All of us will stop working sooner or later – we will leave our job or let someone else run our business.

My question is “how to retire rich?”.:biglaugh:

No matter what your age is right now, we are hoping that we can retire in comfort. i guess there are folks out there reading this... feels running out of time..:nope:

Dear Friends,

Can anyone give some catch-up strategies to accumulate each and everyone’s fund faster?

Are you referring to investment strategies?

Please define 'rich'.

Are you referring to investment strategies?

Please define 'rich'.

it could be an investment strategies, savings strategies, etc. The objective is to make sure that you do not run out of money before you die.

Rich – making your money last a lifetime

Taking a leaf from: Wile E. Coyote catches the Road Runner, I imagine those that make it by the time they are 60 to 70 asking the question: Now that I am rich, so what? ;) ;)

IMHO - "rich" is a state of mind.

Taking a leaf from: Wile E. Coyote catches the Road Runner, I imagine those that make it by the time they are 60 to 70 asking the question: Now that I am rich, so what? ;) ;)

What you would like your life to be after you retire?

A study done in a large manufacturing company revealed that those who retired at age 65 died within 2 years, they only lived an average of 18 months after retiring.

Those who retired at age 60 lived another 17 years.
Those who retired at age 55 or earlier were able to celebrate birthdays beyond 80 years old.

A study done in a large manufacturing company revealed that those who retired at age 65 died within 2 years, they only lived an average of 18 months after retiring.

Those who retired at age 60 lived another 17 years.
Those who retired at age 55 or earlier were able to celebrate birthdays beyond 80 years old.

Presumably it's the upper management with lots of money who could retire at 55 and the poorer workers who had to work until their 60's.............

My father, whose health suffered from illnesses and injuries he received while serving in WWII, died within 2 years of his retirement.

His work defined him. He enjoyed it more than retirement, when he felt at odds with himself. His health soon declined very quickly after he was forced out of his last job. Recently I was going though what paperwork I have of his, and found the stacks of the bureaucratic indignity he had to endure when navigating the state unemployment system. Knowing what a powerful intellectual force he was, it hurt me to see all this evidence of indignity, 20 years after it happened to him. I could practically feel the paperwork communicate his frustration through my hands as I read it.

I suspect my work will also mean more to me than leisure. Being able to retire rich would be, for me, the ability to play more golf but still work in a fulfilling and contributing sense, without worry about paying the bills.

It's kind of a quality of life thing. I find myself at this age (only 52) with my kids gone (or almost gone), my wife and I enjoying each other's company, and a fufilling yet stressful job.

The statistics of that survey are interseting. I think its time for me to break out on my own (auditing, consulting, etc.) in order to reduce the stress and improve my quality of life.

Hopefully its possible to do this and still be 'rich' when I decide (if I decide) to retire.:2cents:

IMHO - "rich" is a state of mind.

'rich' is financial peace of mind

It's kind of a quality of life thing. I find myself at this age (only 52) with my kids gone (or almost gone), my wife and I enjoying each other's company, and a fufilling yet stressful job.

The statistics of that survey are interseting. I think its time for me to break out on my own (auditing, consulting, etc.) in order to reduce the stress and improve my quality of life.

Hopefully its possible to do this and still be 'rich' when I decide (if I decide) to retire.:2cents:

Try to imagine what would happen if you suddenly stop receiving your salary. Will your family survive without having to alter your way of life and for how long? If you can live comfortably for the rest of your life with little financial stress then congratulations...

Try to imagine what would happen if you suddenly stop receiving your salary. Will your family survive without having to alter your way of life and for how long? If you can live comfortably for the rest of your life with little financial stress then congratulations...In my current trajectory, based on all the restarts and left turns my family's lives have taken, I do not forsee financial freedom from working.

'rich' is financial peace of mind



I know very rich people hooked on drugs....

How about their "financial peace of mind?"

I agree with CarolX. :applause:

Stijloor.

In my current trajectory, based on all the restarts and left turns my family's lives have taken, I do not forsee financial freedom from working.

It all begins with believing that regardless of what you have right now you have the ability to achieve financial freedom.

Even if you have no intention of becoming wealthy, you should still prepare for some important reasons e.g. survive financial crisis, improve the lives and well-being of your family, enjoy your years of existence, etc.

I know very rich people hooked on drugs....

How about their "financial peace of mind?"

I agree with CarolX. :applause:

Stijloor.

Stijloor, avoid drugs and extra-marital affairs.

People don’t openly talk about this but extra marital affairs can very expensive. The 'other partner' is usually high maintenance and often they are only in it for the money. just kidding :truce:

Stijloor, avoid drugs and extra-marital affairs.

People don’t openly talk about this but extra marital affairs can very expensive. The 'other partner' is usually high maintenance and often they are only in it for the money. just kidding :truce:

Are you a little off track my friend? I fail to see the humor in your post.

Stijloor.

Oh, let's not take all of this too seriously.

Are you a little off track my friend? I fail to see the humor in your post.

Stijloor.

I’m sorry. I didn’t mean to offend.:(

I’m sorry. I didn’t mean to offend.:(

Thanks for your apology and hope to see many good posts from you :)

This Cove is special and lets maintain the sanctity :D

I beleive that in many western countries there are a lot of retirement plans other than what company/ or Govt offers. Now that could give the peace of mind that you need.:cool:

After Official retirement, Start sharing and investing your wealth of Knowledge like Marc of Elsmar Cove, you never be retired, even after death:agree1:

I agree:agree1:

1. Call Rich into your office
2. offer him an early retirement package.

Pretty easy. If Rich is working for you anyway.

All of us will stop working sooner or later – we will leave our job or let someone else run our business.

My question is “how to retire rich?”.:biglaugh:

No matter what your age is right now, we are hoping that we can retire in comfort. i guess there are folks out there reading this... feels running out of time..:nope:

Dear Friends,

Can anyone give some catch-up strategies to accumulate each and everyone’s fund faster?



Financially, the best way is to start by being born into a rich family. Otherwise, remember that money is not everything.

Financially, the best way is to start by being born into a rich family. Otherwise, remember that money is not everything.

Very true :tg:

I do think the word “rich” is an easy buzzword designed to sell books, self-help seminars, and countless money-making schemes on TV. However, the discussion has merit, in that every one of us needs to think and plan for the future.

