Where do you keep long term savings/investments?

[Kirk W]

It seems that Tesla and electric vehicles have become the dominant subject here. While those do look like excellent long term investments, there must be people who invest in other things as well?? I have always believed in diversification and over the years that has served me well. With the majority of my invested funds in IRA or 401k accounts I don't do a lot of individual stock investment. 

How are you managing your savings and planning for future financial security?

[Barbaraok]

Bulk of ours are in diversified mutual funds with targeted focuses.    

[steiny93]

my free opinion

long term investing within a single company is about the same as betting on red at a roulette table

low cost index funds however are a great long term strategy, fidelity / vanguard are a couple of excellent places to start, basically you buy index funds like a stock

[Jaydrvr]

32 minutes ago, steiny93 said:

my free opinion

long term investing within a single company is about the same as betting on red at a roulette table

low cost index funds however are a great long term strategy, fidelity / vanguard are a couple of excellent places to start, basically you buy index funds like a stock

Exactly... I don't invest in ANY single companies anymore. I only invest in ETFs, which have very low expenses. I've been completely pleased with my results for the last fifteen or so years. Jay

[NDBirdman]

Don't put all your eggs in one basket, so to speak.  I have several mutual funds with different companies.  Only recently I've started playing with stocks on E-Trade but used mostly play money.  Bought on the drop and made quite a bundle when I sold.  Waiting on another drop I think is coming before spring but only with money I can afford to lose.  But, will never have all my eggs in the same basket!  4 different bank accounts/2 different banks that's not touched.  Long term at my age is not done, did that when I was young.  Our retirement is here today, not 20-30 yrs from now.

[RV_]

We did/do index funds and have some regular funds in Lynda's managed retirement fund we target for growth/earnings versus safety in recessions for preservation of capital.

Finances/investing are not only the stock market. I use real property and before buying my first new cars, the Forester in 2019 and the Tesla Model Y in 2020, and before we retired from the USAF at 45 to full time RV for seven years, we kept three cars and the third was my current toy. For all of the 80s I built a lot of Hot VWs beetles/Ghias/Things/convertibles and hard tops/7 Westphalia Pop up campers with full amenities and just the top, buying them needing an interior/paint, glass, or new rebuilt warranted short or long block engine- not all three cheap, and having the money to restore refurbish them to as new immediately. I averaged a month tops to a week as I could do interiors electronics in a weekend including campers. I hired out painting and engine swaps, and upholstery on the Porsche 911 Targa I did in 1988. I have done that and tripled my money since my first car at 16. So I saved interest and had liability, uninsured motorist, medical for passengers not us, and non-collision comprehensive that covered theft hail glass fire etc. I was covered as long as I was never at fault and I never had an accident that was my fault, but I did have my parked cars hit three times - I was present for one and the other two were on base and the people who hit my car in two German ice storms left their info. I always paid cash and I still believe if I can't afford to replace it I can't afford it. I am thinking about dropping collision on our cars again. Back in my heyday I was doing a new proect for my own pleasure every three months, having great cars to drive done differently, and making a profit to boot.

Our homes are also bought cash as an investment because a loan seems to always double the amount borrowed in 20 or 30 years and I have paid only the price for my houses. Folks believe the BS from banks that the deduction of interest on homes helps. Add up the total paid, then deduct the original price borrowed. Then do the math and take your interest, and remember it is tied to your percent tax paid. eg if you have $10,000 taxable income and are at a 10% tax rate you owe $1000. If you have $1000 in interest paid that leaves $9000 taxable and you owe $900. ten percent less or your tax rate. You don't save the amount of the deduction just the tax rate percentage of the deduction/s. If it moves you one tax bracket down it is still not anywhere near the amount paid in interest. Keeping it simple if the house cost $100k it will be roughly $200k you pay back in a 20-30 year note give or take. The amount is immaterial as even if the amount you pay back is $125k that's $25k more than the loan amount. That is a whole lot more than the $100 saved by deducting the $1000 dollars interest paid and deducted.

So our homes cash save us all that interest over time. In the example above the numbers are simple but they work out the same for whatever amount deducted for income tax. Many folks say Uncle Sam is paying for that and it isn't even close. It's not even hard math.

