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Grumpy old man complaining about youngn's


beemerboy

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With the advent of a new NFL almost upon us I'm hearing more and more ads enticing people to join a fantasy football league. I recall my corporate days when younger office staff would join fantasy leagues and spend a lot of time organizing and planning their draft strategy. One year in particular I was collared by one such group and asked why I wasn't participating. I replied thusly: "I prefer to spend my time overseeing my investments to make sure I'm successful on that front. I love football not to the extent I want to play the fantasy game. My reply was met with blank stares. I then explained to them the importance of investing early and often and how they'd have far more control over their lives later down the road if they focused on investment strategy instead of a silly time wasting pastime. This was a mostly college educated crowd for whatever that's worth.

 

Is it any wonder why we read so many stories about people not having enough money to retire? One has to wonder what kind of society we'll be living in when the workforce includes lots of folks in their 80's.

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I get the slack-jaw and drool response all the time, when I tell people I have zero interest in football or spectator sports in general.

 

Once, I had to sit next to a talkative fellow who was very excited that he got tickets to the big game. I said flatly "I don't do ball sports". After a pregnant pause, he asked "What other kind is there?"

 

:dontknow: :dontknow: :dontknow:

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Joe Frickin' Friday
I then explained to them the importance of investing early and often and how they'd have far more control over their lives later down the road if they focused on investment strategy instead of a silly time wasting pastime.

 

Are they really mutually exclusive? It seems to me that managing your retirement nest egg shouldn't take up so much of your time that it precludes engaging in leisure activities. I think the problem for most folks isn't so much the time that they don't put into investing as it is the money that they don't put into investing. My wife and I are pretty satisfied with our retirement forecast; we spend maybe a couple of hours per year on managing our nest egg, which leaves plenty of spare time for other stuff.

 

But I don't think I'll ever spend my spare time on fantasy football. :grin:

 

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Mitch,

 

my point was that they spent little if ANY time planning their financial future. Oh well.....if I live long enough I'll be able to hire them to clean up my yard when they're in their golden years.

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I live this every day, the conversations and the rational for not saving amaze me. It seems everyone knows, through divine intervention, when they are going to die! This innate knowledge helps them make decisions about when to take Social Security, when to start withdrawals from retirement plans and that a 10% withdrawal rate is acceptable, and that they don't have to save for tomorrow as today is the only time that is important! When they tell me that they will die early, I ask them to write down the day of their death so I can help them plan for it to the dime. As to the younger, they don't get financial education in school, so they do not understand the power of compounding of the rule of 72! The awakening will be shocking to them when retirement finally arrives. At that point the horse is already out of the barn as far as compounding's magic is concerned.

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You went 1-15 last year and still got a lousy draft position. Didn't you? Be honest.

 

I went 1 for one in the draft. 730 days later I was released to civilian life again. :thumbsup:

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Lone_RT_rider
Fantasy football is Dungeons and Dragons for guys who used to beat up guys who played Dungeons and Dragons.

 

BINGO!!!!

 

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It does actually take a little time. At least in the beginning. You gotta read Personal Finance for dummies, and a few others. You have to THINK (and retirement can be a fairly abstract concept). You gotta actually DO something that closely resembles math homework - without your mom yelling at you to do your homework! And then you gotta "deny" yourself some of your paycheck. NONE of that sounds like fun!

 

Here's a project for you: Go look up your lifetime earnings at the Social Security website (they'll show you your past taxable income by year). Then make a spreadsheet and virtually save the 10% that they say you should save. Give yourself a modest interest rate, or actually look up historical rates. Adjust for inflation. See if you're ahead or behind.

 

Anyway, I've been keeping myself on track. Over the past 15 years, I was able to make up for those early years where I didn't save anything. Today, at age 51, I've got 1/4 of my lifetime earnings in my retirement fund, simply by saving 10% annually. Holy cow, I've got 25% of every dollar I've ever made in my entire life??? Of course, the house isn't paid off, the car needs work, I haven't had a proper vacation in ages, etc.

 

Interesting read on the rule of 72. LINK. Apparently it should be the rule of 69.

 

 

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I get the slack-jaw and drool response all the time, when I tell people I have zero interest in football or spectator sports in general.

