Reached 4M target. Taking money off table. Advice?

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JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by JSnyder » Thu Dec 07, 2017 8:51 am

inbox788 wrote:
Wed Dec 06, 2017 11:16 am
JSnyder wrote:
Sat Dec 02, 2017 12:40 pm
My goals for the short term:
1. 50K in 2018 and 2019 for my son's eduction
2. 50K in 2021 and 2022 for my daughter's eduction
3. 3 years (300K) in my cash equivalent fund (vanguard admiral corporate short term bonds)
Depending on how you're saving and whether you're transferring the education funds, you might want to keep to the $14k individual ($28k couple) annual limit. For example, putting $50k into a 529 2 consecutive years is asking for additional compliance requirements and possible reduction in lifetime transfers. Putting $25k for 4 consecutive years is simpler, and achieves mostly same result, no?

If you're keeping it in your own account, it might not matter as much, but you give up potential benefits. Wealth transfer is an area that's full of opportunities if you know what you're doing or find the right adviser, but sorting out the right ones from the AUM fee collectors is difficult. And unless you're talking about a lot of wealth, chances are the savings aren't going to overcome the high fees.
I took your advice on this. Where I live I can deduct 20K for a married couple put into a 529 plan per year. The state tax rate here is 4.5% so this represents a $900 savings. And as you indicate this contribution is also is below the gift tax rate. So I created and put 20K in a 529 plan for my son. I will contribute another 20K per year over the next 4 years.

In year 3 (Fall 2019) I will ask my parents to contribute 20K. As I suspect I will need a total of $100K. By then we will have a better idea of the actual amounts needed and how seriously my son is taking his education. That would be his senior year in college.

Good advice. Thank you.

JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Reached 4M target. An update.

Post by JSnyder » Sun Apr 01, 2018 8:50 am

Happy Easter everyone.

A quick update. As I check my portfolio on Vanguard this morning I am at 4,096,357.89.

For the month of March I am down – $50,908.63, but I prefer to look at my YTD performance which shows me squeaking up by $5,995.38.

I am more or less 80/20 which the 20% a mix of vanguard total bond market and vanguard short term corporate bonds. My bonds funds are down –$2,523.70 since I started buying them last June. I guess I thought that would be worse, but it is disappointing that I am making less than if I had kept the money in the bank.

I forecast a choppy year for the stock market. Lots of things for investors to worry about (inflation, tech stock privacy) even though it seems to me the economy is doing great. I hope my portfolio will squeak through with a 5% return this year. Though who knows.

I am becoming very concerned with taxes. I see no scenario the tax rate percentage does not go up from here. I live in Illinois which has pension and Medicare problems. Taxes went from 3.25% to 4.5% this year and it is still not enough. They are talking about a progressive tax rate which will go to 7%.

I hope to get out and move to Texas before it gets to bad here. Texas has no income tax rate, real estate taxes (depending on where you live) which are 60% of Illinois and lower sales tax rate. A similar house in Texas is also 60% of Illinois. I still have kids in school in Illinois. But when they finish I hope to leave Illinois, I a have already told my family about this and they are supportive.

I see no scenario where United States taxes do not go up over the next 20 years. A combination of globalization eroding the middle class with additional citizens on assistance such as Medicare with lots of retirees drawing on social security and Medicare will result in higher taxes.

As I look towards the future I have 60K in college expenses starting fall of this year. I put 20K in a 529 plan last year in anticipation of this (I can deduct this from my state income tax). I plan to contribute another 20K into the 529 this year and will ask my parents to do likewise.

My family is no longer saving anything and I anticipate next year will be worse. My understanding is state income tax deduction will cap out at 10K. Since Illinois is a high income tax and property tax rate state that will hurt. I anticipate having to start draw down our funds for the next few years until my kids are out of college and we can move to a lower tax state.

Our jobs seem OK for now. But who knows. My wife and I are megacorp employees and there is always pressure. Luckily the economy seems to be doing well and unemployment is down. But age discrimination is real and I always say that middle managers get hired and fired by their ability to make profits for the company. The best is to move the top line (sales increase) but if necessary middle managers will cut expenses (layoffs) in an effort to make their profit targets.

