The OFFICIAL Unofficial Achewood Message Board
Trivial Pursuits => Wild Card => Topic started by: Nabubrush on March 26, 2007, 11:05:31 pm
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Jesus, I'm a million years old. Anyway, I'm thinking about how I will sustain my (and Robert, Josie, and my lovely wife's) way of life after I retire from the workforce. All you little shits who are continually traipsing across my lawn can move on and not respond to this, but for the other, more mature denizens of this place, what are you doing in terms of retirement planning? I have a 401k that is cooking along nicely, and I put $250 a month into an ING direct account at 4.5%. I can't fund an IRA. What else? Should I take a dip into the market?
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Depends how truly "old" you are. The younger you are the more you can afford the risks of playing the market. I would suggest doing whatever you can to fund an IRA or two now. That is one of the best (and most tax-advantageous, particularly if you do a Roth) ways to plan for retirement.
Since you asked, my retirement plans include:
1. A SIMPLE IRA rolled over into a Roth from a previous job (not sure how much is in it but it's not a lot)
2. A 401k from a previous job (same as above in terms of amount)
3. A Roth IRA
4. My husband's Roth IRA
5. My husband's 401k from a previous job (quite a bit in there, wahoo!)
As soon as we have steady jobs (again... *sigh* that's been a familiar refrain for us and it's starting to piss me off), we'll be dumping a crapload into our IRAs and also opening a 403-b (I think that's what it's called) which is a special retirement shelter for teachers. Basically we're hoping to double our household income with this move (because then we'll both have jobs instead of just me), but continue to maintain our current standard of living for at least two years, despite the increase in income. All of the extra will go towards student loans and into retirement funds, the theory being that we'd rather be uncomfortable when we're young than when we're old.
I'm always a little skittish of playing the market, but then again I've spent the past 5 years bouncing from silly money to nothing, so I find that kind of yo-yo-ing to be mentally exhausting.
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Yeah, unfortunately we are past the income cut-off for IRAs. I'm thinking that other than the 401k that I am currently conrtibuting to, my only option is playing the maket.
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The Market is the lottery for people who think they're smart, except that instead of two dollars you are flushing your life savings down the toilet and instead of money going to dudes who own the local convenience store and local public schools, your money is going to billionaire with diamond necktie pins and they will use your money to take a vacation to a country where there are no laws so that they can do Terrible Things.
The only sure way to make a lot of money in the market is to start with just a little less than a lot.
Until you reach that threshhold, just go to Chief Splitting-Eights Casino and put your nestegg all on red. You'd probably do better over the same number of tries.
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I disagree about playing the market. Depends on what you mean. If you're talking about trying to time the market and buy low/sell high in the short term, LFM is exactly right. Might as well go to the track.
On the other hand, consistently buying shares of a group of strong diversified companies is a pretty sure bet over the long haul.
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Even though I'm relatively young (25) I've done a bit of research into this topic since the idea of working as a Walmart greeter at age 85 scares the ever-loving shit out of me. A great simple set of steps that I've seen recommended many times are as follows (from Scott Adams, http://tiA-CAPrl.com/336bwp):
1. Make a will
2. Pay off your credit cards
3. Get term life insurance if you have a family to support
4. Fund your 401k to the maximum
5. Fund your IRA to the maximum
6. Buy a house if you want to live in a house and can afford it
7. Put six months worth of expenses in a money-market account
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio
From what I've read, unless you do it for a living (and even then it's extremely risky) you can't really beat the broad-market indexes over the long term. Unless you have gobs of money to blow on hedge funds, or you want to have an aneurysm worrying about how your individual stocks are doing on a daily basis, simply spread your money around and bet on everything going up, not specific sectors or companies.
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Seriously, all your IRAs and 401k's are, are categorized market-playing. The difference is you do your retirement accounts through a company that gets paid to decide where to invest your money (based on guidelines from you and industry best-practices) so you don't have to worry about it. Mr. MoF and I throw a set amount of money at some dude every month and he deals with the details. Honestly I don't even know his name. I scan the statement every quarter to make sure we aren't being robbed blind, but until we're in our 40s and moving our money to less aggressive funds, it can be someone else's problem.
