Hi Guys, first time member/poster. I've been looking for a resource like this for a long time. I am the type of person who refuses to pay financial planners, stock brokers, etc,. as my personality is one where I feel like I can learn to do everything as good as others (for better or worst). As a result, I've virtually had zero guidance ever since I started investing around age 20 (in 2008 I felt there was no way to lose). It wasn't much, but it helped us buy our first house. I was very conservative initially when I didn't have much money, but ever since passing ~500k I've been taking some huge risks (more on this later). I read a lot on the Internet and watch market news, but thats about it for expertise. My theory for a while (6-7 years ago) was that investing in established companies who pay dividends was a pretty solid strategy, but I convinced myself I needed to take more risk.
Since about 23 I started my own contracting business in IT security (mostly contracting). Over the course, my wife and I have saved about 1 million in our various retirements accounts and taxable brokerage. I took quite a bit of heat early (first 2-3 years of biz) when working the 14 hour days and neglecting our early marriage but I told her it would pay off and that I'd rather work hard when we have no children and be able to ease off the gas to enjoy life when we do. She agreed, but it was not easy, this was never possible without her support. I also wanted to capitalize on a young person's ability to really burn the oil (sleep ~5 hours/night over and over again), I knew it wasn't sustainable.
I recently turned 30, we both work and have no children + mortgage, but kids are coming up very soon (next year). We have been maxing out any possible retirement plan for a while now, her roth 401k, my SEP IRA, 529 college savings plans (pay for kids college someday), HSA (been maxing that for close to 7 years and never touched it). All of my extra savings goes straight into my taxable brokerage account while I keep some on-hand cash (~70k) in a money market account for emergencies. I'm self employed and need some cash buffer. We have some real old IRA's before we passed the income restriction, not much in there. We are in the 40% tax bracket now + I pay the self employment tax, so I do literally anything to sock money away and avoid taxes at this stage in our life.
If I counted up our homeowner equity, cars, assets we are probably closer to 1.5 million net worth but I'd rather not count anything that isn't liquid. With the exception of my wive's firm-sponsored 401k, all of our savings is in stocks and I mean everything. I'm a big risk taker, after having some success with early consulting biz I did a startup which is bordering on failure now (currently in talks to potentially sell but its unlikely). I lost about 40k and thousand hours in time (when you are a consulting time is $$). I also lost about 50k in the stock market in last 2-3 years from a bad bet on an IT company and the melt down of oil stocks (which I originally thought were safe 10 years ago). Like I've said, I've become addicted to taking larger risks now that I have more money. As a result, I own nearly 100k in Amazon stock. I made a lot of money early on through that but now it looks insane to even say. I just bought equifax stock yesterday. Some of it is my personality, but I also think I have become numb to losing money if my bets don't pay off.
All of my current holdings are picked stocks, mostly large companies, 50% of which pay dividends, the rest are essentially tech stocks (microsoft, apple, tesla, amazon). I believe tech is the future for all industries so I don't necessarily view this as not diversified. I am also heavy on pharma and robotics. I also felt that true diversification was too low risk. I don't trust myself to pick stocks much anymore except large entities that have a low likelihood of failing. I don't really know how much I've made on my holdings over the years because I hardly sell when anything is up, I have an impulse to hold on to everything forever. But it's fair to say that through a failed startup and some bad stock pics I've probably lost 100k in the last 4-5 years. Granted, I've probably made over 100k in returns as well but I have not realized/sold (thank you NextEra/Amazon).
My question is, am I being too wreckless? I'm starting to feel like I've taken "enough" risks at this point in my life and should start coasting to preserve. If I lose a ton of money I will be severely depressed and lately I have become afraid of losing what I worked so hard for. I recently debated municipal bonds and selling a lot of my stocks in favor of index ETFs so that I can simply stop worrying. I'm at the point now that I am personally managing so much money that I feel like I should get some help, but I also don't trust brokers who make money off of my money. We have also had some lifestyle creep, range rover-style creep which has scared me quite a bit. I've realized it and trying to prohibit. Although, part of me likes to keep throwing the bone out further and if that means I need to buy something to keep motivating myself then I'll do it. Regardless, I know its not a smart choice. I somewhat refuse to pay financial planners because I think I know more than them (stubborn).
