School me on investing...

Discussion in 'General' started by noles19, Nov 8, 2017.

  1. Mongo

    Mongo Administrator

    I live comfortably off of that now.
    rk97 likes this.
  2. Mongo

    Mongo Administrator

    Yep. The money guy that handles dads money says that all the time. I got a loan on the Multi for 1.9%, he's getting me 10 or so on the IRA, why the hell would I take money out to pay off the bike?
  3. Mongo

    Mongo Administrator

    You like Broome live in a different world than I do for sure :crackup:

    I live off of less take home than he listed and could go to half that if push come to shove - granted that doesn't include health insurance since I can't afford that either way any longer.
  4. I max out my company 401k because I get a 50% match, once that’s maxed I invest the rest on my own, also dump my options into a 401 or Roth depending on where I’m at for the year and what the stocks at. Blows my mind people don’t take advantage of that.
  5. Kris87

    Kris87 Friendly Smartass

    As low as inflation is right now, if you can live off $3000/mo now, you'd need $4500 only 20 years from now to have the same dollar effect. Most don't think about that either.
  6. dsapsis

    dsapsis El Jefe de los Monos

    Right there in the middle class. :D
  7. Mongo

    Mongo Administrator


    I'll have even more disposable income next year without health insurance too!
  8. rk97

    rk97 Well-Known Member

    one of my law school professors tried to tell me that America needs social security because, "I'm a smart guy, and I don't understand retirement investing."

    I interrupted him and asked him how difficult it is to grasp that he needs money to survive, and will stop making money when he stops working - thus he needs to save in order to both retire AND survive.

    People who save nothing are complete dolts. People who do not save as efficiently as they could are ignorant. I probably fall into the latter category, if I'm being honest with myself, but I throw 10% of every paycheck at my IRA, and I will have some income from a pension plan. I'm not banking on the latter being solvent.
  9. Well, I kinda figured it went without saying that I meant “today’s equivalent” of $3k-5k a month. I’m sure there will be inflation, taxes, etc. In other words, the same relative amount someone would have if they retired with $3k-5k right now.

    Using an average on today’s costs...

    Utilities - 300
    Cell phone - 200
    Groceries - 800-1000
    Gas - 200-300
    Random shit - 500-1000

    That’s $2000-$2500

    I figured high. Somebody doesn’t need a $200 cell phone bill, and with no daily job somebody shouldn’t need $300 in gas.

    So somebody should be able to “live” off $3k a month, and could have fun with $4-5k a month. There are people all over the nation on a fixed income that is much lower than that.

    I know it all depends on where you live, what you do, etc. But the point is that somebody shouldn’t need $10k a month to live after retirement. If business was handled properly, then somebody should retire with no monthly house/car/etc notes.
  10. Exactly.

    No way somebody should need a lot of money after retiring.
  11. beac83

    beac83 Done

    You can open an investment account that is independent of any retirement plan.

    You use your take home (after tax) funds to invest. You will pay tax on the interest and dividends annually, and on capital gains when you sell.

    There is no guarantee of the principal - this is not a bank. You can lose it all if you make choices that expose you to risk, or of the market tanks (like 1929).

    Mutual funds can be bought through a broker, such as Vanguard, Fidelity, TD Ameritrade, Putnam(Empower), LPL, Raymond James, or any others small or large, etc.

    There are stocks, bonds, government securities (Federal, State, Local and International), mutual funds, and ETF's.

    There are also US Treasury Bills, Notes, and Bonds, including Inflation Protected securities (TIPS). You can open a TreasuryDirect account at and buy them yourself.

    With some mutual funds, like the Vanguard mutual funds, and funds sold through investment arms of banks, you can open an account and buy funds directly from the creator of the fund.

    You can also invest in insurance products like life insurance, annuities, etc.

    There are a huge range of products out there to invest in. They vary greatly in risk/reward profile.

    I'd recommend starting simply. Open a account with Vanguard or some other Mutual Fund manager, and buy broad index funds. That will give you a foot into the stock market. I'd also open an account with TreasuryDirect, and buy notes and/or bills (1-10 year maturity), or even Savings Bonds. These do not earn that much, but are as low risk as is possible in the market.

    I'd allocate a fixed amount each month to invest, and make it a part of my budget.
    When younger, put a large percentage into stocks (up to 80%), and the remainder into bonds/securities.

    Re-balance the mix once a year, moving amounts between stock, bond, and Treasuries to keep within your target for mix and risk.

    As you get into your 50's, transition to more emphasis on securities and treasuries, as these are less volatile and much lower risk.
    Last edited: Nov 15, 2017
    rcarson15 likes this.
  12. beac83

    beac83 Done

    I think you are missing some costs there that need to be included in retirement budget planning:

    If you are 65+ and on Medicare:
    Medicare Part B (usually deducted from your Social Security payment before you get it)
    Medigap / Medicare Supplement premium - about 400/mo currently.
    Drug costs & Medicare Part D premium
    Health Care co-pays, dental care, vision care.

    or if you are not yet 65 and/or have alternative health care access
    Health Insurance and copays

    Property Taxes and Property Maintenance costs - or - Rent and Insurance on property and liability

    Transportation maintenance - Insurance, repairs, car payment, etc.

    These will easily total up to $1000-$3000+ /mo on top of the expenses you listed.

    If you need full time nursing care, that starts around $10K/mo and isn't covered by Medicare.
    TurboBlew likes this.
  13. It wasn’t meant to be an all-inclusive budget. I also didn’t list viagra and condoms. :)

    I was simply making a point that at retirement people shouldn’t have a car payment, house payment, loans, credit card debt, they should be able to live off less at 65 than they do at 35.
  14. GRH

    GRH Well-Known Member

    This is a big one and a quick way to bleed nest egg money
  15. Mongo

    Mongo Administrator

    You're paying way to much for your medicare supplement stuff. Evelynes current plans including a good drug one cost her nothing.
  16. Mongo

    Mongo Administrator

    And not exactly a normal retirement cost.
  17. beac83

    beac83 Done

    Unless you are lucky enough to die quickly or suddenly, it is an eventual retirement cost. The only question is how many months of nursing care you will need before you go.
  18. Mongo

    Mongo Administrator

    You mean like the vast majority of people? I've actually only had one person in my family need full time nursing care and that was grandma with Alzheimers, which their insurance and medicare did cover. There are plenty of places covered by medicare out there, they're just not real pretty and fancy. Welcome to the life of being poor :D
  19. beac83

    beac83 Done

    That sounds like a Medicare Advantage program, which does work for some but not all retirees. Each person's situation is different, and at this time, most people on Medicare have Part B coupled with a Supplemental/Medigap plan, rather than an Advantage plan.
  20. beac83

    beac83 Done

    Of 4 grandparents and two parents, 5 of 6 required nursing care in their last year of life. Only one died of a heart attack (back in 1963 - if he had lived a few more years, that would not have killed him).

    What you are describing is Medicaid, which is what takes over after all your money is spent.

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