Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

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solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 7:00 pm

This is fairly long. Please feel free to skip sections and read the action plan, questions, or other at the end! Summary and asset allocation may also be useful. And feel free to answer just one or two questions, I certainly don’t expect anyone to answer them all!

Background:

Current age: ~25

Retirement age: ~60-65

Taxes: Single Filing Status
25% Margin Tax Rate, 14.5% Effective. (This will change in ~6 months - year)

Curent Investment Balance:

Tax advantaged: Total = 20k

8k in employer 2060 Target Retirement Plan. 90/10 stock bond ratio. (No longer work here)
12k in Roth IRA (same 2060 Target Retirement Plan). 90/10 stock bond ratio

Taxable: Total = 0k (Just Opened)

Outstanding Debt:

Credit Card Debt: 1k (Will pay this off before my next due date. It says I have 0 due though?)

Emergency Fund:

25k. Which I have. I just need to transfer it to my Emergency Fund accounts.

State: CA or NJ

Investment Philosophy:

Stick it out. Keep it simple. Don’t get ahead of yourself. But whatever you do, just don’t avoid it.

Risk Willingness:

As long as I can provide for myself and see a healthy amount of cash in my traditional checking/ emergency accounts then I’m moderate on risk. I don’t have as much safety nets to rely on besides my education. However, I probably wouldn’t feel too bad during a stock market crisis if I know that I did not go above my savings/retirement pre-determined maximums. With that being said, “Do you have the fortitude and discipline to stick with your predetermined investment strategy when the going gets rough?” The answer is no. I don’t want the going to get rough in my day to day life. If my investments are doing bad and it’s not affecting my daily life, then it won’t be too much of a concern. Although I aim for this to be a stable investment, I’m thinking of it as a gamble anyway because it’s not in my bank account. And anything not in my bank account, for better or for worse, is going to feel like a gamble to me and not guaranteed to come back.

Priorities:

25-35
Be excellent to myself in the present. Be great to my future self. And to be good to others.

35-55
Be great to myself in the present. Be excellent to my future self. And to be good to others.

55 - 65
Be great to myself in the present. Be great to my future self. And to be great to others.

65 onwards
Be excellent to myself in the present. Be good to my future self. And to be great to others.

Budget:

Yearly Direct expenses:

Comes to ~2375 month, which equals 28500 a year to have a comfortable living style

Yearly Saving Expenses (excluding emergency fund which I will assume is there)

Comes to ~645 month, which equals 7750 a year (5.5k roth, 2k taxable, 250 charity) (When salary increases, see if you are able to continue saving 17.5% min to 25% max of pretax income. Try not to go above 25%)

Total Yearly Budget: (direct + savings. at least up to 30~35, before I have kids)

28500+7750 = 36,250.

Summary:

10k in easily accessible bank account
15k in emergency fund (10k high yield savings, 5k I-Series bond)
5500 yearly Roth IRA (retirement)
Everything else in personal taxable investments. Maximum: 10k yearly, Minimum: 2.25k (At least up to age 30-35). Only put in what I feel comfortable with.
Expecting higher salary as I age in my career, so dollar amounts may change to take into account higher earnings. Ballpark 17.5% min to 25% max savings

Asset allocation:

Stick to your minimum 7750 savings a year despite market downturns. Do age - 10 = bond at multiples of 5. 85/15 for ages 25-30. 80/20 for ages 30-35, etc... Diversification. Rebalance in January. Every 5 years, perhaps rethink asset allocations and see if your risk perspective has changed.

Funds/Accounts:

Stick to one brokerage bank. I like the three fund idea and the ability to choose my asset allocations, and it doesn’t seem too hard. Just rebalance each year.

Target Allocation (need help on this?)

85/15 for ages 25-30

Total Stock Market Index Fund OF 55% IN Tax Advantaged then taxable (3.)
Total International Stock Market Index Fund OF 25% IN Taxable (2.)
Total Bond Fund OF 20% IN Tax Advantaged (1.)

Other

I am serious about investing in my charity efforts. I’m thinking it can be invested for 5-10 (or more) years until I start using some balance to give back. So long term, I need to determine what my vision for my charitable financial behavior will be and if I should just view it as a percentage of my total retirement/savings or keep it seperate. The $250 is a starting point, but once my salary becomes more stable and increases, I want it to be a higher proportion. Any tips on how to delineate charity expenses/investments. Also if I were to delineate it, I wouldn’t mind if I put a fraction towards medium to high risk categories.

Also, my behavioral pattern is that I tend to not want to muddle with things because I’m afraid it’s going to ruin all the hard work I put in. Thus, I don’t want to reach 63 and obtain my target, and then realize that I don’t want to start cashing in on my investments. I have a bit of fear now that all this money is going to go to waste because I’m going to be afraid to use it, and then I’m just going to die resulting in all this effort and delayed present gratification being for no darn reason! So, I 100% don't want to keep on pushing rewards into the future and future, because when it comes time to use it, I may not be as willing, or physically capable, or it won’t be as fun. I want to make sure I strike a good balance and that I’m treating myself excellent in the present, in addition to making sure I actually treat myself well in the future. In other words, I want to LIVE for today. And I hope my budget and priorities can allow this.

Also, I feel like I’m not managing/conceptualizing money correctly. After reading a couple of threads on various forums, it appears that <10k is a big deal in debt (say on your credit card). But it’s not uncommon for me to have low ks on there, and I just pay it off when I want to. Also, I don’t mind paying off student loans fully at one go, even when I don’t have to since it may be deferred. Or, for example, when I realized that most of my money was being put towards interest, so I just decided to start clearing out individual loans one at a time each month because I had no idea the proportions were so high. I imagine this can be the beginnings of risky behavior, that sometimes I phase my payments (accumulating negligible interest), or sometimes I just pay fully with no clear reasons besides perhaps thinking that I want to get rid of that specific debt today because I'm tired of seeing it. I have no idea how people manage their money, so should I be concerned more about debt and these payment patterns?

Action plan (How you can help, answer some of these…Tackling one or two answers is fine! )

1. Leave 8k in employer plan? I have a flexible account that would be able to do my 3 fund strategy. However, I may just leave it where it is until I am full time employed again and then add it to my new employer plan. I also might stick with the 2060 retirement scheme on there, which is a bit aggressive for me, but at least I’m sharing my risk with the employer’s free money. So, I can stomach this, I think. How likely will this become an unwise decision in the future?
2. Should I begin to restructure my 12k in my Roth IRAs? Age - 10 in bonds. 85/15 scheme as outlined above. Is this even necessary now since it's in the target retirement fund? See #9 and #10 for related questions.
3. Do you think that my strategy is sustainable when you consider my behavioral patterns and priorities? What do you notice?
4. My current plan is to have as an emergency fund ~10k in checking, 10k in high yield savings, and 5k in I bond… I know, this may sound like a whole lot of capital doing nothing, but previously it was more risk averse. I modified it to buy 5k in I-Bond so that it can be less cash equivalents and more interest gaining with acceptable access. I wouldn’t be able to sleep at night thinking that I have no money, because I’ve decided to gamble on the rest.
5. Any advice, suggestions, or comments is truly helpful. I am new to this forum and investing.

