Starting over at 39; lost 400K… seeking advice

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Topic Author
Mikewilliams818
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Joined: Wed Oct 13, 2021 12:43 pm

Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

LONG TIME lurker for more than a decade.

The long and short of it is I lost 400K in a few different stocks and am looking for the best route to be able to offset these massive losses maybe 30 years from now with an equal long term gain . Part of me thinks my mental illness (bipolar 1 with delusions) was part of the cause (reckless behavior) but what’s done is done.

Here are the stats

Own my home free and clear
Married filing jointly
Have no emergency fund nor stocks (taxable or Roth)
Have 18K of loans to 2 people whom are paying back
Don’t have wifi cable shop at aldi
Have 50K left on a HELOC @2.24%
Have 16K left on a used Corolla @4.46%
Have 7K on 0% credit card ending Nov 2022
Wife works retail for 17$ an hour (she’s Thai, recently here)
I work delivering pizzas since high school (24$ an hour average, no plan to change path)
No kids and no plans for any
Aggressive saver (75%) of income (2800 a month)
Wife is planning to start saving 1500 a month
I have Medicaid, might lose it next year
She has insurance from her job
Plan to work until 70 and relocate to Thailand



Should I aggressively pay off the 73K of debt in 2.5 years and start investing in vanguard once I’m 42? At this point, maxing a Roth is pointless since any gains I have down the road can be cancelled out with my huge amount of losses.
Or do I get 10k of cash saved first, then pay off the car loan, then invest aggressively and just pay the 200 a month on the HELOC for 18 more years?

It’s my goal to be debt free and have 200k by age 50. I feel I am in a training camp of life where I don’t mind just working 50 hours a week towards a goal.

I’m sure I’m missing some crucial bits of information, so I’ll continue to reply to this thread

Thanks to all
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SmileyFace
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Re: Starting over at 39; lost 400K… seeking advice

Post by SmileyFace »

Sorry for your loss / bad stock picks.
Minor point but if you have a $50K HELOC you don't really "own your home free and clear". H in HELOC stands for "Home".
I would put some emergency saving aside (presumably that's why you have personal loans) and then start working down the debt before you start investing again.
pizzy
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Re: Starting over at 39; lost 400K… seeking advice

Post by pizzy »

Where has the $2800/month of savings been going?
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SmileyFace
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Re: Starting over at 39; lost 400K… seeking advice

Post by SmileyFace »

pizzy wrote: Wed Oct 13, 2021 6:31 pm Where has the $2800/month of savings been going?
I presumed the $400K in stocks that tanked.
Mike Scott
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mike Scott »

Save a small emergency fund, pay off debt and then save / invest. Have you considered using an advisor or some sort of financial gatekeeper since you think mental illness has been a factor?
young-ish
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Re: Starting over at 39; lost 400K… seeking advice

Post by young-ish »

Yes, I would pay off the debt prior to saving more for retirement.

Why have you chosen to work until 70? If you are really sure about that there is little need to save aggressively. A high savings rate leads to early retirement. You can actually enjoy your money now if you also enjoy your work :D
esqu1re
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Re: Starting over at 39; lost 400K… seeking advice

Post by esqu1re »

OP, sorry to hear that. I once a good chunk of money invested in 1 stock that went from $150 / share go down to around $4. I didn't sell it and after 4 years, it recovered. Not sure if you can just hold and hope for the best or if you already liquidated it, but it's not a "loss" until you sell.

I think you do need to get rid of that credit card debt. Those are usually at a very high interest rate. Might be worth to read up on financial order of operations ("FOO") to see how you can best recover. Best of luck to you and your family.
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cflannagan
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Re: Starting over at 39; lost 400K… seeking advice

Post by cflannagan »

Mikewilliams818 wrote: Wed Oct 13, 2021 5:57 pm Have 50K left on a HELOC @2.24%
Guessing, Third Federal HELOC?
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Re: Starting over at 39; lost 400K… seeking advice

Post by placeholder »

While capital gains from growth will be offset by the losses the dividends from the funds won't so roth is valuable anyway.
Ferdinand2014
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Re: Starting over at 39; lost 400K… seeking advice

Post by Ferdinand2014 »

