I have worked on similar basis but doubled the asset figure and halved the income.

My issue with the 1m house 100k liquidity is that I can get a better return with more liquidity but it did not stop me ending up in a situation where i can not get any money out with out selling.

House value depends on the market; there are areas of London, NY and perhaps even Sydney, that have seen 9% or more compound growth for 40 years through multiple cycles and still offer a 3.5-5% annual dividend in the form of rent.

Plenty of people have become wealthy without touching equities.

https://personal.vanguard.com/..._redirect=true#tab=4

Under distributions, I understood these income funds provided 2 forms of growth; asset and dividend

I have figured out the dividend is quarterly but how do you get the amount paid out for every 100 invested? I dont understans it.

You started saving for retirement aged 10?!

Looked specifically at 1994 to near present day, capturing those big down years. Compared my 100/0 to other A as (e.g., age in bonds, age-10, etc). My 100/0, which I did from 1994 (basically the start of when my retirement accounts were getting funded) to late 2016 (When I started converting a small percentage to bonds) was the top money maker. Admittedly, it was not by much (a few percent), but it was the best. In accumulation phase, it is best, in my opinion, to be as bullish as possible. But since I am approaching the last quarter of my working career it is time to be a little more conservative, if you call 90/10 more conservative. That is still a risky position to some.

Interesting point on #4 above - always thought of retirement as the finish line, not just another starting line.

Why? Rough numbers, if I retire at 62 and just invest the $$ @ 4% return after 5 years I'm sitting at $132K. My full (@ 67YO) retirement benefit is about $900/month more. I think the break-even point is well into my 80s even if I just spend the money every month.

Granted, the decision on SS is pretty much a gamble on how long you expect to live. BTW, you also are not making a valid comparison, since SS benefits are relatively guaranteed (for those near or in retirement), while you specifically need to accept risk to get your 4% return, which makes your overall investment portfolio riskier. SS/Pension/property/equities all are included in your basket. Increasing your SS payments allows you to be more aggressive with other investments while maintaining the same overall risk. My family generally lives past 90, delaying SS to 70 (if possible) is a no-brainer.

With 20XX funds, they are too conservative (IMHO), for the reasons SH gave. We have some money in one (2040 fund), and just added 15 years to our supposed retirement date (~2025), which is a more realistic fit for our risk/return comfort level, given 30+ years of retirement.

Why? Rough numbers, if I retire at 62 and just invest the $$ @ 4% return after 5 years I'm sitting at $132K. My full (@ 67YO) retirement benefit is about $900/month more. I think the break-even point is well into my 80s even if I just spend the money every month. //

We had a thread on this awhile back and I expressed the same sentiment you have here. The way I look at it is that it is very cheap life insurance. If you invest well then you can possible go to your mid 80's before you break even. Die one day before you start to collect and you have lost the entire amount, not just for yourself but your heirs. It just seems silly to me to be betting you will live to 90 just to make a few extra bucks that most likely won't make any difference in your life, even if everyone in your family lives to be 100. I say that because people that do put it off are usually the ones that don't have to depend on it.


It just seems to me that both decisions are gambling, I would just rather gamble with the houses money..

could you provide a link to this thread?

also, what do you mean by the part above? Aren't there survivor benefits (assuming the survivor doesn't make enough)? Also, can one collect SS while still working full time?

Here's a link:

http://forum.slowtwitch.com/forum/Slowtwitch_Forums_C1/Lavender_Room_F4/Social_Security_Reform_P6461841/


Of course there are survivor/spousal benefits. That's why getting benefits past the break-even point is even more likely if you are married. It's a gamble either way, but the odds of better returns improve if you hold-off. Been thinking about this since that last thread. Something not mentioned was the fact that higher SS benefits allow for greater risk with remaining assets. Lost SS benefits should never be compared against equities or other risky investments.

All things being equal, if your goal is to maximize your total wealth, wait until 70 (and balance your investments accordingly). Long-lived family? The odds are hugely in favor of waiting. Family that kicks off early? That's different, take the money now. Need to eat/pay rent? Take the money now.