Newbie questions:
7. Is it easy to withdraw or transfer money from taxable brokerage account? Is this considered cash ($$) when it’s in my settlement fund?
8. Can someone explain in simple terms the two components of why stocks are tax efficient. If I recall correctly, stocks are tax efficient because 1.) most of its dividends (a portion of the profits that the company agrees to pay its stock holders) are less than some threshold which qualifies it to a lower 15% rate. And 2.) It defers your taxes. So, if buy stock now, and it increases from $10 to $20, so a whole 100% increase (capital gain = $10?). If I assume the dividends are 10c then, I pay taxes on $9.90 when I sell? So, I pay taxes one time when I attempt to liquidate. So, this is preferable, why??? What’s exactly the alternative?
9. In my Roth IRA, would I have to sell my target retirement fund in order to buy the three funds that I want. How exactly does that work? What is exchanging?
10. When I’m rebalancing, and my stocks did well and pushed me up to 90/10 and not 85/15, would I have to sell 5% stocks and put that into bonds. Or can I just buy more bonds when I do my yearly contributions. Which is a better strategy? Selling then buying? Or just using contributions?
11. I thought I understood yesterday the folly of 1. Attempting to predict market and 2. Chasing past winners. Plus, to avoid selling low and buying high. But, now today, it’s hard to wrap my self on the last advice. I know important factors in success and return in the market is your total time in the market + compounding interest + beating inflation + costs low + diversification. And on the forum, there’s a lot on here about weathering the storms and sticking to your asset allocation: permanence is key. But can someone explain again, why it is so bad if you see there’s a current stock crash happening (or on the verge of happening), why is it bad to sell a portion of your stocks (minimize loss) and then when it’s at the lowest, or right before it hits the bottom, buy back all your stocks again. Wouldn’t the net loss in that scenario be lower than if you were just to leave everything in? I thought I understood it after watching the videos, but I guess the rationale behind that aspect isnt 100% clear. Because in that scenario wouldn't you be selling higher and buying lower?

If you made it this far, thanks for your time.
Last edited by solarascent on Wed Dec 27, 2017 11:33 pm, edited 1 time in total.

mortfree
Posts: 852
Joined: Mon Sep 12, 2016 7:06 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by mortfree » Wed Dec 27, 2017 7:21 pm

4. EF: I wouldn’t put 10k in checking. I would have it in online savings account too. You should be able to transfer that fairly quickly.

Settlement account is typically cash that you can transfer out.

10. If AA gets out of whack you could buy more bonds (using your example of 90/10).

If you don’t want to have to worry about rebalancing with 3-fund you could always invest in life strategy funds or balanced index fund offered by vanguard (Roth account)

Is there a local credit union where you can get an account if you don’t like BofA?

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 7:30 pm

mortfree wrote:
Wed Dec 27, 2017 7:21 pm
4. EF: I wouldn’t put 10k in checking. I would have it in online savings account too. You should be able to transfer that fairly quickly.
Settlement account is typically cash that you can transfer out.

10. If AA gets out of whack you could buy more bonds (using your example of 90/10).

If you don’t want to have to worry about rebalancing with 3-fund you could always invest in life strategy funds or balanced index fund offered by vanguard (Roth account)

Is there a local credit union where you can get an account if you don’t like BofA?
Hm... I'll keep this in mind. I guess, I just got to get used the idea of not seeing my money in one place.

Credit unions aren't too preferable because I don't know where I'll be located in 6-12 months. I want a bank that's easy, accessible, and far-reaching, but doesn't play with your money like BoA.

I thought the balanced index fund was 50/50? And the life strategy funds is also a good idea. But, then I was thinking that it may take more work to rebalance since it will be spread out in two accounts. My roth and my taxable. And then from what I understand, bonds shouldn't be in taxable.

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BolderBoy
Posts: 3863
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by BolderBoy » Wed Dec 27, 2017 8:09 pm

solarascent wrote:
Wed Dec 27, 2017 7:30 pm
Credit unions aren't too preferable because I don't know where I'll be located in 6-12 months. I want a bank that's easy, accessible, and far-reaching, but doesn't play with your money like BoA.
So you move and get a new credit union. What do you mean by "far reaching"? Are you a vet (USAA Savings Bank)?
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

mortfree
Posts: 852
Joined: Mon Sep 12, 2016 7:06 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by mortfree » Wed Dec 27, 2017 8:16 pm

solarascent wrote:
Wed Dec 27, 2017 7:30 pm
mortfree wrote:
Wed Dec 27, 2017 7:21 pm
4. EF: I wouldn’t put 10k in checking. I would have it in online savings account too. You should be able to transfer that fairly quickly.
Settlement account is typically cash that you can transfer out.

10. If AA gets out of whack you could buy more bonds (using your example of 90/10).

If you don’t want to have to worry about rebalancing with 3-fund you could always invest in life strategy funds or balanced index fund offered by vanguard (Roth account)

Is there a local credit union where you can get an account if you don’t like BofA?
Hm... I'll keep this in mind. I guess, I just got to get used the idea of not seeing my money in one place.

Credit unions aren't too preferable because I don't know where I'll be located in 6-12 months. I want a bank that's easy, accessible, and far-reaching, but doesn't play with your money like BoA.

I thought the balanced index fund was 50/50? And the life strategy funds is also a good idea. But, then I was thinking that it may take more work to rebalance since it will be spread out in two accounts. My roth and my taxable. And then from what I understand, bonds shouldn't be in taxable.
VTI/VTSAX in taxable and life strategy in Roth. May also want international in taxable too. Should be able to balance that out (or close enough) to desired AA.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 8:30 pm

mortfree wrote:
Wed Dec 27, 2017 8:16 pm
solarascent wrote:
Wed Dec 27, 2017 7:30 pm
mortfree wrote:
Wed Dec 27, 2017 7:21 pm
4. EF: I wouldn’t put 10k in checking. I would have it in online savings account too. You should be able to transfer that fairly quickly.
Settlement account is typically cash that you can transfer out.

10. If AA gets out of whack you could buy more bonds (using your example of 90/10).

If you don’t want to have to worry about rebalancing with 3-fund you could always invest in life strategy funds or balanced index fund offered by vanguard (Roth account)

Is there a local credit union where you can get an account if you don’t like BofA?
Hm... I'll keep this in mind. I guess, I just got to get used the idea of not seeing my money in one place.

Credit unions aren't too preferable because I don't know where I'll be located in 6-12 months. I want a bank that's easy, accessible, and far-reaching, but doesn't play with your money like BoA.