 

Once, I had to sit next to a talkative fellow who was very excited that he got tickets to the big game. I said flatly "I don't do ball sports". After a pregnant pause, he asked "What other kind is there?"

 

:dontknow: :dontknow: :dontknow:

 

I'm quite familiar with that response. Some folks around here lose all interest in you if you don't know when the Buckeyes were issued new jock straps.

 

Road-Racing-600x480.jpg

 

 

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Joe Frickin' Friday
Interesting read on the rule of 72. LINK. Apparently it should be the rule of 69.

 

I knew 7% doubles in ten years, and 10% doubles in 7 years, but I had never heard of the rule of ~72 until today. That's pretty handy.

 

It does actually take a little time. At least in the beginning. You gotta read Personal Finance for dummies, and a few others. You have to THINK (and retirement can be a fairly abstract concept). You gotta actually DO something that closely resembles math homework - without your mom yelling at you to do your homework! And then you gotta "deny" yourself some of your paycheck. NONE of that sounds like fun!

 

It does take some reading at the outset, but for really basic analyses the math homework is mitigated by the availability of about a bajillion online retirement calculators that can help you figure out how much you're likely to end up with at retirement, how much you'll be able to safely spend in retirement, and so on. But you're right, the more numerate you are, the more customized an analysis you can do for yourself, which helps you to understand more clearly what you should/shouldn't do with your finances right now, and what you will/won't be able to do when (if?) you retire. I enjoy making little computing machines like this in Excel, so I've done more of this sort of thing than the average bear - trying to figure out what our financial picture will look like if she or I retire at this age or that age, doing Monte Carlo sims to see what the range of possible outcomes is for our retirement nest egg, and so on.

 

 

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Joe Frickin' Friday
Most youngn's don't think about saving until they get a glimpse of their own mortality.

 

Maybe every parent should give their kids a little reminder when they turn 18.

 

i-hZwRgTv-L.png

 

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I hope this does not cross a line here.

I believe a lot of this and the oncoming generation have the mentality that, why worry, someone, [and we know who this is] will take care of me.

 

Please delete if this is inappropriate

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I live this every day, the conversations and the rational for not saving amaze me. It seems everyone knows, through divine intervention, when they are going to die! This innate knowledge helps them make decisions about when to take Social Security, when to start withdrawals from retirement plans and that a 10% withdrawal rate is acceptable, and that they don't have to save for tomorrow as today is the only time that is important! When they tell me that they will die early, I ask them to write down the day of their death so I can help them plan for it to the dime. As to the younger, they don't get financial education in school, so they do not understand the power of compounding of the rule of 72! The awakening will be shocking to them when retirement finally arrives. At that point the horse is already out of the barn as far as compounding's magic is concerned.

 

 

Thanks, Pat. You captured the spirit of this thread completely.

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Joe Frickin' Friday
The reality is one cannot "save" one's way to prosperity. Compound interest and early investing sure help, but seeking additional sources of income and increasing earning power are key to long term financial success. Of course, having a rich uncle die leaving a huge amount of money or marrying money are also options.

 

I think we're not talking about "prosperity" or "financial success" so much as we are talking about basic financial security during retirement. Success/Prosperity, to me, means (for example) having the means for regular international travel while flying first class; security, to me, means you get to continue to live in your own (paid off) home in retirement, maybe travel a few states away to see your kids/grandkids a couple of times a year, and have enough stashed away for a few years in an independent living and/or assisted-living facility if it comes to that. Basic financial security in retirement should be achievable by poodad's recommendation: sock away 10% of every paycheck, starting as early early as possible. If your employer doesn't give you a 5% match, then you should throw in that extra 5% yourself. If you can manage to save more than that (by adopting a more austere lifestyle and/or by earning more money), you might move yourself from the "financially secure" category to the "financially successful/prosperous" category.

 

I believe a lot of this and the oncoming generation have the mentality that, why worry, someone, [and we know who this is] will take care of me.

 

Please delete if this is inappropriate

 

Taylor, you're fine mentioning government and government programs; the "no politics" rule mostly means you need to avoid bringing up partisan political parties, politicians, or philosophies by name.

 

And you may be right, in that some people think "I'll have Social Security when I get that old." These are people who haven't done any of the math that elkroeger mentioned, and don't realize how small their SS benefit is likely to be.