Of course there are survivor/spousal benefits. That's why getting benefits past the break-even point is even more likely if you are married.//

But how is that? Doesn't the spouse also lose out on the 200+K if you waited until 70 and you died on the next day? And now it is a roulette wheel on how long the survivor lives, and aren't those benefits lower than otherwise would have been( I don't really know if they are less, just have heard they can be)?


Lost SS benefits should never be compared against equities or other risky investments.//

I was more comparing them to a life insurance policy, after all at this time in everyones life, that becomes a big factor, and not too many people are able to actually get any of that type of insurance after age 62, at least not very cheaply. For the top earners is could be a quarter million or so policy if they had waited until 70..


I think from the actuarial tables the SSI dept wins in this game if you wait until 70 in the abstract, of course that doesn't take into account longevity increases or decreases. I think I saw where women were losing ground while men were stagnant or gaining just a tiny bit.

Hey, sorry I left this for a couple of days. How do I save 75%? Playing decent offense (household income 3-4x median) and very good defense (spend under 50K/yr including debt repayment for a family of 2 adults 2 small kids). Yes, I live in an area with slightly below average housing prices despite being in the Northeast.

If you rebalance within tax advantaged accounts you are not subject to any taxes on any 'realized' gains losses. Whether you pay fees depends on your broker. I just use Vanguard because they're cheap. You can trade vanguard products without fees but I honestly don't trade. Just pile money into a couple of their Admiral and Institutional level funds that track the entire US market or world stocks.

I diversify into real estate via my primary residence. Once I scale back from full time work - which is busy as shit (that's how you end up making above average wages, as I'm sure you're aware) - I may get a rental or three. Or I may not, I guess we'll see.

I have some marketable skills beyond financial management (I do finance/accounting for medium size businesses 50M - 500M) so if things get too exhausting I can always supplement with income from wages unrelated to my education.

as Peto's chief spokesperson in North America or perhaps a position at Unibroue? :)

And cheers to you for being financially responsible. Btw, in what city do you reside?

Some of the investment i'm thinking of will be on non-tax advantaged accounts... Fortunately, I can still take advantage of Roth IRA, but there will be another sizeable chunk that will fall outside of the Roth contribution limit.

Some of what you said can be true, however, if the house has a mortgage-leverage changes that return. If it’s a $100k property and goes up 3% a year, that’s $3000. But, what if you put $20k down and mortgaged $80k? Now, your return is $3000 on a $20k investment; 15%. Not to mention, if the house cash flows on rents collected, you make money there too.

Accepting what henceforth will be known as the we caveat; house prices do not rise indefinitely

Returns in property using leverage over last 11 yrs

P1 2006-15 >100% capital appreciation. 6-7% rental yield based on purchase price. With a 10% deposit and 90% mortgage

P2 2010-current. 120% capital appreciation. 8% yield. 35% deposit.

P3 2012-current. 0% appreciation. 5% yield. 25% down but has saved 6 figures in vacation costs in 5 years

In a decade of renting out property I have replaced 1 boiler and 1 fridge.

We rent good properties.

We also use leverage, so getting revenue equal to the deposit used to purchase every year and then capital growth equal to 1.5 times the deposit each year is not a bad return. In that example deposit was 10k on 156k. Rent was 12k and growth was 170k over 9 years.

Slum landlord or not thats ok.

All that said. I question owning for myself and I want to dump parts of our portfolio and trade it for a random walk BUT I am a fan of being a landlord.

Better believe it! ;) I like to build things so I know I can always get a job doing some grunt work. Or make things for sale at labor rates well below minimum wage...but at that point, I don't care.

If I told you where I live I'd have to get GMAN to find and silence you. Let's say I'm not too far from one of the oldest Ironman courses...and it's damn cold here.

I think there are many people who are opting for cash equivalent schemes as opposed to others. There are many reasons for this. By definition, a cash equivalent is any asset you can convert to cash quickly. Cash equivalents reach maturity in a shorter period than other forms of investments, usually in three months or less. This is advantageous from the business perspective because a company can use the cash equivalent to meet whatever short-term needs might arise. Should a company want to invest the funds elsewhere, it is easy for authorized personnel to tap the cash equivalent and redistribute company money. This is a significant consideration, given that sometimes the opportunity to invest passes very quickly.

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- Renuka