Personal investment plans

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Learning101
Posts: 5
Joined: Sun Sep 16, 2018 8:14 am

Personal investment plans

Post by Learning101 » Sun Sep 16, 2018 8:27 am

Dear all,

I am brand new on here so please forgive me if my question is amateur or even stupid to some of you. I am a huge fan of Jack Bogles books which I have to admit I stumbled across by chance after reading one of Tony Robbins books on wealth.

My question is can anyone advise me on a tool / resource to workout what how much I would need to save per year to achieve x in x amount of years please thus it would make it much easier to choose the right investment product in the first instance.

Again apologises if this is a daft question I am still finding my feet on here.

Best financial site I have come across by far though.

Regards,

Mark

Ron Scott
Posts: 1090
Joined: Tue Apr 05, 2016 5:38 am

Re: Personal investment plans

Post by Ron Scott » Sun Sep 16, 2018 8:51 am

Welcome!

Bankrate has a bunch of calculators you might want to try: https://www.bankrate.com/calculators/in ... ators.aspx
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

stan1
Posts: 6079
Joined: Mon Oct 08, 2007 4:35 pm

Re: Personal investment plans

Post by stan1 » Sun Sep 16, 2018 9:03 am

FireCalc is a good tool. FIrst thing to remember is there's no way to predict the future. It may or may not be like the past. FireCalc gets around this dilemma by running a simulation using past data to calculate many possible future outcomes. It then gives you a probability of success on meeting your goals. That's a gross simplification so worth reading more about how it works.

https://www.firecalc.com/

billerickson
Posts: 6
Joined: Thu Jan 02, 2014 3:25 pm

Re: Personal investment plans

Post by billerickson » Sun Sep 16, 2018 9:09 am

Portfolio Charts is a great tool for this. You can select one of their pre-built portfolios, or use their Portfolio Growth calculator with a custom portfolio you define.

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damjam
Posts: 942
Joined: Thu Mar 25, 2010 7:46 am

Re: Personal investment plans

Post by damjam » Sun Sep 16, 2018 9:13 am

Learning101 wrote:
Sun Sep 16, 2018 8:27 am
Dear all,

I am brand new on here so please forgive me if my question is amateur or even stupid to some of you. I am a huge fan of Jack Bogles books which I have to admit I stumbled across by chance after reading one of Tony Robbins books on wealth.

My question is can anyone advise me on a tool / resource to workout what how much I would need to save per year to achieve x in x amount of years please thus it would make it much easier to choose the right investment product in the first instance.

Again apologises if this is a daft question I am still finding my feet on here.

Best financial site I have come across by far though.

Regards,

Mark
Welcome

This is the question isn't it?

You'll get a lot of rules of thumb thrown at you and I realize this is not exactly what you asked but I'm going to throw in my 2 cents. Feel free to ignore.

At one point Fidelity put out something suggesting you needed X times your income by X age to be on track for retirement. The problem with that is your income has little to no bearing on what you will need. It's your expenses that matter. So that's the first thing, you need to estimate your future expenses and the further into the future that is the harder it is to do. Any calculator based on income rather than expenses is probably not that accurate. Although I'll admit that in the early days I used income as a proxy for expenses since retirement was many decades away and making an estimate was a shot in the dark.

As far as selecting investment products you need to know what your risk tolerance is. If you're not able to stick to the plan in the downturns the plan isn't the right one for you.

Here's a rule of thumb for you: 25-30 times expenses should be your ideal end goal. If you've save 25 times your expenses it's reasonable to expect that you can have a 25 year retirement, even squeezing out a 30 year retirement is probably attainable.

I found information on safe withdrawal rates to be very helpful. You could start with the Wiki article:https://www.bogleheads.org/wiki/Safe_withdrawal_rates

Ron Scott
Posts: 1090
Joined: Tue Apr 05, 2016 5:38 am

Re: Personal investment plans

Post by Ron Scott » Sun Sep 16, 2018 9:39 am

damjam wrote:
Sun Sep 16, 2018 9:13 am
Learning101 wrote:
Sun Sep 16, 2018 8:27 am
Dear all,

I am brand new on here so please forgive me if my question is amateur or even stupid to some of you. I am a huge fan of Jack Bogles books which I have to admit I stumbled across by chance after reading one of Tony Robbins books on wealth.

My question is can anyone advise me on a tool / resource to workout what how much I would need to save per year to achieve x in x amount of years please thus it would make it much easier to choose the right investment product in the first instance.

Again apologises if this is a daft question I am still finding my feet on here.

Best financial site I have come across by far though.

Regards,

Mark
Here's a rule of thumb for you: 25-30 times expenses should be your ideal end goal. If you've save 25 times your expenses it's reasonable to expect that you can have a 25 year retirement, even squeezing out a 30 year retirement is probably attainable.
This is simple and in my view very good advice. While I would not go so far as trying to squeeze 30 years out of 25X in initial savings for the purposes of planning someone's personal retirement, 25X for 25 years makes sense and is conservative enough to pass the sleep test.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

Learning101
Posts: 5
Joined: Sun Sep 16, 2018 8:14 am

Re: Personal investment plans

Post by Learning101 » Sun Sep 23, 2018 10:04 am

Ron Scott wrote:
Sun Sep 16, 2018 8:51 am
Welcome!

Bankrate has a bunch of calculators you might want to try: https://www.bankrate.com/calculators/in ... ators.aspx
This great thank you!

