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04-08-2017, 09:00 PM | #1 |
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Retired people of F80.BimmerPost - How did you save for retirement?
I think there is a special demographic here of retirees who can still afford an F8X despite leaving the workforce. To me, that is admirable, as I see too many retirees rely on a fixed income that doesn't maintain the lifestyle that they previously had.
As a youngish person looking ahead towards my future and hopefully fruitful retirement, I'd like to know what is the main contributor to your nest egg? 401k? Real Estate? Passive Income streams (if so, what kind?) Stock market? Investments? Good old simple living? A lifetime of saving X amount of dollars a year (if so, how much or what %, whatever you feel comfortable disclosing). Something I haven't thought of or forgot? Thanks so much for any insight. Spread your wisdom!
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04-08-2017, 09:58 PM | #4 |
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Spent 21 years in the Air Force and retired with a pension. Worked for the state of Texas for 20 years and retired with a pension. Wife worked 30 years for federal government and retired with a pension. Wife and I contributed to IRA accounts for 30 years. Wife and I got old and collect Social Security. With 3 pensions and 2 social security checks we are doing about as well as when we were working. House is paid for, cars are paid for and we have no debt, so we have enough income to be very comfortable, plus the IRAs in the bank.
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04-08-2017, 11:01 PM | #6 |
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The key to wealth is "pay yourself first". Simply put a portion of your pay check aside towards your retirement future. Buy blue chip dividend paying stocks and specify a reinvestment of dividends into more shares. Time is your best friend so start early. Stick with your strategy, rebalance your portfolio as necessary. Don't panic in downturns, just buy more of the good stuff when it is cheap. Defer gratification but live reasonably well because you may not live to old age. So balance is important. Get professional advice from someone who has your interest at heart and not trying to meet some quotas of product. Paying for good advice is money well spent.
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04-08-2017, 11:10 PM | #7 |
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All of the above plus invest towards purchasing your personal home instead of cars when you are young (I drove an old Buick Skylark with no headliner or AC after college in order to afford my first home). Additionally, have a serious savings/investment plan in place for kiddo college expenses immediately after they are born.
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04-09-2017, 01:33 AM | #8 |
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Yep, don't buy cars like BMW M cars while you're young. Max out your 401k, save as much as you can. I'm not retired but house is almost paid for and can afford an M and a new Corvette no problem.
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04-09-2017, 07:15 AM | #10 | |
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My grandfather always used to tell me that the secret is in the balance. Don't sacrifice your future for the present and don't sacrifice the present for the future. Life is short and there is only one to live, so it is to be enjoyed to the fullest from begginning to end. And he lived a very full and happy life surrounded by many friends up until the very end .
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04-09-2017, 09:54 AM | #12 |
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Really depends on what you are compounding. Compounding debt or compounding problems are not your best friend.
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04-09-2017, 11:47 AM | #13 |
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I retired from the State of California in 2009 after 39-1/2 years as an electrical engineer. I benefited from former Governor Gray Davis' panic when he was trying to stave off recall. He signed the bill pushed by CalPERS to give state retirees a 2% per year at 55 formula for retirement benefit factor calculation times the highest 12-month pay period. This, and the fact that I could apply my 1-1/2 years of unused sick leave, resulted in my being able to retire at age 63 with at 100% of my base pay for my last 12 months. A sizable inheritance from my mother in 2014 didn't hurt either. After the check cleared the bank in July 2014, I went straight to Niello BMW and ordered my M4 just the way I wanted it. The following November, I got delivery and have been loving it ever since.
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04-09-2017, 12:19 PM | #14 |
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I've posted in other threads how you could save $2000/month for about 6-7 years and, assuming, a conservative interest rate, that will make your $1000 M-car payments for 30+ years. Nice huh? guaranteed m-car for 30 years.
Here's the situation: if you're born in the US, Canada, or Europe you've won the lottery because there's almost a guaranteed path to becoming a multi-millionaire! And the simple path to that isn't some big money job or a startup or tricky investing or a sexy insider secret; it's planning to become a millionaire and then sticking to the plan. Here's the problem: it's not what other people are doing. It's not "normal", which is why most people don't know a lot of multi-millionaires. There's a saying, "if you want something different than what everyone else has, then you have to do something different than everyone else does". And in this case that means planning to be a millionaire and then sticking to the plan. Which means giving some things up today for future spending tomorrow. Which nobody likes to do. Which is why they don't do it. To collect your lottery winnings and become a millionaire you need to (a.) save, and (b.) invest conservatively. No need to figure that all out, it's already been done for you. Go here to learn how to be a savings badass. Go here to learn how to invest that savings If you read the newbie threads and do what they say, you're almost 100% guaranteed to become a millionaire. CONGRATULATIONS!