We have always bought in good neighborhoods and renovated our houses too. This house has appreciated $125k since we bought it. We are about to get a ranch with no stairs. Here we are in a housing bubble and likely in ten years we would not lose money. we only paid 2/3rd of its current value. If it dropped back down to just 10% over aht we paid that is a lot more than the money would have earned in the banks today. And banks passed a bail in law since the last bail outs where they can take our savings and other assets in their bank to save their banks without permission or paying it back. This is supposed to be an improvement over bail outs? For the banks maybe.

So our outflow is only utilities and streaming Internet services, food and clothing. Fuel is covered in utilities once we get rid of our last gas vehicle.

Finances are not just wall street related. MY credit reporting agencies are locked down so not only can no one open any new account or credit card, I can't even do it until I unlock it for a day with a code to use for the agency asking to do it. Banking or other passwords are not on our phones or computers and are air gapped in two places.

Finances investing are not just stock. Nor can many do our way as they are too far into others owning their stuff except for some RVrs. We also bought our RVs used and modified them. Vehicles and homes can be bought low and sold high too.

So my eggs are far from all being in one basket. I may add Rivian to my single stock holdings. You folks never heard of real property investments? Durable goods investing?

Edited October 26, 2021 by RV_

[RV_]

Kirk I agree, others need to post their ideas, successes and not so successful finance and investment plays here.

I am very much into the EV arena and may do Rivian as well. So I cover those issues more than others and those opportunities are not for all granted.

Lots of folks with traditional loans and investment portfolios got badly hurt and some wiped out in the last big recession/market correction which involved a housing bubble then too, as well as the automotive industry.

I would welcome more sharing of investment strategies beyond just  getting a financial advisor.

But if they get treated as the negative half truths and outright false information, partial quotes and negative confirmation bias I have seen leveled at Tesla and other posts as a group are leveled at anyone who succeeds or has a new way to make money that is not a scam also gets treated with potshots calling opinions as if they are facts and knowing they are doing it, then getting upset when I or anyone else points out the actual facts. If you8 want more participation then by all means participate.

Right now the emerging market is a broad swath of electric vehicles, electric lawn and tools using batteries. That is where the profits are and will be for decades to come. As well the renewable energy segment is exploding as we speak. Even Texas is welcoming EV manufacturing, spaceports, renewables, and battery storage from Elon Musk of all people!

I would love some new ideas as well and promise not to naysay anything I can't afford or are resistant to learn more about.

There is room for all the posts people want to post here.

I mean no offense but once you say get a financial advisor and have a diversified portfolio not much else to say. Naming which index funds or other funds and how much earned in what time period might generate more interest.

And if attacking people and investments you don't like for whatever reason, ignoring research that states facts the attackers don't like, or even more blatantly leaving out the parts you don't like, well you won't get a lot of participation here.

Again, I agree and look forward to others posting other investment news from any industry they have expertise in.

Right now with climate change the hot investments are EVs and renewables and a lot of millions of dollars are going into a push for fusion which has had significant breakthroughs recently. Those and their related industries are getting hotter as the climate does the same in summers.

Good luck in your investments folks, there is room for all.

[Randyretired]

As many others have said well diversified index funds.  With the market gains this year the returns have been pretty good.  There are index ETF's also.  We have some real-estate that has seen some nice gains.  However, all these paper gains don't count until you sell and anything can happen.  Still it's been a good looking year.  In the past I have tried a lot of things from options to stock and managed mutual funds but index funds have been the most consistent and overtime provided us the best returns.  Since index funds rarely trade it is easier to do tax planning too.

[Kirk W]

5 hours ago, Jaydrvr said:

I only invest in ETFs, which have very low expenses.

Interesting. Am I correct to assume that your choice of ETF's is to have more direct control than you would have with mutual funds? 

3 hours ago, Randyretired said:

  We have some real-estate that has seen some nice gains.

While I don't have any real estate at all anymore, I am a believer in real property as pretty secure long term investment with a purchased house as probably the most common and for most the best early investment. One thing is sure, they won't be making any more real estate so as long as population grows and the entire economy doesn't collapse it should be pretty safe. 

