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At what age do you hope to retire/Personal Finance and Investing Thread

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Offline  Re: At what age do you hope to retire?
Posted: November 22, 2018, 9:52 PM Post
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I have ~ 600k AA miles right now as I have several of those cards too. They're not even close to the versatility of the CSP and not really comparable cards. Fine if you are going from Chicago to another major city with easy routes, but the rewards redemption availability on AA is horrendous compared to other programs. I use my AA miles but it is always very targeted use; if you are going to the same place every 6 months the card is fine, if you want to get out and explore that card stinks. The trip I mentioned to Kauai, I am actually using the AA miles, but using them is a pain; the awards chart is a mess, and they place a million restrictions on use.

The reason the Chase cards are the far superior cards is because those Chase UR points can be transferred to a hundred partners. Your AA miles are limited to redeeming AA flights; those Chase points can be cash back (bad redemption), but also to Hyatt, Marriott, United, and a host of others. You get WAY more versatility. Even if I lived in an AA hub, I get a CSP or CSR and simply couple it with an AA card...but I'd never waste everyday spend on AA.

Again though...if you don't want to get into playing the game and really scoring the type of insane deals, I get just wanting one card for simplicity's sake. But I can tell you that I haven't paid for a flight in about eight years. I rarely pay for lodging, and will usually only do it if I determine my points are more valuable elsewhere because the hotels are too cheap.

I'm counting this as related to retirement because it allows me to travel without sacrificing savings [smile]


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Offline  Re: At what age do you hope to retire?
Posted: November 23, 2018, 9:46 AM Post
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Like I said, Chase card is more flexible.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: At what age do you hope to retire?
Posted: November 24, 2018, 11:56 AM Post
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I really dig personal finance. I considered pursuing a career in financial planning until I learned it’s more of a sales role unless you’re the JD/CPA type. My latest fascination is the Financial Independence, Retire Early (FIRE) movement. Basically, the premise is to save until it hurts so you can achieve financial independence ASAP.

The typical FIRE person usually earns $60-$70K right out of college and hits six figures by age 30. They delay marriage and children until their mid 30s and pretend like they’re living on a $40K salary the entire time. This allows them to funnel tens of thousands of dollars every year into low cost, equity index funds. By age 40, they have enough saved to live on the income generated from their portfolio. Their efforts have been aided greatly by the 10-year bull market. Some of their early investments have effectively tripled since 2009.

In any case, I see more and more FIRE bloggers popping up and am starting to grow skeptical of the number of people in their 30s who claim to be at or near financial independence. I don’t doubt financial independence is possible at that age, I just think it’s a convenient hook to earn money off a blog. ‘Look, I retired at 34 and you can too - just read my blog, subscribe to my podcast, and buy my book.’


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Offline  Re: At what age do you hope to retire?
Posted: November 24, 2018, 1:19 PM Post
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nodakfan17 said:
I really dig personal finance. I considered pursuing a career in financial planning until I learned it’s more of a sales role unless you’re the JD/CPA type. My latest fascination is the Financial Independence, Retire Early (FIRE) movement. Basically, the premise is to save until it hurts so you can achieve financial independence ASAP.


Yeah, I saw a link to an article on my Linked In feed. It seems the only people capable of this are the ones in the Silicon Valley field. I'm an engineer, DINKs, live frugally and maybe I can retire at 62.


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Offline  Re: At what age do you hope to retire?
Posted: November 24, 2018, 2:05 PM Post
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nodakfan17 said:

In any case, I see more and more FIRE bloggers popping up and am starting to grow skeptical of the number of people in their 30s who claim to be at or near financial independence. I don’t doubt financial independence is possible at that age, I just think it’s a convenient hook to earn money off a blog. ‘Look, I retired at 34 and you can too - just read my blog, subscribe to my podcast, and buy my book.’


It really isn't as hard as people make it out to be to retire early. For me personally, I have three jobs and no kids. I am almost 34 and could easily retire before 40 if I wanted to do that. My main strategy is get rid of debt (I have no mortgage on where I live, no student loan debt, credit card debt, etc) and buy rental properties and pay them off asap. I am really not that incredibly frugal either.

Now I am sure some are going to say "three jobs, why would you want to do that!". I would counter with "kids, why would you want to do that!"