Since the term has been projected, I do think each of us need to define our own term for being rich. For example, I’m rich right now. I get to tuck my kids in bed at night, and greet them in the morning. I only have a house payment for debt, we get to eat out when we want, etc. I really don’t go without anything. Now, I can be like the little boys in the movie Overboard, when realizing their soon-to-be mother is very wealthy, immediately start making a Christmas list.:tg: I am human, and don’t go without desires for material things. But my point is looking and deciding your level of contentment. Like Paul says, it’s learning to be content.;)

I think each of us needs to look to the future. When do I want to stop working? How much money do I need to do what I want? For example, some of the Road Warriors here may want to stay at home, grow a garden, and pick up golf. That will require less income than the individual who wishes to travel internationally with their spouse.

Also, develop hobbies and interests outside of your job, and outside of your kids. I love my kids, and spend a lot of time (and money:D) with them. But… I’m also working on the relationship with me and my wife, so that our lives aren’t empty when the kids move out. Also, find enrichment and edification in other things than just your job.

Me? I’m preaching to myself here. My wife has an awful time envisioning retiring and what she wants to do. I think I have that she wants to travel (I was told no RV:mad:), :)so I need to plan for those expenses.

What about our aging parents? Are you going to have to provide for them? Will they move in with you? Will you have to pay for assisted living? Just saying, we need to think about that stuff.

Finally, all that retirement planning won’t do us any good, if we are not healthy enough to enjoy it. Give up the tobacco-now, and let’s keep each accountable for losing weight.

If you haven’t set down and planned for retirement lately, maybe turn the TV off a little early tonight, and do some light thinking about it.

My best advice:

put as much money into a 401K (or similar) as possible, as early as you can. I wish my company would have had 401k from the day I started. I missed out on probably 15 years of retirement building. While I agree that money can't make you happy, it can sure ease your fears. (I also consider myself rich beyond monetary confines but I'm happy I planned for retirment)

My best advice:

put as much money into a 401K (or similar) as possible, as early as you can. I wish my company would have had 401k from the day I started. I missed out on probably 15 years of retirement building. While I agree that money can't make you happy, it can sure ease your fears. (I also consider myself rich beyond monetary confines but I'm happy I planned for retirment)

I totally agree with this advice but it is too late for many people who did not save early. If you would have put at least 10% of your income in a retirement plan and just invested it on a regular basis in a S&P 500 mutual fund for the last 35 years, you would have accumuluated almost if not more than $1 million for retirement.

The other advice is to make sure your house mortgage has been paid off and your kids college has been paid (if that is your desire). As far as rich, people develop lifestyles that differ in cost. The goal would be to have enough in retirement income to allow you to at least maintain that lifestyle.

Bill Pflanz

I totally agree with this advice but it is too late for many people who did not save early.

Or, those who had "early retirements" (long term unemployment) during their careers and had to eat with it already.

Well, it appears as though some in this area are providing their own type of being rich in the future. I went to a store Saturday and paid with a 5 dollar bill, and the clerk got out one of those money marking pens to test it. I was surprised and asked her if fives were being counterfited. She replied not only fives, but there are some counterfit ONES (1) out there too! Guess they thought that would be easy because nobaody pay any attention to those. Who'd a thought?:mg:

I've always said that if I were going to turn to a life of crime, I'd counterfeit ones, who thinks to check them?

As to investing in a 401k or similar. Yes, the longer you invest the better, but even if you start later it is better than nothing especially if your company does a match. As I said, I didn't start mine (not available through the company, and I was young and dumb) until halfway through my carreer to date. I may not be rich, but at least it is something to live off when I retire and then supplement SS when I'm old enough for that.

Or, those who had "early retirements" (long term unemployment) during their careers and had to eat with it already.

Bob describes another reason why people do not save for retirement so there are pitfalls in getting it done. Taking from a 401K should be the last option when you need money because of the severe penalty from taxes but more importantly the long-term impact on your retirement savings.

I may be one of the few who are still assuming we will get Social Security but I expect that the payments will be reduced for those under 50. If that happens then saving for your own retirement will be even more critical.

Bill Pflanz

Taking from a 401K should be the last option when you need money because of the severe penalty from taxes but more importantly the long-term impact on your retirement savings.


Although a well known caveat, it often becomes the source of money of last resort - with the remaining option, perhaps, personal bankruptcy. Nobody wants to spend their 401K....or at least should want to. It may be more of a question of ever retiring versus retiring rich after this current speed bump in the economy.

Well if you want to be rich dQApprentice, I have one suggestion.
Give me all your money and let me invest it for you.
That way we both can be rich.
No fun being rich alone is it.


Guna8184
:agree::agree1:

Earlier preparation than later.

Make sure you never lose your job or have a plant closing. That really helps retirement planning.

Well if you want to be rich dQApprentice, I have one suggestion.
Give me all your money and let me invest it for you.
That way we both can be rich.
No fun being rich alone is it.


Guna8184
:agree::agree1:Another Bernie Madoff wannabe!:lmao:

Make sure you never lose your job or have a plant closing. That really helps retirement planning.Got a secret plan for that?;)

Got a secret plan for that?;)

Nope. I am not sure I could have stayed at the same place all my career, even if it had been an option. But, it wasn't....so, life goes on...for a while.

Another Bernie Madoff wannabe!

Check out Bernie's retirement plan. He is set for the next 150 years. Talk about stability... :tg:

Check out Bernie's retirement plan. He is set for the next 150 years. Talk about stability... :tg:

That is just soooo wrong.:lmao: I'd prefer not to think about what goes on in prison.:mg:

Well if you want to be rich dQApprentice, I have one suggestion.
Give me all your money and let me invest it for you.
That way we both can be rich.
No fun being rich alone is it.


Guna8184
:agree::agree1:

Hi Guna8184,

I pay doctors to treat my health problems and i compensate lawyers to my legal trouble. But why should i pay you? :biglaugh: (joking)

Sure i am willing to pay you if you can fix my financial situation and make me rich. That way i'll have sufficient money for your salary. :lmao:

Earlier preparation than later.

i agree :agree1:

achieving your financial goals will be easier if you start to invest early. your money will earn more if given more time to grow. :notme:

i agree :agree1:

achieving your financial goals will be easier if you start to invest early. your money will earn more if given more time to grow. :notme:

I disagree after losing 60% of my retirement investment. :mg:

Stijloor.

