Another post worthy of being resurrected.bigamish wrote: ↑Thu Dec 03, 2015 1:01 pmCortopassi wrote: PS,
Your previous thread comment:
If you want to live off your investments, you just need a shitload of money.
Is 100% correct. That was always my goal in being too risky for the first 20 years of investing, and getting absolutely freaking nowhere. Now that I am older, with one child a couple years from college and another one 4 years after that, and at most ideally only 15 working years left, I am 180 degrees polar opposite of what you are saying about yourself become less risk averse. As my net worth grows, I am much more risk averse.
I see three cases --
1) Shitload of money. Then you are right, and I would have been more than happy to have it all in a 5% money market (not possible now or in the foreseeable future)
2) Not enough money to live carefree. Mentally I am able to deal with that, if it ends up being the case. Live day to day and do what you can.
3) Somewhere in the middle. This is ME right now and scares the crap out of me. I want the pendulum to swing to #1, but with things the way they are with the PP and my aversion to too high of a stock concentration, my retirement situation can go either way. The unknown is the most scary part.Pointedstick wrote: Yes, I agree, Corto. The stage when you have between 5 and 25x expenses is the scary one. You're working toward financial independence, but you're not there yet, and every loss or down year sets back your goal…
For me a bug focus has been on controlling costs. I think you and I have different feelings about college, but if you're going crazy trying to figure out how to spend half a million dollars to send your kids to top-tier schools, I could see how that's stressful. But there are alternatives, I promise! You can beat the system! And I think college is overrated anyway. It's over in four years and even if you have a very negative college experience like I did, you'll probably be just fine if your head is screwed on straight and you have a loving family.This is one of the best sequences of posts I've seen in awhile. I hope the new PPers take note. For many of us (myself included) it really is about the long game, staying the course, saving profusely, and reaching your FIRE goals in as safe a manner as possible. Then afterwards having the financial freedom to get fancy should one choose to do so.sophie wrote: Yup, agree with PS. Use the PP to build a base of money that will be the most dependable lifeline you can possibly have: minimized risk of painful drawdowns, plenty of cash to draw on for emergencies, built-in protection against several Black Swan events, and built-in asset management. This is more dependable than a job or any government benefits you can think of. Perfect it is not, because there's no such thing, but it's pretty darn close.
Once you have that, you can now go out and take risks that you might otherwise not have. You can quit your job, start your own business, put new savings into higher yielding but riskier investments, spend money on something you might have hesitated on in the past, etc. Or just wake up in the morning and feel like you don't need to pander to your boss or take on more work than you really want to.
PS I get the idea that you're pretty close to FIRE - what will you do when you get there? I figure I'm about 3 years away, but since I'm highly unlikely to lose my job in that 3 years I'm already enjoying some of the above benefits. Corto - you'll get there soon enough!
And incidentally, who says the PP has "done nothing" for the past two years? It was negative in 2013 and will be slightly negative this year, probably, but mine was up 9% in 2014. It's definitely trailed my stock/bond retirement portfolios, but just wait for that next market crash.
I now return to my lurker hibernaculum.