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  • #46




    I read many posters on this forum with 90%+ allocations to equities. I worry that the long bull market has lulled many into a false sense of financial security. I have always had a 60/40 equity allocation. Clearly, in retrospect, my opportunity cost has been high since 2008, but at least I know I have the fortitude to ride out another market downturn, and will have fixed income assets to rebalance to equities if the market tanks.
    Click to expand...


    I think this perspective / thought is relevant only when taken in conjunction with the person's age. Stating that one should be worried about being 90%, or heck even 100% in equities is not appropriate for a 25-30 year old who should not have 40% in bonds if the purpose of the savings is for retirement.

    On the other hand a person whose only income is from the stock market and is 50-60 years old should consider switching some portion of the savings to bonds or start investing the new savings in bonds rather than adding to stocks.

    Another option is to diversify away from stock market that gives a source of income even in a stock market downturn. I am one such person and therefore hold all my stock market investments in stocks with nary a bond in sight, but it now makes up less than 50% of my overall investments.

    Comment


    • #47




      But now you know why I’m at $4-5M instead of $2-3M. We like to spend lavishly.
      Click to expand...


      I mentioned the $5M number in another thread where I stated that as physicians we could look at annual spending in the 150-200K range. The $1-2M to achieve FI and retire at 45 does not cut it anymore.

      I suspect that the cost for everyday items will rise and inflation may not be as low as it has been for the past decade. The tax rate may not be as low, since the government will need more money to combat increasing national debt. The health care and long term care costs will be high and we can't even put a figure to it at present.

      Comment


      • #48







        I read many posters on this forum with 90%+ allocations to equities. I worry that the long bull market has lulled many into a false sense of financial security. I have always had a 60/40 equity allocation. Clearly, in retrospect, my opportunity cost has been high since 2008, but at least I know I have the fortitude to ride out another market downturn, and will have fixed income assets to rebalance to equities if the market tanks.
        Click to expand…


        I think this perspective / thought is relevant only when taken in conjunction with the person’s age. Stating that one should be worried about being 90%, or heck even 100% in equities is not appropriate for a 25-30 year old who should not have 40% in bonds if the purpose of the savings is for retirement.

        On the other hand a person whose only income is from the stock market and is 50-60 years old should consider switching some portion of the savings to bonds or start investing the new savings in bonds rather than adding to stocks.

        Another option is to diversify away from stock market that gives a source of income even in a stock market downturn. I am one such person and therefore hold all my stock market investments in stocks with nary a bond in sight, but it now makes up less than 50% of my overall investments.
        Click to expand...


        Exactly. Its just as inappropriate for someone young as it for the retiring person to be in 100% stocks.

        The other coincident thing with those who have gone through downturns or those that had just started with retirement at the time is that even if the next bear market is much more normal, and shallower than the last couple, you will likely lose a much larger nominal amount of your portfolio due to growth and accumulated savings.

        I was invested in 2008 for a whole year and a half of residency. I was busy and didnt even know what was going on, but if my account lost 38-50% at some time due to being all stocks (i have no idea in reality, how funny), I lost what maybe 2 grand max? That might even be a stretch. I lose that on the most minor of wobbles during normal intraday now. Anyone with much larger portfolios will have much larger nominal swings.

        60/40 isnt what it used to be either. May still do the trick of decreasing amount of equity risk but your upside from safety haven appreciation during a downturn is much less than it used to be. Not that it isnt still useful, just not as juicy as in the past.

        I remember 2016, I was extremely excited and couldnt get my hands on enough money to invest.

        Comment


        • #49





          But now you know why I’m at $4-5M instead of $2-3M. We like to spend lavishly. 
          Click to expand…


          I mentioned the $5M number in another thread where I stated that as physicians we could look at annual spending in the 150-200K range. The $1-2M to achieve FI and retire at 45 does nto cut it anymore.

          I suspect that the cost foe everyday items will rise and inflation may not be as low as it has been for the past decade. The tax rate may not be as low, since the government will need more money to combat increasing national debt. The health care and long term care costs will be high and we can’t even put a figure to it at present.
          Click to expand...


          You know how out of touch that sounds to the average American? Average net worth (not just nest egg) at 65-69 is $820K. Median is $194K.

          https://en.wikipedia.org/wiki/South_Sea_Company

          $1-2M is plenty to retire on if you don't spend like a doctor. And the reason we spend like a doctor? Because we can.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

          Comment


          • #50
            I see a lot of “low” numbers here. I will be 31 years old when I start a high earning specialty next July. I want to have a somewhat lavish lifestyle as some posters here (minority) in a LCOL area.  I still want to save at least 25% gross income a year, which should be in the ballpark of 125k+ after 225k student loans are paid off. 30 years from now, with 2.5% inflation, $2M will be approximately equivalent to $1M in todays dollars. So, I want to have at least $8M, hopefully $10M, before being ok saying FU, I’m done.  That should be in my low 60s if I get 5% ROI. I just can’t see myself retired earlier anyways for now.

