Hey InvestingDad, no disrespect meant of course. But what I was trying to illustrate was that 1973 and 1980 are huge differences. You graduated college, in theory, in 1995. If you were in tech you would have graduated into a much stronger job market and had a leg up on getting financial footing. Hell maybe you worked at a company that gave you stock options and you exercised some for a little profit before the market blew up. You probably would have been buying your first home in 1998-1999, which was a much better time to buy than 2006.

You can't hold and never sell, because human life is finite. And when you sell is mostly based on your age, or if you are unlucky, when the SHTF in your life (illness, job loss, divorce, etc). If you were set to retire at 60 in 2010, your prime earning years and therefore prime retirement contributions would have been during the two largest stock bubbles ever. you don't have time to make up the crash of 2008 and you gotta start selling on your way to retirement if your income is gonna stop. It's just so much harder to make money than it is to lose it. And every time you are burned by a big loss in either your investing life or personal life, you end up being that much less risk-tolerant.

Can you please stop making stuff up? Stocks and bonds don't move in tandem.

I'd suggest anone reading these posts take them with a huge grain of salt because there is so much false information it's nauseating.

https://www.thebalance.com/stocks-and-bonds-calendar-year-performance-1980-2013-417028

stocks and bonds are non correlated assets.

They don't normally. But they can. And they did during the 2008 crash.

http://www.wsj.com/articles/time-to-worry-stocks-and-bonds-are-moving-together-1473113278

I don't see it.

Are you relying on a Wall Street Journal article, or what actually happened?
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did you look at the link that I posted right before your post?

2008
S&P 500 -37% return
Agg Bond +5.2% return

42% difference in return, I'd hardly call that moving in tandum

the lowest return (during that survey 34 year history) for Agg bond fund was -2.9% (1994)

Stocks and Bonds are non correlated assets. If you are looking at intraday moves you are not going to see that but they no not move in tandem. This is the primary reason to own Bonds.

The year cumulative one year loss for stocks was less than the peak high to peak low loss. But most people had bought their stock positions at far lower than peak price so real term loss was not that great (not paper loss) and if you didn't sell out you didn't have a real (realized loss).

Bonds greatly diversifies an investment portfolio.

Anyone ever buy the Mexican peso? It's is really high right now.

I'd also like to point out that investing should be viewed over a period of time. If you absolutely can not lose money that you need in a short time than Stocks are not for that money.

However if you are investing for retirement which might be 10-30 years in the future and retirement might last 10-30 years that's long timeframe.

Buy and hold (put money in when you are able) reinvent dividends. I have not seen any long ish time period where you lose money in the market.

I know no one who has lost money in the stock market unless he bought a particular stock or tried to jump in and out (people really have the worst timing) which is why I cringe when I read all this market timing advice on this thread.

Also this again points to TIME being a key ingredient of investing and don't look at one short period of time because that's not the whole game. It'd be like watching a football game and seeing a blocked FG just one play and then thinking you know what will happen for the rest of the game either before or after that one play.

Bravo. I have done the same thing with regular stocks since 1996. I bought BRKB in 1996 and have never sold. I have a core of 10 stocks that I have only sold very little of since that time. It makes for an unbalanced portfolio but I can't bear to pay the taxes if I sell. I can retire now if I want age 52.. My wife is 52 and she retired 5 days ago. It is a nice place to be. The stock market is the greatest wealth generator in the history of mankind. It is not that hard to generate wealth with it if you have a long view and don't watch CNBC.
Happy New Year.
This is a great thread. I think we can all learn a lot here.

Case Study: 2017 Rose Bowl.

What level of net worth is "High Net Worth"? Does the definition only include liquid assets or do you consider your house as part of the equation?

Where do you get your Muni Bonds? What is the fee to purchase them? I thought that individuals buying bonds get killed with fees. I must start to build a muni bond ladder as well. Nice thread.

High net worth = $1M+++++

Not counting your primary residence

That's what I'd say.

Your primary residence is an asset but not in the same way as other assets are.

Okay that makes some sense. Thanks Rai. BTW MO was the best stock in the SP500 over the last 45 years, 20.4% annualized return dividends reinvested. I bought lots at the height of all the tobacco litigation . I have owned for 20 of those years never selling a share.

1Mill will give you between $20,000 and $30,000 a yr in income will not feel like much come retirement

I like the 2.5% to 3% estimate for a safe withdrawal rate as far as planning goes, so I will echo what you said above.

Whether you include social security in the model or not is up for debate. I've generally assumed it to be zero for my planning.

Including primary residence is fine for net worth calculations. But home equity is too illiquid to mean much which is why I prefer to exclude it and only look at portfolio value.

No offense taken.