If you have any comments or ideas please feel free to share them with me. Thank you in advance.

BogleBoogie
Posts: 575
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Location: AK

Re: Reached 4M target. Taking money off table. Advice?

Post by BogleBoogie » Sun Apr 01, 2018 9:30 am

sergeant wrote:
Fri Dec 01, 2017 9:20 pm
I'm not sure what information the OP is seeking. I do find it odd that his "first threshold" was 4 million dollars. Mine was a thousand dollars. When I hit a hundred thousand that was another... First time posters with huge portfolios always make me wonder if were being trolled especially when their writing skills are lacking.
Was wondering exact same thing for the exact same reasons...

User avatar
Sandtrap
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Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Reached 4M target. Taking money off table. Advice?

Post by Sandtrap » Sun Apr 01, 2018 9:46 am

Thanks for the update and "keep em coming".

1. 5% returns are unrealistic if you are looking at things for such a short term. Given your allocation, ignore the news, "noise", and stop checking the portfolio balance. Portfolio balances have a daily up and down "heartbeat", not steady but arrhythmia, sometimes near "cardiac arrest". Then there are longer fluctuations like breathing. It's just what happens. Ignore it. Trust in your IPS Statement and what you've done so well to strategize long term.

2. Given that you can retain high income employment, moving from a UHCOL to ULCOL has huge advantages. If Texas is not favorable, choose somewhere else.

3. 4M may seem like a lot to many and can be intimidating but, depending on your annual expenses and strategy going forward and into retirement, and a few inevitable "financial and personal black swans" along the way, it can be depleted and you are wise to be cautious.

4. If you have anxiety with market fluctuations. Revisit your chosen allocation "sleep factor" level.

There is a big difference in attitude and approach between those that have "More to lose than to gain" and those that have "More to gain than to lose".

5. Read this and absorb it into your bones. Larger assets do not mean things need to be more complex. In fact, the simpler you can make everything, the better and more efficient for the long term.

TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505

6. Read this and absorb it into your bones. Everyone, no matter the asset size or experience, is not immune.

Investing Behavior Pitfalls
https://www.bogleheads.org/wiki/Behavioral_pitfalls

Keep the updates coming for encouragement from the forum seniors to "stay the course".

"You kin do it! "

aloha,
jim :D
Last edited by Sandtrap on Sun Apr 01, 2018 10:24 am, edited 1 time in total.

Leemiller
Posts: 1061
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Re: Reached 4M target. Taking money off table. Advice?

Post by Leemiller » Sun Apr 01, 2018 10:13 am

A couple of thoughts...

Divorce is expensive and happens to empty nesters, buy your wife a new or CPO car that is nice - I have the feeling she’d really enjoy a Mercedes, BMW, etc. We got one to celebrate my new job and I feel much safer in it than our very old Honda. I’m a nervous drivers and it has really helped. The safety features are awesome. If your wife has poor night vision, this is a no-brainer. Plus, my car is just is a great drive and my husband really pushed for the nicer car despite driving a junky car himself. Now I’m working on getting a newer car for my husband for the safety features....

You use a lot of “I”. I think you need more “we”. If she wants to quit her job there is no reason for her not to do so, and when you move get a place she likes - a nice place. Maybe she can take the kids on a nice vacation while they are still willing to travel with their parents. Does she want to travel?

For your kids, just please treat them the same 100k to one should mean 100k to the other. Otherwise, you’re going to create major resentment. Personally, I plan to fund Roths for my kids when they start working and then to start gifting them up to the max at some point to help us with estate planning and to give them a good start. They will also need to learn to manage money given what their future inheritance will look like, and I want to watch them enjoy some of it while I’m around.

We are on the road to a couple of million, and we plan to enjoy it along the way. There is too much angst on this forum about several million not being “enough.” Congrats on what you’ve achieved.

maniminto
Posts: 96
Joined: Wed Jan 04, 2017 4:50 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by maniminto » Sun Apr 01, 2018 1:33 pm

Congratulations on your financial success at a relatively young age.
Perhaps you can share with the forum how you did it?
What is the split between your taxable & qualified assets?

chevca
Posts: 1945
Joined: Wed Jul 26, 2017 11:22 am

Re: Reached 4M target. An update.