I've been dreaming of my retirement since I was 14. I have it all planned out, what I want it to be like. The hard part is I've always been terrible at saving money. This is why I married Mr. MoF. He is the World's Second Biggest Tightwad (the Biggest being a guy I dated right before I met Mr. MoF; but that guy's Tightwadery was so great that it was interfering with other aspects of the relationship), so he is helping to ensure that we will have enough money when we get there.
I've always viewed retirement as a time to really simplify. We hope to never have a really big home; ideally we'd have a condo of no more than about a thousand square feet (30 minutes of cleaning and you're done, no yard to deal with, etc.). We also want to spend our money on experiences more than on "stuff." So we'll live frugally in terms of "stuff," but we plan to spend most of our retirement money on travel and food. We are pretty much planning to sell almost everything and live like paupers, stuff-wise, when we retire; just bumming around the world maybe picking up odd jobs in French co-op farms for a while or something.
Plan B is to sell everything and buy a catamaran and live on that, sailing around in the tropics and taking on charter jobs as we feel like it to pull in extra cash.
We're planning for that now by the aforementioned Tightwadery, and also by really being vigilant about our health now, so we can withstand the physical stresses of, say, living on a boat or hiking the Alps when we're in our 60s.
That's the plan anyway. We'll see if we actually make it. So far life doesn't seem to be cooperating too well.
If you're over the income limit, I would suggest talking to a financial planner and/or a trusts & estates lawyer who can guide you towards certain tax shelters and ways to hide your money from the government to maximize your return for retirement.
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I've been dreaming of my retirement since I was 14.
But...but... that is the saddest thing!
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Yeah.
That is completely the saddest thing. I have forgotten all previous candidates for Saddest Thing because it is just that sad. All that saving and work and dreaming and when you get there... you are unable to do most things and death is stalking you with her hot breath on your very neck. Right on the goddamn hackles.
I've always figured that I'm dying young, anyway.
Maybe a heart attack. Maybe cancer. Most likely some kind of assassination.
"Retirement"... jeez. The Mayans say it's all ending in 2012, anyway.
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You might as well commit suicide, as those old fucks are going to take all your retirement funds anyway.
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Open a pizzeria. Pizza makes hell of cash money.
Then, use the store as a front to hustle coke and weed.
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That is completely the saddest thing. I have forgotten all previous candidates for Saddest Thing because it is just that sad. All that saving and work and dreaming and when you get there... you are unable to do most things and death is stalking you with her hot breath on your very neck. Right on the goddamn hackles.
And all that, like, just wanting to get the rest of life over with? When you are 14 shouldn't you be dreaming of having a great time in between 14 and retirement?
Personally I am working on finding work that I like well enough to never want to retire. Since I'm starting over so late in life I think I have a decent shot of not getting tired of it, you know?
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Open a pizzeria. Pizza makes hell of cash money.
Then, use the store as a front to hustle coke and weed.
Goddamn I want to do this, but my wife has scruples!
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Open a pizzeria. Pizza makes hell of cash money.
Then, use the store as a front to hustle coke and weed.
Where I grew up, to say the first is to automatically assume the second.
That is why there are six pizzerias for 4,500 people and they all stay in business.
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I have a Roth IRA with a few K in it... nothing spectacular, but then again I'm 28.
I also have a public employee's retirement plan with just over $10K in it. I have a mandatory contribution per paycheck that Payroll automatically deducts. I can take my balance and leave anytime I want to, but after 5 years I'm vested in the system and will collect my retirement when I'm 65.
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my dad just retired earlier this year. His job basically became something he hated, and he was having issues with other stuff (back injury from youthful sporting came back to haunt him-- leading to sleepless nights, confused doctors, surgeries which did nothing, etc.) He is planning to wait a year, and then find something worthwhile to do with his time. I am not sure what this will be--he has mentioned doing something finance-related with a nonprofit or something.