Never sell means, to me, not selling/trading based on market noise. Other than rebalancing, my view is there should be little reason to sell during the accumulation years.

I will add that, while crap can always hit the fan, living below your means is a great way to smooth out the bumps.

No withdrawal %2/%3 from div income only

I actually like reading about what others are doing on non-investment sites because I fear the motivation of manipulation on dedicated sites. Here I feel like we're more just a group of friends talking about investment strategy. Personally, my wife and I both have jobs with benefits though the WRS (Wisconsin Retirement System). We also both have Roth IRAs which are invested in Vanguard mutual funds: VASVX, VGENX, and VWELX. I also have a Rollover IRA from my previous 401K. That was from when I was in my 20s so there isn't six figures in there, but that's what I use to buy individual stocks.

It probably sounds obvious, but for a lot of my more risky investments I'll try to cash out my initial investment rather quickly. I'm essentially trying to keep some of my initial holding at zero cost. I did that with high success with oil stocks in the last few years. In many cases, I was able withdraw my initial investment while keeping 50% of my shares. I think someone here mentioned, "it's better to be a soar winner, then a soar looser". I agree with that. I also have what I believe to be safer stocks that I simply buy and hold.

I guess, I also have another investment. I have a 529 college savings fund for each of my girls. That's probably the account that I'm the most worried about as I'll have to make sure to move it into safer investments as the girls get closer and closer to college. That's a long ways off for now, but I'm sure the time will go by way to quickly.

PS: My most recent market purchase was ULTA. It's near 52-week highs, but I still feel there is room for growth.

Not reinvesting dividends (i.e. dividend income) is the same as withdrawing them.

When I saw high net worth, I'm talking about individuals who face estate taxes. If Joe Robbie had proper life insurance in place, his family would probably still own the team today. They had to pay the estate taxes. In order to do it, the family sold the team.

When the IRS taxes estates, it looks at everything.

My advisor is a close friend of mine. So the fees I pay are extremely reasonably. Even normal fees are not enough to not purchase muni-bonds.

Muni-bonds make sense depending on the income bracket. Less interest is paid, but it's 100% tax free (unless it's out of state bonds...I only purchase NJ bonds).

About Joe Robby

How much would it have cost to have $200M+ in whole life insurance? Do you know?

They need (probably) half that up front or installments. (I'm just guessing because I don't own whole life, but a crapton goes to commission and insurance company profits, if they sell it it's because they make money).

I'm not saying you're not correct I was just responding to who is considered HNW investors and I checked they say $1M liquid assets make you HNW.

He wouldn't strictly own whole life. It would be an all of the above, including have riders on the insurance. It was $47 million in estate taxes for Joe Robbie.

There is no set cost on insurance. There are so many different factors that go into it.

The really rich people, definitely have the best of the best of the best working on their estates to pass down all, if not as much as possible to their heirs. How someone like Joe Robbie didn't have it all planned out is beyond me. My net worth is a rounding error on his estate and I have everything planned out.

Actually, it's about 95%.

I was just guessing but when I actually looked it up there are 10M people in the US with $1M+

Sorry for my wild ass guess before.

don't be discouraged if you don't have 6-figure or 7-figure assets, just do the best you can and you don't need to get rich all at once, most people get rich slowly (over decades). Ive been saving (for reals) for 19 years. I go back and look at what I had when I was 10 or 15 years ago and it was not great. But it starts to snowball after a while.

Yes, true, I don't really understand what is involved.

I still have a problem with the concept of death tax but I don't want to get into the tax code as that would be a political discussion.

But I don't feel sorry for the Robbie family or the Jack Kent Cook family (etc.)

1) they didn't really do anything to earn the money (in theory). They just happened to be born into wealth.
2) they are still fabulously rich. I mean they inherit tens to hundreds of millions. So they can't keep their Billion dollar football team, that's hard for me to feel bad about their problems.

My problem with the estate tax, is the 55% (not sure of the current rate off the top of my head) tax rate. IMO, that is just criminal. Work hard your entire life to build something, only to have the government take over half of it away...all because you had the audacity to die.

IMO, there shouldn't be an estate tax. Being that we have one, it shouldn't exceed 15%.

Remember, people at that wealth level are buying insurance just to pay the estate tax...something is seriously wrong with that picture.

So for those who plan to retire early how do you plan your future income? Are you planning on living of just the interest earned from your investments?

I could potentially go 30+ years in retirement and that's if I retire at 65. Sure I could die anytime but my family history is fairly good on the longevity end. Had a great uncle die this year at 110. Cancer took my Grandpa but he was still 84 and my great grandfather lived to 96 sucking on pipe every waking moment and eating eggs and bacon every morning.

So I might (maybe, if I'm lucky) have an extended retirement. My goal was to save enough to live of the interest but probably not going to get there unless I work a little longer than 65. I estimated 2 million in order to be able to live off just the interest.....and still be able to travel and have some fun.