Post by chevca » Sun Apr 01, 2018 1:44 pm

JSnyder wrote:
Sun Apr 01, 2018 8:50 am
Happy Easter everyone.

A quick update. As I check my portfolio on Vanguard this morning I am at 4,096,357.89.

For the month of March I am down – $50,908.63, but I prefer to look at my YTD performance which shows me squeaking up by $5,995.38.

I am more or less 80/20 which the 20% a mix of vanguard total bond market and vanguard short term corporate bonds. My bonds funds are down –$2,523.70 since I started buying them last June. I guess I thought that would be worse, but it is disappointing that I am making less than if I had kept the money in the bank.

I forecast a choppy year for the stock market. Lots of things for investors to worry about (inflation, tech stock privacy) even though it seems to me the economy is doing great. I hope my portfolio will squeak through with a 5% return this year. Though who knows.

I am becoming very concerned with taxes. I see no scenario the tax rate percentage does not go up from here. I live in Illinois which has pension and Medicare problems. Taxes went from 3.25% to 4.5% this year and it is still not enough. They are talking about a progressive tax rate which will go to 7%.

I hope to get out and move to Texas before it gets to bad here. Texas has no income tax rate, real estate taxes (depending on where you live) which are 60% of Illinois and lower sales tax rate. A similar house in Texas is also 60% of Illinois. I still have kids in school in Illinois. But when they finish I hope to leave Illinois, I a have already told my family about this and they are supportive.

I see no scenario where United States taxes do not go up over the next 20 years. A combination of globalization eroding the middle class with additional citizens on assistance such as Medicare with lots of retirees drawing on social security and Medicare will result in higher taxes.

As I look towards the future I have 60K in college expenses starting fall of this year. I put 20K in a 529 plan last year in anticipation of this (I can deduct this from my state income tax). I plan to contribute another 20K into the 529 this year and will ask my parents to do likewise.

My family is no longer saving anything and I anticipate next year will be worse. My understanding is state income tax deduction will cap out at 10K. Since Illinois is a high income tax and property tax rate state that will hurt. I anticipate having to start draw down our funds for the next few years until my kids are out of college and we can move to a lower tax state.

Our jobs seem OK for now. But who knows. My wife and I are megacorp employees and there is always pressure. Luckily the economy seems to be doing well and unemployment is down. But age discrimination is real and I always say that middle managers get hired and fired by their ability to make profits for the company. The best is to move the top line (sales increase) but if necessary middle managers will cut expenses (layoffs) in an effort to make their profit targets.

If you have any comments or ideas please feel free to share them with me. Thank you in advance.
I didn't read the entire thread, just the update. But, my thoughts from that are..... you're sure full of doom and gloom for someone with $4M and a seemingly wonderful family. Must be rough....

JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by JSnyder » Sun Apr 01, 2018 3:56 pm

maniminto wrote:
Sun Apr 01, 2018 1:33 pm
Congratulations on your financial success at a relatively young age.
Perhaps you can share with the forum how you did it?
What is the split between your taxable & qualified assets?
I am 49 so not sure about the relatively young age. But here is roughly how I did it.

1. I went into I.T. when it was a hot field and during the run-up to Y2K I did well.

Now I do not think you could do this anymore, or not nearly as easily because of outsourcing. But basically I went into I.T. in part because of the money. Some find this offensive. My family was pretty poor when I was a teenager due to job loss. I never wanted to be poor.

On a side note if I was young I would become a nurse practitioner / physicians assistant / nurse anesthesiologist. I think you could do as well as I did in this generation with one of these jobs.

2. I married well and never got divorced. My wife has a good job (not a great job but better than average)

3. I am been with vanguard for 20 years.

4. During 2008 and other downturns I did not pay attention. I still had my job and was raising a family. I did not notice.

5. I have old cars with 110,000 miles and 180,000 miles. They are Japanese. Fancy cars to me seems like an unnecessary expense.