I have found that my own approach to investing and long term savings has changed as my age increased. Up until I retired I was fairly aggressive and always kept some funds available for speculative investment. Back in my 30's and 40's I just to buy a few "penny stocks" from time to time and while some of them went down the drain, over all I did reasonably well and even had one that turned out to be extremely profitable. It was a fun and also educational experience. Over all I have had ups and downs but more ups than downs. Today we are into the start of a "spend down" mode because of our increasing age. It came to me that we used to ask my parents to enjoy their money when they were at the age we are, so perhaps we should be following our own advice. To that end we have begun international travels but covid-19 put a stop to that. Even with the traveling that we have done in recent years our reserve funds have continued to grow, thanks in part to the healthy stock market in recent years. 

[Jaydrvr]

I did quite a bit of research when I began investing in stocks. I did some individual stocks with mixed results, plus I also did some day trading during the 2009 crash and did reasonably well. After trying different strategies, I settled on ETFs because of the extremely low fees and also because of the targeted sectors. Also, I'm a firm believer in staying away from individual stocks, as they can go to zero. I do diversification, but do not over diversify, which just waters down your investments. I've always been self directed, so I'm not likely to choose a mutual fund. In the last few years, I've sold all my investment real estate and moved to ETFs. I've invested in real estate most of my adult life, but it's generally a lot of work and headache. At this age, I'm done with that. Very happy with my portfolio results. Jay

Edited October 27, 2021 by Jaydrvr

[Randyretired]

33 minutes ago, Kirk W said:

Interesting. Am I correct to assume that your choice of ETF's is to have more direct control than you would have with mutual funds? 

While I don't have any real estate at all anymore, I am a believer in real property as pretty secure long term investment with a purchased house as probably the most common and for most the best early investment. One thing is sure, they won't be making any more real estate so as long as population grows and the entire economy doesn't collapse it should be pretty safe. 

I have found that my own approach to investing and long term savings has changed as my age increased. Up until I retired I was fairly aggressive and always kept some funds available for speculative investment. Back in my 30's and 40's I just to buy a few "penny stocks" from time to time and while some of them went down the drain, over all I did reasonably well and even had one that turned out to be extremely profitable. It was a fun and also educational experience. Over all I have had ups and downs but more ups than downs. Today we are into the start of a "spend down" mode because of our increasing age. It came to me that we used to ask my parents to enjoy their money when they were at the age we are, so perhaps we should be following our own advice. To that end we have begun international travels but covid-19 put a stop to that. Even with the traveling that we have done in recent years our reserve funds have continued to grow, thanks in part to the healthy stock market in recent years. 

I agree purchasing a home is usually a good investment and the rising prices we have seen kinda confirms that.  In many cases home values have risen 20% or more in the last year.  Some financial advisors disagree but I still think it is a good financial decision.   Certainly people as handy a you can keep expenses low while gaining equity. I also kept some money aside for speculative investments in past years but now I don't do much of that.  Index funds with low expenses have become my main stock market investing.  I bought some of the funds years ago mostly just watch them and I don't use an advisor.  The funds have gained more than 20% this year.   This year everybody looks good!   We have also increased our spending some but the funds are still increasing faster than we can spend it. At least on paper.  There is always the next downturn but we just ride it out.  Our real-estate investments are mostly land that we use for pleasure and we like a lot of elbow room.  Our new house that I am slowly working on is in the middle of 140 acres and has public land adjoining.  We also have some Colorado Valley land and some AZ rock for a winter escape.  For medical reasons we typically need some doctor continuity so we only travel out of these 3 areas for short trips.

[whj469]

When I was much younger I did a lot of my own stock picking. Holding about 12 different stocks, selling options etc. As I got older I realized that I really found it boring. I had always had most of my retirement funds in mutual funds, stocks about 80%, bonds 20%. Currently that is the way it is invested via an IRA. I have been very lucky with the investment. Since I retired 5 years ago, I have taken $6,000 per monthly. I started with $1.2 million and it is still at $1.2 million! There are a number of mutual fund families that people use, I am with T. Rowe Price. At some point in the not to distant future I will be required to take more out and I have not thought much about that.

[Kirk W]

Most money "experts" agree that as we age we should become more conservative in our choice of investments. The question I often ask is, at what age should the be and how conservative? it is a question that gets a lot of discussion but no real answers. If use the period of life charts from Social Security it suggests how long you need to plan for, based on your present age. As I pug my present age into them and compare that to my parents and ancestors, it is a little bit low but no matter how I base my plan it looks like have less than 20 more years to plan for. It can be a little bit sobering when you really dig into it. Here is an expectancy calculator based on zip code that is interesting. 