I thought the balanced index fund was 50/50? And the life strategy funds is also a good idea. But, then I was thinking that it may take more work to rebalance since it will be spread out in two accounts. My roth and my taxable. And then from what I understand, bonds shouldn't be in taxable.
VTI/VTSAX in taxable and life strategy in Roth. May also want international in taxable too. Should be able to balance that out (or close enough) to desired AA.
The acronyms aren't totally clear to me. VTI stands for total index and VTSAX is what?

mortfree
Posts: 852
Joined: Mon Sep 12, 2016 7:06 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by mortfree » Wed Dec 27, 2017 8:36 pm

solarascent wrote:
Wed Dec 27, 2017 8:30 pm


The acronyms aren't totally clear to me. VTI stands for total index and VTSAX is what?
Total stock from vanguard is: VTSAX is mutual fund (admiral shares) and VTI is the exchange traded fund (ETF). VTSMX is also the mutual fund if you have less than 10k.

I like ETFs. Others seem afraid of them.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 8:41 pm

BolderBoy wrote:
Wed Dec 27, 2017 8:09 pm
solarascent wrote:
Wed Dec 27, 2017 7:30 pm
Credit unions aren't too preferable because I don't know where I'll be located in 6-12 months. I want a bank that's easy, accessible, and far-reaching, but doesn't play with your money like BoA.
So you move and get a new credit union. What do you mean by "far reaching"? Are you a vet (USAA Savings Bank)?
Well, I want to be able to enter a bank in a different state. So, if I need a quick cash withdrawal and what not or had a question, I want to be able to find my bank locally.

I guess, I have to read up on credit unions as I'm not sure what they are in the first place. But if it involves switching credit unions every time I move, then that's not a good option for me, because I'm lazy and like to keep things simple.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 8:45 pm

mortfree wrote:
Wed Dec 27, 2017 8:36 pm
solarascent wrote:
Wed Dec 27, 2017 8:30 pm


The acronyms aren't totally clear to me. VTI stands for total index and VTSAX is what?
Total stock from vanguard is: VTSAX is mutual fund (admiral shares) and VTI is the exchange traded fund (ETF). VTSMX is also the mutual fund if you have less than 10k.

I like ETFs. Others seem afraid of them.
Hm.. I avoided reading about ETFs because there was just too much investment info to process. All I know is that I believe Vanguard Retirement Funds start switching to ETFs during the later years as if I remember correctly, it offers more inflation protection? Anyway, my 401k will be left in target retirement funds, so I want to avoid ETFs in my primary roth/taxable and keep things simple on my end. But thank you for your advice

mortfree
Posts: 852
Joined: Mon Sep 12, 2016 7:06 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by mortfree » Wed Dec 27, 2017 9:16 pm

solarascent wrote:
Wed Dec 27, 2017 8:45 pm
mortfree wrote:
Wed Dec 27, 2017 8:36 pm
solarascent wrote:
Wed Dec 27, 2017 8:30 pm


The acronyms aren't totally clear to me. VTI stands for total index and VTSAX is what?
Total stock from vanguard is: VTSAX is mutual fund (admiral shares) and VTI is the exchange traded fund (ETF). VTSMX is also the mutual fund if you have less than 10k.

I like ETFs. Others seem afraid of them.
Hm.. I avoided reading about ETFs because there was just too much investment info to process. All I know is that I believe Vanguard Retirement Funds start switching to ETFs during the later years as if I remember correctly, it offers more inflation protection? Anyway, my 401k will be left in target retirement funds, so I want to avoid ETFs in my primary roth/taxable and keep things simple on my end. But thank you for your advice
Incorrect but you’re still learning. Keep reading and hopefully others can give better advice

TG2
Posts: 190
Joined: Sat Nov 25, 2017 6:50 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by TG2 » Wed Dec 27, 2017 9:27 pm

Priorities:
25-35
Be excellent to myself in the present. Be great to my future self. And to be good to others.
If you truly wish to maximize utility, I would consider this backwards. Time is the greatest asset you have. Being excellent to your future self (saving and investing as much as you reasonably can) when young will have far greater benefit than would starting to get serious about it later. If you have both time and money working for you longer, you can be excellent to your present self for a longer period of time. Besides, it's easy to maintain a less luxurious lifestyle if you have not yet become accustomed to it. Spending a lot more on yourself now with the intention of doing the real investing work later will very often fall victim to human nature.

staythecourse
Posts: 5539
Joined: Mon Jan 03, 2011 9:40 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by staythecourse » Wed Dec 27, 2017 9:38 pm

Not to sound harsh, but forget about a 40 year plan. Don't think many, if any, have gotten through one without some serious revisions. If you are not married, done with your family, permanently settled where you are going to live for 10-20 years at a stretch, settled in your career, and done with education, you have NO CLUE how to craft a reasonably accurate plan. So don't worry about 40 years. Just worry about the next 5 years and then revise every 5 years until you have accomplished all of the above. It is not great feat doing the above, but until it is done your life will change A LOT. I figured that out in high school. I figured at that time (being 17) there would be A LOT of changes until about early 30's based on what I wanted to do with my life and I was pretty spot on. Some I predicted and MANY I did not. Either way any plan I made at that time would have been seriously revised numerous times over.

My biggest advice is to focus on how to maximize your human capital. How do you get in a position to make more money. There is NO substitute in investing then making more money. Much easier to get to a million if you are saving 100k/ year vs. 20k/ year for example. Then figure out how to do the above by minimizing your debt. That is the hard part. Do it as young as you can. Figuring it out when you are older with a family is very difficult to do vs. doing it now when you are unattached and young.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 9:56 pm

mortfree wrote:
Wed Dec 27, 2017 9:16 pm
solarascent wrote:
Wed Dec 27, 2017 8:45 pm
mortfree wrote:
Wed Dec 27, 2017 8:36 pm
solarascent wrote:
Wed Dec 27, 2017 8:30 pm


The acronyms aren't totally clear to me. VTI stands for total index and VTSAX is what?
Total stock from vanguard is: VTSAX is mutual fund (admiral shares) and VTI is the exchange traded fund (ETF). VTSMX is also the mutual fund if you have less than 10k.

I like ETFs. Others seem afraid of them.
Hm.. I avoided reading about ETFs because there was just too much investment info to process. All I know is that I believe Vanguard Retirement Funds start switching to ETFs during the later years as if I remember correctly, it offers more inflation protection? Anyway, my 401k will be left in target retirement funds, so I want to avoid ETFs in my primary roth/taxable and keep things simple on my end. But thank you for your advice
Incorrect but you’re still learning. Keep reading and hopefully others can give better advice
Then, maybe it was Tifs? I'm not sure. I don't want to become an investing wiz. I just want to know enough to get by. But I'll keep reading, but my main goal is simplicity in my life. Thanks!