I disagree after losing 60% of my retirement investment. :mg:

Stijloor.

sometimes you may even have to fail a few times before you can taste the success

sometimes you may even have to fail a few times before you can taste the success

Not when you're close to retirement.!!!

Stijloor.

I disagree after losing 60% of my retirement investment. :mg: You did pretty well. A friend I advised to sell his stock a couple years ago held on and he has lost almost all of his money. I can remember him in the chair next to me essentially calling me a fool. He was preaching stocks and home equity. Of course, he refinanced his house multiple times so he has little equity in it now. I don't know for sure, but I'd bet he owes more on the house than he could/can sell it for.

I have another friend who has lost over US$400,000.

You, by contrast, still have 60¢ on the $1. I was lucky to get that on a US$10K loan I made to a friend about a year ago to help keep him afloat. I pretty much had to threaten him to get that. Well, former friend. He's busy hiding from his creditors which, of course, includes me. Luckily I wouldn't and didn't lend him the US$20K to 60K he was angling for at the time. But I have no sympathy for him. He was busy spending money on trips, golf and home improvements that he should have been sinking into his business, or at least putting in a savings account (or like me, in a home safe). He built his life on credit and is getting what he deserves.

...achieving your financial goals will be easier if you start to invest early. your money will earn more if given more time to grow. :notme: The problem lies in your words. Invest in what?

Not when you're close to retirement.!!!

Stijloor.

you can use any investing style regardless of your age.

1. Agreesive investing (age 20 to 35)
- while you are still young, you should take more risk 'coz you will have a lot of time to recover if your investments do not perform well.
- put 80% of your money in high-return, high-risk investments like stocks, equity funds or your own business. These investments have the greatest potential for growth.

2. Balanced Investing (age 36-50)
- 50% of your funds in high-risk investments another half in medium to low-risk investments(your portfolio will have more stability)

3. Secure investing (age 50+)
- yes, i agree. as you get closer to your retirement, you should be concerned with preserving your capital because you cannot afford huge losses in your investments. Change to a secure style of investing, placing 80% of your funds in medium to low-risk investment (with about half in secure TDs and bonds). Keep 20% in high-risk investments so you can still benefit if it earns well. Whn you're retited you can continue this investment mix or you can put all your money in fully secured investments like TDs and government securities.

The problem lies in your words. Invest in what?

the market is flooded with lots of investment opportunities. select what you would prefer. just make smart investment decisions. and it is not enough that you know where to invest your money. to maximize the growth of your funds and minimize the risk of losing money, you need to follow time-tested and proven investing strategies.

the market is flooded with lots of investment opportunities. Name them.

just make smart investment decisions. If people were capable of doing that, do you really think so many people would have lost all the money they have lost over the last couple of years?

All you are advocating is gambling.

Name them.

If people were capable of doing that, do you really think so many people would have lost all the money they lost over the last couple of years?

All you are advocating is gambling.

i mentioned already some good investment opportunities in my earlier post.

an investment strategy is not entirely a gambling.

an investment strategy is not entirely a gambling. Neither is Poker.

Marc,

I didn’t say that everybody will succeed. Success is all up to everyone. The journey ahead will not be smooth. You will encounter a lot of bumps and turns and there will be times when you feel like giving up. If you give up you will never win.

I’m not forcing you to believe me because it’s only my opinion and belief.

Neither is Poker.

According to my former employer goals are strategies for living the best life possible.

Marc,

I didn’t say that everybody will succeed. Success is all up to everyone. The journey ahead will not be smooth. You will encounter a lot of bumps and turns and there will be times when you feel like giving up. If you give up you will never win.

I’m not forcing you to believe me because it’s only my opinion and belief. Like I say - Your advice is to gamble. Some go to Vegas and win. Most lose more than they win, however.

As to "You will encounter a lot of bumps and turns and there will be times when you feel like giving up. If you give up you will never win.", that's a truism about everything in life. But then again, what is 'winning'? The person who makes the most money 'wins'? Or, the person who lives modestly and comfortably and happily 'wins'?

I'm not against gambling. I just don't advise it. I dumped stocks and such some years ago and bought physical gold which I keep here, which was gambling. The only thing I have lost in the mess of the last couple of years is equity in my house which isn't a big deal because I didn't buy it to sell or to otherwise profit on. I bought my home to live out my life in. I paid it off in less than 7 years and am debt free. I got out early.

As an 'index', had you invested $10,000 in gold bullion in 1999, your initial investment would have grown to $33,754 by 12/31/08 – a 237.54% percent increase. That same $10,000 investment in stocks of the S & P index would have lost $3,987. That’s a 39.87% loss.

A history of the Dow/gold ratio (http://www.lewrockwell.com/north/north501.html)

In August 1929, your grandfather sold one unit of the Dow and bought 18 ounces of gold. Three years later, when the Dow/gold ratio bottomed at 2:1, he sold 18 ounces and bought 9 units of the Dow.

Those 9 units reached another peak in 1966 when the ratio hit 28:1. Now your father exchanged those 9 Dow units for 252 ounces of gold.

In January 1980, the ratio got to an almost unprecedented 1:1 ratio, so he converted those 252 ounces of gold into 252 units of the Dow.

Come 1999 with the ratio at an unprecedented 43.85 to 1 level, the prudent family converted those 252 units of the Dow into 11,050 ounces of gold!

No trades were based on the price of gold or the level of the Dow . . . it’s just a simple question of how many ounces is the Dow trading for in the market.

This little fictional fable started with 1 unit of the Dow at a peak in 1929. Two tops, two bottoms, and 5 trades later it’s 11,050 ounces of gold, in 70 years.

Consider what took place from 1900 to 1999. There was a world war, a post-war boom, a decade-long depression, price deflation, another world war, the international post-war boom, multiple smaller regional wars, price inflation, the Cold War, and all of the technological wonders that have transformed our lives. Starting with under two ounces of gold in 1900, a family winds up with over 11,000 ounces in 1999 – if the family’s asset manager had perfect timing and there had been no income taxes.

