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  • familymedicineresident
    replied
    I appreciate the constructive criticism on my thoughts for retirement. Could you give me some guidance on knowing how much my goal should be for retirement. I was trying to use the WCI equation but it seems you are saying that doesn’t account for inflation.

    Leave a comment:


  • Dr.V. Investor
    replied
    First, congratulations on your 3rd child.  I hope he/she is doing well.  It is great you modest lifestyle.  However, 50k a year in the next 30 years is not going to be sufficient.  You also need to understand where you will get her 4% return.  Maybe culturally, you do not feel the need to be on the stock market. Other avenues you can consider, invest in real estate. It takes more money but a lot have used real estate as retirement plan- owning rental properties etc. 2nd, create your own business and make it big enough that it will generate enough money.  It may be something you can look into upon completion of residency.  4th option, not popular option in this forum, get a portfolio manager that can pick stocks for you.  If you feel you can DIY, then you can do your own stock picking.  There are some who create their own portfolio according to their principles.  you may or may not outperform the index, no one knows.  Another unpopular option is have a whole life insurance.  Just a few suggestions.

    Leave a comment:


  • Dreamgiver
    replied




    I was not scared away ITEngineer. Hahaha. I really appreciate all of the advice everyone gave. Super helpful. I didn’t respond because my wife just had our third child and we spent a couple days in the NICU under the bili lights so it has been really busy.

    I had heard about the specific socially responsibly mutual funds. I was most familiar with those at Ave Maria. I agree that they seem like a sales strategy to take advantage of investors. At the same time they not completely off the radar to me because they allow me to avoid some companies. I was especially excited to hear about the index options that are out there.

     

    One other thought I have about all this is: maybe I don’t need to use the stock market to save for retirement. My wife and I have a modest lifestyle and I expect 50,000 dollars a year at retirement will be sufficient for us. Using WCI’s recommendation of the FV function in excel I calculated that if I invest just 20,000 a year for 35 years and get a return of only 4% that I will have saved ~1,800,000 by retirement. My calculation for 30 years of retirement shows I only need 1,500,000. So I wonder if I could hit 4% return and avoid the stock market all together.

    Any thoughts?
    Click to expand...


    Where can you find a 4% guaranteed return? And is it 4% before or after taxes? Before or after inflation? And the 1.5mil you figure you need, is it present value of future value? 35 years from now 60k/year will get you very little.

    Leave a comment:


  • adventure
    replied


    I am wondering if you have any suggestions about how to achieve the goals of using index funds while avoiding some companies.
    Click to expand...


    I think sometimes it's just best to take an antiobiotic for a UTI. Just because you have a patient who "thinks" that medicines are bad and asks for cranberry juice, doesn't mean it's a good idea. Nor does it mean you should throw medicines out all together.

    Yes, the world is gray, and not black & white. Sometimes it's best to accept that gray, and attempt to do spent ones energy and effort where it has the most impact. There are lots of places the world could improve - I've tried to focus on the areas where I can make a change. When I hit a hurdle, I try and be self aware as to why i've hit said hurdle, and be very aware of why, and if it is reasonable, and how I can best watch out for similiar hurdles.

    Leave a comment:


  • Zaphod
    replied
    Sure, but overall is pretty pointless and self detrimental. As stated prior, there are far better ways to go about things with advocacy, supporting good organizations, etc....I agree with the above, no company nor person is perfect, just doesnt exist.

    Leave a comment:


  • Craigy
    replied







    To play a little devil’s advocate to some of the responses there, while you are not directly funding companies on a secondary market, the existence of this secondary market allows companies to raise money in IPOs. Arguing otherwise is similar to being a vegetarian and eating steak because the animal is already dead.

    Also if you avoid certain sectors you are less diversified, but that doesn’t guarantee you’ll do worse. I’m sure those endowments avoiding oil companies outperformed over the last 5 years.