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Offline  Re: At what age do you hope to retire?
Posted: November 24, 2018, 3:32 PM Post
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That’s awesome, Wallus. It definitely takes a different mindset, but I don’t doubt it’s possible. I guess my point in criticizing some (certainly not all) FIRE bloggers is that they’re making more money selling the shovels than digging for gold. I doubt they’ve all achieved financial independence because they can’t lay out the specific actions that helped them generate capital - sort of like Rich Dad, Poor Dad. Good story, but that guy has made way more money selling books than he ever did doing whatever it is he did (that book was extremely vague, despite its good message). I suspect some FIRE blogs (again, not all) are just a front for clicks. I also think human nature leads most of us to believe that we are self made, when in actuality anyone who is financially independent by 40 has probably caught a brilliant stroke of luck (inheritance, for example). But I know some people like yourself really grind and that’s admirable.


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Offline  Re: At what age do you hope to retire?
Posted: November 25, 2018, 7:25 AM Post
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The FIRE concept is pretty weak in my opinion. Living like you make $40k is a pretty crummy life all things considered. Not a whole lot you can do with that. Even looking past that the current success stories lucked into a crazy good stock market to build their wealth. Good luck have that happen to you. Lastly what happens when you hit “financial independence”? Financial independent if you want to live like you make $40k for the rest of your life? Yah, okay. Your life will be even worse paying for all that insurance out of pocket. If you have to count on the investments doing well to have an income so to speak that sounds risky.

If you are independent by your 30s I’m thinking you lived a poor life and would have to continue to do so into your retirement. You would have to be a person who doesn’t need money in any sort of way to enjoy life. Guessing kids would also be a big N-O for this theory to work.


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Offline  Re: At what age do you hope to retire?
Posted: November 25, 2018, 10:01 AM Post
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I suspect the FI is more important than the RE.

Financial independence is about the ability to do whatever you want, not the ability to do nothing. Once your assets hit critical mass, you can still work - but you can be more selective about the work you take on so that you maximize your well-being, not just your bank account.

I haven’t entered my high-earning years yet, but my wife and I have more or less capped our lifestyle at 2017 levels (when our day care bill was rediculous and we maxed out our health insurance). We don’t plan on having any more children and thus don’t think our expenses will ever be higher in real dollars than what they were that year. I don’t expect any more lifestyle inflation (just actual inflation). Our family is complete and our home is pretty nice (no concerns about upgrading). We’ll be able to start funneling our raises into capital now and that’s exciting.


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Offline  Re: At what age do you hope to retire?
Posted: November 25, 2018, 10:21 AM Post
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I agree with Nodak on this one. It is about having the freedom to not work not necessarily stopping work.


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Offline  Re: At what age do you hope to retire?
Posted: November 25, 2018, 9:37 PM Post
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MrTPlush said:
The FIRE concept is pretty weak in my opinion. Living like you make $40k is a pretty crummy life all things considered. Not a whole lot you can do with that. Even looking past that the current success stories lucked into a crazy good stock market to build their wealth. Good luck have that happen to you. Lastly what happens when you hit “financial independence”? Financial independent if you want to live like you make $40k for the rest of your life? Yah, okay. Your life will be even worse paying for all that insurance out of pocket. If you have to count on the investments doing well to have an income so to speak that sounds risky.

If you are independent by your 30s I’m thinking you lived a poor life and would have to continue to do so into your retirement. You would have to be a person who doesn’t need money in any sort of way to enjoy life. Guessing kids would also be a big N-O for this theory to work.


I'm sort of in agreement with this. I learned about FIRE a good number of years ago. I adopted it for a few years. It worked for maybe two years, but after that I got sort of miserable...I got sick of shaming myself for wanting to go out for Mexican on Friday night or not buying a new TV on Black Friday. And that is what they look down upon, if you really study the movement.

I'm all in favor of frugality and delayed gratification, but it got too extreme for me. What gets overlooked by the movement is that yes, you are now 35 or 40 and are independent. And you did it at the expense of the first 35 years of your life. Your relative youth. And that's a good cost to consider. A lot of the things I spent money on, I won't enjoy later on.