Today, a unit of the Dow costs about 20 ounces. This is down from 44 ounces in early 2000. McAvity offers his analysis as to what we should expect in the future regarding the Dow/gold ratio.

Lower peaks and a lower low in the past six years confirms a major trend reversal and suggests we are headed towards the other extreme in the years to come.

There are some forecasters who think the ratio will return to 1:1, with the number at 3,000. Richard Russell, another GOM, has suggested this possibility. McAvity says he expects a less catastrophic ratio, something in the range of 5:1

Considering I believe inflation will rise significantly over the next 5 to 10 years, I recommend investing (aka gambling) only in physical gold that one personally holds or in oil.

BTW - My comments are based upon having seen the investment strategy you laid out many, many times over the years. It boils down to buy low and sell high. There is the part about holding investments no matter what they do which historically isn't a 'bad' idea. I forget who, but someone here (Al Rosen?) did a thread on the overall 'safety' of the stock market within the last 6 months.

But times have changed and this came just like the crash of 1929 did, and for the same reasons. I saw a very good show on the events over the 10 years prior to the '29 crash and it was the same stuff that led to this crash. Little to no regulation and lots of margin speculation. Grouch Marx lost almost every $ he had in the 1929 crash. Luckily he had a profession as an established actor.

It took a war to bring the US out of the recession and depression that followed. I look to the next 10 years (if I live that long) as a time where a lot of people world wide are going to be struggling to make ends meet, and in many cases keeping themselves fed (and hopefully housed).

Just some thoughts.... :notme:

You did pretty well. A friend I advised to sell his stock a couple years ago held on and he has lost almost all of his money. I can remember him in the chair next to me essentially calling me a fool. He was preaching stocks and home equity. Of course, he refinanced his house multiple times so he has little equity in it now. I don't know for sure, but I'd bet he owes more on the house than he could/can sell it for.

I have another friend who has lost over US$400,000.

You, by contrast, still have 60¢ on the $1. I was lucky to get that on a US$10K loan I made to a friend about a year ago to help keep him afloat. I pretty much had to threaten him to get that. Well, former friend. He's busy hiding from his creditors which, of course, includes me. Luckily I wouldn't and didn't lend him the US$20K to 60K he was angling for at the time. But I have no sympathy for him. He was busy spending money on trips, golf and home improvements that he should have been sinking into his business, or at least putting in a savings account (or like me, in a home safe). He built his life on credit and is getting what he deserves.Read his post again. He has 40% left; he LOST 60%!

you can use any investing style regardless of your age.

1. Agreesive investing (age 20 to 35)
- while you are still young, you should take more risk 'coz you will have a lot of time to recover if your investments do not perform well.
- put 80% of your money in high-return, high-risk investments like stocks, equity funds or your own business. These investments have the greatest potential for growth.

2. Balanced Investing (age 36-50)
- 50% of your funds in high-risk investments another half in medium to low-risk investments(your portfolio will have more stability)

3. Secure investing (age 50+)
- yes, i agree. as you get closer to your retirement, you should be concerned with preserving your capital because you cannot afford huge losses in your investments. Change to a secure style of investing, placing 80% of your funds in medium to low-risk investment (with about half in secure TDs and bonds). Keep 20% in high-risk investments so you can still benefit if it earns well. Whn you're retited you can continue this investment mix or you can put all your money in fully secured investments like TDs and government securities.


the market is flooded with lots of investment opportunities. select what you would prefer. just make smart investment decisions. and it is not enough that you know where to invest your money. to maximize the growth of your funds and minimize the risk of losing money, you need to follow time-tested and proven investing strategies.

I was an investment banker for most of my adult life. I wasn't able to keep ALL I made, but I did keep a lot. In my 40+ years of experience, I can attest I have seen more folks bust out following advice like yours than I have who scored big and kept most of it.

Life (and thus investing) is always a gamble, simply because nobody has "perfect information." New technology, wars, famines, natural disasters, individual calamities like deaths, patent fights, frauds, individually or in combination, can wipe out even the most successful organizations in a heartbeat.

Every investment entails risk. Using Quality terminology, we can attempt Failure Mode and Effects Analysis (FMEA) each time we select an investment, but even the most meticulous analysis sometimes lacks complete data and forces the analyst to make a "best guess." In the argot of the back room operations at investment bankers and advisors everywhere, "S[tuff] happens!"

Three years ago, not even the gloomiest Cassandra is recorded as predicting the depth or extent of the current economic downturn. So, even the big and small bears on Wall Street got caught. It is important to remember the stock market is NOT a zero sum transaction. Anyone who didn't get caught has only luck to blame! Real wealth is created and destroyed, not simply transferred from one pocket to another. Only those who manage to cash out when their investment is at a price higher than what they paid actually have a real profit. Until that sale, any "paper profits" are merely "foo foo dust" [a variation on the term "fairy dust" used by many folks in the investment business] and can disappear in an instant. This is what happened to folks like Jan with his investments. You don't have to make bad choices - you just have to blink and forces outside your control move before you do.

Marc, IMHO your idea to get into gold right now is a good one. Even better (again IMHO) would be collectible gold coins (old ones). Pieces of 8 would be nice right now. The gambling part that I see, which I have read has been happening to some extent, is that margin calls have forced some investors to sell their "fall back" gold to make their payments, increasing the supply side of the equation. This pressure should ease as the (if the) market claws back up.

As the advertisements say, gold's price has never been zero... GM used to be the "gold standard" of stocks, and now that stock is worth the paper it is printed on.

Read his post again. He has 40% left; he LOST 60%! Oops! Well, what's 20% between friends... :rolleyes:

Marc, IMHO your idea to get into gold right now is a good one. Even better (again IMHO) would be collectible gold coins (old ones). Definitely coins, but I buy the cheap ones like .9999 Maple Leafs that are close to spot price. The hit you take for collectibles can be pretty high.

Three years ago, not even the gloomiest Cassandra is recorded as predicting the depth or extent of the current economic downturn. So, even the big and small bears on Wall Street got caught. It is important to remember the stock market is NOT a zero sum transaction. Anyone who didn't get caught has only luck to blame! Not correct. See: Feds ignored clear meltdown warnings (http://elsmar.com/Forums/showpost.php?p=286553&postcount=6). It was rumbling in my head when Clinton signed that bill and when Bush was selected in 2000 that was the icing on the cake. Many people have predicted the 'failure', though admittedly most weren't expecting this deep a drop mainly because of the housing bubble aspect which was not very visible back before 2002 - 2003. None the less, many were predicting calamity. Personally I didn't think it would be this bad, but I knew it would be bad. People were falling into the trap of believing "Nothing will ever go down".