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Focus, people.
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My dad had to retire young... early 50s... because of a heart condition and...
He's building the biggest shortwave antenna in three counties.
I am from a weird place, if I haven't covered this.
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Oh man... you misunderstand. My thinking about retirement since age 14 has nothing to do with not enjoying the time between 14 and old, and everything to do with having a kickass retirement. Basically I've been thinking about how to ensure that when I retire I have the health and the means to basically do whatever the hell I want. I looooove my job and I'm grateful for that, but I still have to be on someone else's schedule, and budget my money, and all that. And I'd rather be on a tight budget when I'm young than when I'm old, because the last thing I want my retirement to be is endless days of eating tuna out of the can with my 14 cats, awaiting death. So yes, I've been planning for retirement since that age, mostly to avoid a retirement that feels like sitting in a dark closet listening to Enya (to steal a South Park reference). But I've had plenty of rad times in the meantime, and plan to continue to do so.
Oh, and... Nabu, don't play the markets.
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The best way to make money, and thus fund your retirement, is to find the latest technological gewgaw of the moment and figure out a way to combine it with porn.
VCRs? Achieved no meaningful market penetration (ahem) until they started putting out porn movies.
DVDs? Porn.
Peer-to-peer? Porn-to-Porn, I say.
The Internet in general? The Internet is for porn! (http://www.avenueq.com/)
I suggest pr0nitizing Twitter.
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Goddamn I want to do this, but my wife has scruples!
Who says she gots to know?
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bunch of explanation
Nope, sorry. Still the saddest thing.
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I have never really thought about retirement, because (if the current plans turn out to work out) I'm going to be a scientist, and that has always struck me as a job you do as long as you can possibly do it, with the retirement basically more a gradual decline in assumed time on the job. That suits me; I'd like to think that I can find Neuroscience fascinating the rest of my life, but slowly being able to farm out more and more lab gruntwork seems about my style.
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If you are worried about your kids I'd roll with the life insurance. I'm an only child and an only grandchild and an only nephew. My family and I sleep well knowing I've got some kind of nest egg that I had nothing to do with and can't touch prematurely.
As for retirement. I'm not going to pretend to be a financial adviser but I do study finance now. Bonds and Tbills lose money to inflation by the time they reach their True Future Value. If my grandmother had put my birthday money in exxon stock instead of tbills and bonds, I'd be able to pay off college by now. My personal retirement account is at Etrade where I'm holding onto gold and natural resources.
I don't know what people have against the stock market around here. It has been perfectly documented that it gives modest returns well in excess of CDs or other instruments of that sort over time. I can't imagine how it could be compared to the lottery which has an Expected Value in the millionths of a penny, while a broad based index fund has an Expected Value of greater than 1.
Summary: Life Insurance for the family, High dividend stocks for you.
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I don't have children, and I will never have children. I'm kind of interested in playing the market, but it just seems like such an artificial construct. Like it'll work as long as everyone believes in it. As soon as that little kid points out that the Emperor has no clothes, we all end up with worthless scraps of paper.
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your money is going to billionaire with diamond necktie pins and they will use your money to take a vacation to a country where there are no laws so that they can do Terrible Things.
Until you reach that threshhold, just go to Chief Splitting-Eights Casino and put your nestegg all on red. You'd probably do better over the same number of tries.
Do you say these things just to provoke me? When you buy a stock, you're not giving the money to executives, you're buying a bundle of rights from another dude because he has decided he doesnt want them any more and you think they will be worth more in the future. Also, putting your money on read has an expected value of $0.47 while putting your money in the stock market has an expected value of ~$1.10.
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I don't have children, and I will never have children. I'm kind of interested in playing the market, but it just seems like such an artificial construct. Like it'll work as long as everyone believes in it. As soon as that little kid points out that the Emperor has no clothes, we all end up with worthless scraps of paper.
