Investing And Building Wealth

[Chris M]

Another thing I'd love to hear others opinions on it when to take social security. I've discussed this ad nauseam with many friends, family and financial advisers and while everyones situation is different it's good to get others opinions about this. I'll add mine later as I'd like to hear what everyone else thinks. This ones a touchy subject so let's try and leave the politics out of it and just discuss when you're planning on taking it and why.

I'm 61now and plan to retire at 67. I will be taking my SS then. Jeanie will possibly take hers at 65, but maybe I talk her into waiting til 67 too. I have a Teamsters pension I'm collecting now and dumping it into an IRA. Jeanie has a large IRA also.
Cars will be paid for by then and we have enough equity in our home and low enough payment to either comfortably stay in it or sell it by then and pay cash for our final residence.
If SS fails, I'll eat cat food and work til I'm 107. We will sleep in the truck, I guess.

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[NotBudule]

If SS fails, I'll eat cat food

If SS fails , lots of people will be cat food ...

 

[AzScorpion]

I'm 61now and plan to retire at 67. I will be taking my SS then. Jeanie will possibly take hers at 65, but maybe I talk her into waiting til 67 too. I have a Teamsters pension I'm collecting now and dumping it into an IRA. Jeanie has a large IRA also.
Cars will be paid for by then and we have enough equity in our home and low enough payment to either comfortably stay in it or sell it by then and pay cash for our final residence.
If SS fails, I'll eat cat food and work til I'm 107. We will sleep in the truck, I guess.

Chris you two have a great plan laid out and should be very comfortable going into retirement. Of course anything can happen in life but between your two IRA's, pension and SS you're already in a much better position than most. You should hear the horror stories my financial advisor tells me about some just getting ready to retire and have no IRA, very little savings or investments and are relying on mostly SS. But many do this every day and make it work.

We've talked (text) a lot over the past year and I think I'm a pretty good judge of character. You're a hard worker and one who lives within their means and you have a good head on your shoulders. People like that rarely land upside down. Besides, if SS fails then the whole world has gone to pot and there will be a whole lot more to worry about.

 

[Chris M]

If SS fails , lots of people will be cat food ...

Indeed.

 

[RANGER_MARC]

The wife and I have been working in education since 1988, first in Los Angeles, then in Delaware and Pennsylvania since 1992. She retired in 2021. Salaries in education are not tremendous, but most institutions give full-time employees the opportunity to invest part of their paychecks in tax-sheltered accounts (that is, investments and earnings are not taxed until withdrawn in retirement) administered by first-rate investment companies such as Vanguard. I made it my business to research investments and developed stock-heavy but diversified portfolios (stocks, bonds, real estate, annuities, stable-value funds, etc.) If you contribute regularly, every two weeks in our case, have a long time horizon, and stay the course, keeping it about sixty-percent stocks and forty-percent bond and bond equivalents regardless of market conditions, you are almost guaranteed to generate significant wealth over the long run.

With the wife's retirement at seventy, we started her social security and annuitized her savings, which will provide a stable monthly income for the rest of her life. Since I am still working--and still love my job--I have kept the same diversified, stock-heavy portfolio and am adding to it every two weeks, allowing us the possibility of significant capital growth going forward. I will start taking my social security at the latest possible point, the required seventy years of age, which is not for a few more years. This is not a tough call in our case: the longer you wait, the more you get.

As for spending and borrowing, the only significant debt we have taken on is student loans for my education and a mortgage for the house. My student-loan debt was massive in the day but proved to be the best investment I ever made as it allowed me to practice the profession of my choice--and yes, we paid every penny owed. The mortgage allowed us to stop paying rent by purchasing a modest home in the 1990s. We paid that off early and have lived here ever since, with no plans to move or upgrade. I have borrowed to purchase new vehicles (first VWs, then Hondas, now Fords, solid vehicles and fun ones but nothing luxurious) but have stuck to the rule of buying new, driving it until it is paid for and crosses at least five years and at least 100,000 miles, and then trading up, which keeps our transportation expenses regular and manageable. We use credit cards, but only for convenience, and pay them off monthly.

So, younger members, to sum up, the best advice I could give you is to keep the spending in line, that is, below your earnings, borrow only when absolutely necessary, and start saving and investing regularly, putting away as much as you can as early as you can. Note that I am saying "investing" and not "gambling": invest for the long run in proven assets such as stocks, bonds, real estate, and annuities; do not try to make a fortune in one shot by gambling on hot tips or trends. Happy Trails!