Yes - There were people prognosticating a very serious, very deep drop off when the bubble burst, and they weren't just lucky. They were looking at the numbers and the numbers said "this is not sustainable". Just as prior to the '29 crash, anyone who predicted a terrible crash was laughed at and forgotten. People may say they were 'lucky', but listen to them and they weren't lucky. They were people watching the numbers and able to cast emotion aside.

I was watching a Bill Moyers show within the last 6 months where he had a couple of people on (whose names I unfortunately forget) who predicted the crash in the 1990's. They saw the effects of deregulation and explained why the numbers were not making sense. This was pre-internet speculation bubble.

Actually, if you come right down to it the signs of the devastation potential of deregulation became apparent during the 1980's with the Savings and Loan crisis. There were people at that time predicting what has come to pass, including its severity. Where they were wrong was in exactly how many years the melt down would occur. Many figured it would be by 2000 to 2003.

Of course one thing that the early 'predictors' did miss was the housing bubble. As we know, that has greatly exaggerated the effects of the market crash.

But again, if you look back to the 1929 crash it was the same pattern. People had loaded themselves up with debt, much of it to buy stock with (or like Groucho Marx they bought on a 10:1 margin), but also for home appliances and all the related new fangled appliances that were coming on the market. From 1910 through 1929 credit became not only acceptable but 'the right thing to do'. Before 1900 it was pretty much a coin and barter world for 'everyman'.

Just some thoughts...

Definitely coins, but I buy the cheap ones like .9999 Maple Leafs that are close to spot price. The hit you take for collectibles can be pretty high.

I had started collecting Roman coins as a hobby several years ago, but there got to be so many fakes in the market I gave it up as too risky. So, you do have a point there. Still, it was interesting.

Not correct. See: Feds ignored clear meltdown warnings (http://elsmar.com/Forums/showpost.php?p=286553&postcount=6). It was rumbling in my head when Clinton signed that bill and when Bush was selected in 2000 that was the icing on the cake. Many people have predicted the 'failure', though admittedly most weren't expecting this deep a drop mainly because of the housing bubble aspect which was not very visible back before 2002 - 2003. None the less, many were predicting calamity. Personally I didn't think it would be this bad, but I knew it would be bad. People were falling into the trap of believing "Nothing will ever go down".Right! As I wrote not even the gloomiest Cassandra is recorded as predicting the depth or extent of the current economic downturn.The problem is there are always Cassandras and Chicken Littles predicting disaster, but NONE of them predicted the domino effect.
Consider:


Greenspan warned of "irrational exuberance"
Some others talked about credit being too loose
Still others talked about similarities to 1929 when the nonprofessionals started speculating (versus investing) in the stock market and were actively engaging in day trading without regard to how trading fees were continually eating up any profits
Some of the triggers certainly had to be some of the massive frauds in stocks and the relatively new investment "product" - derivatives.

None of these folks put it all together and said, "This will trigger a world-wide recession." Not just the greedy, but the innocents, too, were blindsided by the frauds. If it were only greedy foolish people such as those who got caught up in the Holland tulip bulb bubble or in Ponzi schemes, then the effect would not have been as deep or as widespread (there is a finite limit to foolishness.) Instead, even seasoned professionals were not aware the underwriting on the bond and mortgage derivatives was pure fabrication of value based on an unsubstantiated belief that inflation would continue on houses and stocks, providing future dollars for repayment. Essentially, whether they realized it or not, almost every investor was relying on the "greater fool" theory to provide liquidity and bail him out any time he wanted out. Sadly, one little chink in the protective fence around investments was enough to let a few rapacious foxes in to slaughter a lot of chickens. With those chickens slaughtered (losing money in Enron and the like), there were fewer and fewer "greater fools" with money to provide liquidity in the market. When liquidity falters, prices drop (cash is king!) and the drop in prices of investment products continues to snowball. Corporation mergers grind to a standstill because the stock of an acquiring company is no longer valued high enough to allow stock swaps for companies to be acquired. New IPOs grind to a halt and companies cannot get capital to enter or expand markets, increase production, pay for new research and development. Without the continual innovation engine driving new sales, gross income of organizations drops, but because expenses don't drop as quickly, the result is red ink, spurring more rapid decline of stock prices.

Bottom line:
Many folks predicted a downturn - not one (who got any publicity) predicted the depth or extent of the downturn across all sectors of the economy.

:topic:I was raised and educated in the Chicago school of economics (free markets, etc.), but the whole theory of the Chicago school is predicated on the market as a whole having perfect knowledge of the factors surrounding any given investment (no individual knows everything, but thousands of individuals collectively know everything, goes the theory.) Further, the theory postulates that increasing speed of communication makes it possible to discern trends in investing, even if the underlying true motives are not known, so other investors can "follow the herd" even if they don't, themselves, have have direct access to the knowledge driving other investor decisions.

The only problem is those herd leaders were working from false info (kind of like a Judas goat leading sheep following him into a slaughterhouse when the goat has no idea of what will happen to everyone else and is merely going for a personal treat for himself.:nope::nope:)

Hence, charity endowment funds put money with guys like Bernie Madoff because big hitters on the boards of those charities mistakenly thought they were doing a favor for the charity endowment funds because they "thought" they were making lots of money with Bernie.

Those who should have been protecting the sheep were like the citizens in the story of the Emperor's New Clothes - - nobody wanted to be first to point out the king was naked and risk being humiliated if he was deluded. That moment's hesitation, multiplied by several million, is what allowed the frauds and misquided investments to balloon to calamitous proportions.

I had started collecting Roman coins as a hobby several years ago, but there got to be so many fakes in the market I gave it up as too risky. So, you do have a point there. Still, it was interesting.
That's another reason to buy coins instead of bullion bars, and no one is going to ask for an assay on a Maple Leaf or an Eagle.