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 10:01 pm

TG2 wrote:
Wed Dec 27, 2017 9:27 pm
Priorities:
25-35
Be excellent to myself in the present. Be great to my future self. And to be good to others.
If you truly wish to maximize utility, I would consider this backwards. Time is the greatest asset you have. Being excellent to your future self (saving and investing as much as you reasonably can) when young will have far greater benefit than would starting to get serious about it later. If you have both time and money working for you longer, you can be excellent to your present self for a longer period of time. Besides, it's easy to maintain a less luxurious lifestyle if you have not yet become accustomed to it. Spending a lot more on yourself now with the intention of doing the real investing work later will very often fall victim to human nature.
I disagree. I mean, you're making assumptions and suggesting that my priorities mean I'm not going to be saving. I will be saving, but not to the expense of my current happiness and comfort. That's not what I'm going to do, and it's a personal choice. People have varying comfort levels and spending/saving habits that fit them, and this is something that I personally am not going to settle on. If saving right now means a less comfortable life now, then I'm not going to bother. Lucky for me, I can have a comfortable life and save at the same time, and so I don't think I have much to worry about. And like I said, I think pushing rewards and rewards into the future is dangerous. This shouldn't be taken to mean preparing and planning for the future (financially and otherwise) is unwise, it just means, that people should strive for happiness and comfort now instead of thinking that whatever you're doing now is going to make you happy in the future.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Wed Dec 27, 2017 10:05 pm

staythecourse wrote:
Wed Dec 27, 2017 9:38 pm
Not to sound harsh, but forget about a 40 year plan. Don't think many, if any, have gotten through one without some serious revisions. If you are not married, done with your family, permanently settled where you are going to live for 10-20 years at a stretch, settled in your career, and done with education, you have NO CLUE how to craft a reasonably accurate plan. So don't worry about 40 years. Just worry about the next 5 years and then revise every 5 years until you have accomplished all of the above. It is not great feat doing the above, but until it is done your life will change A LOT. I figured that out in high school. I figured at that time (being 17) there would be A LOT of changes until about early 30's based on what I wanted to do with my life and I was pretty spot on. Some I predicted and MANY I did not. Either way any plan I made at that time would have been seriously revised numerous times over.

My biggest advice is to focus on how to maximize your human capital. How do you get in a position to make more money. There is NO substitute in investing then making more money. Much easier to get to a million if you are saving 100k/ year vs. 20k/ year for example. Then figure out how to do the above by minimizing your debt. That is the hard part. Do it as young as you can. Figuring it out when you are older with a family is very difficult to do vs. doing it now when you are unattached and young.

Good luck.
I'm just following the wiki and the Boglehead philosophy. I expect things to change so I gave myself time reconsider perspective changes every 5 years. I do appreciate your advice that it's impossible to know for the future, but I think setting a solid foundation and at least thinking about goals is a start. I'm fully aware when I have kids that my investment plans will change, this is just a start and should last me for the next 10 years or so. And the asset allocations should hopefully stick with me forever unless I decide to get an advisor or something when I have more money and don't want to deal with it. Thank you for your comments! Very much appreciated. And starting at 17 is pretty amazing.

TG2
Posts: 190
Joined: Sat Nov 25, 2017 6:50 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by TG2 » Thu Dec 28, 2017 1:07 am

solarascent wrote:
Wed Dec 27, 2017 10:01 pm
TG2 wrote:
Wed Dec 27, 2017 9:27 pm
Priorities:
25-35
Be excellent to myself in the present. Be great to my future self. And to be good to others.
If you truly wish to maximize utility, I would consider this backwards. Time is the greatest asset you have. Being excellent to your future self (saving and investing as much as you reasonably can) when young will have far greater benefit than would starting to get serious about it later. If you have both time and money working for you longer, you can be excellent to your present self for a longer period of time. Besides, it's easy to maintain a less luxurious lifestyle if you have not yet become accustomed to it. Spending a lot more on yourself now with the intention of doing the real investing work later will very often fall victim to human nature.
I disagree. I mean, you're making assumptions and suggesting that my priorities mean I'm not going to be saving. I will be saving, but not to the expense of my current happiness and comfort. That's not what I'm going to do, and it's a personal choice. People have varying comfort levels and spending/saving habits that fit them, and this is something that I personally am not going to settle on. If saving right now means a less comfortable life now, then I'm not going to bother. Lucky for me, I can have a comfortable life and save at the same time, and so I don't think I have much to worry about. And like I said, I think pushing rewards and rewards into the future is dangerous. This shouldn't be taken to mean preparing and planning for the future (financially and otherwise) is unwise, it just means, that people should strive for happiness and comfort now instead of thinking that whatever you're doing now is going to make you happy in the future.
No, I am saying that you get a bigger bang for your buck by doing it the other way. It's simple math. You can do whatever you want, and you will. Nobody here will really care. It's your life and your priorities. I started the post with, "If you truly wish to maximize utility..." Apparently you don't, and that's fine. For you. Someone else might be reading and it might go the other way for them. Think about this though: Retirement can start at 50 or 55 instead of 60-65. Is that worth it to you? Only you can answer that. I certainly don't care what your answer is to that question. I only care about what my answer is to that question. I retired a couple of months ago at 58 and could have gone sooner. My priority was freedom to not have to work. Your priority can be whatever you want.

retiredjg
Posts: 32167
Joined: Thu Jan 10, 2008 12:56 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by retiredjg » Thu Dec 28, 2017 8:05 am

solarascent wrote:
Wed Dec 27, 2017 7:00 pm
11. I thought I understood yesterday the folly of 1. Attempting to predict market and 2. Chasing past winners. Plus, to avoid selling low and buying high. But, now today, it’s hard to wrap my self on the last advice.I know important factors in success and return in the market is your total time in the market + compounding interest + beating inflation + costs low + diversification. And on the forum, there’s a lot on here about weathering the storms and sticking to your asset allocation: permanence is key. But can someone explain again, why it is so bad if you see there’s a current stock crash happening (or on the verge of happening), why is it bad to sell a portion of your stocks (minimize loss) and then when it’s at the lowest, or right before it hits the bottom, buy back all your stocks again. Wouldn’t the net loss in that scenario be lower than if you were just to leave everything in? I thought I understood it after watching the videos, but I guess the rationale behind that aspect isnt 100% clear. Because in that scenario wouldn't you be selling higher and buying lower?

If you made it this far, thanks for your time.
Because there is no way to know when a crash is on the verge of happening or when the market is at the lowest or hitting bottom. This can only be seen in retrospect.

Obviously, you can't see that so just accept it for now. You will see it later when you have some experience. "Later" may be several to many years.

spooky105
Posts: 97
Joined: Fri Aug 14, 2015 11:38 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by spooky105 » Thu Dec 28, 2017 8:55 am

solarascent wrote:
Wed Dec 27, 2017 7:00 pm
8. Can someone explain in simple terms the two components of why stocks are tax efficient. If I recall correctly, stocks are tax efficient because 1.) most of its dividends (a portion of the profits that the company agrees to pay its stock holders) are less than some threshold which qualifies it to a lower 15% rate. And 2.) It defers your taxes. So, if buy stock now, and it increases from $10 to $20, so a whole 100% increase (capital gain = $10?). If I assume the dividends are 10c then, I pay taxes on $9.90 when I sell? So, I pay taxes one time when I attempt to liquidate. So, this is preferable, why??? What’s exactly the alternative?
For anything not in a tax-protected wrapper (roth/trad ira, 401k, etc.):

1) You'll pay tax on the dividends earned each year.

