S&P500 is saying Merry Xmas to all

[MBAVisionary]

There are many roads leading to Rome. Your parents are successful in their own way. If you manage to push them into an uncomfortable position (say owning significant buckets of equities), then when the market crashes (as it will at some point), they will be in hell. If I were you, I would leave them in their heaven (now) and be proud of them instead of changing their thinking. Listen to them as they are telling you they sleep better with their current portfolio. That is priceless IMO.

Well said. I don't pressure them to do anything they don't understand. I sometimes get told how this whole life insurance product they bought 30 years ago is still a good investment today. I politely disagree, show them the S&P average return rates since 1990, and we move on. Also have had a few discussions about how the friend / relative selling them some new way to invest is just out to make a quick buck. Once I show all the evidence on how it's a scam and reviews of frustrated customers they usually thank me and are disappointed in the person who tried to rip them off to begin with. It's worked about 5 times the past 20 years. I steered them away from crypto when everyone was talking about all the money they made with it.

I'm proud especially when I look back at all they've been through over the years. They didn't make excuses or give up when life challenged them. A lot of others would've used some of the situations as a reason to stop working and go on govt assistance.

 

[Koolau]

My parents thought they had plenty of money with about $250K in the bank (literally) plus house value. This was in the 90's. Both needed LTC (memory unit - serially.) Fortunately, mom had an LTC policy which helped a lot. Dad passed first and 10 years later mom passed. They (she) was literally down to the point that she could not have paid the next month's LTC bill had she lived that extra month. That's what you call cutting it close.

Unfortunately, their son (yours truly) didn't know much more than mom and dad about investing at that time. By the time I started looking to see what might get them through the financial crisis, it was too late to become aggressive. After all the dust had settled, I think there was about $2K left over - which I took as my "fee" for 10 years of w*rk on their finances (selling house, visiting the CPA for taxes, etc.) not to mention running them to doctors/dentists, etc. IOW I cut my big sis out without a penny (as she'd never lifted a finger to help.)

Better lucky than good, I always say though YMMV.

 

[kgtest]

When you hit your first million - it gets even more unreal.



Great expense ratio, by the way!

RIGHT! I count the days it takes to get another 100k in the portfolio. So far the quickest 100k came at 148 days, followed by 166 days. Tomorrow will be another 165 days from the last time I first hit this past +100k milestone... and I am not quite at it yet.

But yeah counting the duration between 100k milestones is fun, especially during the accumulation phase since you work so hard for it!

 

[kgtest]

My dad was a saver, mom a spender. So I inherited that haha, for better or worse. I am an EARNER above all other which helps support saving AND spending. DW is a good saver and EARNER and not much of a spender. SO having two saver's AND earners has helped us tremendously.

I've help my dad avoid quite a large tax torpedo, and also helped him physically and with backoffice stuff managing some rental properties throughout the years. Lots of trial by error. A little bit of insight from peers, and a LOT of help from this forum to get us where we are. ER forum has probably saved us at least 100k+ in tax torpedoes for 1st gen, even more for 2nd and 3rd generations getting so many mega roth conversions executed as efficiently as possible.

I'm not the most educated person in terms of college coursework, I have a little. Both my late and still living sisters have Master's degrees but not quite the earning power as their lil bro.

I got a little lucky with the hobbies I chose as a kid, and probably the timing of the technology revolution a bit.

BUT I did hustle and GRIND a lot, to make up for lost time. I had not a dime to my name when I was 26...but did start to build equity in a RE investment at that time and started 401k contributions. IT TOOK a LOOOOONG time to save my first 100k. I remember when I finally had access to my own 401k and enough money to even bother saving at age 26, I was only earning about $34,000 a year.

Looking back at ALL SS reported earnings, I am over 1.5MM now with 26 yrs reporting. Had I saved sooner, more often, and much more, sure maybe I could be retired by now but a guy has to live a little too. Retiring at 42 might not be the greatest plan for a guy like me. Give it another 8 to 10yrs.

 

[2retireearly]

My Investment Advisor (that I pay for) has me in a Moderately Aggressive model, so I didn't get 24%, I only got 10%. He tells me I am doing great, meeting all my needs, without taking much risk...but a few years ago, when I did all my investment choices myself, I would have had a big gain! But, I would have lost my mind if there had been a reversal of it, too. So no 24% for me.

 

[Dtail]

My Investment Advisor (that I pay for) has me in a Moderately Aggressive model, so I didn't get 24%, I only got 10%. He tells me I am doing great, meeting all my needs, without taking much risk...but a few years ago, when I did all my investment choices myself, I would have had a big gain! But, I would have lost my mind if there had been a reversal of it, too. So no 24% for me.