Krugs are popular, but they're not even to weight and they're less than .999 - There are a few others like the Panda, but I like to keep things simple.

Best buy if you're thinking metal is Maple Leafs and Eagles. They're true weight and .9999. The spot-sell price spread usually runs 20 to 50 bucks and they're easy to sell. AND buy online to avoid sales tax. APMEX has been pretty good for me.

:blowup:FYI There are people here in the Philippines who become rich fast because they made their own religion.

:blowup:FYI There are people here in the Philippines who become rich fast because they made their own religion.

thus it has been from time immemorial!

Every country in the world has lost and confused people with more dollars than sense who will give those dollars to someone who promises to remove their confusion and give them a "home" so they are no longer lost.

There are only a few complaints from the people paying the dollars because the whole scheme works like any other placebo [on the mind.]

:blowup:FYI There are people here in the Philippines who become rich fast because they made their own religion. Nothing new there...

Ex-pastor, sons face 10 felony counts in Sullivan (http://www.tribstar.com/news/local_story_181214709.html)

It's pretty much an every day thing everywhere.

Marjoe_Gortner

And it doesn't stop at money: Roman_Catholic_sex_abuse_cases

thus it has been from time immemorial!

Every country in the world has lost and confused people with more dollars than sense who will give those dollars to someone who promises to remove their confusion and give them a "home" so they are no longer lost.

There are only a few complaints from the people paying the dollars because the whole scheme works like any other placebo [on the mind.]

Being rich doesn't know mean you are more worthy as a person nor acts as if you have more rights and previleges than ordinary people.

However, i really don't understand why some people insist that they don't want to be rich. They probably don't understand what true wealth means. There's nothing bad or evil about being welathy. Finnacial stability will solve more problems than it creates, if any. It is alright to aspire and work hard to build wealth and achieve financial security so you can let your family enjoy the good, but not extravagant, life. It is not greed.

Being rich doesn't know mean you are more worthy as a person nor acts as if you have more rights and previleges than ordinary people.

However, i really don't understand why some people insist that they don't want to be rich. They probably don't understand what true wealth means. There's nothing bad or evil about being welathy. Finnacial stability will solve more problems than it creates, if any. It is alright to aspire and work hard to build wealth and achieve financial security so you can let your family enjoy the good, but not extravagant, life. It is not greed.

Well, how have you done thusfar? :D

Stijloor.

Well, how have you done thusfar? :D

Stijloor.

Struggling because I was not burn rich. I hope to become rich by accident and I will also share the blessings to others in many ways.

Some folks might call me wealthy (not Bill Gates or Warren Buffett, of course) and I had a lot of what many people might call "advantages" when growing up and entering into business.

However, many of my contemporaries with the same or better "advantages" did not fare nearly as well, while some folks with practically no starting advantage have far outstripped me in accumulated wealth.

The happiness factor is extremely tough to quantify. While I was scrambling to make a lot of money, my health and personal relationships suffered. I count a lot of wealthy folks among my acquaintances (far more acquaintances than "friends") and while we all live comfortably, we each have one or two nagging problems (health, relationships, stress from precarious business conditions, etc.) which prevent us from saying we are truly "happy."

Like many of my similarly situated acquaintances, I did not take investment capital from my friends or relatives to jump start my business. Those of us who have received inheritances got them AFTER we were already wealthy.

Most of us who are wealthy from earned wealth versus windfall wealth (with one or two rare exceptions), live relatively frugally. In fact, the book, The Millionaire Next Door, (http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206) is a fairly accurate description of our lifestyles.
(http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206)

Interesting.

This can be summarized as follows.

Two reasons why people are well off. Either you are..

Born into money
Damn lucky
And that's it.

I have experienced neither.

Stijloor.

Interesting.

This can be summarized as follows.

Two reasons why people are well off. Either you are..

Born into money
Damn lucky

And that's it.

I have experienced neither.

Stijloor. I beg to differ - except for lottery winners, most wealthy folk have worked and sacrificed to EARN their wealth. Once those folks have it, of course, it becomes easier to make more because one has more disposable income to invest over and above food, shelter, and clothing.

The primary advantage of being born into earned wealth families is the continual reminder that "nothing is free; it has to be earned."

My own anecdotal experience with folks born into wealth where that theme was not continual background music is the sad "riches to rags" tale where the untutored generation dissipates all the wealth and have nothing to pass on to the heirs.

I beg to differ - except for lottery winners, most wealthy folk have worked and sacrificed to EARN their wealth.

I am not so sure that is divergent form the concept of being lucky. I say that because there are people who have worked and sacrificed equally hard, but could not maintain their wealth due to their unique circumstances. Only on rare occasions does luck alone do the job, though - as in the lottery winners.

I am not so sure that is divergent form the concept of being lucky. I say that because there are people who have worked and sacrificed equally hard, but could not maintain their wealth due to their unique circumstances. Only on rare occasions does luck alone do the job, though - as in the lottery winners.Bad luck is definitely a wealth killer. Medical calamities, even for those folks who think they have adequate insurance, is one of the leading factors in personal bankruptcies. Liability lawsuits also tear big chunks of net worth away, even when one successfully defends against one, the legal costs and distraction from income earning have put a lot of folks in the poor house.

The key word, Bob, in your message is "maintain" because it posits the guy did get wealthy through hard work and only lost it because of bad luck, not bad management. Of course, lottery winners have been known to burn through the winnings faster than the dot com folks burned through all that equity capital folks put up hoping to become another Bill Gates.
That's bad management, not bad luck.

The happiness factor is extremely tough to quantify. While I was scrambling to make a lot of money, my health and personal relationships suffered. I count a lot of wealthy folks among my acquaintances (far more acquaintances than "friends") and while we all live comfortably, we each have one or two nagging problems (health, relationships, stress from precarious business conditions, etc.) which prevent us from saying we are truly "happy."
You have to take care of your health to enjoy your wealth.;)

Question:

What do you want, to live a ripe old age or spend your retirement years confined to a wheelchair or bedridden?

The key word, Bob, in your message is "maintain" because it posits the guy did get wealthy through hard work and only lost it because of bad luck, not bad management. Of course, lottery winners have been known to burn through the winnings faster than the dot com folks burned through all that equity capital folks put up hoping to become another Bill Gates.
That's bad management, not bad luck.
I know someone after working very hard to build his wealth dropped it all to a scam. Can you call it bad luck or bad management?

