Number of 0s in the account dont mean much anymore
Nobody will remember how much money you made.
Real estate is a hobby
Markets is where the real money is
I disagree. We’ve made way more selling houses. Renting was a pittance to offset college tuition in comparison— but hey you do you!
If it works or works.
You see this is just a nonsense statement unless you say where and what you are talking about …yields in Taiwan would be negative whereas in parts of Europe you could get 7 to 10% a year easily until recently anyway. But you may get dinged for tax if you live there.
One thing I do agree of course is having a property or two to diversify.
I find that property is a horse to be traded.
I’ve used James Shack’s cashflow planner (google sheet) to get a rough idea of where things stand.
https://james-shack.co.uk/cashflow-planner
I like dividends too, however I get dinged for 30% WHT on US shares. The healthy CGT allowance here seems to make growth stocks more appealing if you harvest annually.
I’m American.
We all have to take our individual situation into consideration.
I like the franking credits of Australian shares too (which you only benefit from if you are an Australian tax resident)
My estimation of retirement expenses was done 15-20 years ago. The wife linked all basic expenses to one bank account so she could see how much we spent during the year. After reviewing a five year trend we had a pretty good picture of what we were spending. We used her paycheck to live on while mine went to investments so just easier to see the expense trend. Like I said the only big variables are car, home and health. Health is always the uncontrollable and could be the deal breaker at any time. Our home is depreciating in value due to living in Hualien which is a bummer and has been the only major issue after 12 years of retirement. The long term effect of that depreciation is possibly real downsizing in future if most back to Taipei.
Inflation must always be considered as a big threat if planning long term. I think in terms of 3% per annum.
Key point is we have no kids so much less volatility in any planning.
We can see inflation will eventually cause our annual expenses to exceed our investment income. Even with me gone and only need income to cover one person’s expenses…will simply not be enough. For the last twenty years we have checked our investment income levels and expenses about twice per year. At this point we are just relying on the basic trends that we have been following to make a guess about when our investment income will not be sufficient to cover expenses.
At 3% annual return on investment we could survive but would hit the inflation bug earlier then we hope. At 6% we can invest a nice portion of our investment income as is more than our expenses. In general, we are usually around 5%.
Appreciate the feedback. My wife and I plan to be in a similar situation (no kids) as well. Ive been tracking all our expenses for a few years using an app, so I have a good idea where we spend our money as well. Yeah inflation should be in everyone’s mind when thinking about future goals. Health is extremely hard to predict, so we have additional insurance to cover what we can if something happens.
Do you spend about the same amount during retirement as you did prior to retirement?
What’s the reason you stayed so conservative? I’m not criticizing because everyone has different levels of comfort, but you did miss the biggest bull run in history even if you were 50/50 in stocks/bonds.
Well, I would say we are spending more (but not significantly more). But that is because we have been messing with a new house and trying to manage a plot of land. We had many small expenses which we did not have before. But we also have weeks where we do nothing but just mess with our land with not going out with friends. We are boring so not much lavish spending. We had two very long, expensive holidays overseas this year, but we plan ahead for those.
Has everything mostly gone according to your plan over the years?
Have you considered that maybe your investments or allocations are a bit too conservative?
Hindsight is always crystal clear.
Guy
Yeah but the “standard” allocation in retirement is generally 60/40 or 50/50. Just wondering what kept him away from stocks.
Plans have been pretty on track…luckily. However, I do think I was too conservative. I should have put a higher percentage of my funds in growth related funds in the U.S…and just rode up the momentum of the stock market. However, I am a worry wart and just put almost everything into dividend and interest earning investments. I would have more money on hand if I had not been so conservative 20 years ago. But now that I am older and closer to my final days I do not see much change going forward in my portfolio. My wife has some shares in Taiwan companies which have seen good growth which has helped some with keeping our entire asset amount growing even with my conservative holdings.
So this is a matter of faith in the future and how old you are. When young you can recover from some stretches of poor world and local economy…from a investment point of view.
I use a wealth management firm. I used to work there so my fees are a bit lower as a courtesy.
Could I do it myself? Yes.
But I don’t for 2 main reasons.
- I don’t want to spend time on it and watching the market. I’m busy running the business don’t want to spend the time on my portfolio.
- I have a slightly more complicated situation. I earn in euros and pounds. My main assets are my businesses in UK and 2 EU countries. I want to diversify and have more dollar assets. I also want to have different options on where I want to spend my time later in life so I have a good balance of different currency assets.
So it’s just more peace of mind to have someone on my side on these issues. And I’ve worked with these people before and I’m on a lower fee structure.
How much does your firm charge the average client? Is it a percentage of assets under management? Is there a minimum investment? What services do they provide for their fee?
I’ve always been curious as to how much value a wealth management firm provides vs a financial planner vs a DIY situation.
Here’s a start - a fundamental start.
The rich buy assets
The poor and middle class buy liabilities.
Higher education doesn’t mean rich
Life is teaching us…we just choose not to listen.