 

[deleriumtremor]

The wife and I have been working in education since 1988, first in Los Angeles, then in Delaware and Pennsylvania since 1992. She retired in 2021. Salaries in education are not tremendous, but most institutions give full-time employees the opportunity to invest part of their paychecks in tax-sheltered accounts (that is, investments and earnings are not taxed until withdrawn in retirement) administered by first-rate investment companies such as Vanguard. I made it my business to research investments and developed stock-heavy but diversified portfolios (stocks, bonds, real estate, annuities, stable-value funds, etc.) If you contribute regularly, every two weeks in our case, have a long time horizon, and stay the course, keeping it about sixty-percent stocks and forty-percent bond and bond equivalents regardless of market conditions, you are almost guaranteed to generate significant wealth over the long run.

With the wife's retirement at seventy, we started her social security and annuitized her savings, which will provide a stable monthly income for the rest of her life. Since I am still working--and still love my job--I have kept the same diversified, stock-heavy portfolio and am adding to it every two weeks, allowing us the possibility of significant capital growth going forward. I will start taking my social security at the latest possible point, the required seventy years of age, which is not for a few more years. This is not a tough call in our case: the longer you wait, the more you get.

As for spending and borrowing, the only significant debt we have taken on is student loans for my education and a mortgage for the house. My student-loan debt was massive in the day but proved to be the best investment I ever made as it allowed me to practice the profession of my choice--and yes, we paid every penny owed. The mortgage allowed us to stop paying rent by purchasing a modest home in the 1990s. We paid that off early and have lived here ever since, with no plans to move or upgrade. I have borrowed to purchase new vehicles (first VWs, then Hondas, now Fords, solid vehicles and fun ones but nothing luxurious) but have stuck to the rule of buying new, driving it until it is paid for and crosses at least five years and at least 100,000 miles, and then trading up, which keeps our transportation expenses regular and modest. We use credit cards, but only for convenience, and pay them off in full every month.

So, younger members, to sum up, the best advice I could give you is to keep the spending in line, that is, below your earnings, borrow only when absolutely necessary, and start saving and investing regularly, putting away as much as you can as early as you can. Note that I am saying "investing" and not "gambling": invest for the long run in proven assets such as stocks, bonds, real estate, and annuities; do not try to make a fortune in one shot by gambling on hot tips or trends. Happy Trails!

I love it! Good on you Marc.

 

[wanted33]

Some think they can just print up a bunch of business cards and now they're in business. lol See Jim it's all in what someone wants and the determination to go out and get it. Your neighbors son is a go getter!!

My brother in law is like this and all through the building boom we had back in MA (early 2000's) he swore there wasn't much work out there and the money was bad. I had 7 guys working 7 days a week and making upper 6 figures but I had a goal. Now him being married with 2 kids you'd think he'd be a little more motivated but he wasn't. He'd rather fish and hunt and make enough money to just get by. That's fine but the snarky remarks I'd get from my sister had me biting my tongue more times than I cared for. She'd always tell the kids "go suck up to your rich uncle" or "we're all not rich like you". You wanna know the funny part, he was a painter too! He had the same opportunity as I had but lacked the drive.

I have a friend like that. Just enough is good enough for him, and he'll never have anything but debt the rest of his life. Oh well, to each his own. I thought about being lazy when I was a kid, but being poor is just so damned inconvenient.

 

[wanted33]

Well, I definitely can’t top what’s been posted here. Great advice from all.
Our main goal early on was to get debt free and stay that way. Paid our house off 20 years ago. My husband has heart problems, so I am the primary income. For insurance purposes, I still work. I don’t want to spend my retirement on insurance at this time. Fortunately, I love my job.
Other than my 401k, I don’t invest. I know that’s probably a mistake. We do have savings. My brother, who is a financial advisor, just shakes his head. But, he’s also the one who told me I was stupid to pay my house off instead of investing that money. 20 years later, he still has a very large mortgage and other debt. Its hard for me to take advice from someone drowning in debt.
We may not have much, but it’s paid for. We also own a small business that is part of our retirement plan, but we don’t depend on it.
I’m definitely not someone to model after. I don’t save every dime. I help my son & grandson out (or whoever).
I would say, though, that being debt free brings such peace. I wish it for everyone. It’s not impossible. Live within or below your means.

Miss Tracy, richness of life beats richness from money. And from what we know of you, your life is full of richness. And, you are so right. Being debt free is a wonderfull feeling. It's not easy to get there as it takes a lot of work, and ton of doing without sometimes. But, it's worth all of the hard work, and more. Had the wife, and I not been willing to give up most of the fluff people put on their charge cards, we would have never been able to retire as early as we did. We did have some luck, and many blessings from God that helped us also.

If only I had gotten a job at a bank...........

 

[deleriumtremor]

Miss Tracy, richness of life beats richness from money. And from what we know of you, your life is full of richness. And, you are so right. Being debt free is a wonderfull feeling. It's not easy to get there as it takes a lot of work, and ton of doing without sometimes. But, it's worth all of the hard work, and more. Had the wife, and I not been willing to give up most of the fluff people put on their charge cards, we would have never been able to retire as early as we did. We did have some luck, and many blessings from God that helped us also.