There has been plenty of analysis about investing for the long term that indicate you will do well. The trick is to:

1. Start early (best if by age 21).
2. Invest in the stock market whether it is going up or down (i.e. do not try to time the market)
3. Be diversified (i.e. do not buy single company stocks and it is best to buy into mutual funds.
4. Do not take out retirement money until you retire especially if it is in tax deferred 401K's

If you can save 10% of your income (which may include company matching funds in your 401K) it may take 35-40 years but you can retire with a million dollars. Being diversified is hardest for those starting out since it takes lots of money to really manage a diversified portfolio. The best option is to invest in
S&P mutual funds. As you get closer to retirement it will be necessary to reduce volatility risk by reducing the amount in stocks and investing in income producing investments.

I have been following this strategy since the mid-70's and it has worked out okay for me. By the way, I am only down 20% from late 2007 when the stock market started to go down because I was diversified. I will admit it is a boring way to invest for those who like to gamble.

Bill Pflanz

I know someone after working very hard to build his wealth dropped it all to a scam. Can you call it bad luck or bad management?Definitely bad management. One of the prime precepts of good fiscal management is to perform due diligence to assure the project is legitimate and that the investor knows enough about the project in which he invests to be more than throwing money down a black hole with only a hope and a prayer [and some con artist's promise] it will return original principal and profit when it comes time to divest.

There has been plenty of analysis about investing for the long term that indicate you will do well. The trick is to:

1. Start early (best if by age 21).
2. Invest in the stock market whether it is going up or down (i.e. do not try to time the market)
3. Be diversified (i.e. do not buy single company stocks and it is best to buy into mutual funds.
4. Do not take out retirement money until you retire especially if it is in tax deferred 401K's

If you can save 10% of your income (which may include company matching funds in your 401K) it may take 35-40 years but you can retire with a million dollars. Being diversified is hardest for those starting out since it takes lots of money to really manage a diversified portfolio. The best option is to invest in
S&P mutual funds. As you get closer to retirement it will be necessary to reduce volatility risk by reducing the amount in stocks and investing in income producing investments.

I have been following this strategy since the mid-70's and it has worked out okay for me. By the way, I am only down 20% from late 2007 when the stock market started to go down because I was diversified. I will admit it is a boring way to invest for those who like to gamble.

Bill PflanzRight! It takes a lot of personal discipline to continually set aside money for investment - it is never a "once and done" operation.

Fact: folks who borrow for day to day expenses (credit cards) without paying off early to avoid interest fees are crippling their chances at ever becoming wealthy. I read recently the AVERAGE outstanding credit card debt was $10,000! Millionaires who EARNED their money rarely see the need for borrowing money for instant gratification with the possible exception of buying a home, but, even then, they ensure the debt payments are manageable and do not prevent them from continuing to set aside money for investment.

I absolutely agree the entire process can be boring, but the payoff is the investor gets to live a comfortable life within his means.

Check out where Warren Buffett lives (http://www.google.com/#hl=en&q=warren+buffett%27s+house&aq=1&oq=%22warren+buffett&aqi=g10&fp=O_JfTbC4B24), not a multi-million dollar mansion, despite being one of the two wealthiest folks in the USA.

from late 2007 when the stock market started to go down because I was diversified.

Ah hah! The truth is revealed at last. So it was all your fault. :lol:

The best ways:


Make sure you're born into a rich family, or
Become an entertainer, or
Start your own business


Whichever:

Learn as much as you can about finances and investing and how it works; don't think 'I'll do that when I have more money to have to think about' - that's the wrong way around
Start as early as you can
Always spend less than you earn
Aim to become rich slowly through investing ('get rich quick' things almost invariably only transfer your money into someone else's pocket)

Ah hah! The truth is revealed at last. So it was all your fault. :lol:

I wish I was the Warren Buffett of the quality world and had such power.

Actually the Dow Jones Industrial Average was at an all time high in late 2007 due to unrealistic speculation similar to the housing industry. I don't think Buffett anticipated the speed of the decline when it happened and he also took a large hit. I remain optimistic about stocks longterm because their core values are an indication of future profitability not investor speculation.

Bill Pflanz

There has been plenty of analysis about investing for the long term that indicate you will do well. The trick is to:

1. Start early (best if by age 21).
I agree. Do not wait for the “right” time to invest. NOW is the right time.


2. Invest in the stock market whether it is going up or down (i.e. do not try to time the market)
Warning: your investment can rise or fall 10% in one day. Warren Buffet recommends investing your assets in companies you really like. Put your money in stocks of companies whose products and services you already patronized.
3. Be diversified (i.e. do not buy single company stocks and it is best to buy into mutual funds.
I agree. Diversify is the key. As I said in my earlier post, do not put all your money in one basket.
About mutual fund, warning: it’s not guaranteed that your money will grow through mutual funds and besides it can be reduced. However, the greatest advantage of mutual fund is that you let your professional fund manager do the thinking on how to grow your money without having to pay for expensive fees.

4. Do not take out retirement money until you retire especially if it is in tax deferred 401K's

If you can save 10% of your income (which may include company matching funds in your 401K) it may take 35-40 years but you can retire with a million dollars. Being diversified is hardest for those starting out since it takes lots of money to really manage a diversified portfolio. The best option is to invest in
S&P mutual funds. As you get closer to retirement it will be necessary to reduce volatility risk by reducing the amount in stocks and investing in income producing investments.


I have been following this strategy since the mid-70's and it has worked out okay for me. By the way, I am only down 20% from late 2007 when the stock market started to go down because I was diversified. I will admit it is a boring way to invest for those who like to gamble.

Bill Pflanz
When you calculated how much you need to set aside monthly to accumulate the funds required to retire comfortably, you assumed that your money will be growing constantly at a certain rate.


Bad luck is definitely a wealth killer. Medical calamities, even for those folks who think they have adequate insurance, is one of the leading factors in personal bankruptcies. Liability lawsuits also tear big chunks of net worth away, even when one successfully defends against one, the legal costs and distraction from income earning have put a lot of folks in the poor house.