1.) I’d start by saving up emergency fund - $1,000 or so to avoid credit card when you need car repair or new washer.
2.) Pay off credit card
3.) Build up emergency savings to 3 months wages
4.) Pay off car
5.) Fully fund Roth IRA with target date fund through brokerage of the three: Vanguard/Fidelity/Schwab
6.) Have your wife change and hide login password - give her access as a trusted person in case brokerage has concerns regarding your behavior.
7.) Cut up credit cards to avoid impulse spending during manic episodes
8.) Pay off Heloc
9.) Make sure you continue to get consistent mental healthcare.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
mayurgai
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Re: Starting over at 39; lost 400K… seeking advice

Post by mayurgai »

Have you considered getting a better, higher paying job ? Maybe doing side hustles ? Anything you can do to accelerate income will help in your overall situation
Topic Author
Mikewilliams818
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

The credit card is 0% until NEXT November .

Third federal, you called it

The 2800 a month went into stocks, but I lost everything! The latest stock I had went to zero (I didn’t sell.)

Basically I lost 120K In 2013 in 1 stock, didn’t learn my lesson, got margin called in March 2020 and my whole portfolio got wrecked, lost 200K. Then just last week my last 77K went bankrupt and zero.

Planning to stay on antipsychotic for life, hopefully not another “episode.”

My house has a band new roof, furnace, and hot water tank.
Car is 3 years old
Theoretically, I should be able to coast along and have 85-90% of my income go towards debt or invest it without a major expense sidelining me


I was unsure if I should get a head start on investing and let the car and HELOC loans ride or go ALL IN on the debt and by age 42 be completely debt free. Or some combination of the 2.

Thanks for the replies so far
Flashes1
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Re: Starting over at 39; lost 400K… seeking advice

Post by Flashes1 »

Get a regular day job 40/hours with insurance then supplement it delivering pies on Friday & Saturday nights when all the money is made in that business (at least it was 30 years ago when I did it in college).
Topic Author
Mikewilliams818
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Joined: Wed Oct 13, 2021 12:43 pm

Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

Oh, and as for proper investing, I know what I should be doing (sort of), just didn’t do it myself. Learned the hard way.

My investing plan is either buy 3 funds that track S&P500 or buy a target retirement date fund, maybe 20 years after I plan to retire to keep it aggressive. Yes, I can handle the volatility of a 40% market correction, I’ve already stomached losses already.

And if worst comes to worst, I’ll get 1400 a month SS and wife probably similar , should be easy in thailand
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Sandtrap
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Re: Starting over at 39; lost 400K… seeking advice

Post by Sandtrap »

Mikewilliams818 wrote: Wed Oct 13, 2021 5:57 pm LONG TIME lurker for more than a decade.

The long and short of it is I lost 400K in a few different stocks and am looking for the best route to be able to offset these massive losses maybe 30 years from now with an equal long term gain . Part of me thinks my mental illness (bipolar 1 with delusions) was part of the cause (reckless behavior) but what’s done is done.

Here are the stats

Own my home free and clear
Married filing jointly
Have no emergency fund nor stocks (taxable or Roth)
Have 18K of loans to 2 people whom are paying back
Don’t have wifi cable shop at aldi
Have 50K left on a HELOC @2.24%
Have 16K left on a used Corolla @4.46%
Have 7K on 0% credit card ending Nov 2022
Wife works retail for 17$ an hour (she’s Thai, recently here)
I work delivering pizzas since high school (24$ an hour average, no plan to change path)
No kids and no plans for any
Aggressive saver (75%) of income (2800 a month)
Wife is planning to start saving 1500 a month
I have Medicaid, might lose it next year
She has insurance from her job
Plan to work until 70 and relocate to Thailand



Should I aggressively pay off the 73K of debt in 2.5 years and start investing in vanguard once I’m 42? At this point, maxing a Roth is pointless since any gains I have down the road can be cancelled out with my huge amount of losses.
Or do I get 10k of cash saved first, then pay off the car loan, then invest aggressively and just pay the 200 a month on the HELOC for 18 more years?

It’s my goal to be debt free and have 200k by age 50. I feel I am in a training camp of life where I don’t mind just working 50 hours a week towards a goal.