6. I lived in a house I could easily afford until my wife went through her mid-life crisis and now I live in a McMansion. That was a mistake but see point #2. It is cheaper than a divorce.

7. I maxed out the 401K from a young age and asked my wife to do likewise.

8. I got lucky. The market has done well.

JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. An update.

Post by JSnyder » Sun Apr 01, 2018 4:04 pm

chevca wrote:
Sun Apr 01, 2018 1:44 pm
JSnyder wrote:
Sun Apr 01, 2018 8:50 am
Happy Easter everyone.

A quick update. As I check my portfolio on Vanguard this morning I am at 4,096,357.89.

For the month of March I am down – $50,908.63, but I prefer to look at my YTD performance which shows me squeaking up by $5,995.38.

I am more or less 80/20 which the 20% a mix of vanguard total bond market and vanguard short term corporate bonds. My bonds funds are down –$2,523.70 since I started buying them last June. I guess I thought that would be worse, but it is disappointing that I am making less than if I had kept the money in the bank.

I forecast a choppy year for the stock market. Lots of things for investors to worry about (inflation, tech stock privacy) even though it seems to me the economy is doing great. I hope my portfolio will squeak through with a 5% return this year. Though who knows.

I am becoming very concerned with taxes. I see no scenario the tax rate percentage does not go up from here. I live in Illinois which has pension and Medicare problems. Taxes went from 3.25% to 4.5% this year and it is still not enough. They are talking about a progressive tax rate which will go to 7%.

I hope to get out and move to Texas before it gets to bad here. Texas has no income tax rate, real estate taxes (depending on where you live) which are 60% of Illinois and lower sales tax rate. A similar house in Texas is also 60% of Illinois. I still have kids in school in Illinois. But when they finish I hope to leave Illinois, I a have already told my family about this and they are supportive.

I see no scenario where United States taxes do not go up over the next 20 years. A combination of globalization eroding the middle class with additional citizens on assistance such as Medicare with lots of retirees drawing on social security and Medicare will result in higher taxes.

As I look towards the future I have 60K in college expenses starting fall of this year. I put 20K in a 529 plan last year in anticipation of this (I can deduct this from my state income tax). I plan to contribute another 20K into the 529 this year and will ask my parents to do likewise.

My family is no longer saving anything and I anticipate next year will be worse. My understanding is state income tax deduction will cap out at 10K. Since Illinois is a high income tax and property tax rate state that will hurt. I anticipate having to start draw down our funds for the next few years until my kids are out of college and we can move to a lower tax state.

Our jobs seem OK for now. But who knows. My wife and I are megacorp employees and there is always pressure. Luckily the economy seems to be doing well and unemployment is down. But age discrimination is real and I always say that middle managers get hired and fired by their ability to make profits for the company. The best is to move the top line (sales increase) but if necessary middle managers will cut expenses (layoffs) in an effort to make their profit targets.

If you have any comments or ideas please feel free to share them with me. Thank you in advance.
I didn't read the entire thread, just the update. But, my thoughts from that are..... you're sure full of doom and gloom for someone with $4M and a seemingly wonderful family. Must be rough....
Yeah that is true. I have always been this way. I always see the cup half full but things generally have worked out very well for me. Maybe my faith should be greater.

JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by JSnyder » Sun Apr 01, 2018 4:14 pm

Leemiller wrote:
Sun Apr 01, 2018 10:13 am
A couple of thoughts...

Divorce is expensive and happens to empty nesters, buy your wife a new or CPO car that is nice - I have the feeling she’d really enjoy a Mercedes, BMW, etc. We got one to celebrate my new job and I feel much safer in it than our very old Honda. I’m a nervous drivers and it has really helped. The safety features are awesome. If your wife has poor night vision, this is a no-brainer. Plus, my car is just is a great drive and my husband really pushed for the nicer car despite driving a junky car himself. Now I’m working on getting a newer car for my husband for the safety features....

You use a lot of “I”. I think you need more “we”. If she wants to quit her job there is no reason for her not to do so, and when you move get a place she likes - a nice place. Maybe she can take the kids on a nice vacation while they are still willing to travel with their parents. Does she want to travel?

