What is the minimum amount of investments?

[Kirk W]

Reading some articles on the internet about investing and financial planning got me to thinking(dangerous thing to do). If you were advising someone who was considering retirement, what would you suggest is enough money, and should it be invested, banked, or what?  As I look back at our finances when we hit the road, I am not sure if we were smart or just lucky. 

Some possible places for retirement money like IRA's, Roth IRA's, 401k's, CD's, individual stocks, mutual funds, and a lot of other possibilities. I have frequently had conversations of this type with our sons, but hesitate to give advice, I mostly ask them questions. 

[SWharton]

Each person has a different "basic" life style. They need to do some forecasting. I found this site very useful, https://www.firecalc.com/.  By using this you are not involved with a broker or someone who wants to sell you something, keeps everything private.

[NDBirdman]

Big question with many different answers.  I've often heard/been told 2, 3 million to live good off interest with no/little investments.  Good is an opinion as different as there are many stars.  One thing I had beat into my head from an early age, don't keep all your eggs in the same basket, I interpreted into, have many different accounts/investments.  Following that, I have several, usually when one does bad, another one keeps my bottom line safe (my mainstay has always been savings and mutual funds, some risky, some low paying/safe).  I also say, it depends on your age, if still working, now/soon retired.  Young, go for different accounts, some low interest bearing, some high risk and a few in-between.  The older a person gets, the *safer* your investment should be (lower risk).  We still have a few funds, all low risk.  I told my kids to think of investing the same as going to a craps table.  Only bet, or invest, what you feel you can afford to lose as nothing is a sure bet.  Put the rest in a savings, CD or savings bonds although savings bonds don't pay well anymore.  One of mine has done exceptional, the other, did not follow my suggestions very well.  I also suggest, not so much as an money making investment but as a safe way to ancor some $$, precious metals.  I do silver/gold.  I did that many years back and all my pms have at least doubled in value.  But, I have them as a hedge (?) against??  If $$ falls/fails, pms will always have value, same as all my firearms/ammo.  I won't suggest real-estate any longer as it's at a ridiculous high right now.  I hope it doesn't happen, but I think the bubble will again pop someday.

As far as 401s, etc, I tell everyone to max out their employers donations.  If they don't, they are throwing $$ away!

Edited August 21, 2021 by NDBirdman

[Barbaraok]

I believe that the 2 Million is the thought for someone today working in their mid 30s to early 40s to aim for.  And notice that is designed NOT to touch principal.  And to keep one in the same lifestyle they are accustomed too.   But most of us know that (1) it takes less to live in terms of normal consumer goods as one retires - no more work clothes, no commuting costs, etc.  Medical costs go up.   And the idea that ALL of your retirement is passed along is kind of absurd, just make sure you have enough to pay your bills and not saddle your kids with debt,  and if something is left over good.   We've found it better to help them as we go along, rather than waiting until we die and they don't have a great need for extra funds.   They are successful and we were able to give them help along the way with things like downpayment for their first home, etc.

[NDBirdman]

Yes, and no.  The big savings is where my kids are shooting for, live on interest from the principal.  As far as less to live on after you retire, no, in my case and many others, takes more.  We don't sit, we travel, other countries, etc.  Between that, and my wife and my hobbies, we are now free to pursue them and they are not cheap.  Hobbies we could not afford when we had kids and both of us worked.  Our investments here and there during our work-life, dollar here dollar there we did not miss or need, invested and now paying for our retirement.  We did the right jobs to guarantee our medical is covered the rest of our lives (and I paid dearly for it) so that's safe.  Payed for everything we have before retirement, have the ability to pay for what we buy if/when we wish, not lavish, but a good life.  We have what I call a burial savings, enough to cover both my wife/myself when the time comes, no bills other than utilities/taxes so not strapping the kids with it.  Passing it on to the kids, not our intentions, we plan on spending what we spent a lifetime earning and kids know it.  Well, house, tools, vehicles, all will make a nice inheritance but it is what it is.

All that is/was done through investing for 40 years.  We live better now than we ever did working.  I agree on helping children along the way but we also believe that the more you help a kid, the more they need and will not appreciate what they have/need because they did not earn it. 