     

    Not saying you should or shouldn’t do this.
    Click to expand…


    Oh, are the oil companies bad too? I mean, are there any companies or governments that are 100% good? Let’s just go down the list and you guys tell me when you see one that is “all good.”





























































































































































































































































    Apple Inc. 113,091,257 $20,143,814,697
    Microsoft Corp. 188,791,082 $17,702,939,759
    Amazon.com Inc. 10,024,255 $15,161,184,475
    Facebook Inc. Class A 58,365,494 $10,407,734,890
    JPMorgan Chase & Co. 84,920,995 $9,808,374,923
    Berkshire Hathaway Inc. Class B 46,199,386 $9,572,512,779
    Johnson & Johnson 65,758,517 $8,540,716,188
    Alphabet Inc. Class C 7,298,056 $8,062,381,405
    Alphabet Inc. Class A 7,270,985 $8,026,585,761
    Exxon Mobil Corp. 103,693,176 $7,853,721,150
    Bank of America Corp. 242,489,172 $7,783,902,421
    Wells Fargo & Co. 108,475,042 $6,336,027,203
    Intel Corp. 114,541,044 $5,645,728,059
    Visa Inc. Class A 44,371,610 $5,455,045,733
    AT&T Inc. 150,263,262 $5,454,556,411
    Cisco Systems Inc. 120,986,850 $5,417,791,143
    UnitedHealth Group Inc. 23,716,964 $5,363,828,578
    Pfizer Inc. 145,908,028 $5,297,920,497
    Home Depot Inc. 28,576,718 $5,208,678,390
    Chevron Corp. 46,483,823 $5,202,469,470
    Boeing Co. 13,846,068 $5,015,184,290
    Citigroup Inc. 64,708,409 $4,884,837,795
    Procter & Gamble Co. 62,079,709 $4,874,498,751
    Verizon Communications Inc. 100,958,736 $4,819,770,047
    AbbVie Inc. 39,077,362 $4,526,330,840
    Comcast Corp. Class A 114,161,777 $4,133,797,945
    Coca-Cola Co. 93,832,276 $4,055,430,969
    Mastercard Inc. Class A 22,984,847 $4,039,816,709
    DowDuPont Inc. 57,274,099 $4,026,369,160
    Philip Morris International Inc. 38,013,598 $3,936,308,073
    Oracle Corp. 76,592,617 $3,880,947,903
    PepsiCo Inc. 34,805,994 $3,819,261,722
    Walt Disney Co. 35,108,940 $3,621,838,250
    Merck & Co. Inc. 66,692,408 $3,616,062,362
    3M Co. 14,572,904 $3,432,064,621
    International Business Machines Corp. 21,522,944 $3,353,920,364
    Walmart Inc. 36,557,943 $3,290,580,449
    Amgen Inc. 17,769,149 $3,265,436,512
    NVIDIA Corp. 13,346,924 $3,229,955,608
    McDonald’s Corp. 19,507,297 $3,077,081,029
    General Electric Co. 212,258,787 $2,994,971,485
    Altria Group Inc. 46,692,593 $2,939,298,729
    Netflix Inc. 10,061,142 $2,931,615,556
    Honeywell International Inc. 18,629,647 $2,815,125,958
    Bristol-Myers Squibb Co. 40,071,515 $2,652,734,293
    Medtronic plc 33,128,957 $2,646,672,375
    Texas Instruments Inc. 24,113,704 $2,612,719,828
    Abbott Laboratories 42,595,751 $2,569,801,658
    Adobe Systems Inc. 12,064,984 $2,523,150,104
    Gilead Sciences Inc. 31,976,272 $2,517,491,895

     

    How about Johnson and Johnson? Are they okay? Oh wait, they give people cancer: https://www.thestar.com/business/2017/08/21/johnson-johnson-ordered-to-pay-417-million-in-lawsuit-linking-baby-powder-to-cancer.html

    Seriously, as I go down that list I can criticize nearly every company for something.
    Click to expand...


    I can't speak for him, but I don't think Allonblack is advocating that people avoid certain businesses or saying that certain businesses are or aren't ethical.  He's just pointing out (correctly IMO) that owning a business is equivalent to supporting that business.