If you you have say $4M and wanted to live only off the dividends/interest you'd be able to take off around 2-2.5% or $200K (or so), but you would not be spending enough. You could easily spend 3-3.5% maybe as much as 4%(spending down some of the principle) as because when you get older you won't have as long to live. You won't have 30+ years to live when you are 75 years old.

Plus (as predicted you're savings will grow if you don't spend anything but dividends - if you hold a good portion of stocks). And as you go along if you find it's getting tighter you can cut back. You don't need to plan for 35+ years because you can correct the spending as you go along. And typically you will spend less as you become elderly. Your medical bills may be more but you won't buy as many cars and you won't travel as much etc.. as you become elderly.

people spend less as they get older. They don't need to pay as much to commute to work, work clothes, etc. People will have likely paid for their house by they time they are 60-70 and all the furniture big ticket items. My parents are 78-84 and they don't spend much at all. I am not saying you or I will live like my parents but we likely won't be spending as much when we are 75 as we do now.

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Anyway here is a great website for playing around with scenarios.

http://firecalc.com/

this is quite a powerful website. You can just punch in three sets of numbers (years in retirement, savings, and spending) and it will give your probability of success. But there are other pages (tabs at the top) you can explore more detailed or different spending methods and if you will get SS income etc..

Ahh, firecalc. I love that website. You're talking my language now. Happiness is 98.9% chance of success.

You all are doing it WRONG!

I just watched Trading Places (again)

Quoteth the masters:
Buy Low / Sell High / Drink Egg-nog! (sic)

Louis: My God! The Dukes are going to corner the entire frozen orange juice market!
Ophelia: Unless somebody stops them...
Coleman: ...or *beats* them to it.
[all turn and look at him]
Coleman: Egg-nog?

You guys are getting way too serious
faz

Getting div income is not at all the same as taking out principal

To clarify "out of st bonds" you must buy st city or town bonds in the state you live in for them to be tax free fed and state

What no NIB

Safe withdrawal rate pertains to taking a percentage of the portfolio at a rate that can be maintained in perpetuity.

It's irrelevant whether that is in the form of dividends, principal, or a combination thereof...ignoring tax efficiency of course.

Pins will be a lot cheaper in the future.

Actually at 75-85 I probably won't have the strength to move pins around.

I figure this may cause eyerolls amongst the investment wizards, but I'm a big fan of Mr. Money Mustache. His articles are so enjoyable to read. I stay out of the forum as some of the people there are batshit crazy IMO! Unlike pinside

Go to your local library check out monthly Morningstar weekly Value Line and Barron's

I agree, I actually trust layman opinions a little more than brokers with vested interests. More importantly if you are going to invest actual money on something, do not make the decision based on information from a single source. Stock message boards are particularly troublesome to follow, so many contradictory opinions.

My favorite site, which is now defunct, had a message forum for each ticker symbol... everyone could create a portfolio, discuss the companies, and estimate future value. Most importantly over time everyone was essentially rated on the accuracy of their pics, so you could cross check what they said and their end result. Overall the information from there was as good as any other investing source.

An interesting source of macroeconomics information is http://www.zerohedge.com. The articles are broad ranged and the comments can be entertaining and/or offensive, but I like the enthusiasm.

I bought NEE today. It lost 8% after the election. I expect growth to be conservative, but it should continue to pay dividends quarterly.

I just picked up FDC as a somewhat speculative investment with high risk possible high return

The next 30 days should tell us a lot

All my put options expired (that's good) so I really caught a break. I believe I went overboard last two years so I'm going to make a strong effort to limit my exposure.

I think my strategy is like taking candy from a baby but only when stock prices are low these all time high prices are not ideal for selling low out of the money puts.

I wouldn't recommend it to average joe investors because it can blow up in your face but when it works it works.
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Selling options is the way to go as most options expire worthless when I buy it is always well out I have many right now that I bought that expire jan 2019

Just one was going to execute on me Jan 20 2017 it was GE $31 and GE was $30.50 so I bought that back at $.50 x5 contracts for $250 net made $70 on the trade (instead of $320) but I can always sell an even lower out of the money put like GE $29 and get that back.

It's the times when you are deep in the money that buying them back is just as bad as being assigned the shares..

Last year's early Jan 2016 swoon, I was assigned a crap-ton of stocks but they were at low prices so they all went up, this is not always the case though.

I like 10% or more dividends. I had a good year in my REIT brokerage account. 20% growth plus 9% yield. I am less optimistic on REITs in 2017 though...

When bonds go up rests will take a hit.If you like yield check out CIM a ETF that uses leverage and loans for high yield a good but a higher risk then average