2) You'll pay tax on the capital gains incurred by the mutual fund's activity for the year (selling positions to buy others, adjusting to changes in the index, etc.), regardless of whether you sold any shares.

3) You'll pay tax on the capital gains for any investments sold during the year (stock, bond, mutual fund, etc.).

For example. You buy a mutual fund share for $100 and keep it for ten years. It pays a $1 dividend every year (not reinvested, for simplicity). The fund has $8 in Long Term capital gains and $2 in Short Term capital gains every year (from selling winners to buy new, undervalued stocks; again not invested for simplicity). The fund doubles in value over the 10-year period. In this example:

1) You pay tax on $1 in dividends each year (taxed same as long term cap gains, 0%,15%, 20% in 2017 depending on tax bracket)

2) You pay tax on $10 in capital gains each year. The $8 is taxed at the long term rate (same as dividends, 0%,15%, 20% in 2017 depending on tax bracket), while the $2 is taxed at the short term rate (taxed as income).

3) You pay tax on the $100 in long term capital gains (same as dividends, 0%,15%, 20% in 2017 depending on tax bracket) when you sell your fund at the end of the 10-year period.

The biggest "tax efficiency" is between active vs index and relates to part 2) above. An index fund simply tracks an index, so the annual capital gains will be limited to the small adjustments that come with firms being added/subtracted form the index and adjustments need to remain aligned with the index. An actively managed fund will often have significantly more churn than can amount to more than 100% of the total portfolio over a year, depending on how "active" the fund is. That triggers significantly more capital gains, costing you more in end of year tax regardless of whether you actually sold any of your position. If you re-invest both dividends and capital gains, the tax you must pay annually on these diminishes your compound return over time. So, given a choice in a taxable account between an active or index fund, the index fund will be more tax efficient. If you're putting the investment in a tax-protected account (Roth or Traditional), it really doesn't matter. Regardless of Roth or Traditional, annual dividends and capital gains are protected from tax and can be fully re-invested. Likewise, any rebalancing does not trigger a capital gain so you can focus on the asset allocation without worrying about tax consequences.

Some additional reading you may be interested in:
http://www.mrmoneymustache.com/2013/02/ ... blog-post/
http://jlcollinsnh.com/stock-series/

EvelynTroy
Posts: 293
Joined: Sat Jun 07, 2008 8:35 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by EvelynTroy » Thu Dec 28, 2017 9:50 am

Tip of the cap to you solarascent to be 25 yrs. and getting focused on your future, i.e., saving and investing. You're receiving lots of good advice and direction - priceless. Take your time and really think thru the advice you are given - don't be quick to disagree.

I can only address the bank topic. I've used the same credit union for close to 40 years - 15 of those I lived overseas in the age of no cell phones, internet, on-line anything - it worked just fine, the CU went out of their way to serve me even though I wasn't living/working in the neighborhood. I've found I have absolutely no reason to go into my physical branch CU in this digital age.

Credit unions are not-for-profit cooperative financial institutions owned by members. They offer the same services as banks, but the profit cycles back to members instead of stockholders. As a result, members benefit from better rates and lower fees. With the help of financial services technology by the CO-OP organization, members can access their money through a network of about 30,000 ATMs — some of which include low fees internationally — and 5,000 shared branches.
Recently I needed to wire money quickly and wasn't home - just walked into a shared branch 30 miles away did my transaction with no fee and was on my way. I did have to look up the closest shared branch to where I was.

CU's are notorious for good customer service. Also same $250,000 account insurance as a bank's FDIC protects you - its NCUA.
The list goes on - and no I'd never do business with BOA either.
I also hold CD's in 6 CU's across the country - never a problem.
Recommendation - take time to learn how CU's work, the advantages, disadvantages.

Evelyn

emoore
Posts: 402
Joined: Mon Mar 04, 2013 8:16 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by emoore » Thu Dec 28, 2017 10:10 am

Another recommendation for a credit union. I joined one in California but have been living in Colorado the last 10 years. There are no branches of the credit union outside California but with online banking it makes it easy. And I can use any other credit unions atm without any fees.

4nickt
Posts: 10
Joined: Thu Dec 28, 2017 5:25 pm
Location: Chicago

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by 4nickt » Thu Dec 28, 2017 6:04 pm

First, congratulations on your investment savings and plan for the future. Your future is very bright. A few words of wisdom-stick with a diversified plan e.g. 90/10, 60/40 as you reach age sixty. Invest in index funds 500 or total market including international ( low cost and historically out performs all other funds). Avoid target funds if possible- you pay extra fees for diversification that you can do yourself. You are kidding yourself if you think you can time the market- buy low sell high. It doesn’t work, and many very smart people have tried and failed. Recommend you stick with dollar cost average investments over time. In other words you are buying low over time 10-40 years, and will sell high, at age seventy when you take RMD. In fifty years I can 100% guarantee you the market will be much higher than it is today. Lastly, on a personal note don’t get divorced, avoid sector funds, keep up charity, and spend less on cars and housing, avoid annuities and whole life insurance ( buy term), good luck!

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Thu Dec 28, 2017 6:11 pm

TG2 wrote:
Thu Dec 28, 2017 1:07 am
solarascent wrote:
Wed Dec 27, 2017 10:01 pm
TG2 wrote:
Wed Dec 27, 2017 9:27 pm
Priorities:
25-35
Be excellent to myself in the present. Be great to my future self. And to be good to others.
If you truly wish to maximize utility, I would consider this backwards. Time is the greatest asset you have. Being excellent to your future self (saving and investing as much as you reasonably can) when young will have far greater benefit than would starting to get serious about it later. If you have both time and money working for you longer, you can be excellent to your present self for a longer period of time. Besides, it's easy to maintain a less luxurious lifestyle if you have not yet become accustomed to it. Spending a lot more on yourself now with the intention of doing the real investing work later will very often fall victim to human nature.
I disagree. I mean, you're making assumptions and suggesting that my priorities mean I'm not going to be saving. I will be saving, but not to the expense of my current happiness and comfort. That's not what I'm going to do, and it's a personal choice. People have varying comfort levels and spending/saving habits that fit them, and this is something that I personally am not going to settle on. If saving right now means a less comfortable life now, then I'm not going to bother. Lucky for me, I can have a comfortable life and save at the same time, and so I don't think I have much to worry about. And like I said, I think pushing rewards and rewards into the future is dangerous. This shouldn't be taken to mean preparing and planning for the future (financially and otherwise) is unwise, it just means, that people should strive for happiness and comfort now instead of thinking that whatever you're doing now is going to make you happy in the future.
No, I am saying that you get a bigger bang for your buck by doing it the other way. It's simple math. You can do whatever you want, and you will. Nobody here will really care. It's your life and your priorities. I started the post with, "If you truly wish to maximize utility..." Apparently you don't, and that's fine. For you. Someone else might be reading and it might go the other way for them. Think about this though: Retirement can start at 50 or 55 instead of 60-65. Is that worth it to you? Only you can answer that. I certainly don't care what your answer is to that question. I only care about what my answer is to that question. I retired a couple of months ago at 58 and could have gone sooner. My priority was freedom to not have to work. Your priority can be whatever you want.
Thank you. I understand that math that if you save more you will retire earlier. That's not what I am exactly saying though, because that part is clear to me. But I do appreciate your perspective.