            I worry about blowing my retirement money on trips, spending etc since I will have so much spare time. Health insurance costs and amount devoted to helping family (etc college, grad school, cars, homes etc) while retired are other concerns. Any others, particularly young attendings, have a good way to factor in inflation?

            Comment


            • #51
















              My net worth has gone up nearly a half million this year, which is pretty amazing.  I am trying to stay at my full time job for another three years to get all the benefits before punching out, and if this keeps up I might have 2.5-3 million at that point.  It makes sense to slow down and go part time after that, but part time positions with health insurance are extremely hard to find, and I’m scared to death of buying health insurance out of pocket when marketplace rates are rising ~30% a year.

              One idea I have is to move to one of the two states that offers the ACA basic health plan and see if I can keep my income to <200% of the FPL in order to qualify.  I don’t know what I’ll do if I quit working, but just sitting around, reading, volunteering, and relaxing sounds a lot better than working.
              Click to expand…


              I think we all need to be careful about having “a number”, especially nine years into a bull market.

              Yes, your net worth may have gone up by half a million this year, but it isn’t always going to go up smoothly. On paper, my net worth dropped by over a million in 2008.

              I read many posters on this forum with 90%+ allocations to equities. I worry that the long bull market has lulled many into a false sense of financial security. I have always had a 60/40 equity allocation. Clearly, in retrospect, my opportunity cost has been high since 2008, but at least I know I have the fortitude to ride out another market downturn, and will have fixed income assets to rebalance to equities if the market tanks.
              Click to expand…


              I’m at 86/14, and go up on bonds 1% a year.  Won’t really know how I can weather a bear market till we have one, but I’ve done fine in late 2011 and early 2016.

              regardless, if you can get your savings up to 35x your annual expenses, all the research suggests you should be all right even if the SOR is terrible.
              Click to expand…


              I don’t remember late 2011 or early 2016 at all. In contrast, I have very clear memories of 2000-02, and 2007-09. In other words, I don’t think 2011 or 2016, whatever happened then, have any bearing whatever on what a real financial crisis or market crash feels like. Based on those experiences, I am happy at 60/40 as well. I didn’t sell during those catastrophes, in fact I largely market timed my way around them, but I am not sanguine about watching an 80+% equity allocation crater by 60%. There is no question the level of anxiety, even existential angst, was very, very high.
              Click to expand…


              Clearly youngin’s like me haven’t been through major downturn prior to any substantial investments. Hope it never comes (ha), but will be interesting on this forum and how people react. I guess saying that one is 90% equity and will just hold out to recovery vs. actually going through it requires alot of fortitude.
              Click to expand...


              This forum obviously didn't exist in 2008, but I was surprised to see how many posters that I thought were really steadfast Bogleheads bailing out. It was called "Plan B" back then. Here's a sample:

              https://www.bogleheads.org/forum/viewtopic.php?t=25126

              https://www.bogleheads.org/forum/viewtopic.php?t=32591

              https://www.bogleheads.org/forum/viewtopic.php?t=32623

              I guess I shouldn't be surprised. I had three partners who also bailed out. They're all still working.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

              Comment


              • #52
                Everybody has a plan
                Til they get punched in the face.

                - Mike Tyson

                Comment


                • #53



















                  My net worth has gone up nearly a half million this year, which is pretty amazing.  I am trying to stay at my full time job for another three years to get all the benefits before punching out, and if this keeps up I might have 2.5-3 million at that point.  It makes sense to slow down and go part time after that, but part time positions with health insurance are extremely hard to find, and I’m scared to death of buying health insurance out of pocket when marketplace rates are rising ~30% a year.

                  One idea I have is to move to one of the two states that offers the ACA basic health plan and see if I can keep my income to <200% of the FPL in order to qualify.  I don’t know what I’ll do if I quit working, but just sitting around, reading, volunteering, and relaxing sounds a lot better than working.
                  Click to expand…


                  I think we all need to be careful about having “a number”, especially nine years into a bull market.

                  Yes, your net worth may have gone up by half a million this year, but it isn’t always going to go up smoothly. On paper, my net worth dropped by over a million in 2008.