If only I had gotten a job at a bank...........

I totally agree.

I would take it one step further and say once you get past the owning your home, being debt free and an emergency nest egg (all things that I think ease a persons mind), after that, the more someone accumulates makes happiness more of a challenge. Maybe not terribly so for quite a ways past the above, but at some point, it definitely starts to make happiness more elusive.

I have a theory that the human brain is a problem solving machine. When you take away all the normal problems a brain might work on every day, the brain will start making up problems that it can’t solve.

Anyone looking for proof, need only look at Hollywood, where stars and starlets have no apparent problems. They are beautiful, beloved, wealthy beyond most people’s imagination and invariably, their brain will start working on itself. It seems a few conquer those issues, but most do not.

I really believe that. Happiness comes from within. Money, after the first bit of comfort and security, only makes happiness harder to keep.

 

[Gibs45]

Gib, I know I'm really nobody to tell you what to do, but you know how old people are. Consider a "blue collar" job. Have you seen how much it cost to have a plumber, electrician, or contractor do work for you. Not everyone can work in an office, etc. The money isn't there anymore as there are so many vying for not enough of those jobs. As you can see from some of the post here many have done quite well working in the trades. Just some advise from one that grew up in cotton country, and went to work at 13 mowing yards. Good luck, at 28 the world is still out there waiting for you to succeed.

thank you so much! I’ve thought about that, my best friend is a general contractor and is my age, I honestly don’t know anyone else my age who has the skill set he has. It’s always made me want to consider a trades career but it can be a little overwhelming to think about pivoting. Will definitely consider it. Thanks for the words.

 

[Gibs45]

Sorry to hear you were laid off but hopefully something better will come along soon. One good thing (not sure what industry you're in) is that so many companies are in need of workers right now you should be able to land on your feet again soon. Living within your means really helps in times like this.

I know the trades aren't for everyone but Jim @wanted33 is right. Learning a good trade will/can be a very profitable career. There's hardly any younger tradesman in the business now and it's a great time to learn one. When I started right out of high school everyone on the job sites were younger with a few older guys. Now it's the opposite and most of is old (er) guys are retiring soon and someone needs to fill our shoes. I get it it's hard work and sitting in a office is much easier but those office jobs just aren't forever anymore.

You will always have work if you put 100% into your career. Not everyone is cut out to be self employed and trust me there were times throughout the years I wanted to just hang it up and go back to work for someone else. No one sees the endless hours you're working off the clock. The phone calls, estimates, gathering materials, laying out the next days plan for 7 guys, billing, payroll and a whole lot more. Now try and find some time for a personal life after working 60-70 hours a week. ?

When I sold my business in MA and moved here to AZ I knew 2 people. I was burned out and hated getting up every morning and the thought of going to work (we did a lot pf production) just depressed me. After being here 6 months I started up another small company with zero employees this time. It wasn't going to be easy as I only knew 2 people where back east I had hundreds of connections. I got in good with my local Sherwin Williams store and they passed out my cards, hooked up with a decorator and long story short in 18 months I had and still have more work than I can do. Word of mouth is the best advertising. I honestly turn more work away because I don't want or need to kill myself now.

Hopefully some of our advise helps you and others and we's love to know when you get another job. Good luck!!!

makes a ton of sense Dave, thanks for the words! Your story is inspiring to young guys like myself as you truly don’t see that kind of work ethic anymore. Seriously considering a career pivot, all options are on the table

 

[Gibs45]

Hang in there, things will turn around if you work at it. Sounds like you are on the right track.
I've was laid off from a job I was at for only 6 months. I took the job because it was a huge increase in pay but not exactly what I wanted to do. It ended up a blessing and not sure I would have ended up where I am now without that little setback. I did side jobs for a few months, one for the company that I was at previously, and then landed my next job that paid less but ended up going the direction I wanted.
Overall, just another lesson in the school of life.

I’m glad to hear things worked out for you in the end and hope things are going well for you. Admittedly I have not faced a ton of adversity as of late so I’m welcoming this chapter of growth just like you did

 

[Gibs45]

Hey Gibran,

I am sure lots of people have told you everything works out for the best (with regard to being laid off). Truth is, almost without fail, they are right. It might not become apparent for a while and things may even be tough right now, but honestly, it almost always ends up better.

I started a company after leaving an incredibly lucrative and very easy (for me) job. I had accumulated a pretty sizable nest egg (which would have been much bigger if I wasn’t such a profligate during the foregoing years).

