EARLY RETIREMENT

[Owen` 2]

I also think that assuming 10% guaranteed return on your retirement portfolio is insane.

 

 

You know, I don't blame the guy at all for quoting this in his real estate advocacy. Guys in real estate are in sales and sales guys who spend 20 years being enthusiastic and brimming with sunny optimism simply cannot turn it off. Their livelihood depended on them projecting confidence and that's a habit that will be with them their whole lives. It's not dishonest or insanity. It's just . . . mindset.

 

Not that I at all dispute "insane". Just in a moderated way.

 

And let's remember that . . . I think when Paul Volker was taking a sledgehammer and killing inflation a few decades ago, there was a brief few months 30 Yr Treasury bonds yielded 15%. Yeah. It's true. You could have bought 30 yr T-Bonds and locked in a US government guaranteed 15%/yr for 30 yrs. The government will pay on those for another few years because I think it was in the 1980's that the period took place.

 

So not only 10% is possible. There is actually a time on record that 15% was guaranteed.

 

But no way in hell I would bet even a single dollar that I can get 10%+/yr every single year for the next 30-40 yrs. I expect to lose money some retirement years, even beyond my living expenses. I'm confident that I am just not smart enough to make money on investments every single year for 30-40 years.

[Bazle 1,485]

Here is the easy way to calculate the effect of future inflation if you didn't know. If your expected future asset return is 5% and your expected inflation is 3% then, your actual return is 1.05/1.03 = 1.0194 (1.94% actual return). IRS is looking at 2% or less for the future 10 year outlook on the US inflation. Personally I am not worrying about inflation except medical inflation which have been double degit for a few years.

5% return may be realistic but it is the gross (before tax) return. Deduct, say, 25% tax and the real return is then 3.75% - not much different from inflation.

 

The other problem is that the world gets richer, and poverty (and wealth) is a relative concept. The people around you in work will be earning more in real terms year by year, so ideally the retiree's earnings should go up year by year in at a rate in excess of inflation.

[Owen` 2]

The other problem is that the world gets richer, and poverty (and wealth) is a relative concept. The people around you in work will be earning more in real terms year by year, so ideally the retiree's earnings should go up year by year in at a rate in excess of inflation.

 

This is a good point. A lot of discussion and analysis goes into this by mutual fund companies chasing retiree bux. You can fall behind the "normal lifestyle" of the future.

 

The conclusion seems to be that perceived poverty is best avoided by creating your own inflation rate -- which is lower than the published one. Medical care is the biggy, so quit smoking if you smoke, drink in moderation, exercise, lose weight . . . all the usual health stuff. The incentive becomes not just health, but money.

 

I saw one analysis that said a 50 yr old who quits smoking can add a travel vacation per year to his annual activity schedule starting at age 60. The end of cigs and dodging some relentlessly inflating health care costs funds it.

[Tengotodo 52]

Medical care , drink in moderation,

You had me at hello! Drink in moderation? Might as well kill myself now and save the estate...

[nidnoyham 30]

Money isn't the only consideration.

 

How many multi millionaires like Frank Sinatra and now Barbera Striesand, have made come backs after retirement ? I think it's her 5th. Some people can't handle the life change.

 

I was watching a Fools and Horses episode where they had become millionaires.

Del was fed up with walking around his big house playing snooker alone. He went back to their old flat, to have a last look at the place. His brother asked him why he was so down and unhappy. He relpied, that he missed the exitement of trading, living on a knife edge, ducking and diving, whealing and dealing, it was exiting, it made him feel -alive. He always wanted to be a millionaire, big house, holidays in Barbados, now he had it, it wasn't how he thought it would be. He was bored.

 

I like that scene, well written and probablly portays most working peoples circumstance. 35- 40 years will take some filling, as well as financing.

 

My son is considering a 25 year motgage, he worked out that he will be 46 when it's finnished. I cheered him up, by telling him that in 25 years, I'll probably be dead. Didn't cheer me up much, but did make me take stock of my life ( again).