Once we retired I found that self managing was more difficult as a fulltimer, although with improving access to the internet and cell phones, that has improved dramatically since we hit the road in 2000. For us and others like us, managed funds can be a good alternative. There are several levels of control available in those as well and our managed fund has served us very well in recent years. The critical part of any managed fund is your confidence in the fund manager.

[2gypsies]

Ugh..... those life expectancy charts are depressing.  😝

[Chad Heiser]

I am probably younger than most on here (recently turned 50) and have been thinking a lot about this lately since I just retired.  My situation is a little unique.  I have a pension that will pay me a set amount (with potential COLA’s) for the rest of my life.  This amount will allow me to live comfortably with no real worries.  I did not contribute to social security the majority of my working career because of my pension benefits so I won’t have enough quarters of service to collect anything there.  My wife will retire next year, also with a pension (although not as good as mine) and eventual SS benefits.  Her big benefit is she has paid medical for us when she retires (plus I have a medical stipend from my former employer along with a fairly hefty medical savings account).  We most likely will have very little to no out of pocket medical expenses in retirement as a result of this (at least we hope not barring any major medical issues).  We are not rich by any means, but we have no real debt (outside our house which we plan to pay off in the next few years) and as a result can live reasonably comfortably on just our pension income.

I got some good advise when I was young and have been contributing to an additional 457 plan since the day I got hired.  I made some good investments over the years with that plan and the funds available to it and have a nice nest egg there.  My wife has done the same, but not for as long as I did or as much as I did (but every little bit helps).  Our current plan is to live on our pensions and leave the investment money alone and let it grow for another decade or two.  We will see how well that works for us.  I’m sure we may dip into it from time time, but we will most likely not make regular withdrawals until we are forced to (at least that is the plan for now).  Because we are still thinking long term, those investments will remain moderately aggressive with the same investment strategy I had while working, the only difference being I am no longer actively contributing to the funds.  We have met regularly with a financial advisor over the years and vetted this plan through her multiple times and in multiple ways.  It has always penciled out in our favor on paper and hopefully will in real life.  

My only real question that keeps me thinking about the plan is how long do we leave the investments untouched (no distributions).  Do we wait until we are forced to take distributions or do we start earlier?  There is no guarantee in life and who knows how long each of us has left?  I look at that money as Monopoly money right now, since it really isn’t mine until I withdraw some of it.  Then there are the tax implications that go along with the withdrawals.  These were all pre tax contributions so the disbursements will get taxed.  Those implications also weigh on me a little. If only we all had a crystal ball to tell us the right answers to all these life questions 😎.

[Kirk W]

6 hours ago, Chad Heiser said:

I got some good advise when I was young and have been contributing to an additional 457 plan since the day I got hired.

I have been aware of the 457 but not really familiar so will post this description: 

Quote

457 plans are IRS-sanctioned, tax-advantaged employee retirement plans. They are offered by state, local government, and some nonprofit employers. Participants are allowed to contribute up to 100% of their salary, provided it does not exceed the applicable dollar limit for the year.        What is the difference between a 401k and 457 plan?401(k) plans and 457 plans are both tax-advantaged retirement savings plans. 401(k) plans are offered by private employers, while 457 plans are offered by state and local governments and some nonprofits.

You have several similarities to my situation 20+ years ago as I retired at 57 with a pension and a 401k & IRA both. While my pension does mention future increases with retirement fund growth, due to changes in government regulations on private pension plans that has not happened and likely will not. We had health insurance through my previous employer until 65 and a supplement funded by them today. We both have SS as it was part of the retirement plan of my previous employer and Pam now draws 1/2 the amount I do (spousal benefit).

Much like your plan we did not draw anything from 401k/IRA savings until the "minimum required annual withdrawal" began, but with an exception when we left the road and purchased a home again when we took about $60k. Like you, we do use a financial advisor and have found the services very helpful. You don't say what you are invested in but we put the majority of ours (all 401k/IRA funds) into managed accounts. We did retain about 20% that was not tax sheltered for self management. 