The key word, Bob, in your message is "maintain" because it posits the guy did get wealthy through hard work and only lost it because of bad luck, not bad management. Of course, lottery winners have been known to burn through the winnings faster than the dot com folks burned through all that equity capital folks put up hoping to become another Bill Gates.
That's bad management, not bad luck.

Well, I can’t give my opinion on how to deal with bad luck. I think to increase the chance to succeed we have to choose wisely the business we want to start. We need to have the heart for the business. It should be something that we love doing. We will have a greater chance of succeeding in a business if that’s close to our heart. If possible make it part-time, doing it part-time will give us the chance to have a “feel” for the business. If it doesn’t work out we can stop doing the business just concentrate on our job. Also, start small and grow gradually.

“how to retire rich?”.


From early on I decided to follow Mark Twain's deep advice: "Put all your eggs in one basket, then watch that basket". The basket's s'posed to grow sometime. I'm watching it reel hard now.

From early on I decided to follow Mark Twain's deep advice: "Put all your eggs in one basket, then watch that basket". The basket's s'posed to grow sometime. I'm watching it reel hard now.
If it fails, you lose big time.

Fact: folks who borrow for day to day expenses (credit cards) without paying off early to avoid interest fees are crippling their chances at ever becoming wealthy. I read recently the AVERAGE outstanding credit card debt was $10,000! Millionaires who EARNED their money rarely see the need for borrowing money for instant gratification with the possible exception of buying a home, but, even then, they ensure the debt payments are manageable and do not prevent them from continuing to set aside money for investment.
"It's better late then never" is not applicable for credit cards. Always pay on time. Be a responsible credit card holder. If possible stop using your credit card and pay in cash.

When you read all of these posts the focus has mainly been on accumulating the wealth for retirement. The other part of the formula is how to continue to invest the wealth and use it after retirement. Here is what I think are the rules for retirement wealth.

1. Since retirement money is (hopefully) spent over a 20-30 year time, a portion of the money can continue to be invested at higher risk and possibly get better returns.

2. During your retirement planning you developed a plan that included a certain investment return usually 7-9%. Assuming you invested over a long period of time as I suggested in my earlier post then you probably did get this return. If that is true than you should assume your next 30 years will get a similar return. Most planning experts do recommend assuming a couple of points less in retirement of 5-7% as you move out of higer risk investments.

3. It is probably not wise to retire if you still have a mortgage or still are not past helping your children through college. Assuming you do not have any unusual circumstances, you can reasonably determine your base living expenses including inflation adjustments. If your investment plan after retirement does not cover these expenses then you know you cannot retire. If you do cover those basic expenses then the difference between your retirement returns and the expenses is your discretionary income that can be used to do the fun things in retirement. The goal is to run out of retirement money when you die which is an interesting financial plan.

4. Although the number is dwindling there are many people who have accumulated retirement money in company pensions. They can be a hidden source of money since they are not very visible because it's contributions are company and not individual contributions like your 401K. It is also easy to be negative about Social Security but you should assume it will exist even if at a lower level than in the past. Everyone receives annual statements from Social Security about their retirement benefits and their website even allows you to forecast out your future benefits at retirement. Even if you assume it will be 80% of that value it is still a significant source of retirement money.

5. There is some bad news - the government wants their money. Your 401K and pensions have grown tax free so the goverment will be taxing that money when you retire. Your retirement income will have to be adjusted for taxes. The frustrating part is that the more you planned for retirement the more you can take out for discretionary spending but it could be at a high tax rate depending on the amount taken each year.

Very seldom do you see financial advisors talking about this part of the retirement cycle. Planners make money on you investing and growing your wealth and then they have declining income as you use it in retirement. They have less incentive to work on this part of the plan. I guess at some point, you will have moved entirely away from stocks and will be just investing in certificate of deposits and other very safe investments. At that point you can easily manage your own investments.

Bill Pflanz

Bill,

Some of your advice I agree with as generally applicable, but other parts of it not, because they're completely specific to your country. For example, parts #4 and #5 just don't apply here (Australia) and I presume they also differ in other countries.

A 401K is a US thing only. Here, they tax superannuation (our compulsory savings for retirement) going in as well as on any gains made while in the super fund (with various complicated rules and varying rates), but after retirement, it's then tax free. That used not to be the case, but got changed around 5-6 years ago under our previous government.

At least that's the situation for now, probably only until the latest government gets to mucking around with the rules. Yet again.

Jane,

Thanks for providing the additional information about non-U.S. savings and tax plans. Our Social Security system is tax free in retirement. Your comment on governments mucking with the tax rules is a problem in any country and does increase uncertainty in planning.

I should have noted in both of my posts of the need for constant review and possible adjustments to the plans for both pre-retirement and post-retirement. Not only is there possible changes in taxation but you collect actual data in both plans as you move through the 30 year planning cycles. If you are half way to retirement and your plan is behind schedule you have some decisions to make on savings. As you use your retirement funds you will need to make adjustments in spending to make the money last during your lifetime. Retirement planning is real work that takes time and there are too many that put little if any effort into it but still expect it to happen.

Bill Pflanz

Interesting.

This can be summarized as follows.


Two reasons why people are well off. Either you are..
Born into money
Damn lucky
And that's it.

I have experienced neither.

Stijloor.

According to a friend, these two are not reasons but excuses for not trying harder. He mentioned few examples to prove one could make it really big even if you start with almost nothing. (I will not mention the names since most of the example personalities are Filipinos and you don’t know them).

He doesn’t attribute success to luck. It's about being ready when opportunities come knocking. Those who have the knowledge, skill, discipline, persistence & determination will encounter more luck/opportunities to succeed.

He told me to tell you not to wait to be lucky but to create your own luck by being prepared and trying harder.

According to a friend, these two are not reasons but excuses for not trying harder. He mentioned few examples to prove one could make it really big even if you start with almost nothing. (I will not mention the names since most of the example personalities are Filipinos and you don’t know them).

He doesn’t attribute success to luck. It's about being ready when opportunities come knocking. Those who have the knowledge, skill, discipline, persistence & determination will encounter more luck/opportunities to succeed.

He told me to tell you not to wait to be lucky but to create your own luck by being prepared and trying harder.

I you knew me, and you don't/can't, you wouldn't make a statement like this.
My career and reputation speaks for itself.

Have a good day.

Stijloor.