I’m sure I’m missing some crucial bits of information, so I’ll continue to reply to this thread

Thanks to all
"sah wah dee khrap. . . ."
Options:
1. Is selling the home and paying off debt to get ahead of things once and for all, an option?
2. You are deeply in debt with a non-substantial income stream to offset that and also make significant gains in saving and investing. So, significant changes should be made to change this path or it will continue and go nowhere.
3. What will replace Medicaid if you lose it?
4. Are opportunities better to relocate to Thailand now? Where? Chiang Mai? Why? Why not?
5. Again, it doesn't matter how you invest small savings per month compared to "what can you do to greatly increase your income stream now? And, what can you do to eliminate all debt, now"?

j :D
Wiki Bogleheads Wiki: Everything You Need to Know
Topic Author
Mikewilliams818
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

I make 55K a year and can save almost 40k of it, that will tackle my “huge” debt in a couple years. No, I’m not one of these high fliers here that’s a lawyer/doctor making 400K a year. My original goal was to be able to start working LESS by 40, but I lost all my money so I have to stomach working another 15 years at least. I’m going with the notion that I’ll retire at 70 and whatever I have by then I have (hopefully 1 million.)

Yes Chiang Mai would be great, but I can’t leave my family behind (aging parents and sister.) it’s just not the time, and besides, what would I do in Thailand while my wife supports us? The best route is to continue to live here In the states for dirt cheap and make as much as we can for 20-30 years and then take that pile to thailand
JD2775
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Re: Starting over at 39; lost 400K… seeking advice

Post by JD2775 »

Mikewilliams818 wrote: Wed Oct 13, 2021 7:49 pm I make 55K a year and can save almost 40k of it, that will tackle my “huge” debt in a couple years. No, I’m not one of these high fliers here that’s a lawyer/doctor making 400K a year. My original goal was to be able to start working LESS by 40, but I lost all my money so I have to stomach working another 15 years at least. I’m going with the notion that I’ll retire at 70 and whatever I have by then I have (hopefully 1 million.)

Yes Chiang Mai would be great, but I can’t leave my family behind (aging parents and sister.) it’s just not the time, and besides, what would I do in Thailand while my wife supports us? The best route is to continue to live here In the states for dirt cheap and make as much as we can for 20-30 years and then take that pile to thailand
Just a tip, it would be helpful if you quoted the person you were responding to. That would keep the thread more organized and easier to follow
onourway
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Re: Starting over at 39; lost 400K… seeking advice

Post by onourway »

Before you talk about saving 75% of your income - which is extreme at almost any income level - the first step is to get out of debt and start an emergency fund. I would make an aggressive plan to pay that off - and then settle into a sustainable savings rate that will, with time, get you to where you need to be. Attempting to save 75% of income on a pizza delivery income, while owning a home, is not a long-term recipe for success. 20-30% seems more reasonable. I agree with the other suggestions to consider working with a financial advisor to limit your own access to the funds, and to consider looking for work that will provide you with more options in the long run.

Best of luck!
jmw
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Re: Starting over at 39; lost 400K… seeking advice

Post by jmw »

First, save $2k or one month's worth of expenses, whichever is less.
Next, devote all money above expenses or $2k to debt even if it is 0% interest. Every last dime. Your brokerage account balance should be zero the whole time until your debt is completely gone.
Your friend debt counts ($91k debt total) unless they can't successfully sue you and you intend to stiff them as a purely acceptable business decision.

Given the unique aspect of your story, I'm totally 100% OK with you continuing to deliver pizzas if that's what you are good at and if it would potentially be disastrous if you went to another line of work to make your shovel bigger.

Once all of your debt is zero, I'd let the wife make the transactions to invest with a 3 mutual fund/ETF Bogle friendly portfolio. No more stock picking.

I think that's it. Good luck. You got this.
a2_alice
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Re: Starting over at 39; lost 400K… seeking advice

Post by a2_alice »

Can your wife take charge of the finances? You can still plan (or plan together, ideally) but she can execute?

