Mapper's Account Talk

[Mapper]

I'm not sure TNA is going to make it back into the $60 range anytime soon. It might be better to cut our losses now?

Certainly contemplating that idea but I'm not convinced we wont make it back above $60. All it takes is one more day like today and I'm not ruling out another move to S&P 1400. I want to see what happens tomorrow.

I don't buy into 3x leveraged funds if I can't tolerate a little risk. Even if I sold today I'd be ahead for the year. It would have been smart to sell before the downturn but I missed that opportunity. A lot of people are expecting we continue down, that's all the hopium I need right now to see the potential for a continued move up. If I can get my current position in the green I'll likely start a laddered move to safety.

 

[Mapper]

Been meaning to post this article. I believe it's excellent for retirement planning and defining your financial targets. This is the single best article I have ever read addressing savings goals throughout one's career. Not necessarily easy reading but the tables are pretty straightforward. The authors use a robust statistical approach (monte carlo simulations) to define the range of likely market outcomes so you can see what your high-side and low-side savings should be to give a high probability of a comfortable income in retirement (based on your current income). As we all know the market is fickle, so I really appreciated the way these guys calculated probabilities of success.

http://corporate.morningstar.com/ib...s/ibbassociates/nationalsavingsguidelines.pdf

Happy to discuss if anyone wants.

 

[SteelSaving]

For individuals who are saving alot, this can be significant. Lower retirementexpenses means less needed capital.You could say the more one saves, the lessone needs to save. The mathematics for​

calculating this can be relatively complicated.

Actually, I don't think it's that complicated at all:

The Shockingly Simple Math Behind Early Retirement | Mr. Money Mustache

Though to be fair, the article you posted includes SS and other factors in with their calculations.

 

[Mapper]

Thanks Steel, I appreciate another take on the issue. Looks like the basic assumptions are pretty accurate but there just isn't enough information in there for me to really build a plan from. Namely, that article takes into account your # of years to retirement (good) but has no provision for the amount of money a person has already saved :blink:. A big factor for a lot of people. After all, I haven't been stashing money away for nothing! Rather it assumes a consistent savings rate throughout one's career. As a 34 yr old, I can tell you, consistent savings rate has been impossible thus far. Life happens!

Those of us trying to save as much as possible walk a tight line between meeting our goals and enjoying life in the present. I also like to see more details on how the equations are derived. Since I'm talking about my financial security and lifestyle. I don't really want an easy answer.

At any rate, I see they use the 4% withdrawal rate as a retirement income assumption. That is one rate I see consistently in almost every article I read.

 

[SteelSaving]

Obviously there is no one size fits all but that article provides a pretty good guide.
Honestly, all one needs to know on the road to retirement is their expenses. Once you know that, you can figure out how much to save so that when you start taking money out of your funds, you are making enough to not touch the principle (this is where you have to estimate that amount, usually 4%, but this can be anything, go to 2% or 3% to be safer).
The market isn't constant, you can't always expect 7% a year, so you can either build a bigger cushion, or learn to do with a little less in the down years.

The answers are really easier then you think. Nothing can be 100% and I don't want to waste time on equations that only get me from 75% to 78%.

 

[Mapper]

No, you can't guarantee anything but you can track your progress. If you are falling behind it's better to know sooner than later!

I plan to retire, or move into a position where wages are no concern, when I have enough money to do so. I guess because I want to do this before I get to the gov't determined "retirement age" the accumulated value of my account is a tremendously important component determining my income.

If I have a retirement goal, the % I need to save is directly influenced by the accumulated value of my current retirement account. The closer I get to retirement the more important the value of the account becomes. That's how I determine whether or not I can live comfortably on an annual 4% without exhausting my account before I die.

 

[Mapper]

Steel, I do really like that site though. Haven't looked through it much but I really appreciated this post.

The True Cost of Commuting | Mr. Money Mustache

Among other great ways of determining commuting costs this calculation really stood out. See the post for all the lead-ins:

"So each mile you live from work steals $795 per year from you in commuting costs.$795 per year will pay the interest on $15,900 of house borrowed at a 5% interest rate.
In other words, a logical person should be willing to pay about $15,900 more for a house that is one mile closer to work, and $477,000 more for a house that is 30 miles closer to work. For a double-commuting couple, these numbers are $31,800 and $954,000."