                  I read many posters on this forum with 90%+ allocations to equities. I worry that the long bull market has lulled many into a false sense of financial security. I have always had a 60/40 equity allocation. Clearly, in retrospect, my opportunity cost has been high since 2008, but at least I know I have the fortitude to ride out another market downturn, and will have fixed income assets to rebalance to equities if the market tanks.
                  Click to expand…


                  I’m at 86/14, and go up on bonds 1% a year.  Won’t really know how I can weather a bear market till we have one, but I’ve done fine in late 2011 and early 2016.

                  regardless, if you can get your savings up to 35x your annual expenses, all the research suggests you should be all right even if the SOR is terrible.
                  Click to expand…


                  I don’t remember late 2011 or early 2016 at all. In contrast, I have very clear memories of 2000-02, and 2007-09. In other words, I don’t think 2011 or 2016, whatever happened then, have any bearing whatever on what a real financial crisis or market crash feels like. Based on those experiences, I am happy at 60/40 as well. I didn’t sell during those catastrophes, in fact I largely market timed my way around them, but I am not sanguine about watching an 80+% equity allocation crater by 60%. There is no question the level of anxiety, even existential angst, was very, very high.
                  Click to expand…


                  Clearly youngin’s like me haven’t been through major downturn prior to any substantial investments. Hope it never comes (ha), but will be interesting on this forum and how people react. I guess saying that one is 90% equity and will just hold out to recovery vs. actually going through it requires alot of fortitude.
                  Click to expand…


                  This forum obviously didn’t exist in 2008, but I was surprised to see how many posters that I thought were really steadfast Bogleheads bailing out. It was called “Plan B” back then. Here’s a sample:

                  https://www.bogleheads.org/forum/viewtopic.php?t=25126

                  https://www.bogleheads.org/forum/viewtopic.php?t=32591

                  https://www.bogleheads.org/forum/viewtopic.php?t=32623

                  I guess I shouldn’t be surprised. I had three partners who also bailed out. They’re all still working.L
                  Click to expand...


                  Love livesoft's quote in the first thread.  Great posts to look back on BTW.

                  Comment


                  • #54






















                    My net worth has gone up nearly a half million this year, which is pretty amazing.  I am trying to stay at my full time job for another three years to get all the benefits before punching out, and if this keeps up I might have 2.5-3 million at that point.  It makes sense to slow down and go part time after that, but part time positions with health insurance are extremely hard to find, and I’m scared to death of buying health insurance out of pocket when marketplace rates are rising ~30% a year.

                    One idea I have is to move to one of the two states that offers the ACA basic health plan and see if I can keep my income to <200% of the FPL in order to qualify.  I don’t know what I’ll do if I quit working, but just sitting around, reading, volunteering, and relaxing sounds a lot better than working.
                    Click to expand…


                    I think we all need to be careful about having “a number”, especially nine years into a bull market.

                    Yes, your net worth may have gone up by half a million this year, but it isn’t always going to go up smoothly. On paper, my net worth dropped by over a million in 2008.

                    I read many posters on this forum with 90%+ allocations to equities. I worry that the long bull market has lulled many into a false sense of financial security. I have always had a 60/40 equity allocation. Clearly, in retrospect, my opportunity cost has been high since 2008, but at least I know I have the fortitude to ride out another market downturn, and will have fixed income assets to rebalance to equities if the market tanks.
                    Click to expand…


                    I’m at 86/14, and go up on bonds 1% a year.  Won’t really know how I can weather a bear market till we have one, but I’ve done fine in late 2011 and early 2016.

                    regardless, if you can get your savings up to 35x your annual expenses, all the research suggests you should be all right even if the SOR is terrible.
                    Click to expand…


                    I don’t remember late 2011 or early 2016 at all. In contrast, I have very clear memories of 2000-02, and 2007-09. In other words, I don’t think 2011 or 2016, whatever happened then, have any bearing whatever on what a real financial crisis or market crash feels like. Based on those experiences, I am happy at 60/40 as well. I didn’t sell during those catastrophes, in fact I largely market timed my way around them, but I am not sanguine about watching an 80+% equity allocation crater by 60%. There is no question the level of anxiety, even existential angst, was very, very high.
                    Click to expand…


                    Clearly youngin’s like me haven’t been through major downturn prior to any substantial investments. Hope it never comes (ha), but will be interesting on this forum and how people react. I guess saying that one is 90% equity and will just hold out to recovery vs. actually going through it requires alot of fortitude.
                    Click to expand…


                    This forum obviously didn’t exist in 2008, but I was surprised to see how many posters that I thought were really steadfast Bogleheads bailing out. It was called “Plan B” back then. Here’s a sample:

                    https://www.bogleheads.org/forum/viewtopic.php?t=25126

                    https://www.bogleheads.org/forum/viewtopic.php?t=32591

                    https://www.bogleheads.org/forum/viewtopic.php?t=32623

                    I guess I shouldn’t be surprised. I had three partners who also bailed out. They’re all still working.L
                    Click to expand…


                    Love livesoft’s quote in the first thread.  Great posts to look back on BTW.
                    Click to expand...


                    Totally agree. The fear and pain are palpable, across space and time.