I would save a small emergency fund and pay the debt first, especially the HELOC.
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rob
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Re: Starting over at 39; lost 400K… seeking advice

Post by rob »

This is one of the VERY few times I would suggest something like Vanguard's PAS service..... Takes the decisions out of your hands and you just send the $ to be invested to an account and are not involved in the running of the investments.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
harrychan
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Re: Starting over at 39; lost 400K… seeking advice

Post by harrychan »

I think you will benefit from reading "Total Money Makeover" by Dave Ramsey. It will give you the advice you and your wife need to get on track and take care of your debt. Once you get out of debt, come back here for investment advice.
This is not legal or certified financial advice but you know that already.
Katietsu
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Re: Starting over at 39; lost 400K… seeking advice

Post by Katietsu »

I think you are too optimistic about how much you can use to pay off debt or to save. You might be able to spend so little for a short time. But you will need to expect to have expenses above basic utilities and food. Needs like new tires for your car should not surprise you.

Make a plan and try to automate it as much as possible. Write it down so that you do not need to think about your next step will be.

My list might look like:
1) A $2500 emergency fund
2) Pay off personal loans
3) Pay off credit card
4) Increase emergency fund to $5000
5) Pay off car
6) Set up automatic contribution of $500 to Roth IRA. Use target date or life strategy fund.
7) Put extra towards paying off HELOC (I am assuming this is a variable rate and could eventually be at a higher interest rate.)
8) Invest in taxable account after all debt is gone. Use life strategy fund.

I am suggesting using target date or life strategy funds because I think that an automated process with no rebalancing required will help you resist the urge to tinker or buy stocks again.

I am not sure how you can make $24/hr or $55k in a year and still have medicaid. Now that you are married to a spouse who is working, your household income seems that it will be 4X the federal poverty level. Your options for insurance will be very dependent on your state. And the ACA with subsidies can be tricky with a spouse with insurance through work. You might want to see if there are resources to help you navigate the insurance situation. Being without insurance or having to pay the full unsubsidized premiums could really hurt you financially.
Tdubs
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Re: Starting over at 39; lost 400K… seeking advice

Post by Tdubs »

jmw wrote: Wed Oct 13, 2021 8:39 pm First, save $2k or one month's worth of expenses, whichever is less.
Next, devote all money above expenses or $2k to debt even if it is 0% interest. Every last dime. Your brokerage account balance should be zero the whole time until your debt is completely gone.
Your friend debt counts ($91k debt total) unless they can't successfully sue you and you intend to stiff them as a purely acceptable business decision.

Given the unique aspect of your story, I'm totally 100% OK with you continuing to deliver pizzas if that's what you are good at and if it would potentially be disastrous if you went to another line of work to make your shovel bigger.

Once all of your debt is zero, I'd let the wife make the transactions to invest with a 3 mutual fund/ETF Bogle friendly portfolio. No more stock picking.

I think that's it. Good luck. You got this.
Agree with all of this.

Given your issues, I wouldn't invest a dime till you pay off all debt. You can be reckless with investments. You can't be reckless paying off a loan with your own money. Since it is also hard to be reckless with a house, I'd keep it (pay off the HELOC and close it out).

Only then put cash into a lifecycle fund and throw away the keys.
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FoundingFather
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Re: Starting over at 39; lost 400K… seeking advice

Post by FoundingFather »

Mikewilliams818 wrote: Wed Oct 13, 2021 5:57 pm The long and short of it is I lost 400K in a few different stocks and am looking for the best route to be able to offset these massive losses maybe 30 years from now with an equal long term gain . Part of me thinks my mental illness (bipolar 1 with delusions) was part of the cause (reckless behavior) but what’s done is done.
There are few things I know as devastating, financially and otherwise, as bipolar disease. Those who suffer from it, along with schizophrenia, are notorious for having decent periods, which almost always results in relaxation of protections and foregoing of medications. I am glad that your disease has only cost you money, so far.

Here are my ideas for your financial priorities:

1. Protect your wife and your marriage from your disease. This includes medications, and putting whatever protections are necessary in place to make sure that you don't do anything to betray her or harm her. This is essential for step #2.

2. If we are talking true bipolar disease, give your wife complete control over your finances, and eliminate any ability you have to access them other than to view balances. Have a monthly budget meeting at which you both agree how all of your money should be spent, along with your personal spending allowance. This money should be put in a separate account, the only account, that you can access.