 

[konakathy]

Mahalo for sharing that site SS.

Some really cool, down to earth advice.

The chipmunks in my brain are starting to spin their wheels.

 

[SteelSaving]

No, you can't guarantee anything but you can track your progress. If you are falling behind it's better to know sooner than later!

Amen.

You both are welcome for the link. That site has been changing my views on life since September, lots of wheels spinning!
I've been keeping track of all my expenses. Once the value from month to month stops changing for the most part, I'll have a good estimate (to be honest, I'm including my rent payment, when I retire I plan to have no mortgage on the house I live in, so I am definitely overshooting my needs!) on how much I need to save. Obviously, I can't touch my retirement accounts until I reach certain ages (contributions in my roth IRA excluded), so I will need to have that savings/passive income in taxable accounts if I really want to be financially independent.

The more I read that site, the more I hate the automobile. Or at least, the amount I use mine.

 

[jpcavin]

SS

Thank you so much for the link. I am going to be glued to my computer more so than normal. Really got me thinking and determined to mkae some changes!

 

[Mapper]

Well, with 20"+ of fresh cold wasatch snow landing in the last 24 hours it's gonna be a ski day today. I'll be leaving my positions to chance.

 

[MrJohnRoss]

Good conversations and articles here. Thanks. One assumption being made that you may want to reconsider... only spending the earnings/interest on your retirement accounts and leaving the corpus intact.

Two trains of thought here. One, by only spending the earnings/interest (or a 4% withdrawal rate) you'll never have to worry about spending all your money and going broke when you're old and you're still alive. Understand. That certainly gives a person a level of comfort. However, once we kick the bucket, where will all that money go?

The other train of thought is to plan to spend all your resources and bounce the check to the undertaker on the way out. Not sure you can plan the exact day you will meet your maker, but I understand this train of thought as well. The thinking here is, I earned it, I saved it, I should spend it! And I don't want to leave anyone with millions of $$.

Neither one is "right" or "wrong", just wanted to throw that out there as another consideration and food for thought.

 

[SteelSaving]

Good conversations and articles here. Thanks. One assumption being made that you may want to reconsider... only spending the earnings/interest on your retirement accounts and leaving the corpus intact.

Two trains of thought here. One, by only spending the earnings/interest (or a 4% withdrawal rate) you'll never have to worry about spending all your money and going broke when you're old and you're still alive. Understand. That certainly gives a person a level of comfort. However, once we kick the bucket, where will all that money go?

The other train of thought is to plan to spend all your resources and bounce the check to the undertaker on the way out. Not sure you can plan the exact day you will meet your maker, but I understand this train of thought as well. The thinking here is, I earned it, I saved it, I should spend it! And I don't want to leave anyone with millions of $$.

Neither one is "right" or "wrong", just wanted to throw that out there as another consideration and food for thought.

Guessing the day I will die is not something I think I'd be good at. If I can ensure that money would last for 75 years (and thus, basically forever), I'd feel fine about finances for life and remove that stress from the back of my mind. I am not trying to live the life of a hermit with nothing, but I am understanding what's really important in life. Keeping up with the Jones's has really put a cramp on values in this country.
When I kick the bucket? Whatever's left can go to my grandkid's college fund. Or I can leave it with charities that I am partial to. Or I can just open a scholarship fund for kids who show financial savvy so they can hopefully spread the message to their kids or friends and maybe, just maybe, they will all end up in Congress one day to fix this country. This country has done and can do a lot of good in this world. There used to be a time when it was through leading by example, now it seems to be more about leading by force. I'd like to go back to the old way.
I will travel well, eat well, live well, and do things I love in retirement. Frugality won't stop from realizing that, trust me.

 

[MrJohnRoss]

Sounds like you have a good head on your shoulders, SS!

I plan to live well into my 90's, at least. I'm very healthy, and longevity and good health runs in the family. Will have to take into consideration the possible costs of LTC as a result.

Ugh, insurance. Boo.

 

[SteelSaving]

Yeah, that's the kicker, isn't it?

The best I can do is stay active and keep seeing the doctor regularly.