We began doing RV volunteer positions early on to help keep expenses down (little RV park rent) but did not take paid positions. We very quickly discovered that we preferred the RV volunteer lifestyle to just roaming constantly and as I look back, that did play a major role in our never needing to withdraw funds from our tax sheltered investments. 

6 hours ago, Chad Heiser said:

My only real question that keeps me thinking about the plan is how long do we leave the investments untouched (no distributions).  Do we wait until we are forced to take distributions or do we start earlier?

We did mostly wait and have been in the required mode now for several years. Even when you wait for the currently set age of 72 (it was 70 1/2 when we got there) you still have somewhat that same dilemma, unless your goal is to die wealthy.  And when you do begin to "spend down" the question is, how long must your funds last and what will the future cost?

As a part of your plans, I suggest that you also consider long term care insurance. I can tell you from our experience that the cost of such care is less and the options available are greater if you act now than when you wait. We bought our present coverage at are 50 and were able to get a 10 year pay policy that was completely paid up at age 60. 

[Randyretired]

What to do with IRA and like funds for tax considerations is confusing to me.  Additionally if you pass that money on it can be confusing for them as well.  Most of our funds are not in traditional retirement accounts but that has it's own problems.  We have been invested in some of the index funds long enough that if we wanted to change, sell and reinvest, the taxes would be substantial.  Luckily we are happy with these funds so we just draw what we need and the taxes are long term gains so a little less tax now.  I haven't really looked at the differences of a Roth versus a traditional retirement account but if I were to be investing today I think at least part of those investments would be in a Roth IRA.  Roth accounts would be much easier to manage and if any is passed on these are less problematic.  And of course there is some tax advantages.  Some even find it advantageous to convert a traditional account to a Roth.  

[Chad Heiser]

5 hours ago, Kirk W said:

We began doing RV volunteer positions early on to help keep expenses down (little RV park rent) but did not take paid positions. We very quickly discovered that we preferred the RV volunteer lifestyle to just roaming constantly and as I look back, that did play a major role in our never needing to withdraw funds from our tax sheltered investments. 

We won’t go full time and probably won’t do work camping or volunteer spots, although they do look attractive to me.  They may be something we do later in our traveling lives.  In the meantime I started my own RV related business that keeps me as busy as I want to be and is supplementing my income.  It also allows me to set my own schedule and travel between jobs.  As I get older, this business will eventually end and then I will look harder at volunteer/work camp/camp host positions.  I figure I have a good ten years or maybe longer before I call it quits from working completely.  At least now I am working on my schedule and at my pace rather than punching a clock for someone else.

 

5 hours ago, Kirk W said:

As a part of your plans, I suggest that you also consider long term care insurance. I can tell you from our experience that the cost of such care is less and the options available are greater if you act now than when you wait. We bought our present coverage at are 50 and were able to get a 10 year pay policy that was completely paid up at age 60. 

We have looked at long term care insurance.  My wife’s step mom had it and it came in very handy when she got sick, so we are very familiar with it.  Unfortunately very few companies offer it anymore and the ones that do are very proud of their accomplishment (from a cost to the consumer perspective).  Even our financial advisor (who is a fiduciary) has stopped recommending it in most cases because of the costs involved.  If anyone can point me to a reasonably priced policy, I’d be happy to look at it.

5 hours ago, Kirk W said:

Even when you wait for the currently set age of 72 (it was 70 1/2 when we got there) you still have somewhat that same dilemma, unless your goal is to die wealthy.  And when you do begin to "spend down" the question is, how long must your funds last and what will the future cost?

I have no desire to die wealthy.  We don’t really have any direct heirs to leave a bunch of money to, although we wouldn’t mind leaving a little bit to some specific people.  My wife has a plaque on the wall in our kitchen that talks about, in essence, skidding into the finish line with a glass of wine in one hand and a few dollars to pay final costs in the other (in other words having enjoyed life).  Even though my wife has that plaque, she has a hard time following the philosophy.  She is a penny pincher by nature.  While I don’t want to cut it that close, I like the idea of enjoying my life and not worrying so much about taking care of the future after I am gone (from a financial perspective - other than my wife of course 😉).  

[whj469]

Non profits also have a 403b plans which are a lot like 401k plans except 403b's don't profit share. They put matching funds, to a limit, into the employee's account.