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 8:18 AM Post
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OldSchoolSnapper said:
I'm all in favor of frugality and delayed gratification, but it got too extreme for me. What gets overlooked by the movement is that yes, you are now 35 or 40 and are independent. And you did it at the expense of the first 35 years of your life. Your relative youth. And that's a good cost to consider. A lot of the things I spent money on, I won't enjoy later on.


You would have to live and breath the FIRE concept to not only be successful (still requires investing luck), but to actually enjoy it. If someone does good for them, but I am guessing most don't. I just can't get behind something that requires me to pretty much have no spending money for 35 years of my life to make the years following that pretty much the same way. It isn't like at that saved money is going to be blown on your dreams then...its for basic living expenses if you stop working.

A more effective method would be to find something you love and make it your career. Then you would never have to worry about suddenly not wanting to work or retiring early. I know, crazy concept right?


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 10:25 AM Post
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Some people just get their jollies from saving.


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 11:44 AM Post
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I think I'd rather get a job I enjoy for 35 years than one I feel the need to retire from after 15.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 12:08 PM Post
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It's really a best-case scenario to be smart enough to have a job that would pay you six figures shortly after college and then have no speedbumps along with way like kids and layoffs. And if you're in a place like NYC the cost of living is so much higher.

I'm starting to think along the lines of good investments for when this money train finally comes off the rails. I have to do my research on it, but I'm thinking along the lines of a trailer-park REIT or Dollar General.


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 12:19 PM Post
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McDonald’s actually had a pretty good run in 2009 because everyone wanted $1 hamburgers. I like low cost, equity index funds in my retirement accounts as much as the next guy, but I’m skeptical about getting 10% annual returns over the next 20-30 years. Too many variables to treat that as a certainty.


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 12:47 PM Post
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nodakfan17 said:
McDonald’s actually had a pretty good run in 2009 because everyone wanted $1 hamburgers. I like low cost, equity index funds in my retirement accounts as much as the next guy, but I’m skeptical about getting 10% annual returns over the next 20-30 years. Too many variables to treat that as a certainty.


But haven't those indexes achieved about the same return the last 75, 100 years? yeah there've been dips along the way but it always bounces back and then some.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 1:11 PM Post
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How can you be sure the market won’t be in a trough when you want to (or are forced to) retire? Don’t get me wrong, I like equities. I’d just prefer to diversify with my non-qualified funds in case those 10% returns don’t materialize.


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 2:17 PM Post
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nodakfan17 said:
How can you be sure the market won’t be in a trough when you want to (or are forced to) retire? Don’t get me wrong, I like equities. I’d just prefer to diversify with my non-qualified funds in case those 10% returns don’t materialize.


Well yeah there's always that risk but the market has always rebounded within a few years. And let's say you have $2 million when you retire. If the market tanks as bad as the depression or great recession or whatever other market calamity that has struck, it will go down probably 40 - 50%. You will still have $1 million and within a few years you'll be back to $2 million. Putting off retirement for a couple of years is probably a wise move if it tanks right before you want to call it quits.

And if it tanks more than 40 - 50% that probably means every investment on the planet is tanking.

And I'm not saying seeing 50% of your net worth go away is easy to swallow. I'm just saying expecting 10% return on an index fund is reasonable given historical returns and time.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 2:56 PM Post
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homer said:
I think I'd rather get a job I enjoy for 35 years than one I feel the need to retire from after 15.


In defense of FIRE, a lot of them don't hate their jobs. The movement is really about the freedom to choose. If they decide at 43 that IT Director is a boring job, they go coach wrestling or open an Etsy shop. They can do what they want at any moment. It's cool.

But I have regrets and I was very watered down fire guy in my late 20s. I have weddings that I skipped, concerts, sporting events, because I didn't want to spend $500 on travel.

I do get my jollies from saving, to a degree, but the level some of the movement takes it too was just too much for me. I tried it, for at least 2 years, and it just simply was't for me. I enjoyed "extravagance" too much. Once in while I liked taking my wife out to a $500 dinner or buying a stupid tech device nobody actually needs.

I just learned I was made more for balance.


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Offline  Re: At what age do you hope to retire?
Posted: November 26, 2018, 3:04 PM Post
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Homer - You’re right. 10% is a reasonable projection, provided you account for alternative (more conservative) scenarios in your planning.


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