For your kids, just please treat them the same 100k to one should mean 100k to the other. Otherwise, you’re going to create major resentment. Personally, I plan to fund Roths for my kids when they start working and then to start gifting them up to the max at some point to help us with estate planning and to give them a good start. They will also need to learn to manage money given what their future inheritance will look like, and I want to watch them enjoy some of it while I’m around.

We are on the road to a couple of million, and we plan to enjoy it along the way. There is too much angst on this forum about several million not being “enough.” Congrats on what you’ve achieved.
A few things.

1. I have two kids to send through college. The spend rate will be the same. I am calculating about $120K each or $240k together. It would be nice if I made enough in the market through dividends, capital gains and appreciation to not pull anything out when paying for college. Hence it would be nice to make 5%.

2. My wife is older than I am and wants to retire at 62. Her dad worked a stressful job and had a heart attack at a relatively young age and was dependent on others after that. This haunts her.

3. I purchased the current McMansion for my wife. She was also taking me to look at fancy cars during this time and I figured well at least with the McMansion I might not lose money. Now if I sold my McMansion right now after commission and real estate taxes I would lose money. But I am hopeful that the McMansion might break even as an investment by the time my kids finish school.

4. I have at least two years, probably 4 years, and maybe 6 years until I will have an empty nest. I have a way to go, yet. Try to get along a megacorp because frankly I still need this job.

5. I recently put over 3K in my vehicles this year to make sure they are in good working order. I hope they will last until both kids are out of college. Yes the new vehicles are safer, I am really interested in the automatic braking and lane departure. I just will feel more comfortable about my financial situation once at least one kid is out of school and working.

JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by JSnyder » Sun Apr 01, 2018 4:22 pm

Sandtrap wrote:
Sun Apr 01, 2018 9:46 am
Thanks for the update and "keep em coming".

1. 5% returns are unrealistic if you are looking at things for such a short term. Given your allocation, ignore the news, "noise", and stop checking the portfolio balance. Portfolio balances have a daily up and down "heartbeat", not steady but arrhythmia, sometimes near "cardiac arrest". Then there are longer fluctuations like breathing. It's just what happens. Ignore it. Trust in your IPS Statement and what you've done so well to strategize long term.
Hi Jim, I like your positive attitude. I generally check my portfolio balances once a month at the beginning of each month. The reason is vanguard has a tool which tells you your personal rate of return but it is only based on month, not day. Generally I do not check each day. But your point is still valid.

Personally I am staying the course, I like my portfolio the way it is though some would argue it is too aggressive for my age and asset level. My walkaway goal is 5 million in pure assets (after mortgage debt). The reason for this number is at a 4% withdrawal rate this would be 200K which is more than enough for my wife and I to live on, spoil the grandkids, do what we want and still leave my kids a sizeable inheritance.

And while some might say 200K why would I need this, well I am factoring in the possibility of a market downturn of 50% where my assets went to 2.5 M with a 4% withdrawal rate would be 100K which I still think we could live on after kids are out of college.

JSnyder
Posts: 36
Joined: Wed Nov 29, 2017 2:03 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by JSnyder » Sun Apr 01, 2018 4:26 pm

BogleBoogie wrote:
Sun Apr 01, 2018 9:30 am
sergeant wrote:
Fri Dec 01, 2017 9:20 pm
I'm not sure what information the OP is seeking. I do find it odd that his "first threshold" was 4 million dollars. Mine was a thousand dollars. When I hit a hundred thousand that was another... First time posters with huge portfolios always make me wonder if were being trolled especially when their writing skills are lacking.
Was wondering exact same thing for the exact same reasons...
There are bogleheads on this website with significantly more in assets than I have. The difference is I am willing to be transparent (well relatively) so I can get accurate feedback.

I am also willing to share how I did it and offer advice on how others could (please see my 8 points on how I did this). This web site is excellent for education on how to invest but maybe not so great on "how did I get to where I am today". I think most are unwilling to share this information.

retiresmart70
Posts: 29
Joined: Sun Apr 01, 2018 7:36 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by retiresmart70 » Mon Apr 02, 2018 9:46 am

JSnyder..