Shares of stock are very real things. They are contracts with rights: voting rights, rights to dividends when declared, rights to residual liquidation values of the company, rights to access books, etc. It is the value that one places on this contract that determines the value of the stock.
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Where does the money go when the stock is initially issued? Serious question, I don't know much about this shit.
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As soon as that little kid points out that the Emperor has no clothes, we all end up with worthless scraps of paper.
Happened at the end of the LAST Guilded Age when the rich got richer conning the regular folks into putting so much of their money into the system that values were so exceeded by the prices that one day... POP. People saw the market as a money machine, deregulation made the whole thing a million times worse and then...
Actually, this sounds really familiar, doesn't it?
While in a different time or a different place, the diversified long term portfolio thing probably actually makes sense? I'm prrrrrreeeeeeettttty sure we're coming up close to the next big realization of how much of that money is tied up in worthless paper (or just electrons in some machine!) how little of it is tied up in the actual intrinsic value of the companies and then...
POP.
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Hey LFM, you know what blows? Subways. Let me tell you about subways...
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Where does the money go when the stock is initially issued? Serious question, I don't know much about this shit.
In the I.P.O. the money does go to the corporation as an entity. You and I don't have access to these events that are organized by investment banks to sell whatever fixed number of shares the corporation has decided to issue. Usually large institutions, banks, and of course the firm's owners will purchase the most of these shares. The money is then used by the firm to do things like expand, pay off debt, invest in capital, etc. As the value of the company grows, the value placed on shares of ownership in that company usually increase as well. Google's IPO was spectacular because everyone wanted to own a piece of google and knew the company could do a lot with the money. Now that the people who took on the most risk in the beginning by buying the I.PO. can sell their shares of ownership to people who think google can do still more.
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We agree that subways blow and that the basic idea of many people owning parts of the same company that can be publicly exchanged is a pretty good idea.
We disagree slightly on why subways blow and we disagree substantially on what happens to the idea of a public exchange of ownership shares when allowed to reach a massive scale largely unfettered.
Perhaps these are things we should stick to the basic concepts on, my friend.
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Shares of stock are very real things. They are contracts with rights: voting rights, rights to dividends when declared, rights to residual liquidation values of the company, rights to access books, etc. It is the value that one places on this contract that determines the value of the stock.
Well yes. That's true. In fact the definition of any property they teach you in law school is "a bundle of rights." That is, your property rights are whatever the state defines them as. For instance, I own my home in fee simple absolute, which is set of rights very well defined by centuries of legal tradition.
And you're right, shares are very real things and give you very specifically defined rights. I just have two caveats.
First, and this is the more flaky of the two, is that intangible property such as stock is entirely dependent upon a well developed civil society to enforce those property rights. Not that we're on the verge of living in a post-apocalyptic world where there's no social contract to enforce these rights, but some things are worth considering. Namely, that the more esoteric the property right, the more dependent it is on having a fully functional civil government capable and sophisticated enough to enforce shareholders' rights. It's one thing to have a legal system capable of enforcing your rights to a trunk full of ingots in your basement, it's entirely another thing to have a legal system capable of negotiating the maze of derivatives, hedge funds, SPDR's, REIT's et al. The corollary to this is that your rights to intangible properties are exactly what a court says they are. There are plenty of former Enron employees and retirees who have an impressive portfolio of intangible rights that the court are no longer willing or able to enforce.
Second, and more practically. Stocks are worth exactly what somebody will pay for them. This is determined by complex and ever varying formula of financial fundamentals, mass psychology and public relations. You say "It is the value that one places on this contract that determines the value of the stock.", which is exactly correct, as far as it goes. The problem is the value of a stock isn't always (or perhaps is seldom...) rationally assigned.
I'm not trying to suggest that people shouldn't buy stock or other intangible property. When I have money I do. I'm just pointing out the philosophical and pragmatic differences between tangible and intangible property.
When the levee breaks...
If I have a barn full of cotton, well, possession is 9/10's of the law. I have a great deal of control over the dispostion of that asset.