In Fidelity for example, a moderately aggressive AA would be around 40% stock exposure. With that allocation and Fixed Income getting 5%+ without any real risk, a 10% return would not have worked for me this year.
Are you familiar with all the investments he has you in?

 

[2retireearly]

In Fidelity for example, a moderately aggressive AA would be around 40% stock exposure. With that allocation and Fixed Income getting 5%+ without any real risk, a 10% return would not have worked for me this year.
Are you familiar with all the investments he has you in?

Ok, I sound like a ditz...I WAS in Moderate Aggressive. I am NOW in Moderate Growth and Income.
Because I am far above my target my advisor doesn't see the need to put me into anything more risky. I used to work on these products for a living, as an Actuarial Programmer and Analyst ( of the numbers, and programming, not the appropriateness of each of the portfolio models for each client). I am using a large company, which has good and bad reviews, but I notice most all have good and bad reviews. My mortgage used to be with them, before I paid it off 5 years ago, so I use them for my Retirement IRA.
If I told my guy to change my investments into a more risky (and hopefully higher ) grouping, he would. But he keeps telling me i don't need it, for what my needs and wants are. But..my wants could get pretty greedy if I did make a ton of money. but, my risk tolerance is low...it used to be high, and when I did my investments myself, I made quite a large return. I am now 66, single, been retired since i was 55, so, maybe I should just keep accepting mediocre. But, my ears are open for any discussions.

 

[ut2sua]

... But, my ears are open for any discussions.

There is no point playing Monday quarter-back. There are pros and cons in most asset allocations. Your 2023 AA gave you what it gave you. Most folks don't get 24% since that requires a 100/0 AA which most don't have.
I would suggest asking these questions for future years:
1- What investment paper loss can you tolerate? If you can tolerate 20% paper loss of your investment then you can have 40% of stock (assuming a 50% drop). I ask myself this question fairly often. The answer needs some imagination on how I will react once the paper loss comes in.
2- What to do with the non-stock portion of your portfolio. Right now, that is a much better (easier) things to plan given that interest rate is ~4% (used to be 0.25% not long ago) for many things. CDs, Treasuries and other things will yield some meaningful returns
3- How much is your investment adviser is charging you? 2% of a 1M is $20000 as an example. Keep in mind, having an adviser is an option that carries a cost to it.
Best of luck to you.

 

[Koolau]

other things will yield some meaningful returns
3- How much is your investment adviser is charging you? 2% of a 1M is $20000 as an example. Keep in mind, having an adviser is an option that carries a cost to it.
Best of luck to you.

Yeah, unless the adviser is willing to make up my losses, I can win or lose on my own. I tried advisers and I found myself much less expensive. YMMV

 

[RetiredHappy]

My former FA at ML was charging us 0.8% for about 10 years and when we decided to DIY, he was willing to drop to 0.6%. We pointed out several reasons to him why we wanted DIY, including the fact that they incurred unnecessary large capital gains in my taxable brokerage account which I would be paying taxes on. Back then, his philosophy was "my job is not to get you rich, but to ensure that you are not poor." Our mix with ML was 60-40.

Fast forward 2 years later, my FL brokerage account is "Most Agressive" at 98-2. My husband's closer to 95-5. When we had the large drop in 2022, I simply not log into my account to look at the balance. Ignorance is bliss. Now we are still down about half a million from high in 2021 but then we have also drawn about that amount for living expenses. No complaints.

 

[RetirementNinja]

I was amazed to find my specific balance of funds made me 38% in 2023! it was a great year. Good luck to all, I think 2024 will easily be a 30-40% year again.

Wow, stock is setting up to have a great year.
I recalled starting the year with the wishful thinking to have equity going back to the 1/2022 peak, and we are very close to that. 24% of gain so far for s&p500. Of course, things can go back down in a flash any time, but for now, congrats to all who has owned US equity this year.
After seeing the gain in 2020 (Covid19) and this year (which is supposed to be a bad year for stock due to interest rate hike etc.), I have given up all hope on my ability to predict the stock market ups and downs. J. Bogle's is so right and his message is still extremely helpful to individual investors like me.

 

[Koolau]

Back then, his philosophy was "my job is not to get you rich, but to ensure that you are not poor."

That's pretty much my philosophy and I can do that myself. Good for you, firing your FA.



I DO approve of fee-for-service help of a FA (IF you find a good one.)