Learning101
Posts: 5
Joined: Sun Sep 16, 2018 8:14 am

Re: Personal investment plans

Post by Learning101 » Sun Sep 23, 2018 10:05 am

stan1 wrote:
Sun Sep 16, 2018 9:03 am
FireCalc is a good tool. FIrst thing to remember is there's no way to predict the future. It may or may not be like the past. FireCalc gets around this dilemma by running a simulation using past data to calculate many possible future outcomes. It then gives you a probability of success on meeting your goals. That's a gross simplification so worth reading more about how it works.

https://www.firecalc.com/
Thank you for this, much appreciated

Learning101
Posts: 5
Joined: Sun Sep 16, 2018 8:14 am

Re: Personal investment plans

Post by Learning101 » Sun Sep 23, 2018 10:05 am

billerickson wrote:
Sun Sep 16, 2018 9:09 am
Portfolio Charts is a great tool for this. You can select one of their pre-built portfolios, or use their Portfolio Growth calculator with a custom portfolio you define.
Thank you for replying

Learning101
Posts: 5
Joined: Sun Sep 16, 2018 8:14 am

Re: Personal investment plans

Post by Learning101 » Sun Sep 23, 2018 10:06 am

damjam wrote:
Sun Sep 16, 2018 9:13 am
Learning101 wrote:
Sun Sep 16, 2018 8:27 am
Dear all,

I am brand new on here so please forgive me if my question is amateur or even stupid to some of you. I am a huge fan of Jack Bogles books which I have to admit I stumbled across by chance after reading one of Tony Robbins books on wealth.

My question is can anyone advise me on a tool / resource to workout what how much I would need to save per year to achieve x in x amount of years please thus it would make it much easier to choose the right investment product in the first instance.

Again apologises if this is a daft question I am still finding my feet on here.

Best financial site I have come across by far though.

Regards,

Mark
Welcome

This is the question isn't it?

You'll get a lot of rules of thumb thrown at you and I realize this is not exactly what you asked but I'm going to throw in my 2 cents. Feel free to ignore.

At one point Fidelity put out something suggesting you needed X times your income by X age to be on track for retirement. The problem with that is your income has little to no bearing on what you will need. It's your expenses that matter. So that's the first thing, you need to estimate your future expenses and the further into the future that is the harder it is to do. Any calculator based on income rather than expenses is probably not that accurate. Although I'll admit that in the early days I used income as a proxy for expenses since retirement was many decades away and making an estimate was a shot in the dark.

As far as selecting investment products you need to know what your risk tolerance is. If you're not able to stick to the plan in the downturns the plan isn't the right one for you.

Here's a rule of thumb for you: 25-30 times expenses should be your ideal end goal. If you've save 25 times your expenses it's reasonable to expect that you can have a 25 year retirement, even squeezing out a 30 year retirement is probably attainable.

I found information on safe withdrawal rates to be very helpful. You could start with the Wiki article:https://www.bogleheads.org/wiki/Safe_withdrawal_rates


Your 2 cent is very welcomed, thanks!

Okie77
Posts: 77
Joined: Mon Aug 20, 2018 10:11 pm

Re: Personal investment plans

Post by Okie77 » Sun Sep 23, 2018 11:32 am

Keep it simple:

A good start is saving 15% of your total gross income. Increasing with raises, bonuses etc. As the years go by.

Dottie57
Posts: 4794
Joined: Thu May 19, 2016 5:43 pm

Re: Personal investment plans

Post by Dottie57 » Sun Sep 23, 2018 11:41 am

Okie77 wrote:
Sun Sep 23, 2018 11:32 am
Keep it simple:

A good start is saving 15% of your total gross income. Increasing with raises, bonuses etc. As the years go by.
Agree with this. But it is just a beginning. As the years pass, you will need to understand your expenses. If expenses are high, then more savings are needed. It is easier to save now than cut expenses at 70 or 80. And there is never a guarantee you have done it “right”.

pkcrafter
Posts: 13130
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Personal investment plans

Post by pkcrafter » Sun Sep 23, 2018 5:52 pm

Learning101 wrote:
Sun Sep 16, 2018 8:27 am
Dear all,

I am brand new on here so please forgive me if my question is amateur or even stupid to some of you. I am a huge fan of Jack Bogles books which I have to admit I stumbled across by chance after reading one of Tony Robbins books on wealth.

My question is can anyone advise me on a tool / resource to workout what how much I would need to save per year to achieve x in x amount of years please thus it would make it much easier to choose the right investment product in the first instance.
Here is info that will provide some perspective.

https://www.bogleheads.org/wiki/Asset_allocation

The right investment products are total stock market, total international, and total bond. The sooner you can invest the better, as time is a powerful asset accumulation tool. A savings rate of 12%-15% is good. In the link above, notice that potential higher returns come with higher risk and higher losses. You have to find a balance that is comfortable.

Link to Getting Started

https://www.bogleheads.org/wiki/Getting_started


Paul
Last edited by pkcrafter on Sun Sep 23, 2018 11:38 pm, edited 1 time in total.
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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arcticpineapplecorp.
Posts: 3483
Joined: Tue Mar 06, 2012 9:22 pm

Re: Personal investment plans

Post by arcticpineapplecorp. » Sun Sep 23, 2018 6:21 pm

if your goal is retirement, there is an interesting blog post at mr. money mustache that shows how much to save to retire in a certain number of years (which assumes earning 5% after inflation during accumulation phase and withdrawal rate of 4% a year, though with flexibility during recessions):

http://www.mrmoneymustache.com/2012/01/ ... etirement/

welcome to the group!
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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