    Leave a comment:


  • Craigy
    replied




    To play a little devil’s advocate to some of the responses there, while you are not directly funding companies on a secondary market, the existence of this secondary market allows companies to raise money in IPOs. Arguing otherwise is similar to being a vegetarian and eating steak because the animal is already dead.

    Also if you avoid certain sectors you are less diversified, but that doesn’t guarantee you’ll do worse. I’m sure those endowments avoiding oil companies outperformed over the last 5 years.

     

    Not saying you should or shouldn’t do this.
    Click to expand...


    +1

    When you buy stock in the morally reprehensible company, while your money didn't technically flow into the coffers of the bad organization, you still bought, and now own, that company.  You become an owner of the company.  Further, the buy and the hold of a company's stock supports its price, however incrementally, which supports the business even though your dollars did not physically flow into the company.

    Just the ownership alone is giving you a vested interest in that company's future success.  If you love chickens, hate people who kill chickens, and grandma gifts you some Tyson chicken stock, you now have an active interest in the raising and slaughtering of billions of chickens.  When you get a dividend, the blood of those chickens is on your hands. 

    Joking aside, directly or indirectly, you want Tyson to remain in business and be successful doing what it does best.  If you sell your shares, or never purchase them in the first place, it now doesn't matter to you if Tyson expands or goes out of business.  Plus, selling your shares depresses the share price.

    Taking this to an extreme, if you knew that a publicly traded corporation owned slaves, would it be morally acceptable to purchase non-IPO shares?   If nazi germany issued bonds, would you be ethically absolved by purchasing bonds only on the secondary market?   :P  Of course not.

    Leave a comment:


  • The White Coat Investor
    replied




    To play a little devil’s advocate to some of the responses there, while you are not directly funding companies on a secondary market, the existence of this secondary market allows companies to raise money in IPOs. Arguing otherwise is similar to being a vegetarian and eating steak because the animal is already dead.

    Also if you avoid certain sectors you are less diversified, but that doesn’t guarantee you’ll do worse. I’m sure those endowments avoiding oil companies outperformed over the last 5 years.

     

    Not saying you should or shouldn’t do this.
    Click to expand...


    Oh, are the oil companies bad too? I mean, are there any companies or governments that are 100% good? Let's just go down the list and you guys tell me when you see one that is "all good."





























































































































































































































































    Apple Inc. 113,091,257 $20,143,814,697
    Microsoft Corp. 188,791,082 $17,702,939,759
    Amazon.com Inc. 10,024,255 $15,161,184,475
    Facebook Inc. Class A 58,365,494 $10,407,734,890
    JPMorgan Chase & Co. 84,920,995 $9,808,374,923
    Berkshire Hathaway Inc. Class B 46,199,386 $9,572,512,779
    Johnson & Johnson 65,758,517 $8,540,716,188
    Alphabet Inc. Class C 7,298,056 $8,062,381,405
    Alphabet Inc. Class A 7,270,985 $8,026,585,761
    Exxon Mobil Corp. 103,693,176 $7,853,721,150
    Bank of America Corp. 242,489,172 $7,783,902,421
    Wells Fargo & Co. 108,475,042 $6,336,027,203
    Intel Corp. 114,541,044 $5,645,728,059
    Visa Inc. Class A 44,371,610 $5,455,045,733
    AT&T Inc. 150,263,262 $5,454,556,411
    Cisco Systems Inc. 120,986,850 $5,417,791,143
    UnitedHealth Group Inc. 23,716,964 $5,363,828,578
    Pfizer Inc. 145,908,028 $5,297,920,497
    Home Depot Inc. 28,576,718 $5,208,678,390
    Chevron Corp. 46,483,823 $5,202,469,470
    Boeing Co. 13,846,068 $5,015,184,290
    Citigroup Inc. 64,708,409 $4,884,837,795
    Procter & Gamble Co. 62,079,709 $4,874,498,751
    Verizon Communications Inc. 100,958,736 $4,819,770,047
    AbbVie Inc. 39,077,362 $4,526,330,840
    Comcast Corp. Class A 114,161,777 $4,133,797,945
    Coca-Cola Co. 93,832,276 $4,055,430,969
    Mastercard Inc. Class A 22,984,847 $4,039,816,709
    DowDuPont Inc. 57,274,099 $4,026,369,160
    Philip Morris International Inc. 38,013,598 $3,936,308,073
    Oracle Corp. 76,592,617 $3,880,947,903
    PepsiCo Inc. 34,805,994 $3,819,261,722
    Walt Disney Co. 35,108,940 $3,621,838,250
    Merck & Co. Inc. 66,692,408 $3,616,062,362
    3M Co. 14,572,904 $3,432,064,621
    International Business Machines Corp. 21,522,944 $3,353,920,364
    Walmart Inc. 36,557,943 $3,290,580,449
    Amgen Inc. 17,769,149 $3,265,436,512
    NVIDIA Corp. 13,346,924 $3,229,955,608
    McDonald's Corp. 19,507,297 $3,077,081,029
    General Electric Co. 212,258,787 $2,994,971,485
    Altria Group Inc. 46,692,593 $2,939,298,729
    Netflix Inc. 10,061,142 $2,931,615,556
    Honeywell International Inc. 18,629,647 $2,815,125,958
    Bristol-Myers Squibb Co. 40,071,515 $2,652,734,293
    Medtronic plc 33,128,957 $2,646,672,375
    Texas Instruments Inc. 24,113,704 $2,612,719,828
    Abbott Laboratories 42,595,751 $2,569,801,658
    Adobe Systems Inc. 12,064,984 $2,523,150,104
    Gilead Sciences Inc. 31,976,272 $2,517,491,895