 

I think there are plenty of people who aren't even thinking that far ahead at all. It's sort of like tailgaters: some of them look at the gap in front of them and foolishly think "I can stop in time," but most of them haven't even thought it through at all.

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My kids have told me they are NOT counting on SS at all. They are doing their own planning.

 

The question of what will be "enough" is determined by your wants.

 

 

Edited by Bud
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Sports breeds divisiveness. Ah yes, the rumor says that it brings people together, yes, to argue and even fight over a game......nah, I'll have none of that.

 

As for saving for the future,...I'm lucky, I raised my right hand and retired with 23 years enlisted service and we planned the retirement many years in advance to lower our debt at retirement. Our household expenses are kept below that retirement check including our mortgage. My job (which pays extremely well for the geographical area), well, it's just gravy, so I've got 20% going into the 401k and 68% going into my company's stock(been told that's crazy, but it's doing about 23% annually with this year being the exception hovering around 12%). If I lost my job, wife lost her job we'd still be comfortable.....less luxuries but comfortable and all of our living expenses will be paid by my military retirement.

 

 

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So my sad but happy story is that my folks both passed away in the last couple of years. And having some of their left-over nest egg has prompted me to seek out a financial planner (over the years I just stuck it all in high growth mutual funds and figured "what the heck!"). But the financial planner has VERY sophisticated software, and a LOT of good advice. The main thing I've learned so far, that I thought was interesting, was that she put me in different investments that have a lower return, but also have a much lower tax burden, so it actually comes out ahead. This is only recently, so I haven't had a chance to fully understand it, yet. But now that I've seen it, I can't say enough about consulting with a professional.

 

The software she uses, (she says) is remarkably accurate, and she gave me a variety of income scenarios with net earnings, depending on different ages that I might decide to retire. All adjusted for inflation. I tell you, that is remarkable when you see the numbers, and have a professional finance wizard tell you "This is the way it is." In the past, I'd do my own math, and make different assumptions for interest and inflation and what-not, but then I'd always wonder, and be skeptical. Is 4% reasonable, or should I use 5%? Do I really need to have money until I'm 100? Does my answer REALLY MEAN ANYTHING?

 

Turns out I wasn't terribly far off, but I am sleeping better at night. :-)

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"so I've got 20% going into the 401k and 68% going into my company's stock(been told that's crazy, but it's doing about 23% annually with this year being the exception hovering around 12%). If I lost my job, wife lost her job we'd still be comfortable.....less luxuries but comfortable and all of our living expenses will be paid by my military retirement."

 

68% in a company stock is a very high risk strategy, regardless of the return. There is a saying in our industry, "Pigs get fed, Hogs get slaughtered!" When you think of great companies that have disappointed their employees with their stocks, look up Enron, GE, Kodak, 2008, 1999(2000) etc. As I am sure you have heard before, try not to have more than 10% of your portfolio in any one position, especially your companies stock. Returns at their very core are just luck. You, I can only assume, certainly have not done a deep dive on research, and even if you had, even the best of the best miss at some point, and when they miss, or the luck runs out, they suffer losses. I don't have a dog in this fight, in my practice I would strongly discourage someone from being that long in a single position. The advantage you have in life is that at retirement you have a pension income, you will receive some SS from your non-military income, and income/withdrawals from your 401-K, and you planned and kept your expenses below your fixed income, as well as being disciplined enough to commit to saving. Good luck.

Edited by Patallaire
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Soooo.....if I'm still under 40, will have my house paid off in less than 5 years, 1 modest car payment left for 3 yrs, have well over 10% of my life earned income saved for retirement, money set aside for my kids education, and all the toys paid off.......can I PLEASE go to my fantasy football draft tomorrow? Its about the only time I get to see my old college buddies and BS like like the last 20 years haven't happened. I made a killer batch of fresh salsa thats going to burn the taste buds right out of their mouths. For the time being, my wife and I could both retire on either one of our retirement savings. Hopefully that continues to the point where one day we realize that we can retire early, travel, and be awesome grand parents........when that day comes. Hopefully not for a few more years.

 

That being said.....it scares the crap out of me when I see how little some of my friends and younger coworkers are ignoring the long term planning aspect of things. I have a constant fear of having to work the rest of my life.....who the hell wants to do that? Really?