When I told my wife about the business plan she was stunned. Her first response was, Why? We were really comfortable, I had great job security, benefits, well into six figures annually, she was working at a goofy little company called Apple, that while seemingly doing pretty well at that time and she had a good income but anything but a sure thing, I said to her “because it is a really good idea, I have a really good feeling about this idea.”

Much to her distress I pushed on and we (my partner and I) proceeded to quit our jobs, find an office and set up our lemonade stand… (kind of joke, but not totally off the mark, we had no business plan, didn’t know about such things, etc.).

We started the company in early 1987. We didn’t have any income, so we funded everything from our nest eggs. While we didn’t have many employees early on, it didn’t take many, coupled with rent, startup costs like building out the office with computers, local area networks, etc., to make our “burn rate” actually live up to that term.

We were peddling pretty fast working on getting contracts with a few giant companies that were our prospects, getting all the legal work done so we could actually start signing contracts if we were so lucky as to get a return call.

In my past life, before we quit our jobs, we both (partners) had been kind of rolling it. In 1987, the stock market seemed to be on a one way street, kind of like (pick any year after 2009, until Covid for reference) and I thought I kind of knew all there was to know about buying stocks successfully (like any other cash rich 30 something master of the universe who discovered the stock market in that kind of bull market). I had invested in individual stocks of tech companies that were growing really fast (we lived in the Bay Area) and my stock broker had introduced me to the concept of buying on margin, which for an overconfident putz, seemed like shooting fish in a barrel.

The Friday before 10/19 came along and the market was really down. A few friends I bumped into asked me if I had seen the sell off and I told them I hadn’t, too busy working.

On Monday October 19th, the market crashed. I didn’t realize it had as again, I was at work early that day. When my partner came into the office, he was white as a sheet, he said, “did you see the news?” I said, “no, what is going on?” He said, “I think we both lost a lot of money.”

We turned on the news. There wasn’t a CNBC or any other business channel if I can recall, but that didn’t matter because it was big enough news the regular news channels were going full tilt on the coverage.

After an hour or so of just watching stunned, we both kind of turned it off and understood, our motivation just got fortified, but the other shoe hadn’t dropped yet.

I think it was Tuesday (might have been Wednesday), my stock broker called and asked what I wanted to do with the account (meaning my stock brokerage account). He said I needed to send in some money if I wanted to keep it open and I was like, “what’s wrong with all the money, I have in it now?”. Then the other shoe dropped, he said, “we closed you account, the margin calls netted you out.” I said, “I will get back to you.” My nest egg was gone and we were pretty far from anything representing solid stable income for the business.

Those were some really tough days, not the least of which was explaining my stupidity to my wife.

In the end, we went into overdrive, I called everyone I had ever met in my previous line of work and scraped enough income together to keep the lights on in the new business, having a few payroll cycles where I had to borrow for friends and family to fulfill and we just scraped through.

That experience taught me so much. For you, I mainly wanted to say that 28 is really young, you have so many options, never get daunted when setbacks occur. There is NO place on earth with as much opportunity as the US. You have plenty of time to make 3 fortunes, just set a plan, track your goals, suit up every day and come to play your hardest and success will follow.

I read your post over multiple times yesterday and even shared it with my sister (she works at Apple right now). I really do appreciate the words and it really put things in perspective for me. Nothing happens when you stay in your comfort zone that’s for sure! I never knew I’d get so much wisdom from a forum like this ?

 

[AzScorpion]

makes a ton of sense Dave, thanks for the words! Your story is inspiring to young guys like myself as you truly don’t see that kind of work ethic anymore. Seriously considering a career pivot, all options are on the table

Those who are hard workers will always find work and land on their feet. You sound like you have the determination and mindset to push forward whether it be working for someone else or trying to start a business. Even if you try and it doesn't work don't think of it as a failure, self employment isn't for everyone and at least can say you tried. It's easy to get depressed but just keep pushing forward! There were many times I wanted to hang it up and go back to work for someone else or change careers. Looking back I'm glad I didn't and pushed myself through it.

You can change careers at anytime. Mark @txquailguy did it later in life and he has a great new career now and is happy. Rick @Trigganometry and Jim @wanted33 both did it too and have (had in Jims case as he's retired) a great new career and a great life. While making money is important you have to be happy at what you're doing. Your story is really one of the reasons I wanted to start this thread. I figured if one of us here can help someone out it was all worth it. I hope it all works out for you and please let us know what you decide to do.

 

[wanted33]

thank you so much! I’ve thought about that, my best friend is a general contractor and is my age, I honestly don’t know anyone else my age who has the skill set he has. It’s always made me want to consider a trades career but it can be a little overwhelming to think about pivoting. Will definitely consider it. Thanks for the words.

I understand the apprehension Gibs. Anybody my age knows it well. Remember, nothing worthwhile is ever easy. Good luck on your decision young man.

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