Comments on: Flying on Auto Pilot

By: Adrian

Adrian — Wed, 25 Mar 2009 00:04:58 +0000

@ Jeff – Just wait until you see how good your memory is when you get to 67

If you assumed circa 8% stock market return (pretty much ‘guaranteed’ for that long a period) then I would agree with your approx. $3 Mill. in today’s dollars.

Can you wait until 67 to live off $13,600 a month (I think that’s already $1k a month over ‘safe’)? Is it worth keeping this ‘backup plan’ going for this lifestyle by this date? Is it worth ‘risking’ your primary plan – whatever that turns out to be – to keep this going?

Only questions that you will be able to answer as this ‘grand experiment’ progresses …

By: Jeff

Jeff — Tue, 24 Mar 2009 22:42:43 +0000

@ Adrian – I’m home in MA for a few days….So here’s the numbers that I promised you.

Based upon my last analysis using Fidelity’s Monte Carlo retirement planner I’m on track to have the following by 67:

3.1 Million (13,639/month) if the market performs poorly

7.6 Million (24,487/month) if the market performs on average.

That’s a bit less than I stated above. Shows you how good my memory is these days.

The one question I can’t find in my answers is whether these answers are in 2008 dollars or 2037 dollars. I’m pretty sure I assumed about 3-4% inflation and normally I’d request my answers in “today’s dollars” on these type of exercises, but I can’t determine that for certain with the print outs I have from that analysis.

I’ll run the numbers again when I have more free time and see if I can provide more clarity.

By: Jeff

Jeff — Sat, 14 Mar 2009 03:30:43 +0000

Diane – I didn’t know your were a Pensacola girl. I’ve spent a fair amount of time here in the past. I went to Aviation Officer Candidate School there at NAS Pensacola in the early nineties and did my primary flight training at Whiting Field in Milton. I lived here for only about a year in 1992-1993.

Haven’t hit McGuire’s yet, although I did drive by last night. Maybe this weekend.

By: Diane

Diane — Sat, 14 Mar 2009 03:10:02 +0000

Jeff – say hello to the McQuire’s for me! You’re in my home town!! I assume you’re getting a vehicle in Boston, btw, to do your business, but don’t recall that coming up in any of the posts…

Regarding when you pick an individual stock, I would agree that you don’t put all your money in that stock; you probably want 3-5 that you can track easily and as you feel more comfortable with stocks, you will know what you want to do as far as $/% of your monies in each one.

I did Dogs of the Dow initially when I started out, and that worked well for me then, but I don’t know that I’d bet on them now from one year to the next.

What do you think about the Aerospace Industry, particularly with the release of information recently that the Obama administration is going to remove the Tanker from the Five-Year Budget Plan that the President is putting out this year? My guess is that it may take until the Congress resolves the next budget this fall before it can be predicted well…and of course that won’t happen until Jan
But, as an investment, the bet might be that the industry will drop (and effectively go on sale if one believed it would return) and then adjust and stabilize when congress works out details later – OR – will they do that sooner than later?

By: Adrian

Adrian — Sat, 14 Mar 2009 01:11:12 +0000

@ Charles – Well said!

By: Charles

Charles — Fri, 13 Mar 2009 23:21:54 +0000

My suggestion would be to look at the final results of your investment choices instead of focusing on the tax benefits. You could invest $30K in a tax deferred account and make 8% in a year ($2,400) or you could use the $30K in a non-tax deferred option ______ (fill in the blank) and make more than $2,4000 after taxes. Which one will get you to your number on your date?

By: Retirement Accounts: 7 Case Studies « How to Make 7 Million in 7 Years™

Retirement Accounts: 7 Case Studies « How to Make 7 Million in 7 Years™ — Wed, 11 Mar 2009 07:45:13 +0000

[...] Jeff – Here is an example of a reasonably well-salaried government employee who has one foot in each camp: his Grandpappy once told him to invest in his 401k so that he does, as well as have a couple of residential properties. How much money – in today’s dollars – does a high-saving guy expect to accumulate by the time he reaches 60? Is it worth the wait? [...]

By: Adrian

Adrian — Tue, 10 Mar 2009 22:28:20 +0000

@ Jeff – That’s cool … just something for you to mull over, Jeff.

By: Jeff

Jeff — Tue, 10 Mar 2009 22:18:56 +0000

Diane – Taking the aggressive growth funds out of the mix does exactly what you point out. It removes those who are doing the picking. The other funds in my portfolio are pure indexes. No picking involved, just total market returns save for minor fees.

I intend to try and put the resources you mention to work, but that’s going to take time. I’m not going to take the entire portfolio and put it into the first stock that meets value investing criteria. I understand that diversity limits returns, but I’m not ready to stomach the risk of putting everything on black with my first pick…especially with my track record on individual stocks.

AJ – I know I owe you answers to those questions, but it will have to wait for now. As I mentioned previously the files that contain those details are still in a box (in Boston, MA) and I am now on a two week business trip (in Pensacola, FL). I should be able to find the answers sometime after March 20th when I return to Boston.

Sorry.

By: Diane

Diane — Tue, 10 Mar 2009 14:20:34 +0000

Not that I’m an expert, but I’m with Josh on your losing the mutual funds (they diversify risk, so they make less for you) and the folks who recommend them. I think if you can do the research required to learn about individual companies (i.e., USE the data in the books you’re reading that tell you how to pick a solid company with a solid management), then you should be making your own choices, not paying someone else to do it. Particularly since you do not know the ethics of the guys doing it (unless that’s you) and there are enough people in the mix already (CEOs, CFOs, etc).

Beyond that (managing your own investing in stocks), I have to bow out of the discussion and listen.