HFWR
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
As soon as I get to $2-3m, I'm going all cash. That should happen in another 30 years. Is retiring at 84 considered early?
I'm with you.As soon as I get to $2-3m, I'm going all cash. That should happen in another 30 years. Is retiring at 84 considered early?
-- you just need to start with a larger nest egg. While $1M might do the trick if you invest aggressively in stocks, it might require $1.5 or even $2M to ensure a retirement based on ultra conservative investments.
While $1M might do the trick if you invest aggressively in stocks, it might require $1.5 or even $2M to ensure a retirement based on ultra conservative investments.
Unless they invested in real estate instead of stocks.I agree, but not many have enough disposable income to get to $2M without investing in stocks during their working lives.
That is the cruel Catch-22 here. Those in a financial position to be able to not have plans derailed by huge downturns are exactly the ones who don't need to take the market risk.Well, there's a catch-22 kind of thing here. If I had $4 million, I could just put it in cash, and I would never have to worry. But, if I had $4 million, I could afford the wild swings in value, so I may as well invest it aggressively.
Unless they invested in real estate instead of stocks.
you just need to start with a larger nest egg. While $1M might do the trick if you invest aggressively in stocks, it might require $1.5 or even $2M to ensure a retirement based on ultra conservative investments..
Well, there's a catch-22 kind of thing here. If I had $4 million, I could just put it in cash, and I would never have to worry. But, if I had $4 million, I could afford the wild swings in value, so I may as well invest it aggressively.
I think they're both extremes, too. And I'm saying that from the perspective of having a COLA pension dumbelled with an ER portfolio that's over 90% equities.Barring a catastrophic meltdown of the entire financial system -- rendering savings worthless -- I'm counting on a nestegg consisting of cash and cash equivalents (about $1.6M) plus a small cola'd pension ($20k/yr) to see me through to the end. The point is I don't believe either strategy (emphasizing stocks or cash) is necessarily superior -- there is aways a tradeoff. Retiring on a stock portfolio requires less capital, but also requires a stronger stomach. Retiring on cash significantly dampens the risk, but requires a substantially larger nest egg. Take your pick -- in my view both are legitimate strategies.
I
But the other side of the all-cash portfolio is my parents-in-law, who were born during the Depression. They didn't suffer (not more than any other Bronx kids, anyway), but they were raised by people who'd learned to squeeze nickels until the buffalo whimpered.
My FIL started his ER in 1994 with a large lump-sum buyout which he initally appeared to invest fairly conventionally in a mix of stock & bond mutual funds, CDs, & Treasuries. He even had some Berkshire Hathaway, although he sold it at $2500/share because it was "overvalued". By 2002, though, it became apparent that they were hugely risk-averse and had put their portfolio into 100% fixed-income & cash. The problem was that they were attempting to live off the interest/dividends (without touching the principal) at a time of record low interest rates.
.