     

    How about Johnson and Johnson? Are they okay? Oh wait, they give people cancer: https://www.thestar.com/business/2017/08/21/johnson-johnson-ordered-to-pay-417-million-in-lawsuit-linking-baby-powder-to-cancer.html

    Seriously, as I go down that list I can criticize nearly every company for something.

    Leave a comment:


  • Allonblack
    replied
    To play a little devil's advocate to some of the responses there, while you are not directly funding companies on a secondary market, the existence of this secondary market allows companies to raise money in IPOs. Arguing otherwise is similar to being a vegetarian and eating steak because the animal is already dead.

    Also if you avoid certain sectors you are less diversified, but that doesn't guarantee you'll do worse. I'm sure those endowments avoiding oil companies outperformed over the last 5 years.

     

    Not saying you should or shouldn't do this.

    Leave a comment:


  • The White Coat Investor
    replied




    I was not scared away ITEngineer. Hahaha. I really appreciate all of the advice everyone gave. Super helpful. I didn’t respond because my wife just had our third child and we spent a couple days in the NICU under the bili lights so it has been really busy.

    I had heard about the specific socially responsibly mutual funds. I was most familiar with those at Ave Maria. I agree that they seem like a sales strategy to take advantage of investors. At the same time they not completely off the radar to me because they allow me to avoid some companies. I was especially excited to hear about the index options that are out there.

     

    One other thought I have about all this is: maybe I don’t need to use the stock market to save for retirement. My wife and I have a modest lifestyle and I expect 50,000 dollars a year at retirement will be sufficient for us. Using WCI’s recommendation of the FV function in excel I calculated that if I invest just 20,000 a year for 35 years and get a return of only 4% that I will have saved ~1,800,000 by retirement. My calculation for 30 years of retirement shows I only need 1,500,000. So I wonder if I could hit 4% return and avoid the stock market all together.

    Any thoughts?
    Click to expand...


    Sure, you save enough money and spend little enough, you don't have to use the stock market.

    I think I'd probably invest in real estate before I did that though, at least if you're okay with policies like throwing people out on the street if they don't pay their rent.

    I mean, what are you going to invest in? Buy treasuries? Do you agree with everything the US government does? I mean, they drop bombs on people. Or corporate bonds? Same issue with buying stocks. How about muni bonds? Do you agree with what state and city governments are doing? CDs? Do you agree with what banks are doing? I mean, it just goes on and on and on.