 

[Mapper]

Good conversations and articles here. Thanks. One assumption being made that you may want to reconsider... only spending the earnings/interest on your retirement accounts and leaving the corpus intact.

Two trains of thought here. One, by only spending the earnings/interest (or a 4% withdrawal rate) you'll never have to worry about spending all your money and going broke when you're old and you're still alive. Understand. That certainly gives a person a level of comfort. However, once we kick the bucket, where will all that money go?

The other train of thought is to plan to spend all your resources and bounce the check to the undertaker on the way out. Not sure you can plan the exact day you will meet your maker, but I understand this train of thought as well. The thinking here is, I earned it, I saved it, I should spend it! And I don't want to leave anyone with millions of $$.

Neither one is "right" or "wrong", just wanted to throw that out there as another consideration and food for thought.

I agree MJR, that's the part of my calculations that really needs some tweaking and optimizing. I also need to think about the fact that I'll probably always be doing something part time or find a way bring in a little dough through one of my many hobbies. For the time being I just want to get a good foundation built. I have a little catching up to do because I made a career change. And, to be honest, I expect I'll make another career change or take a nice mid-career sabbatical. It will be a nice way to reward myself for thinking ahead.

Even at 34, it's quite shocking to realize just how few people are really preparing their finances for retirement. It seems like doing anything at all is "good"...but I've never been one to strive for average.

 

[Mapper]

Well, with 20"+ of fresh cold wasatch snow landing in the last 24 hours it's gonna be a ski day today. I'll be leaving my positions to chance.

Well, again, I should have waited this one out in cash...dully noted. At least the skiing was good .

One great thing about the wasatch is great winter skiing in the mts through April then coming 20 mins down to the valley for a warm sunny spring afternoon and a little BBQ action.

 

[jkenjohnson]

I agree MJR, that's the part of my calculations that really needs some tweaking and optimizing. I also need to think about the fact that I'll probably always be doing something part time or find a way bring in a little dough through one of my many hobbies. For the time being I just want to get a good foundation built. I have a little catching up to do because I made a career change. And, to be honest, I expect I'll make another career change or take a nice mid-career sabbatical. It will be a nice way to reward myself for thinking ahead.

Even at 34, it's quite shocking to realize just how few people are really preparing their finances for retirement. It seems like doing anything at all is "good"...but I've never been one to strive for average.

Just curious, what kind of hobbies do you have that you can make money from? I'd like to have some kind of part-time business for now and when I retire (maybe).

 

[Mapper]

Jken, sorry for the delay, I've been a bit busy lately. Anyway briefly I do the following things that could turn into small money making enterprises if I shifted my focus and wasn't glued to the day job. Most of these things are hobbies now but I'm fairly knowledgeable in them. Add more years of knowledge and you are in a place where your knowledge/skills/experience can be valuable. None of these are going to make a person rich but certainly can add a little supplemental income to a well planned early retirement.

skiing and outdoors
-ski instruct/ski patrol
-ski mountaineering guide
-avalanche awareness/forecasting work, field observations for the forecast center
-general backcountry guide winter or summer
-want to get into hang gliding...that could lead to instruction options
-sports shop (bike/ski tech stuff) build bikes, recommend and fit bikes
-mt bike riding instruction (now that I think about it)
-fly fishing, not there yet but could be helping guide in 30+ years

mechanical related stuff (I like working on cars, bikes and generally use tools)
-classic car restorations
-buy & sell classic or modern cars
-general handyman work
-small home remodel projects
-landscape work (native plant project consults)
-fruit tree work, I'm a big fruit tree fan
-I have a decently green thumb

Animals
-beekeeping (not there yet, but on the list)
-dog training, specifically behavioral problem dogs. I enjoy the challenge and already work with huskies & malamutes
-animal welfare societies, I already work with dog fosters and adoptions & have a good network for that
-there are always vet clinics that need responsible help, training required but that's not a barrier

You get the idea. just think about what you like to do and immerse yourself in. If you're good at it you can make it into a part-time job and eventually a business (if you like)

 

[Mapper]

I'm holding some at $60.85.

We might have missed a good play along the way, but don't look now...the ticker is creeping closer.

3x funds are easy come, easy go. I'd like to get this one in the black before jumping ship.