Is it safe to say I should scale back after having taken so many risks already? startups, big stock pick bets failed, etc. OR should I keep the pedal to the metal? I was a big believe in no pain no gain, must take risks to "get ahead" and avoid regrets BUT at some point when is enough enough?
I don't want to retire anytime soon, I mostly work from home and contract. I could do this forever since it is basically my own schedule. I love what I do and it's not work. I figure that about 1 million invested @ age 30 is almost enough to throw the towel in already and easily retire around 50 max, but that is not my style.
Thoughts:
1. Should I move some retirement out of stocks and into ETFs or something safer? Is 100% stocks sane for our net worth?
2. Any investment vehicles I am missing here? We are in the top tax bracket + about another 15% self employment, its insane. I pay more than 130k in taxes.
3. Should I try to avoid dividend stocks in my taxable brokerage account? I was moving dividends to nontaxable because of how high our tax rate was, it was pissing me off to pay income tax and unqualified dividends and lose our on full compounding due to paying cap gains. Are holding all dividend stocks in retirement still a sound strategy or is that an old fools game from 20-30 years ago?
4. Am I crazy to hold so much tech? I like risks and this is one bet I am confident in but I don't want to destroy our life. If Amazon goes bankrupt and shuts down tomorrow I'll be in a ball in a corner.
5. Is some lifestyle creep good for motivation? Or should it all be killed with fire? We moved out of our old house and bought something about double the price which is much nicer, drive nice cars, etc. Part of me thinks you need to walk the walk to run with certain crowds, e.g., biz partner comes over for dinner your house should be nice to rationalize your pay, but another part is depressed about the waste. Should I be reaping rewards from our success or push that off to 50? What if we die early? I started to become afraid of working ALL the time these days and telling my wife "we will enjoy life later" because you just don't know what can happen before "later" comes. I feel like we should enjoy some sucess but also feel stupid spending money our us when we don't even have children yet nor do we know what complication may lay ahead. I'm a huge car guy and I have a very expensive toy but it makes me feel guilty to own at this age.
6. If you were me, would you go into conservation mode provided the risks already taken? We plan to have ~3 children and my wife will stop working soon. I don't think I can afford to take many more big risks nor will I feel comfortable post-children.
Thanks all! Apologies for the length and rambling.
Since about 23 I started my own contracting business in IT security (mostly contracting). Over the course, my wife and I have saved about 1 million in our various retirements accounts and taxable brokerage. I took quite a bit of heat early (first 2-3 years of biz) when working the 14 hour days and neglecting our early marriage but I told her it would pay off and that I'd rather work hard when we have no children and be able to ease off the gas to enjoy life when we do. She agreed, but it was not easy, this was never possible without her support. I also wanted to capitalize on a young person's ability to really burn the oil (sleep ~5 hours/night over and over again), I knew it wasn't sustainable.
I recently turned 30, we both work and have no children + mortgage, but kids are coming up very soon (next year). We have been maxing out any possible retirement plan for a while now, her roth 401k, my SEP IRA, 529 college savings plans (pay for kids college someday), HSA (been maxing that for close to 7 years and never touched it). All of my extra savings goes straight into my taxable brokerage account while I keep some on-hand cash (~70k) in a money market account for emergencies. I'm self employed and need some cash buffer. We have some real old IRA's before we passed the income restriction, not much in there. We are in the 40% tax bracket now + I pay the self employment tax, so I do literally anything to sock money away and avoid taxes at this stage in our life.
If I counted up our homeowner equity, cars, assets we are probably closer to 1.5 million net worth but I'd rather not count anything that isn't liquid. With the exception of my wive's firm-sponsored 401k, all of our savings is in stocks and I mean everything. I'm a big risk taker, after having some success with early consulting biz I did a startup which is bordering on failure now (currently in talks to potentially sell but its unlikely). I lost about 40k and thousand hours in time (when you are a consulting time is $$). I also lost about 50k in the stock market in last 2-3 years from a bad bet on an IT company and the melt down of oil stocks (which I originally thought were safe 10 years ago). Like I've said, I've become addicted to taking larger risks now that I have more money. As a result, I own nearly 100k in Amazon stock. I made a lot of money early on through that but now it looks insane to even say. I just bought equifax stock yesterday. Some of it is my personality, but I also think I have become numb to losing money if my bets don't pay off.