Thank you for sharing.

Texas has some great places to move to but you have to select wisely...

N. Houston, Woodlands, Spring. Some great places there. Woodlands property tax high
Austin, North,
DFW, Mid Cities, or Denton.

If you hunt wisely, you can find great value, solid construction, better than any mcmansion.. and still make wife happy. Some houses with great character...

Save money on cars: Carmax... Buy the warranty. Met a guy that worked at GM Factory, has purchased 9 cars at Carmax... Warranty 1800. Any big engine or transmission issues, saves you thousands. only $300 per incident..

My retirement
Purchased home 20 yrs, ago, 134K, now worth 500K property alone.
This is our retirement, now we are going to sell, and take cash (375-400) to invest in Vanguard Index Fund for next 10 yrs. With some bonds,

What % of bonds on a 100 scale, vs. Total Market VFIAX.? do you suggest?

Rent for next 5 yrs. small ranch home 1200 month, or apartment.

Me 55
Wife 54.
no children

Our income is small. Used to be in Telecom, and that industry is gone, for experienced people.

My yearly: 25-30K
Wife: 37K
no IRA, 401K,

But now, we have more money to start Roth, as we were living on fumes to survive, last 2 years.

Rgds

retiresmart

blinx77
Posts: 261
Joined: Sat Jan 07, 2012 11:23 am

Re: Reached 4M target. Taking money off table. Advice?

Post by blinx77 » Mon Apr 02, 2018 2:32 pm

I don't understand the point of loading up on bonds, which can go down in value and will require you to pay taxes (except for muni bonds, which are riskier esp. in Illinois, or bonds in retirement accounts, which is valuable space that could be used to shelter equity dividends from taxation), at low interest rates when you have mortgage debt outstanding. Let's not even get into sitting on cash in hopes of a market drop.

I have a small allocation of bonds for diversification, but to me the obvious "take money off the table" move is to reduce debt.

It doesn't make sense to be concerned about "taking money off the table" and then state that you don't want to prepay your mortgage because you in the past made a lot of money by taking risk investing in equities. You can't compare a risky return to a risk-free return, and plus isn't your stated goal to now "take money off the table" now that you have made these gains?

I'd also let your DW do what she wants with regard to employment. You have $4 million. If you want to keep working that's your thing but she is older than you so it's fair to let her stop working sooner anyways. I'd also go buy safer cars. Maybe you can make a deal that she stays in work long enough to save up for her new car and then she can get it as a retirement present?

Then stay the course until the mortgage is prepaid and the kids are out of school and go do whatever you want.

EDIT: For clarity, I am not saying "liquidate your bond positions." I am saying, instead of shifting to 50/50 or 60/40 or whatever, why not stay the course or shift to 80/20 and then use money that would otherwise go into taxable investments (or otherwise be reinvested as dividends back into taxable investments) to prepay your mortgage, while still staying invested in existing stocks / bonds.

User avatar
1210sda
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Re: Reached 4M target. Taking money off table. Advice?

Post by 1210sda » Mon Apr 02, 2018 8:20 pm

---delete----

Beehave
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Re: Reached 4M target. Taking money off table. Advice?

Post by Beehave » Mon Apr 02, 2018 10:37 pm

retireearly wrote:
Fri Dec 01, 2017 1:14 pm
That is a lot to digest and I'm not sure the exact goal or question but I'll add a few things!

Don't be reluctant, we are all anonymous posters. I wish more posters would be transparent (I think many, like you, are concerned about not sounding humble) because ages, portfolio size, net worth, goals, family situation, etc, are a huge part of any decision or planning.

One common theme I keep reading about is winning the game. The older I get (mid-40s now), the more I'm aware of moving from accumulation to preservation; esp. since the huge run up the last decade or so. You have won the game, no doubt. You really could retire now and be fine for life. An SPIA for "only" 2M would give you your 100K a year for life.