                    Comment


                    • #55
                      Wow. Thanks for those links WCI. Should be stickied!

                      Comment


                      • #56


                        I worry about blowing my retirement money on trips, spending etc since I will have so much spare time. Health insurance costs and amount devoted to helping family (etc college, grad school, cars, homes etc) while retired are other concerns. Any others, particularly young attendings, have a good way to factor in inflation?
                        Click to expand...


                        If you are going to save 25% of your income at $125K per year and are only 31, you will have more than enough during retirement provided it is invested wisely for 30+ years.

                        One thing you should not do is curtail you enjoyable activities.  Take your trips now and you need not be extravagant about those trips. You do not want to have millions in your 60-80's and have poor health to not enjoy it or take those trips. Enjoy your life with your significant other and children ( if you have them) now and not worry about the future.

                        Comment


                        • #57




                          Everybody has a plan
                          Til they get punched in the face.

                          – Mike Tyson
                          Click to expand...


                          Or having a chunk of their ear bitten off.

                          - Mike Tyson

                          Comment


                          • #58
                            I'm still fairly new into attendinghood but I've always pegged my number to be $8M. I assume a 3% withdrawal rate. That gives me $240k per year. That's a ridiculous number for several reasons. The primary reason is that is about 3x what we currently spend and I feel like we certainly don't go without. I've never been a big spender but I like to think that will change in retirement but deep down I know it won't. I would also like to be able to give very generously to charities that we care about and be able to anonymously help people.

                             

                            In reality, once we get to $4-5M, that's when I'll seriously look at retiring.

                            Comment


                            • #59




                              I see a lot of “low” numbers here. I will be 31 years old when I start a high earning specialty next July. I want to have a somewhat lavish lifestyle as some posters here (minority) in a LCOL area.  I still want to save at least 25% gross income a year, which should be in the ballpark of 125k+ after 225k student loans are paid off. 30 years from now, with 2.5% inflation, $2M will be approximately equivalent to $1M in todays dollars. So, I want to have at least $8M, hopefully $10M, before being ok saying FU, I’m done.  That should be in my low 60s if I get 5% ROI. I just can’t see myself retired earlier anyways for now.

                              I worry about blowing my retirement money on trips, spending etc since I will have so much spare time. Health insurance costs and amount devoted to helping family (etc college, grad school, cars, homes etc) while retired are other concerns. Any others, particularly young attendings, have a good way to factor in inflation?
                              Click to expand...


                              A2 proper isn't LCOL.     It's still not  metro city coastal costs, but not LCOL.

                              I believe we all talk in today's dollars than future dollars.   $5M today is a very good living level ~$150k /year.

                              That's our rough number too with a lot of jiggering since we are heavy on the public pension plans; and diversified with Real Estate.

                               

                              Comment


                              • #60
                                I find that every time I hit THE NUMBER, I just adjusted it upward. We are working for engagement, mental stimulation. We started funding our TRAD IRAs and through employer retirement (TX) in 1990. When I went solo pvt practice, contributed to TRADs and maxed out SEP in 1994, strictly Vanguard S+P 500. In 1996, started buying Div producing, blue chip, multinationals in Taxable Acct after I reread Graham and Dodd "Security Analysis". As a consequence, I sidestepped .com bust. When it was available, switched my SEP and spouses PSP to brokerage type accounts and bought individual securities in retirement accounts.

                                As a consequence of that, annual dividends in AfterTax +Retirements grossly exceed our annual cost of living by roughly 150K, not factoring in SS, RMDs or the 2 small pensions we'll collect. We stay 90% invested in indiv stocks, tiny portion in mutual funds, Vanguard only. 10% state specific municipal bonds. We've got 5 years living expenses in cash simply because the stock market is at nosebleed levels. The last time I felt this way(and had that much cash on the sidelines) was the fall of 2007. So in Fall 2008, I bought div producing household names relentlessly. From Jan-May 2009, I sat on my hands, terrified that everyone would cut their dividend and we'd be living under a bridge. In late May 2009, I resumed buying. We picked up a lot of shares at generational lows. I feel like we've been lucky.

                                I fully expect a -50% return in 2018-2019. However, I focus on the # of shares of X,Y,Z that we own rather than price at that moment in time. Yes, I think we'll leave a sizable legacy to the kids; but it's that or a cat hospital, right? We are somewhat diversified. Our real estate is worth the same as 2/3 of our more liquid assets.When buying said realestate and looking at the amortization schedule, we never followed a  standard 15 year mortgage but paid off that purchase in 0-3 years.

                                In 2008-2010, we acquired stuff =10% of liquid portfolio to address currency risk. We also bought way more ammo etc etc  etc to address the zombie apocalypse risk. Crazy times.

                                Comment

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