I do think that 2/3 mil I mentioned for most (including us) is a dream, we never reached it but it is a goal for middle aged folks.  Kirk has it right, young-folks do need to invest in "IRA's, Roth IRA's, 401k's, CD's, individual stocks, mutual funds," something even if it is $10-$20 week, what-ever they can do.  It adds up over time and basically is what we did.  I fear, as do a lot of young-uns, the way things are going, soc. security will be broke before they reach 65-70, what ever it is in 30-40 years.  Never too late to invest for a person's future although I think getting lucky like one or 2 individuals that brags on here a lot is not attainable for most. (no-offense meant to them)

 

[RV_]

I believe in diversification too. First we did 27 years USAF and now have that retirement/full medical/prescriptions covered in addition to Medicare/ Social Security. But long before we retired at 45 to go full time, I knew we would not like just living on our small retirement/Social Security/Medicare if we had a house note too. We never had a car note, not even for the 911 Targa. We drove very cool cars and still do as I am an enthusiast,

Investments: I always looked at the stock market as the same risk as a casino. Because in my 20s I didn't understand how and had little time in the military. I always had a second business in the military like being Pro Mobile DJs on weekends 1983-2003 here and in Europe which also yielded great profits. From importing and selling car stereos in the 70s, to starting an ISP in Germany in 1995, and a satellite card and hardware/installation biz and computer store.

We always used real property as a major part of our planning for retirement and to live well. So decades ago we paid off our house for the first time as a priority and pay cash since like our cars. This for us makes total sense as we did the same by buying used cars and restoring vehicles like VW Pop up campers and Porsches/BMW/Mercedes etc as well as Motorcycles since I got my first license at 16 in 1968. I made on average 200% after the cost to buy the vehicle and parts back then I did the electronics and had friends that did paint and body and .

We bought a good spread of funds and a 401k.

I never bought individual stocks until 2010 nor was interested in a measly 4-6% return as a kid. Now I am however at age 69 because the bank rates on savings are horrific today! They pay us under a percent, by far in many cases for savings accounts. I made out and am making out very well with Tesla and soon Starlink. But my ego made m decide not to sell my two marijuana stocks and try to hold them long like Tesla. I lost a lot on them but very little compared to my gains with Tesla. 

I believe you need about $100k liquid, at terrible interest rates, or a year's worth of living money, for emergency situations. Gold and other hard currencies are too hard to carry in a Go bag and using them may be harder than many realize if normal currencies are down or gone.

So do investments, diversify with real property and possessions with inherent value you can buy, repair upgrade and sell at a good profit.

I used to call it Guerilla Economics.

So we are very much like ND in that we are set for life, have a year in savings and much more invested.

We are thinking about the fact that at some point in the future we will have a correction and a serious one as we have never had a 13 year long bull market before. I am getting with our tax person and find out if the tax and penalties for early withdrawal is equal to the tax we'd pay if we did the mandatory 401 withdrawals. If close we are likely going into real property and hold our Tesla that doubled in the last years. I think we will buy one or a few rental houses since we can refurbish and restore those. They will be cash too. Lynn is a master interior trim carpenter and we can afford to hire out landscaping, painting and plumbing now so that may be my last investment change and put all the cashed investments into those. My youngest will be our executor and he knows the numbers. They are both BSRNs at Landstuhl Hospital Germany through which many of the Afghan refugees will pass which started yesterday. We did a video call about that today as the first 1000 or so came in yesterday.

We too have enough to travel and not worry as well as live very well. I have to say though that I still buy mostly like new used a few months electronics and still like to go to yard sales.

I am still working on our banking and investment changes. We don't necessarily need any more monies but the game and the attention needed not to lose any money still takes study and research and time.

I loved my military time and have honestly never worked a day in my life. We talked and will continue to look for a better place to base out of but can't really find one. If climate change adds water here it will remain perfect.

Safe Investing!

 

 

 

 

[NDBirdman]

23 minutes ago, RV_ said:

I loved my military time and have honestly never worked a day in my life.

 

 

Mostly agree!  I loved my military time, did 20 years but my health pretty much said John, said health, time to go.  I was enlisted so can't say I never worked, I worked hard but loved it.  I was young enough to do another job and retire from that although from damages to my health during military, then pushing my already bad health harder working again as a truck driver... LOL, I call everything I did an investment in my old phart days.  Just glad I listened to my dad in my early days and dropped extra cash into investments instead of liquid assets, etc.

 

TY for service!

[justRich]

How long will my savings last:
https://www.bankrate.com/calculators/savings/savings-withdrawal-calculator-tool.aspx

Another how long will my money last:
https://www.firecalc.com/

Portfolio Visualizer: A more advance fun or serious tool set:
https://www.portfoliovisualizer.com/

2 million pretty much does it for anyone with a semi-frugal life style.

 

[RV_]

ND,

Thanks for yours too!

One of our members said here, a lady that had an Austin mini cartoon as her pic: "We are all living with the consequences of decisions we made 20 or more years ago!"