So, with your future income needs just about met, why have 80-85% stocks,esp now? Up until this year, I was all stock and after the great run up, I'm much closer to where I need to be than before, so I decide to move to about 33% Fixed Income. My point is that you can essentially secure your future self/family's future my doing something like 50/50. The 50% fixed income can take care of the annual stuff and the 50% equity can help guard against inflation with "hopefully" gains a decent amount beyond inflation. Even better, in a case of huge crash, you would then be in a position to dabble back and buy on sale since to you, going from 50% fixed income to 40, or even 30%, would not be a big deal.

Also, I would strongly recommend revisiting US-only position. You are making a bet that on markets by doing so. At a minimum, there is data that shows 20% international provides more reward and less risk than 100% US.

Congrats on doing well.
I think this is first post in string recommending considering SPIA. I second that idea. Since interest rates may be going higher, consider laddering SPIAs over time to try for better interest rates and also to spread the payout risk to multiple different companies. This will help lock in a base monthly payout which is the "sleep well at night" option.

Regarding working to 70 or beyond, I am a kindred soul, older than OP and still working part-time. I exercise very regularly and generally eat prudently. My work (teaching nights at a community college) keeps me mentally active and in touch with young people. Anyone who wants to work and can get work should do so regardless of age.

GibsonL6s
Posts: 259
Joined: Tue Aug 29, 2017 12:17 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by GibsonL6s » Tue Apr 03, 2018 2:18 pm

retiresmart70 wrote:
Tue Apr 03, 2018 1:44 pm
WhiteMaxima wrote:
Fri Dec 01, 2017 4:20 pm
In casino, stop playing when you win. Because the odds is always against you.

In equity market, keep invested will always win because the odds is on your side. For smooth ride, just add more fix income (like Bond, CD).
Equities vs. Bonds Martin Armstrong 2018 Warning
https://www.armstrongeconomics.com/arms ... -v-trader/

His system, not him, but his machine predicted the big crash a few years ago, to the DAY!

What other possibilities for mix, for protection?
I guess you could buy his $750 report and it will tell you what to do

retiresmart70
Posts: 29
Joined: Sun Apr 01, 2018 7:36 pm

Re: Reached 4M target. Taking money off table. Advice?

Post by retiresmart70 » Tue Apr 03, 2018 2:23 pm

I don't think any report can tell "Anyone" what to do, but all must learn...

denovo
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Re: Reached 4M target. Taking money off table. Advice?

Post by denovo » Tue Apr 03, 2018 2:25 pm

Bacchus01 wrote:
Fri Dec 01, 2017 11:15 am
What is the question?
+1
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LadyGeek
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Re: Reached 4M target. Taking money off table. Advice?

Post by LadyGeek » Tue Apr 03, 2018 3:12 pm

JSnyder - Thanks for the follow-up and for sharing, but the discussion is starting to stray. Is there a specific question you have regarding your portfolio?

See A reminder that non-investing general comment threads are OT for guidance.
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Re: Reached 4M target. Taking money off table. Advice?

Post by MrPotatoHead » Tue Apr 03, 2018 5:20 pm

JSnyder wrote:
Fri Dec 01, 2017 8:18 am
I am reluctant to share my financial information. But without letting you know my situation I do not think I can receive good advice.

Please let me know your thoughts and any or all of what I write below. Thanks in advance.

Today I met my first threshold. 4 million. I celebrated this by changing all dividends and cap gains of my vanguard funds to Vanguard's short term corporate bond index (VTCLX)

I have two thresholds. 4 million of 5 million. At 4 million with a 4% withdrawal rate that is 160K a year. Even if the stock market goes down 50% to 2 million, with a 4% withdrawal rate that is 80K.

Actually I am probably at the 5 million. I expect to inherit $1 million. My parents are mid 80s. But I do not like to think about this as I do not want them to die and counting on inheritance seems a little morbid to me.

At 5 million with a 4% withdrawal rate we are at 200K and if the market tanked by 50% at 2.5 million we are at 100K.

I figure I need 100K a year to live the type of lifestyle I want to live.