Edit: I took a reread because maybe I was missing something. And I see, you're just saying that your priority was retiring early so that you want to save more. That's understandable. I guess what I'm not clear on if you are suggesting that I should save more at the expense of my comfort today to maximize utility? Like, I know all of us have to make decisions, for example whether we want to have a roommate or live in a single apartment. I mean, in this time of my life I want to go for the single apartment especially if my salary allows me. I'm not saying I'm not going to be saving, I just don't want to give myself undue present burden when the money exists for me be comfortable in addition to save. I see it as different things. You don't need to be profligate nor on the verge of poor in order to save. There's a good balance and you can still be thrifty and save.
Last edited by solarascent on Thu Dec 28, 2017 6:23 pm, edited 1 time in total.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Thu Dec 28, 2017 6:15 pm

EvelynTroy wrote:
Thu Dec 28, 2017 9:50 am
Tip of the cap to you solarascent to be 25 yrs. and getting focused on your future, i.e., saving and investing. You're receiving lots of good advice and direction - priceless. Take your time and really think thru the advice you are given - don't be quick to disagree.

I can only address the bank topic. I've used the same credit union for close to 40 years - 15 of those I lived overseas in the age of no cell phones, internet, on-line anything - it worked just fine, the CU went out of their way to serve me even though I wasn't living/working in the neighborhood. I've found I have absolutely no reason to go into my physical branch CU in this digital age.

Credit unions are not-for-profit cooperative financial institutions owned by members. They offer the same services as banks, but the profit cycles back to members instead of stockholders. As a result, members benefit from better rates and lower fees. With the help of financial services technology by the CO-OP organization, members can access their money through a network of about 30,000 ATMs — some of which include low fees internationally — and 5,000 shared branches.
Recently I needed to wire money quickly and wasn't home - just walked into a shared branch 30 miles away did my transaction with no fee and was on my way. I did have to look up the closest shared branch to where I was.

CU's are notorious for good customer service. Also same $250,000 account insurance as a bank's FDIC protects you - its NCUA.
The list goes on - and no I'd never do business with BOA either.
I also hold CD's in 6 CU's across the country - never a problem.
Recommendation - take time to learn how CU's work, the advantages, disadvantages.

Evelyn
Oh, okay, since credit unions seem to be a prevailing recommendation, I'll google it some more and do some research. I guess I was a little bit uneasy about not having physical branches, but if there's some compromise there and there's shared branches, then that'll work as well. I'll take a look at the CU's near me and give them a call so they can explain their advantages to me and so some further research. Thanks a bunch.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Thu Dec 28, 2017 6:34 pm

spooky105 wrote:
Thu Dec 28, 2017 8:55 am
solarascent wrote:
Wed Dec 27, 2017 7:00 pm
8. Can someone explain in simple terms the two components of why stocks are tax efficient. If I recall correctly, stocks are tax efficient because 1.) most of its dividends (a portion of the profits that the company agrees to pay its stock holders) are less than some threshold which qualifies it to a lower 15% rate. And 2.) It defers your taxes. So, if buy stock now, and it increases from $10 to $20, so a whole 100% increase (capital gain = $10?). If I assume the dividends are 10c then, I pay taxes on $9.90 when I sell? So, I pay taxes one time when I attempt to liquidate. So, this is preferable, why??? What’s exactly the alternative?
For anything not in a tax-protected wrapper (roth/trad ira, 401k, etc.):

1) You'll pay tax on the dividends earned each year.
Wow. That's complicated. So, I'm being taxed like 3 times!? On dividends, on long term/short term capital gains yearly, then on long term gains when I sell!? That might be normal for you all, but that sounds so absurd to me. I guess, I don't understand the purpose of the last tax. If I had already been paying taxes on the capital gains yearly, where does this extra tax come from when I have to sell?

Anyway, thanks for the detailed explanation. I'm going to follow your links and learn more.

TG2
Posts: 190
Joined: Sat Nov 25, 2017 6:50 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by TG2 » Thu Dec 28, 2017 9:34 pm

solarascent wrote:
Thu Dec 28, 2017 6:11 pm
TG2 wrote:
Thu Dec 28, 2017 1:07 am
solarascent wrote:
Wed Dec 27, 2017 10:01 pm
TG2 wrote:
Wed Dec 27, 2017 9:27 pm
Priorities:
25-35
Be excellent to myself in the present. Be great to my future self. And to be good to others.
If you truly wish to maximize utility, I would consider this backwards. Time is the greatest asset you have. Being excellent to your future self (saving and investing as much as you reasonably can) when young will have far greater benefit than would starting to get serious about it later. If you have both time and money working for you longer, you can be excellent to your present self for a longer period of time. Besides, it's easy to maintain a less luxurious lifestyle if you have not yet become accustomed to it. Spending a lot more on yourself now with the intention of doing the real investing work later will very often fall victim to human nature.
I disagree. I mean, you're making assumptions and suggesting that my priorities mean I'm not going to be saving. I will be saving, but not to the expense of my current happiness and comfort. That's not what I'm going to do, and it's a personal choice. People have varying comfort levels and spending/saving habits that fit them, and this is something that I personally am not going to settle on. If saving right now means a less comfortable life now, then I'm not going to bother. Lucky for me, I can have a comfortable life and save at the same time, and so I don't think I have much to worry about. And like I said, I think pushing rewards and rewards into the future is dangerous. This shouldn't be taken to mean preparing and planning for the future (financially and otherwise) is unwise, it just means, that people should strive for happiness and comfort now instead of thinking that whatever you're doing now is going to make you happy in the future.
No, I am saying that you get a bigger bang for your buck by doing it the other way. It's simple math. You can do whatever you want, and you will. Nobody here will really care. It's your life and your priorities. I started the post with, "If you truly wish to maximize utility..." Apparently you don't, and that's fine. For you. Someone else might be reading and it might go the other way for them. Think about this though: Retirement can start at 50 or 55 instead of 60-65. Is that worth it to you? Only you can answer that. I certainly don't care what your answer is to that question. I only care about what my answer is to that question. I retired a couple of months ago at 58 and could have gone sooner. My priority was freedom to not have to work. Your priority can be whatever you want.
Thank you. I understand that math that if you save more you will retire earlier. That's not what I am exactly saying though, because that part is clear to me. But I do appreciate your perspective.

