5 year recovery without having to sell anything and we'll probably even buy some equities on sale. So I guess that kind of says we've "made it."
OldShooter is offline   Reply With Quote
Old 04-03-2018, 01:55 PM   #10
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 2,778
When I was still working I was much more emotionally vested in the value of the stock market. I was afraid that a major correction could have a major impact on my life by forcing out my retirement date.

Now that I have retired, there is a certain peace that goes along with it.

-gauss
gauss is offline   Reply With Quote
Old 04-03-2018, 02:26 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,161
Quote:
Originally Posted by OldShooter View Post
Yes. I find myself "rooting" for down days, wanting to see the 20-30% (or more) drop that history would say is inevitable. I think this is because I'd like to see it over and done with instead of feeling that it is hanging over our heads.
And here I was thinking I was the only one with this 'hope'!
(Plus a buying opportunity)
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 04-03-2018, 02:40 PM   #12
Full time employment: Posting here.
Lawrencewendall's Avatar
 
Join Date: Feb 2017
Location: Severn
Posts: 603
According to PC, I could take a 75% hit and still be in excellent shape. Bring it on!
Lawrencewendall is offline   Reply With Quote
Old 04-03-2018, 02:49 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,161
Our NW is good to know and necessary to be aware of but we're at the point where the income from our portfolio is what matters.

Dividends more than cover our living expenses and have been pretty stable over the past decade.

As I noted on another thread, I think this downdraft is a headline issue; let's see what earnings announcements over the next few weeks bring. Fidelity's Timmer noted: "If you overlay earnings & the SP500 over the last 100+ years there is basically a perfect correlation."
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 04-03-2018, 03:23 PM   #14
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 43,482
Quote:
Originally Posted by gauss View Post
When I was still working I was much more emotionally vested in the value of the stock market. I was afraid that a major correction could have a major impact on my life by forcing out my retirement date.

Now that I have retired, there is a certain peace that goes along with it.

-gauss
+1 Exactly! For me, anyway, now that I am retired it does seem a lot easier to feel peaceful when checking on what the market is doing.
__________________
"It ain't over till it's over"
- - - Yogi Berra (1973)
W2R is offline   Reply With Quote
Old 04-03-2018, 04:31 PM   #15
Full time employment: Posting here.
 
Join Date: Dec 2015
Posts: 714
Quote:
Originally Posted by marko View Post
Dividends more than cover our living expenses and have been pretty stable over the past decade.
Would love to hear more about your strategy (including what funds/stocks/bonds/cash investments you're using for Dividends) as we've been working on a similar plan..

I assume you pull the dividends even if there's a net loss on the fund for the year? I've thought about that, but pulling dividends out when the NAV has taken a hit still worries me a bit..

What investments do you like for constant, reliable dividends?
24601NoMore is offline   Reply With Quote
Old 04-03-2018, 07:39 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,161
Quote:
Originally Posted by RetireSoon View Post
Would love to hear more about your strategy (including what funds/stocks/bonds/cash investments you're using for Dividends) as we've been working on a similar plan..

I assume you pull the dividends even if there's a net loss on the fund for the year? I've thought about that, but pulling dividends out when the NAV has taken a hit still worries me a bit..

What investments do you like for constant, reliable dividends?
It's not very complicated. We have a bunch of MFs which pay typical dividends. Instead of re-investing them, I have them deposited into a short term bond fund. When my checking gets low, I transfer about six month's worth to checking.

I don't see any connection between the fund's NAV and 'pulling dividends out' or not. The dividends are typically unconnected to the NAV other than the adjustment to cover the dividend on that day. A bad/good month of NAV will generally yield the same dividend.

As far as what funds I have, there's no secret sauce. In general, my dividends pay just a little over 2% which many funds do ( a moderate stake in a High Yield fund helps push us over from an average of 1.7%); some years we'll also use our Cap Gains which can bring the whole payout to 5% but generally we'll reinvest the CGs.

That and our SS pretty much covers our expenses.

To be fair, we have a fairly high NW portfolio (where the 2% comes from) and moderate W/D rate so living off the dividends is not so hard. Living off of 2% dividends on a $500K portfolio would be another story.

You might check M*'s "Discuss" forum where they have a Dividend Investor group.

There's also discussion ad-nauseum here and elsewhere as to whether dividends or total return is a better strategy. It's what works for us...YMMV
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 04-03-2018, 08:26 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 27,515
Quote:
Originally Posted by Andre1969 View Post
... it got me worried a bit, about my own attitude. Here, I just "misplaced" $50,000, yet it seemed like nothing. Now, if I physically lost the money, and couldn't get it back, I'm sure I'd feel sick to my stomach. But I guess I've gotten used to the ups and downs of the market that a momentary loss like that, which I can get back over time, just doesn't seem like a big deal...
In the market routs of 2002-2003 and 2008-2009, I "lost" more than $500K each time. The 2nd time, it was a smaller percentage than the 1st (I was getting to be a better trader).

If it happens again, even if it's a smaller percentage yet, I won't like it, though I will not feel sick.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 04-05-2018, 11:11 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,161
Quote:
Originally Posted by NW-Bound View Post
In the market routs of 2002-2003 and 2008-2009, I "lost" more than $500K each time. The 2nd time, it was a smaller percentage than the 1st (I was getting to be a better trader).

If it happens again, even if it's a smaller percentage yet, I won't like it, though I will not feel sick.
This sort of reflects my OP last month asking if the 2008 Recession made one complacent.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 04-05-2018, 05:33 PM   #19
Thinks s/he gets paid by the post
UnrealizedPotential's Avatar
 
Join Date: May 2014
Posts: 1,126
As my portfolio rises I become accustomed to the amounts fluctuating on a daily basis. So as the amounts get bigger I become used to them and it's no big deal becomes it becomes the norm.
__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger

The first rule of compounding: Never interupt it unnecessarily. Charlie Munger
UnrealizedPotential is offline   Reply With Quote
Old 04-06-2018, 01:02 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,051
Send a message via Skype™ to kcowan
Quote:
Originally Posted by W2R View Post
+1 Exactly! For me, anyway, now that I am retired it does seem a lot easier to feel peaceful when checking on what the market is doing.
+2
I am completely at peace. Worst case is I have to die early. By not worrying, I am improving the odds of running out!

When friends talk about the latest stock tip, I ask them why they are still trying to make a big win? Leave that to my kids.
__________________

__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
A sign the market is at peak ?,Kiyosaki "workshops" are back Lakewood90712 FIRE and Money 2 04-07-2013 10:36 AM
"SOLD" sign posted 3/14 Dimsumkid Other topics 30 03-25-2011 09:36 AM
Do you sign your CC? mickeyd Other topics 19 09-03-2006 09:08 AM
Buying low or sign of things to come? Sisyphus Young Dreamers 17 07-24-2006 02:22 PM

» Quick Links

 
All times are GMT -6. The time now is 03:59 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×