In my experience as a physician, and working in a boarding home for mentally disabled veterans, having a family member that loves you is the most important thing to your success, financially and in all other ways. Protect that relationship at all costs, then leverage it and rely on it.

I am sorry you are going through this. I wish you all the best, and hope that this $400,000 is able to immunize your life against the effects of this terrible disease.

Founding Father
“They accomplished a revolution... [and] reared the fabrics of governments which have no model on the face of the globe... which it is incumbent on their successors to improve and perpetuate.” James Madison
MHA556
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Re: Starting over at 39; lost 400K… seeking advice

Post by MHA556 »

jmw wrote: Wed Oct 13, 2021 8:39 pm First, save $2k or one month's worth of expenses, whichever is less.
Next, devote all money above expenses or $2k to debt even if it is 0% interest. Every last dime. Your brokerage account balance should be zero the whole time until your debt is completely gone.
Your friend debt counts ($91k debt total) unless they can't successfully sue you and you intend to stiff them as a purely acceptable business decision.

Given the unique aspect of your story, I'm totally 100% OK with you continuing to deliver pizzas if that's what you are good at and if it would potentially be disastrous if you went to another line of work to make your shovel bigger.

Once all of your debt is zero, I'd let the wife make the transactions to invest with a 3 mutual fund/ETF Bogle friendly portfolio. No more stock picking.

I think that's it. Good luck. You got this.

Actually, I think his friends owe him money- and are paying him back. Makes his balance sheet a bit better off, but doing personal loans seems like a horrible idea.
Orangutan
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Re: Starting over at 39; lost 400K… seeking advice

Post by Orangutan »

Mike Scott wrote: Wed Oct 13, 2021 6:42 pm Save a small emergency fund, pay off debt and then save / invest. Have you considered using an advisor or some sort of financial gatekeeper since you think mental illness has been a factor?
I agree with this. It’s a small fee to protect yourself.
Vanguard User
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Re: Starting over at 39; lost 400K… seeking advice

Post by Vanguard User »

$400k principal lost? Which stocks were they?
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WingsFan4Life
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Re: Starting over at 39; lost 400K… seeking advice

Post by WingsFan4Life »

Vanguard User wrote: Wed Oct 13, 2021 10:09 pm $400k principal lost? Which stocks were they?
Asking the real questions. :confused
Topic Author
Mikewilliams818
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

Appreciate all the advice thus far

Real quick, there are 2 people that owe ME 18K total , it’s not a debt of MINE

I think saving 75% of my income is what I’ve gotten accustomed to anyways, I’m living a Spartan lifestyle. The only activity I do is 12$ a week bowling league with my father and 1x a month golf.

I’m surprised people are suggesting to pay down the HELOC all the way right away even at 2.24%. Wouldn’t it make more sense to get a head start into the market again?

New tires are 220$ for 4, I go to Walmart.com and get the cheapest 205/55/16 size. No Michelin for me, even with 20k additional miles doesn’t justify the 2x expense.
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Mikewilliams818
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

My disease has cost me a job and various friends and almost my wife. Don’t wanna get into specifics but I was attempting to divorce her during my manic phase last year. What suits me though is LOW stress work, pizza delivery fits the bill because it keeps me somewhat active (walking a couple thousand steps a day) and I’m mostly on my own. It’s the perfect job to do in retirement (though some may disagree)
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Mikewilliams818
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

To answer the questions of “which stocks were they”

VELTF in 2013
NIHD 2014?
DNDN 2014?
INTEQ just recently

When I got Margin called last March, I had 14 different stocks and was okay until the DJIA dipped below 23K, after that point I was forced to liquidate (had 17000 shares bbby at 13, had 10000 shares X at 10, 2500 big at 21, 7K of Goodyear, etc), had I been able to HOLD thru the sniffles (covid) dip id be sitting pretty

It’s been extremely hard to mentally accept the losses but I figure what else would I be doing right now if I was free to not work (or work 20 hours a week.) I’m extremely unproductive if I’m not working so maybe it’s all in Gods plan anyways. And hey, it’s only money right 😂?
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Mikewilliams818
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Re: Starting over at 39; lost 400K… seeking advice

Post by Mikewilliams818 »

To those who suggest to give my wife full control of the finances, I mostly agree BUT she is a poor track record herself. When we first started dating a few years ago, she was intrigued with stocks because of me and decided to get into forex trading. She lost 10,000$ and part of that was her parents money whom are already poor. She’s also lost on buying a few penny stocks.