 

In other news.....GET OFF MY LAWN!!!

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"so I've got 20% going into the 401k and 68% going into my company's stock(been told that's crazy, but it's doing about 23% annually with this year being the exception hovering around 12%). If I lost my job, wife lost her job we'd still be comfortable.....less luxuries but comfortable and all of our living expenses will be paid by my military retirement."

 

68% in a company stock is a very high risk strategy, regardless of the return. There is a saying in our industry, "Pigs get fed, Hogs get slaughtered!" When you think of great companies that have disappointed their employees with their stocks, look up Enron, GE, Kodak, 2008, 1999(2000) etc. As I am sure you have heard before, try not to have more than 10% of your portfolio in any one position, especially your companies stock. Returns at their very core are just luck. You, I can only assume, certainly have not done a deep dive on research, and even if you had, even the best of the best miss at some point, and when they miss, or the luck runs out, they suffer losses. I don't have a dog in this fight, in my practice I would strongly discourage someone from being that long in a single position. The advantage you have in life is that at retirement you have a pension income, you will receive some SS from your non-military income, and income/withdrawals from your 401-K, and you planned and kept your expenses below your fixed income, as well as being disciplined enough to commit to saving. Good luck.

 

The way I read it, he's contributing 68% of his paycheck to the company stock, not 68% of his portfolio is there.

 

Thanks for the advice, and I've been told the same thing several times,....I'll take my chances. When I started at my current job nine years ago, my company stock was at $58,....it's now $200 and still projected to rise (I shoulda put more in it upon the start of my employment). I contribute 20% of my paycheck to the 401k, my portfolio has 68% in company stock, yes extremely risky but I'm willing to take that chance. My 401k is only nine years old, the small TSP (gov't 401k) that I had got cashed in to pay off some things upon retirement from Uncle Sam, the payoff outweighed the penalty.

 

As for SS, even active duty put in to that so when I do start drawing, it will include those contributions as well. I'm only 50, my house will be paid in less than ten years, we generally save up and pay cash for large purchases/services/vacations. We have one credit card that's paid off monthly, so,...I think we're doing just about fine, oh, and a daughter in college that we're paying out of pocket (not as expensive as we've been led to believe (UNC-C).

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Sounds like you are doing a great job. Professionally I can't agree with the weightings of a single stock in your portfolio, but I don't have a dog in that fight as I stated. The recommended withdrawal rates now, without running out of money before you reach age 95{Which we need to plan for in the industry} is between 3.2% and 5% depending on your age when you make your withdrawals, I have used as high as 6% but only when the client was close to age 80. So you can do the math, add in your SS and your pension, and it may reduce the drain on the portfolio withdrawals. Subtract your overhead, estimate Medical expenses and there you have it.

Keep up the great work.

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I hope this does not cross a line here.

I believe a lot of this and the oncoming generation have the mentality that, why worry, someone, [and we know who this is] will take care of me.

 

Please delete if this is inappropriate

 

More realistically, a large number of the current generation are carrying so much debt from school that they don't see themselves being able to save, much less buy a house, until they're in their 40's or 50's. Even later if they have kids. So a great many of them plan to work their entire lives and take some enjoyment during that time, as opposed to putting off all joy until much later in life. Given, too, that a great many of them came of age during the great recession of 2007-2010, their view of investing is very negative. The ones that I've talked to prefer to invest in tangible assets like property, and view the stock market as a risky casino where the owners will change the rules and steal everyone's money. On the positive side, if you talk to many of them they have a bunch of side-hustles that they do in addition to their full-time job. One younger fellow I work with keeps bees so he can sell honey, as well as recharging e-scooters at night for additional cash. He's doing that, working part-time with us, and going to school full time. I don't think you can say he lacks initiative. So, they blend fun and work, and try to enjoy themselves a bit every day, and prefer to trade time for experiences, rather than money. They have a different take that will affect the way society views jobs, work, investing and retirement. I remember my grandparents, who lived through the great depression, 'retired' to their cattle farm to work full time. The other set 'retired' to being a full-time university professor. I think the current generation will be like that earlier generation who never stopped working, always had a few plates in the air, and viewed 'retirement' as something for the idle rich.

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