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04-09-2017, 01:29 PM | #15 |
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This is probably the wrong forum to ask this question, as it is a forum for discussion of a depreciating asset, but nonetheless I'll attempt to answer your question.
There was a discussion about this in FerrariChat. Most people save for retirement by not really focusing on saving. The focus should be on passive income that continues to pay during retirement. For most people, that is some form of Real Estate that you collect rent or a lease on, or financial investments with dividends/coupon payments, and if you're very lucky, then a business with recurring revenue stream. The key takeaway is that it's not like the "old days" of saving a x% of income and then just spending that when you retire; it is about creating lasting revenue stream that pay in perpetuity. |
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04-09-2017, 01:38 PM | #16 |
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I lived way under my income level, bought used cars (except now), and accumulated property while working. My first home was always set up to be a rental. During the great recession, I was busy buying real estate and renting them out.
Now almost all my income is passive.
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04-09-2017, 01:42 PM | #18 | |
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It was a risk, but thanks to Bush, things were basically in the gutter, so I had nothing to lose. Now in my 40's, I have a constant revenue stream.
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04-09-2017, 01:47 PM | #19 |
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I might add that instead of going on ski trips with my friends I invested in real estate with a couple of partners. I had a low-paying entry-level job, drove the same used car for 15 years and was living paycheck to paycheck but it has all paid off.
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04-09-2017, 07:24 PM | #20 | |
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Just to even, with the real estate approach you put many or all your eggs in one basket ... and then if you're collecting rental income you've got a whole job to do (renting, maintenance, etc) or you have to pay someone to do it. That's not exactly "passive" income, and it's not diversified. Not that it doesn't work - it's a time honored approach and more millionaires have been made in real estate than any other assets class. It can work great! But you don't need to do that - you can invest in the market broadly (with some REITs if you want). I somewhat disagree with onetrader (if I understand his point), as I don't think there's a "most people" and the whole dividend / coupons thing is not needed (although it can certainly be part). It *is* like the old days: save your money, use a conservative investment approach in low fee broad market index funds (i.e, Vanguard), and withdraw to live after you retire. There's an acronym for this: FIRE = financially independent, retire early. There's also a calculator to figure out how much you need to save: FIRECalc And, trust me, that fucker is nerded out to the highest level of dork you can get. These are monte carlo simulations based on a zillion scenarios from history - in short, it covers just about everything. The goal is to tell you how risky your plan is. So let's do an example: * You've manage to save $2,000,000 by 50. Great job! * You want to spend $75,000 / yr * You're pretty sure you're going to live to 100 years old, meaning you've got 50 years of partying left to do This is pretty much everything that has ever happened applied to the future. The net-net is, with those numbers above, only a few worst-case scenarios would put you in poor house, and those would happen for 26ish years so you'd have plenty of warning to adjust your spending. Basically, you'd be good ... and in some scenarios you're baller. So this point is, decide how much you want to spend, then calculate how much you need to save, assisted by compound interest, to hit your target. All the other stuff about dividends, coupons, real estate is gravy. Start now, spend then. W00T!
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04-09-2017, 07:51 PM | #21 | |
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the holdings are diversified in multiple counties and 2 states, all of which are providing both rental income and appreciation. irs defines the income as passive. that is the basis of the term. As far as actual work is involved, I manage all my holdings as well as other people's holdings and my average work week is about 4-6 hours a week. https://en.wikipedia.org/wiki/Passive_income
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04-09-2017, 07:55 PM | #22 |
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Just for fun, let's do another few examples:
* You didn't hit your savings target, but you did bank $750,000 * You wanted to spend $75,000 / yr, but you know you have to downgrade to $50,000 in spending / year * You're pretty sure you're going to live to 100 years old, but you decide to work until 60 and then retire. You might be ok, you might not - in about 50% of the scenarios, you're fucked, and the fucking starts 10 years after you retire or when you're about 70 What if you cut your spending down to $30,000 / yr on that $750k of savings? Looks much safer ... Now check this out: let's say these graphs are scaring you and you think, "fine. I'll buckle down and save a cool $1M. Now what?" For just 250k more in savings, you can spend $50k / yr ( a LOT more) and in most scenarios still be fine
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