At any rate, I’ve convinced her (and I’m not person to give advice) to do JUST MUTUAL funds, no more stock picking. I told her in 10 years we should each have 200,000$ in our brokerages if we stay diligent. A first hurdle to clear if you will.

I’ll keep my paying on this debt for awhile though
onourway
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Re: Starting over at 39; lost 400K… seeking advice

Post by onourway »

Mikewilliams818 wrote: Wed Oct 13, 2021 10:29 pm Appreciate all the advice thus far

Real quick, there are 2 people that owe ME 18K total , it’s not a debt of MINE

I think saving 75% of my income is what I’ve gotten accustomed to anyways, I’m living a Spartan lifestyle. The only activity I do is 12$ a week bowling league with my father and 1x a month golf.

I’m surprised people are suggesting to pay down the HELOC all the way right away even at 2.24%. Wouldn’t it make more sense to get a head start into the market again?

New tires are 220$ for 4, I go to Walmart.com and get the cheapest 205/55/16 size. No Michelin for me, even with 20k additional miles doesn’t justify the 2x expense.
The thing is that if you are incurring debt faster than you are saving, it’s a false economy. You are much better off having enough emergency fund to actually cover your variable expenses than living like a spartan until they won’t be ignored. This is especially true with home and auto repairs. Sure, you might spend nothing on the house for months, but if it then costs you $10k in maintenance that largely could have been prevented - again - false economy. Same with tires. How much is the deductible on your insurance? I’d wager it’s significantly more than the savings by buying the bottom of the barrel tires. And as you realize, they wear out faster to boot. You don’t need the Michelins, but a decent set of Coopers or Generals will make a big difference. It’s expensive to be poor - yet you actually make enough not to live like you’re poor. That’s what we’re saying. It’s much more sustainable to set a goal of living a more balanced life. It’s ok to spend money. Just make sure you consistently save 20% of it (and find a way to avoid your past mistakes in the future).
Paul78
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Re: Starting over at 39; lost 400K… seeking advice

Post by Paul78 »

Mikewilliams818 wrote: Wed Oct 13, 2021 7:15 pm
Planning to stay on antipsychotic for life, hopefully not another “episode.”
Maybe consider a fiduciary. Even if you do everything right (you know what that is but I don't think I can comment cause it could be consider "medical advice) it is less likely but still possible you have another "episode". A fiduciary would eliminate the financial risk of another "episode".

edit- and no a fiduciary doesn't have to be your wife. A third party could be hired. Granted it would cost a tiny bit of money but you could at least avoid future financial catastrophe.
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JoeRetire
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Re: Starting over at 39; lost 400K… seeking advice

Post by JoeRetire »

Mikewilliams818 wrote: Wed Oct 13, 2021 5:57 pm The long and short of it is I lost 400K in a few different stocks and am looking for the best route to be able to offset these massive losses maybe 30 years from now with an equal long term gain . Part of me thinks my mental illness (bipolar 1 with delusions) was part of the cause (reckless behavior) but what’s done is done.
If what's done is done, then you have to stop trying to offset past losses.
Have no emergency fund
Work on this first.
Have 18K of loans to 2 people whom are paying back
Work on this next.
Plan to work until 70 and relocate to Thailand
That's a plan.
Should I aggressively pay off the 73K of debt in 2.5 years
Can you afford to do that? I wouldn't be in much of a rush to pay off a HELOC @2.24%.

Whatever you do, don't skimp on your mental health.
Just remember: it's not a lie if you believe it.
animarising
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Re: Starting over at 39; lost 400K… seeking advice

Post by animarising »

With your diagnosis, I agree that a fiduciary is in order. You're on Medicaid. Are you also on SSI? If so, I believe a fiduciary can be appointed that will manage your "above the table" money. [Political comment removed by moderator oldcomputerguy]
aristotelian
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Re: Starting over at 39; lost 400K… seeking advice

Post by aristotelian »

Make sure you claim your investment losses. You can deduct $3k this year and carry forward the losses to offset gains and income for as long as needed.
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Re: Starting over at 39; lost 400K… seeking advice

Post by Outer Marker »

Mikewilliams818 wrote: Wed Oct 13, 2021 10:29 pm I’m surprised people are suggesting to pay down the HELOC all the way right away even at 2.24%. Wouldn’t it make more sense to get a head start into the market again?
Yes, pay off all debt first before venturing into the market. Considering how high and frothy the market is at the moment, that could be a "head start" into more losses. Clean up your debt before taking on more market risk.