I would not take back one minute of my military time, and would not go back for one minute more.

We don't need millions but we are more than I ever expected. And with no debts or payments all we have for outflow is Internet, utilities, food and clothing. The rest is discretionary. We are about to start spending some if we ever get out of this pandemic.

And I used a large block last year to buy Tesla again and it doubled already to $700 give or take after a $900 dollar peak. The analysts are saying the new price target is ~1200.00 and change. We'll see. Our house gained $100k in value since we bought in 2019. And we inherited a lot of property and mid six figures in real property, stock, and cash. Our goals are not to make a bunch more but to now safely invest the cash into safer investments after we decide to sell our last stocks.

Our realtor in Louisiana went to HS with my wife and her and her husband stayed in touch and friends. When they came to sell the properties there we inherited she blurted out that she had never realized we weren't just talking, that we really had no debt. They had a nicer house by a little in town but no land. And they were mortgaged to the hilt! Almost a million in debt! That conversation was pretty enlightening. They had always been a bit condescending but that day they found we were not exaggerating and told us they would give everything up to be in our position. They dropped the snobby and I dropped the friendship. I was shocked that they thought we were BSing. We get that a lot!     

We don't put on airs or dress up much. RVing full time taught us how to be retired. That took a whole year! Now we are cutting loose and our kids know we are about to do the rest of our bucket list. Oz and the land of the Kiwi, Japan, Guam and Puerto Rico then Colombia and maybe Argentina. Back to Europe before the kids come back to revisit old friends there. Maybe buy Lynn's Tesla at the Berlin factory if they are shipping worldwide at the same price as here. The Germans are great at cars and manufacturing.

But if something happens before we do it bear in mind we already did all our previous bucket lists. Traveled the world, learned the languages and cultures of a couple of them and phrases in the rest. When we were in Egypt in '96 we just said we were Canadian if a local asked. But having lived in Europe seven years and two in Colombia, I understand the ugly Americans image. 

 

 

Edited August 21, 2021 by RV_

[RV_]

Rich,

Your first link takes me back to this thread we are posting on. I copied it here: https://www.bankrate.com/calculators/savings/savings-withdrawal-calculator-tool.aspx

[Kirk W]

9 hours ago, Barbaraok said:

And the idea that ALL of your retirement is passed along is kind of absurd, just make sure you have enough to pay your bills and not saddle your kids with debt,  and if something is left over good.

We have a very similar outlook. We have enough to live quite well and have begun to spend down, or to at least think that way. Thus far, our investments have continued to grow but the rate of growth has slowed some as we shift to more conservative investments. We have told our sons that their inheritance will be a collection of digital pictures that show where the money went. We have been somewhat more reluctant to get ultra conservative with our investments because the increase in costs of some things has exceeded what used to be predicted in terms of price/time/inflation. Since we are not both past the age of the average US lifespan, we do feel pretty secure in our financial future, but we have also had enough experiences to realize that nobody's future comes with any guarantees. 

I suspect that a better guide to what amount one should set aside would be some multiple of their current income, than any set number. The reason is the fact that we each of us consider to be an acceptable income is very dependent upon the lifestyle and income we had over the bulk of our working years. 

3 hours ago, RV_ said:

Your first link takes me back to this thread we are posting on.

I had that same experience so I copied the printed link and it then took me to Bankrate Savings Withdrawal Calculator with I think is quite useful and also fun to play with. 

[RV_]

23 hours ago, Kirk W said:

We have a very similar outlook. We have enough to live quite well and have begun to spend down, or to at least think that way. Thus far, our investments have continued to grow but the rate of growth has slowed some as we shift to more conservative investments. We have told our sons that their inheritance will be a collection of digital pictures that show where the money went. We have been somewhat more reluctant to get ultra conservative with our investments because the increase in costs of some things has exceeded what used to be predicted in terms of price/time/inflation. Since we are not both past the age of the average US lifespan, we do feel pretty secure in our financial future, but we have also had enough experiences to realize that nobody's future comes with any guarantees. 

I suspect that a better guide to what amount one should set aside would be some multiple of their current income, than any set number. The reason is the fact that we each of us consider to be an acceptable income is very dependent upon the lifestyle and income we had over the bulk of our working years. 

I had that same experience so I copied the printed link and it then took me to Bankrate Savings Withdrawal Calculator with I think is quite useful and also fun to play with. 

I did too Kirk but I thought others here might not search. Just like folks don't read my links then blame me when they are wrong. So having any link is likely wasted effort with some here, glad you posted it.