I am 49 years old. My wife is 54. One kid is 19 and at the local jr college. The other is 16. They will also go to the local jr college. I figure I will need 50K a year for their jr and senior years of college. Basically I am budgeting 200K for their education.

My other costs, I live in a house that I consider to large. It is 3,400 square feet. Once my kids go to college, my wife has already agreed to live in a smaller place. I also want to move at that time because I live in a high tax area where the economy is not so good. My monthly mortgage, insurance, taxes is $4,250. Real estate taxes alone are over 16K.

I drive a toyota with 160K plus miles and my wife drive's a honda with 100K plus miles. I am not really into cars. I hope to keep my vehicle until my youngest goes to college (2.5-4.5 years from now).

I guess I am getting to the point where I could retire but I have no interest in this. Nor would I want my wife to retire. I l have a corporate job and I like it well enough. I have decided that I am not very good at not being busy. I tell myself I plan to work until I am 70 unless I am disabled. I have read studies that show those who work live longer.

I volunteer at my church which is important to me, but I have no interest in spending my time volunteering all day. I guess I feel that at work, what I do matters.

I do not have much interest in traveling. Flying scares me. I have visited 42 of the 50 states in the U.S. I plan to see them all over time. But in terms of flying to some exotic location as an early retiree, I am not really interested.

I am pretty boring. I am not into cars, I eat simple, outside of U.S. travel I don't like flying. I joke that my hobby is fixing things around the house. I am pretty handy. But that is about it.

I have about 100K in cash. 150K in vanguard short-term bond. 300K in vanguard total bond index. The rest is in U.S. stocks.

I have 84.3% in stocks, 11% in bonds, and 2.5% in short term reserves. Over time I want to change this mix to 80% stocks, 15% bond, 5% shot term reserves.

I am pretty 86% in U.S. stocks, 71% of which are large cap. I am not really interested in international stocks. I figure I get international exposure through my large caps. Over time I would like to increase my mid cap %. I am not really interested in small cap.

I am overweight on health care. it is 30.1% of my portfolio. I have a large holding of vanguard healthcare index. Yet I am comfortable with this. I think the advances in healthcare over the next 20 years will be impressive.

I guess I am literally the millionaire next door. I never really set out for this. I always lived below my means and saved. It is the stock market which has made me rich. I thank God and I feel blessed every day.

As I said above I am not really interested in spending a lot or having a lavish lifestyle. In face I want to work. I am in a field that is at risk of being outsource. I may end up doing something else. But I would like to work.

One upcoming expense I might have is that my son is interested in being an entrepreneur. He is a sophomore in college so this may change. But if it does not I would like to provide him with 100K in seed money to start a company. I would just write this amount off. If he makes it great. If he doesn't it would be a good learning experience. I am close to my son and I would actually like to start a business with him. Though families and business do not necessarily mix well.

If you read this far, I want to thank you! Sorry if I have been wandering all over the place on my topic.

One of the biggest risks we have as humans is not knowing what we don't know. We have a bias based on our existing knowledge. So, what I am missing? Thank you in advance.
Amigo, one of the greatest hands up a father can give his son is the gift of wisdom and assisting him in the wise selection of a business and the providing him with the insight and judgement that can only be gained through decades of experience and the maturation process.

My offspring are all professional brainiacs, to wit, much to my dismay, they have no interest in the multitude of start-ups ol' dad created in the days of yor, but I have nurtured along many a young man and sold my businesses to them, so they could also prosper. There is nothing like it. And my offspring come to me on a weekly basis for guidance. Which is to say, I think your concerns about a business is poppy-cock, it is bonding experience. You just need to plan on stepping back at some point and letting him have total autonomy at some point.

I will point out, unless he is looking at starting a consulting company, he likely would have been bettered served for business getting an associates degree in business at a community college. What is really needed is the basics of marketing, finance. accounting, management, the legal environment of business, and perhaps business operations. I would also toss in a real estate course, because at some point that can be very useful. And put the rest of the money that would have been spent on a 4 year college into the business. Many concepts fail due to cash flow reasons, people often underestimate the time it takes to turn a profit.

You sound very blessed, and by that I mean in terms of true riches: your family.

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