Once you have your balance sheet cleaned up, I'd keep it really simple. Invest in a Vanguard Target Date fund corresponding to your desired departure date for Thailand. Roth first, then in taxable if you are in fact able to maintain a high savings rate. Having a professionally managed, low cost, and well diversified fund will hopefully help you resist the urge for tinkering.
iamblessed
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Re: Starting over at 39; lost 400K… seeking advice

Post by iamblessed »

A lot of us have that mistake some with smaller amounts some with much larger amounts than yours. Try not to think about the past. Think about today forward.
30west
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Re: Starting over at 39; lost 400K… seeking advice

Post by 30west »

Google "Dave Ramsey baby steps"
sureshoe
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Re: Starting over at 39; lost 400K… seeking advice

Post by sureshoe »

I'm really sorry to hear about your misfortune.

This forum can be a great resource, but I would recommend you start with Dave Ramsey (like the person above)

You're going to be on this forum seeing people talk about their large nest eggs, retiring, etc. I'm playing armchair psychologist, but I think that might not be what you need right now.

I think for people who have not mastered their domain, Ramsey's Baby Steps are the way to go:
https://www.ramseysolutions.com/dave-ra ... HEEALw_wcB

I recommend everyone get to Step 4 (saving 15% for retirement). Once you're doing that in boring-old-mutual-funds-or-ETFs, then come here and have a discussion. But until you have done that, I think anything else is very destructive.
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Re: Starting over at 39; lost 400K… seeking advice

Post by Paul78 »

iamblessed wrote: Thu Oct 14, 2021 7:36 am A lot of us have that mistake some with smaller amounts some with much larger amounts than yours. Try not to think about the past. Think about today forward.
But the OP kinda has to take a different approach. Many on the this board that made that mistake was caused by a lack of knowledge, feeling smarter than the average person, or greed. In the OP case he basically admits a disease contributed to the mistake. So it is kinda similar when topics come up about parents or relatives with dementia come up. You aren't going to just tell the person with dementia to learn from their mistake and move forward. You are going to develop a plan to help preserve whatever wealth is left and any future income.
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Tamarind
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Re: Starting over at 39; lost 400K… seeking advice

Post by Tamarind »

aristotelian wrote: Thu Oct 14, 2021 7:00 am Make sure you claim your investment losses. You can deduct $3k this year and carry forward the losses to offset gains and income for as long as needed.
This is great tax advice I want to highlight.

I suggest writing an IPS together that defines what you need to stick to for life. No individual stocks, no margin, no buying or selling in response to news, prioritize retirement contributions, etc. It's a good exercise to be on the same page w your wife.

I would also suggest, if a fiduciary is not an option, then any kind of arrangement that stops you from making decisions by yourself in the short term. For example, set automation rules for your planned investments. In a Roth IRA at Vanguard you can set it to automatically draft from your bank account and purchase the funds of your choice, on schedule. Then set your 2FA to a trusted friend's or family member's phone - someone who is on the inside of what's happening for you medically - so that you cannot log in without their help. Ask them not to let you log in if you go off your meds or are showing signs of mania.

Wishing you the very best in support and care so you don't have to go through another episode, but you should also make a plan that assumes you will and protects you against that.
RobLyons
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Re: Starting over at 39; lost 400K… seeking advice

Post by RobLyons »

Best route is the Boglehead way. Lazy 2 or 3 fund portfolio. Set it and forget it. And invest as heavily as you can. Every spare dollar beyond your EF.
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bradinsky
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Re: Starting over at 39; lost 400K… seeking advice

Post by bradinsky »

Wow! It’s hard to imagine that both you & your wife have jobs, and that you have be able to make, invest & lose $400K & you’re STILL on medicaid. [OT comments removed by admin LadyGeek] Stop picking stocks because you’re not as good at it as you think you are.
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Re: Starting over at 39; lost 400K… seeking advice

Post by retiredjg »

This is a situation where I consider a financial advisor to be a significant improvement over doing it yourself. Almost a "must do".