    I think there's something to be said for getting over the idea of trying to enact social good while investing, but if you can't, just buy a socially responsible fund, accept the likely lower returns, pat yourself on the back that you tried to do a lot more than most investors, and move on.

    https://www.whitecoatinvestor.com/the-reason-you-take-market-risk/

    Leave a comment:


  • Peds
    replied
    Unlikely to be possible. And with 3 kids your spending will go up, not down.

    Leave a comment:


  • familymedicineresident
    replied
    I was not scared away ITEngineer. Hahaha. I really appreciate all of the advice everyone gave. Super helpful. I didn't respond because my wife just had our third child and we spent a couple days in the NICU under the bili lights so it has been really busy.

    I had heard about the specific socially responsibly mutual funds. I was most familiar with those at Ave Maria. I agree that they seem like a sales strategy to take advantage of investors. At the same time they not completely off the radar to me because they allow me to avoid some companies. I was especially excited to hear about the index options that are out there.

     

    One other thought I have about all this is: maybe I don't need to use the stock market to save for retirement. My wife and I have a modest lifestyle and I expect 50,000 dollars a year at retirement will be sufficient for us. Using WCI's recommendation of the FV function in excel I calculated that if I invest just 20,000 a year for 35 years and get a return of only 4% that I will have saved ~1,800,000 by retirement. My calculation for 30 years of retirement shows I only need 1,500,000. So I wonder if I could hit 4% return and avoid the stock market all together.

    Any thoughts?

    Leave a comment:


  • Peds
    replied




    I am a year from graduating from residency and earning an attending‘s salary. I have been reading about saving for retirement in the WCI book and Bogleheads guide to investing. I am convinced about indexing as the main part of saving. However I have run into a hurdle.

    For ethical reasons there are many companies that I would not want to be connected with or profiting from – armaments for example. Thus having an index fund that will have hundreds of companies will almost certainly involve these companies. I am wondering if you have any suggestions about how to achieve the goals of using index funds while avoiding some companies.

    Obviously people may disagree with the tenet that you should not profit from a companies whose practices you disagree with but this is very important to me. I realize this. I think it is a worthwhile discussion but not the question here
    Click to expand...


    You can do it with an IRA taxable or self directed 401k, but you will pay more and likely earn less. Tis the pay off.

    Leave a comment:


  • The White Coat Investor
    replied




    I am a year from graduating from residency and earning an attending‘s salary. I have been reading about saving for retirement in the WCI book and Bogleheads guide to investing. I am convinced about indexing as the main part of saving. However I have run into a hurdle.

    For ethical reasons there are many companies that I would not want to be connected with or profiting from – armaments for example. Thus having an index fund that will have hundreds of companies will almost certainly involve these companies. I am wondering if you have any suggestions about how to achieve the goals of using index funds while avoiding some companies.

    Obviously people may disagree with the tenet that you should not profit from a companies whose practices you disagree with but this is very important to me. I realize this. I think it is a worthwhile discussion but not the question here
    Click to expand...


    You're free to invest however you like. You should be aware of a few things before you go down this road however.

    # 1 Your fees are likely to be higher and your returns are likely to be lower. You will be donating money to Wall Street that could have gone to provide for your favorite charities doing good in the world.

    # 2 Your "bad companies" are completely different from someone else's. And the chances that your list overlaps precisely with that of a mutual fund manager is essentially nil. The world is a very gray place.

    # 3 Your money isn't going to the company and its founders unless you're buying it at an IPO. It's going to the last guy who owned it, probably a mutual fund or pension. You're not hurting anyone or affecting anything by avoiding investing in the stock of a "bad company."

    Here's a post about socially responsible investing: https://www.whitecoatinvestor.com/low-fee-socially-responsible-investing-an-oxymoron/

    Leave a comment:


  • ITEngineer
    replied




    Obviously people may disagree with the tenet that you should not profit from a companies whose practices you disagree with but this is very important to me. I realize this. I think it is a worthwhile discussion but not the question here
    Click to expand...


    I get the feeling we might have ambushed you and you went radio silent. That was not my intention at all. I would definitely be interested in what your thoughts are as you wrestle with this issue. Personal finance, is well, personal 

    Leave a comment:

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