Edit: I took a reread because maybe I was missing something. And I see, you're just saying that your priority was retiring early so that you want to save more. That's understandable. I guess what I'm not clear on if you are suggesting that I should save more at the expense of my comfort today to maximize utility? Like, I know all of us have to make decisions, for example whether we want to have a roommate or live in a single apartment. I mean, in this time of my life I want to go for the single apartment especially if my salary allows me. I'm not saying I'm not going to be saving, I just don't want to give myself undue present burden when the money exists for me be comfortable in addition to save. I see it as different things. You don't need to be profligate nor on the verge of poor in order to save. There's a good balance and you can still be thrifty and save.
Right, to an extent, but it's not about me. Nobody is saying, and certainly not me, that you need to deprive yourself now. Taking on a roommate, or something like that, is fine if someone wants to live like that. Most don't, at least not if they have a choice, and it is perfectly understandable. There is a balance to be found, and that is different for everyone. The original post implied a plan to overspend early (while saving some) and make up for it by saving more later. (And I perhaps misread the "be excellent" part to imply overspending.) My point was simply that saving more early rather than late will end up better in the long run. It is up to you to make decisions based on that.

As long as you are saving and investing, great. That determination alone puts you way ahead of most people. The key, as much as possible, is to think of as many possibilities as you can. Plans only become better when more variables are considered. I offered another variable to consider, but it is always your choice. Deciding what is most important to you among four or five options is better than deciding what is most important to you among two or three.

The biggest regret among retired people is that they did not start saving early enough. Think about all of your options and their likely outcomes and decide based on that. Do what is best for you. Don't expect it to be the same for anyone else. There are some basic truths which will apply to everybody, such as being invested for a longer time is better than being invested for a shorter time, but everybody's situation is different. The only person who can decide what is best for you is you, and it always helps to have as much information as possible. Good luck.

solarascent
Posts: 23
Joined: Sun Dec 24, 2017 8:39 am

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by solarascent » Thu Dec 28, 2017 9:46 pm

TG2 wrote:
Thu Dec 28, 2017 9:34 pm
solarascent wrote:
Thu Dec 28, 2017 6:11 pm
TG2 wrote:
Thu Dec 28, 2017 1:07 am
solarascent wrote:
Wed Dec 27, 2017 10:01 pm
TG2 wrote:
Wed Dec 27, 2017 9:27 pm


If you truly wish to maximize utility, I would consider this backwards. Time is the greatest asset you have. Being excellent to your future self (saving and investing as much as you reasonably can) when young will have far greater benefit than would starting to get serious about it later. If you have both time and money working for you longer, you can be excellent to your present self for a longer period of time. Besides, it's easy to maintain a less luxurious lifestyle if you have not yet become accustomed to it. Spending a lot more on yourself now with the intention of doing the real investing work later will very often fall victim to human nature.
I disagree. I mean, you're making assumptions and suggesting that my priorities mean I'm not going to be saving. I will be saving, but not to the expense of my current happiness and comfort. That's not what I'm going to do, and it's a personal choice. People have varying comfort levels and spending/saving habits that fit them, and this is something that I personally am not going to settle on. If saving right now means a less comfortable life now, then I'm not going to bother. Lucky for me, I can have a comfortable life and save at the same time, and so I don't think I have much to worry about. And like I said, I think pushing rewards and rewards into the future is dangerous. This shouldn't be taken to mean preparing and planning for the future (financially and otherwise) is unwise, it just means, that people should strive for happiness and comfort now instead of thinking that whatever you're doing now is going to make you happy in the future.
No, I am saying that you get a bigger bang for your buck by doing it the other way. It's simple math. You can do whatever you want, and you will. Nobody here will really care. It's your life and your priorities. I started the post with, "If you truly wish to maximize utility..." Apparently you don't, and that's fine. For you. Someone else might be reading and it might go the other way for them. Think about this though: Retirement can start at 50 or 55 instead of 60-65. Is that worth it to you? Only you can answer that. I certainly don't care what your answer is to that question. I only care about what my answer is to that question. I retired a couple of months ago at 58 and could have gone sooner. My priority was freedom to not have to work. Your priority can be whatever you want.
Thank you. I understand that math that if you save more you will retire earlier. That's not what I am exactly saying though, because that part is clear to me. But I do appreciate your perspective.

Edit: I took a reread because maybe I was missing something. And I see, you're just saying that your priority was retiring early so that you want to save more. That's understandable. I guess what I'm not clear on if you are suggesting that I should save more at the expense of my comfort today to maximize utility? Like, I know all of us have to make decisions, for example whether we want to have a roommate or live in a single apartment. I mean, in this time of my life I want to go for the single apartment especially if my salary allows me. I'm not saying I'm not going to be saving, I just don't want to give myself undue present burden when the money exists for me be comfortable in addition to save. I see it as different things. You don't need to be profligate nor on the verge of poor in order to save. There's a good balance and you can still be thrifty and save.
Right, to an extent, but it's not about me. Nobody is saying, and certainly not me, that you need to deprive yourself now. Taking on a roommate, or something like that, is fine if someone wants to live like that. Most don't, at least not if they have a choice, and it is perfectly understandable. There is a balance to be found, and that is different for everyone. The original post implied a plan to overspend early (while saving some) and make up for it by saving more later. (And I perhaps misread the "be excellent" part to imply overspending.) My point was simply that saving more early rather than late will end up better in the long run. It is up to you to make decisions based on that.

As long as you are saving and investing, great. That determination alone puts you way ahead of most people. The key, as much as possible, is to think of as many possibilities as you can. Plans only become better when more variables are considered. I offered another variable to consider, but it is always your choice. Deciding what is most important to you among four or five options is better than deciding what is most important to you among two or three.

The biggest regret among retired people is that they did not start saving early enough. Think about all of your options and their likely outcomes and decide based on that. Do what is best for you. Don't expect it to be the same for anyone else. There are some basic truths which will apply to everybody, such as being invested for a longer time is better than being invested for a shorter time, but everybody's situation is different. The only person who can decide what is best for you is you, and it always helps to have as much information as possible. Good luck.
Thanks for your advice. This is wise. My initial defensiveness was unnecessary as there was miscommunication. I guess, I need to find the correct balance as I enter my late twenties and thirties, because you're right. I have more money than I have responsibilities, and as long as I can find comfort now with a certain amount of money then I shouldn't need to think that I'm saving too much. Because, I'm sure in the future there might be regret. Almost feels like regardless of the decision, there may be regret on the opposite side. So a balance is essential.