You already know what can happen during manic phases. This is not a situation that can be fixed. But it can be managed. Giving control to an advisor is a management tool and I think you should use it for your own protection.

It would be preferable if your wife could assume these duties. I have seen a bi-polar situation work out satisfactorily through a guardianship. But apparently she is not ready for that responsibility either.

Vanguard's personal advisor service is one that I recommend for others - because we know Vanguard is not going to send anyone down the primrose path. And they are very low cost. However, I don't know if Vanguard can offer as close a personal relationship as you might need. Is just having your money 1 step outside your personal control enough for you?
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Re: Starting over at 39; lost 400K… seeking advice

Post by Ramjet »

retiredjg wrote: Thu Oct 14, 2021 8:28 am This is a situation where I consider a financial advisor to be a significant improvement over doing it yourself. Almost a "must do".

You already know what can happen during manic phases. This is not a situation that can be fixed. But it can be managed. Giving control to an advisor is a management tool and I think you should use it for your own protection.

It would be preferable if your wife could assume these duties. I have seen a bi-polar situation work out satisfactorily through a guardianship. But apparently she is not ready for that responsibility either.

Vanguard's personal advisor service is one that I recommend for others - because we know Vanguard is not going to send anyone down the primrose path. And they are very low cost. However, I don't know if Vanguard can offer as close a personal relationship as you might need. Is just having your money 1 step outside your personal control enough for you?
I second the advisor suggestion
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willthrill81
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Re: Starting over at 39; lost 400K… seeking advice

Post by willthrill81 »

Ferdinand2014 wrote: Wed Oct 13, 2021 6:53 pm 1.) I’d start by saving up emergency fund - $1,000 or so to avoid credit card when you need car repair or new washer.
2.) Pay off credit card
3.) Build up emergency savings to 3 months wages
4.) Pay off car
5.) Fully fund Roth IRA with target date fund through brokerage of the three: Vanguard/Fidelity/Schwab
6.) Have your wife change and hide login password - give her access as a trusted person in case brokerage has concerns regarding your behavior.
7.) Cut up credit cards to avoid impulse spending during manic episodes
8.) Pay off Heloc
9.) Make sure you continue to get consistent mental healthcare.
:thumbsup

The only thing I would add to that is that the OP is a prime candidate for an all-in-one fund of some type, like a target date fund. Buy the fund and literally hold it until forever.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
aristotelian
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Re: Starting over at 39; lost 400K… seeking advice

Post by aristotelian »

Tamarind wrote: Thu Oct 14, 2021 7:53 am
aristotelian wrote: Thu Oct 14, 2021 7:00 am Make sure you claim your investment losses. You can deduct $3k this year and carry forward the losses to offset gains and income for as long as needed.
This is great tax advice I want to highlight.

I suggest writing an IPS together that defines what you need to stick to for life. No individual stocks, no margin, no buying or selling in response to news, prioritize retirement contributions, etc. It's a good exercise to be on the same page w your wife.

I would also suggest, if a fiduciary is not an option, then any kind of arrangement that stops you from making decisions by yourself in the short term. For example, set automation rules for your planned investments. In a Roth IRA at Vanguard you can set it to automatically draft from your bank account and purchase the funds of your choice, on schedule. Then set your 2FA to a trusted friend's or family member's phone - someone who is on the inside of what's happening for you medically - so that you cannot log in without their help. Ask them not to let you log in if you go off your meds or are showing signs of mania.

Wishing you the very best in support and care so you don't have to go through another episode, but you should also make a plan that assumes you will and protects you against that.
This is good advice too. Retirement accounts are a great option, not only for the tax benefits but also giving you a psychological barrier (as well as tax incentives) to keep you from touching the funds. 401k in particular usually limits your options to index funds. If you can max your retirement accounts year after year you will generally be fine regardless of what gambling you do in your taxable account. 401k would also eliminate the need for a financial advisor.
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