All of my current holdings are picked stocks, mostly large companies, 50% of which pay dividends, the rest are essentially tech stocks (microsoft, apple, tesla, amazon). I believe tech is the future for all industries so I don't necessarily view this as not diversified. I am also heavy on pharma and robotics. I also felt that true diversification was too low risk. I don't trust myself to pick stocks much anymore except large entities that have a low likelihood of failing. I don't really know how much I've made on my holdings over the years because I hardly sell when anything is up, I have an impulse to hold on to everything forever. But it's fair to say that through a failed startup and some bad stock pics I've probably lost 100k in the last 4-5 years. Granted, I've probably made over 100k in returns as well but I have not realized/sold (thank you NextEra/Amazon).
My question is, am I being too wreckless? I'm starting to feel like I've taken "enough" risks at this point in my life and should start coasting to preserve. If I lose a ton of money I will be severely depressed and lately I have become afraid of losing what I worked so hard for. I recently debated municipal bonds and selling a lot of my stocks in favor of index ETFs so that I can simply stop worrying. I'm at the point now that I am personally managing so much money that I feel like I should get some help, but I also don't trust brokers who make money off of my money. We have also had some lifestyle creep, range rover-style creep which has scared me quite a bit. I've realized it and trying to prohibit. Although, part of me likes to keep throwing the bone out further and if that means I need to buy something to keep motivating myself then I'll do it. Regardless, I know its not a smart choice. I somewhat refuse to pay financial planners because I think I know more than them (stubborn).
Is it safe to say I should scale back after having taken so many risks already? startups, big stock pick bets failed, etc. OR should I keep the pedal to the metal? I was a big believe in no pain no gain, must take risks to "get ahead" and avoid regrets BUT at some point when is enough enough?
I don't want to retire anytime soon, I mostly work from home and contract. I could do this forever since it is basically my own schedule. I love what I do and it's not work. I figure that about 1 million invested @ age 30 is almost enough to throw the towel in already and easily retire around 50 max, but that is not my style.
Thoughts:
1. Should I move some retirement out of stocks and into ETFs or something safer? Is 100% stocks sane for our net worth?
2. Any investment vehicles I am missing here? We are in the top tax bracket + about another 15% self employment, its insane. I pay more than 130k in taxes.
3. Should I try to avoid dividend stocks in my taxable brokerage account? I was moving dividends to nontaxable because of how high our tax rate was, it was pissing me off to pay income tax and unqualified dividends and lose our on full compounding due to paying cap gains. Are holding all dividend stocks in retirement still a sound strategy or is that an old fools game from 20-30 years ago?
4. Am I crazy to hold so much tech? I like risks and this is one bet I am confident in but I don't want to destroy our life. If Amazon goes bankrupt and shuts down tomorrow I'll be in a ball in a corner.
5. Is some lifestyle creep good for motivation? Or should it all be killed with fire? We moved out of our old house and bought something about double the price which is much nicer, drive nice cars, etc. Part of me thinks you need to walk the walk to run with certain crowds, e.g., biz partner comes over for dinner your house should be nice to rationalize your pay, but another part is depressed about the waste. Should I be reaping rewards from our success or push that off to 50? What if we die early? I started to become afraid of working ALL the time these days and telling my wife "we will enjoy life later" because you just don't know what can happen before "later" comes. I feel like we should enjoy some sucess but also feel stupid spending money our us when we don't even have children yet nor do we know what complication may lay ahead. I'm a huge car guy and I have a very expensive toy but it makes me feel guilty to own at this age.
6. If you were me, would you go into conservation mode provided the risks already taken? We plan to have ~3 children and my wife will stop working soon. I don't think I can afford to take many more big risks nor will I feel comfortable post-children.
Thanks all! Apologies for the length and rambling.
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