On the other hand, if I have 1,000,000 shares of Microsoft, I have a piece of paper and the expectation that the government will support my claim for a defined share of Microsoft's assets. If the government and the society that supports that government are not functioning, my 1,000,000 shares may be worthless.
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Word, internet friend, word. We agree here.
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That's the part I was wondering about. Because it's not beyond any imagining that my 1000 shares of IBM, for instance, might not turn into 1000 shares of nothing at some point. I mean, I can't go down to IBM headquarters and turn my shares in for staplers and desk chairs and indentured servitude on the part of some nubile young Administrative Assistant.
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Second, and more practically. Stocks are worth exactly what somebody will pay for them. This is determined by complex and ever varying formula of financial fundamentals, mass psychology and public relations.
You say "It is the value that one places on this contract that determines the value of the stock.", which is exactly correct, as far as it goes. The problem is the value of a stock isn't always (or perhaps is seldom...) rationally assigned.
You, sir, have saved me a lot of typing.
When stocks are actually roughly worth that chunk of the current real value of the company and you are buying a stock on the belief that it will be worth more in a year or ten years because the company will grow in value and the value of your chunk will grow with it... I am completely down with the idea of stocks.
When stocks cost wildly more than the chunk of the current real value of the company and you are buying a stock on the belief that people will pay even MORE wildly over its value for it in one month or ten months... then I am completely against the idea of stocks.
Difficulty is... like... the more that people with a little money try to make tons of money off the second idea by essentially gambling or the more that people with a lot of money try to make more money by being able to manipulate that second idea...
The closer you get to a collapse that destroy even the value of the mostly-uninflated stocks with the rest of the destroyed market.
Which is good for nearly no one.
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That's the part I was wondering about. Because it's not beyond any imagining that my 1000 shares of IBM, for instance, might not turn into 1000 shares of nothing at some point. I mean, I can't go down to IBM headquarters and turn my shares in for staplers and desk chairs and indentured servitude on the part of some nublie young Administrative Assistant.
Thing is, if your 1000 shares of IBM turn into 1000 shares of nothing, money might well be the least of your worries.
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You, sir, have saved me a lot of typing.
Oh really?
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LFM has a mindstate of a very fragile universe where institutions of society can fail at any moment.
Did your parents divorce when you were a young child? Did a beloved pet die at a young age? Theres something deep here.
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Thing is, if your 1000 shares of IBM turn into 1000 shares of nothing, money might well be the least of your worries.
Well, if instead of investing in 1000 shares of IBM I invested in AR-15s and so on . . .
Also, LFM, don't put a responsibility like that on A-Dub. That's a heavy load to carry.
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LFM has a mindstate of a very fragile universe where institutions of society can fail at any moment.
Did your parents divorce when you were a young child? Did a beloved pet die at a young age? Theres something deep here.
On the other hand, maybe you have too much faith in societal institutions.
Look at the history of the 20th century and consider what social norms have changed since 1907 or so. Does that instill a great deal of faith in the stability of social institutions?
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That's a heavy load to carry.
And how!
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Also as per the topic of discussion: I mentioned I own stakes in gold and natural resources. Over the long run I believe that things that are useful and get scarcer are necessarily going to be worth more money. For example after 9/11 I bought Exxon, HAL, and gold stocks. Once the iraq war subsided i moved towards Gold, Palladium, Copper, etc. As soon as those British soldiers were captured by Iran a couple days ago I bought oil and gold again. Alas, I could cash out now and buy a car that parks itself. But I'm only 21 so I'll keep rolling.
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Alas, I could cash out now and buy a car that parks itself. But I'm only 21 so I'll keep rolling.
Do you need a girlfriend with a penchant for shoes, jewelry, and travel? Because I know someone.
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I didn't read this entire thread, but I should note that 401(k)s are basically free money. Use them to the max as soon as you can.
Otherwise, hoard gold and diamonds and keep them in a safe deposit box in some old bank that was around since old times.