TG2
Posts: 190
Joined: Sat Nov 25, 2017 6:50 pm

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by TG2 » Fri Dec 29, 2017 1:16 am

solarascent wrote:
Thu Dec 28, 2017 9:46 pm
TG2 wrote:
Thu Dec 28, 2017 9:34 pm
solarascent wrote:
Thu Dec 28, 2017 6:11 pm
TG2 wrote:
Thu Dec 28, 2017 1:07 am
solarascent wrote:
Wed Dec 27, 2017 10:01 pm


I disagree. I mean, you're making assumptions and suggesting that my priorities mean I'm not going to be saving. I will be saving, but not to the expense of my current happiness and comfort. That's not what I'm going to do, and it's a personal choice. People have varying comfort levels and spending/saving habits that fit them, and this is something that I personally am not going to settle on. If saving right now means a less comfortable life now, then I'm not going to bother. Lucky for me, I can have a comfortable life and save at the same time, and so I don't think I have much to worry about. And like I said, I think pushing rewards and rewards into the future is dangerous. This shouldn't be taken to mean preparing and planning for the future (financially and otherwise) is unwise, it just means, that people should strive for happiness and comfort now instead of thinking that whatever you're doing now is going to make you happy in the future.
No, I am saying that you get a bigger bang for your buck by doing it the other way. It's simple math. You can do whatever you want, and you will. Nobody here will really care. It's your life and your priorities. I started the post with, "If you truly wish to maximize utility..." Apparently you don't, and that's fine. For you. Someone else might be reading and it might go the other way for them. Think about this though: Retirement can start at 50 or 55 instead of 60-65. Is that worth it to you? Only you can answer that. I certainly don't care what your answer is to that question. I only care about what my answer is to that question. I retired a couple of months ago at 58 and could have gone sooner. My priority was freedom to not have to work. Your priority can be whatever you want.
Thank you. I understand that math that if you save more you will retire earlier. That's not what I am exactly saying though, because that part is clear to me. But I do appreciate your perspective.

Edit: I took a reread because maybe I was missing something. And I see, you're just saying that your priority was retiring early so that you want to save more. That's understandable. I guess what I'm not clear on if you are suggesting that I should save more at the expense of my comfort today to maximize utility? Like, I know all of us have to make decisions, for example whether we want to have a roommate or live in a single apartment. I mean, in this time of my life I want to go for the single apartment especially if my salary allows me. I'm not saying I'm not going to be saving, I just don't want to give myself undue present burden when the money exists for me be comfortable in addition to save. I see it as different things. You don't need to be profligate nor on the verge of poor in order to save. There's a good balance and you can still be thrifty and save.
Right, to an extent, but it's not about me. Nobody is saying, and certainly not me, that you need to deprive yourself now. Taking on a roommate, or something like that, is fine if someone wants to live like that. Most don't, at least not if they have a choice, and it is perfectly understandable. There is a balance to be found, and that is different for everyone. The original post implied a plan to overspend early (while saving some) and make up for it by saving more later. (And I perhaps misread the "be excellent" part to imply overspending.) My point was simply that saving more early rather than late will end up better in the long run. It is up to you to make decisions based on that.

As long as you are saving and investing, great. That determination alone puts you way ahead of most people. The key, as much as possible, is to think of as many possibilities as you can. Plans only become better when more variables are considered. I offered another variable to consider, but it is always your choice. Deciding what is most important to you among four or five options is better than deciding what is most important to you among two or three.

The biggest regret among retired people is that they did not start saving early enough. Think about all of your options and their likely outcomes and decide based on that. Do what is best for you. Don't expect it to be the same for anyone else. There are some basic truths which will apply to everybody, such as being invested for a longer time is better than being invested for a shorter time, but everybody's situation is different. The only person who can decide what is best for you is you, and it always helps to have as much information as possible. Good luck.
Thanks for your advice. This is wise. My initial defensiveness was unnecessary as there was miscommunication. I guess, I need to find the correct balance as I enter my late twenties and thirties, because you're right. I have more money than I have responsibilities, and as long as I can find comfort now with a certain amount of money then I shouldn't need to think that I'm saving too much. Because, I'm sure in the future there might be regret. Almost feels like regardless of the decision, there may be regret on the opposite side. So a balance is essential.
NOW you've got it. :thumbsup

The one certainty is that life will not happen according to plan. You may find that you want to get married and have kids, buy a house, etc. Responsibilities can increase quickly, and almost without warning. Health could become an issue, you never know. One thing you can know is this: Time is your ally in investing. Even if you can't continue to invest for some reason, time will increase what you managed to do before. Find your balance now, but keep an eye on your future. That future self would much rather thank you when you get there. Looking back with regret is nobody's first choice.

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dratkinson
Posts: 4149
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by dratkinson » Fri Dec 29, 2017 8:36 am

+1 Credit unions can share locations, banks do not.

If you join a CU that is a member of the CU CO-OP network, you can access your account from all.
See: https://co-opcreditunions.org/

Banks are insured by the FDIC. CUs are insured by NCUA. Different names, same goal.
See: https://www.ncua.gov/


Disclosure. I've used CUs since the mid-80s. Sometimes I've added a new CU when I moved to a new location if it had better CD rates. But all were able to access all my CUs' accounts.

A CU deposit/withdrawal form is a little bigger than a bank deposit/withdrawal form because it includes spaces to identify your other CUs' account numbers---so you can move money between them. You will have no problems moving money if all your identifying information is the same (name, SSN) on all your CUs' accounts.

After I retired, I consolidated all my CUs' accounts by walking into my local CU and filling out the withdrawal/deposit forms to move the bulk of the money quickly. I then called each distant CU to close the account and they mailed me small checks to cover any residual* money.

* When you open a CU account, you are required to put a small amount ($5?) into a "Share"/savings account. You can't get that money back until you close the CU account. Those were the residual checks mailed after my distant CUs' accounts were closed.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

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Info_Hound
Posts: 267
Joined: Wed Mar 23, 2011 9:47 am
Location: Fort Collins, Colorado

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by Info_Hound » Fri Dec 29, 2017 12:25 pm

BolderBoy wrote:
Wed Dec 27, 2017 8:09 pm
solarascent wrote:
Wed Dec 27, 2017 7:30 pm
Credit unions aren't too preferable because I don't know where I'll be located in 6-12 months. I want a bank that's easy, accessible, and far-reaching, but doesn't play with your money like BoA.
So you move and get a new credit union. What do you mean by "far reaching"? Are you a vet (USAA Savings Bank)?
Most Credit Unions have also formed a partnership with other CUs where they will handle transactions for their member partners regardless of who you have an account with. The ATMs for their partner members are fee free as well. They extend all services to CU members as though you held an account with them.

I hold an account with a FCU that is located in the MD-VA-DC area as my main CU account. However, I live in Colorado and there are no branch offices in the state. Public Service CU of Colorado (which is widespread in CO) is a CU partnership member and handles my FCU face time transactions, no fees charged.

As a backup plan, I've also opened a Public Service account with some small change. The tellers can transfer funds to and from both accounts with no issues. The poster just above mine has several good links for searching CUs and their partnership member locations. Type in your location and check the results before you join a CU to see if they are in the CU partnership.

User avatar
dratkinson
Posts: 4149
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: Now, here it is: My 40 Year Investment Plan. I would appreciate any advice!

Post by dratkinson » Fri Dec 29, 2017 6:42 pm

Sidebar.
Info_Hound wrote:
Fri Dec 29, 2017 12:25 pm
...

As a backup plan, I've also opened a Public Service account with some small change. The tellers can transfer funds to and from both accounts with no issues. The poster just above mine has several good links for searching CUs and their partnership member locations. Type in your location and check the results before you join a CU to see if they are in the CU partnership.
As long as you have a PSCU "account with some small change", did you know about their new Reverse Tier Savings Account?

See PSCU Reverse Tier Savings Account: viewtopic.php?f=10&t=235879
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

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