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I didn't read this entire thread, but I should note that 401(k)s are basically free money. Use them to the max as soon as you can.
Otherwise, hoard gold and diamonds and keep them in a safe deposit box in some old bank that was around since old times.
I can get behind the gold, but I believe the scarcity of diamonds is an artificial construct.
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I can get behind the gold, but I believe the scarcity of diamonds is an artificial construct.
Yep. I thought carbonrundum (rubies and emeralds) were supposedly far rarer. fuck*ng DeBeers.
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I dunno. If civilization falls, who's going to want gold? What's useful about it? I'm going to hoard, like, peanut butter and spaghetti. And chocolate.
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I dunno. If civilization falls, who's going to want gold? What's useful about it? I'm going to hoard, like, peanut butter and spaghetti. And chocolate.
There won't be any tinfoil left for the hats and gold has the malleability you'll be looking for.
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Gold is beautiful
It stays beautiful (it doesn't oxidize)
Its malleable, ductile, and rare. It will always be considered a luxury, and therefore anyone who accumulates it will be seen as powerful.
Still, when the revolution comes, my stocks of ammunition will outweigh my gold reserves.
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I might just stock up on oxycontin. I'm sure an army of gibbering crackleheads armed with pieces of hurricane fencing and defending themselves with trashcan lids will be a formidable sight to see when people try to storm my demesne.
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Yeah... I've got my work retirement, my Roth IRA, and I'm slowly amassing ammunition. I've got about 500 rounds. If anything bad happens, we have a lot of Native folks here who could teach us how to live off the land and sea, as long as it wasn't polluted. If it were polluted and we were limited to stock on hand, I would probably die within 2 months.
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I might just stock up on oxycontin. I'm sure an army of gibbering crackleheads armed with pieces of hurricane fencing and defending themselves with trashcan lids will be a formidable sight to see when people try to storm my demesne.
Yeah, uh, I can come protect you. That shit is awesome.
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I like how "Retirement" has turned into "Utter Apocalypse Survival."
I would die real fast. I have no usable skills.
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I like how "Retirement" has turned into "Utter Apocalypse Survival."
I would die real fast. I have no usable skills.
If you like synthetic heroin (and who doesn't) and are willing to chew through someone's throat, I can give you a place to sleep.
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synthetic heroin
Isn't heroin synthetic heroin?
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Isn't heroin synthetic heroin?
If you are going to be splitting hairs, you'll be first up against the wall.
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Nabu, you sound a little angry and sleep-deprived. Do you have a S.O.-S.A.D. lamp up there?
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Nabu, you sound a little angry and sleep-deprived. Do you have a S.O.-S.A.D. lamp up there?
Sssshhhhh. We're not allowed to talk about pot, didn't you hear?
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and two legged predator medecine earlier this week.
Heh heh heh. Tiny can.
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I'm never going to retire.
I'm planning on living until i'm 150 and spending the second half of my life on Mars.
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I'm never going to retire.
I'm planning on living until i'm 150 and spending the second half of my life on Mars.
Fine, abandon the Green, Green Hills of Earth. I'm going to be a mole-person.
And Linn, I'm not at work. That happens Thursday morning. If I'm around you'll notice the difference, what with the enforced sobriety and all.
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Fine, abandon the Green, Green Hills of Earth. I'm going to be a mole-person.
And Linn, I'm not at work. That happens Thursday morning. If I'm around you'll notice the difference, what with the enforced sobriety and all.
Oh! Damn. Well, I hope you enjoy your hometime. How often do you have to be working in Alaska?
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Oh! Damn. Well, I hope you enjoy your hometime. How often do you have to be working in Alaska?
Every other two weeks, about. it's actually one day extra in AK. Luckily, my wife doesn't mind too terribly much.
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Every other two weeks, about. it's actually one day extra in AK. Luckily, my wife doesn't mind too terribly much.
wow, I bet they search your luggage and everything. When my ex was in Iraq, he had his friends decant bottles of hooch into empty Mountain Dew bottles and mail them in that way.