[wacmedia 277]

And let's remember that . . . I think when Paul Volker was taking a sledgehammer and killing inflation a few decades ago, there was a brief few months 30 Yr Treasury bonds yielded 15%

 

Hi,

 

We seem to be living in a low inflation era which is why there is such a problem with pensions. One big plus is try live a healthy lifestyle as healthcare inflation seems out of kilter with inflation in general. I think eating Thai food and ladies can only be good for your general health and longevity.

[whitespider 1]

You cannot live on 4150.00 a month us dollars in Thailand ARE YOU Fucking kidding me.

 

Mrstein

Mrstein

 

I certainly cannot live here on $4,150 a month. We are not all single - thats why.

 

I have to pay $400+ per month for family med-insurance and $600 per month for 3 lots of school fees.

 

Accepted I CHOOSE to pay for those but to me they were an essential consideration when deciding to move.

 

That leaves $3,150. Now I have to think in £GB and thats £1,800 a month. yes I could quite easily "survive" on that but my lifestyle would not be great after feeding and clothing a family of 5. I certainylk didn't move here to live on "survival" rates. After all £1,800 is only £60 a day and it wouldnt be much fun for a single person on that sum let alone a family.

 

Before I made the move I made sure we had $4,000 AFTER housing costs, insurance and school fees.

 

Whatever the figure you feel you need personally its VITAL to plan it properly - too many people picth up here on a whim and a prayer and suffer badly after a while with lack of or very low funds.

[BigDUSA 71]

I agree with whitespider, we all have our own comfort level as far as living expenses go. I spent one month in Pattaya living on 1000 baht per day including hotel. It was certainly doable, I had a good time but I wouldn't want to live that tight month in month out.

[Owen` 2]

Lots and Lots and Lots of websites devoted to retirement. Much has been said in threads like this but there are newbies encountering the threads all the time so some mention of new things in threads that will be searched for is probably a good thing.

 

1) The whole world of retirement is one where those Lots and Lots and Lots of websites are both valuable and way too easily ignored. The reason they will be ignored is parents. An ageing single guy looks at how his parents are getting by or got by in retirement and says to himself . . . I make more money than they ever did and they aren't doing too bad. Retirement is going to be sweet!!! And so they ignore websites that advise a lot of caution.

 

2) The world ageing single guys face for retirement is NOTHING like what your parents lived in. Planning retirement by or finding reassurance in how your parents are living or lived before they passed on is a completely incorrect perspective. You Have No Database Of Observations About Retirement That Has Any Value. The world has changed.

 

3) Your parents probably had a safe inflation-indexed pension. Few single guys looking at retirement coming in the next 10 years will. Period. Full stop. They are going away. The government pensions will resist the erosion influences to their last breath, but eventually even government pensions will fade away. If you are close enough to retirement or on retirement RIGHT NOW, you are on the cusp of this development. Your pension may or may not out last you. If you are looking at retirement in 5-10 yrs, your pension will probably NOT outlast you.

 

4) The internet has changed the world. You have better information about this sort of thing than your parents ever did. You can find better deals. You can be aware of advantages that are temporary and require fast action. And you discovered guys are retiring in Pattaya. All hail the internet.

[twocatsmac 0]

I agree with whitespider, we all have our own comfort level as far as living expenses go. I spent one month in Pattaya living on 1000 baht per day including hotel. It was certainly doable, I had a good time but I wouldn't want to live that tight month in month out.

is that a misprint? 1000 baht a day. beer,pussy and food? how handsome are you?

[BigDUSA 71]

is that a misprint? 1000 baht a day. beer,pussy and food? how handsome are you?

You forgot hotel. In my own mind very hansom and incredibly sexy. FWIW, I go with older BG 30+ and I had a liv in that I paid 6k per month with no bar fine. BTW 6-10K per month is what the average expat pays his liv in. Some guys pay more others pay less. Living on 1K per day is doable but TIGHT.

[Gary 4,119]

How much per month has been beat to death many times. It's definitely different strokes for different folks. What it costs me per month wouldn't pay some guy's bar bills.

 

I live exactly how I want to live and I buy what I want to buy whether I need it or not. For living expense we pay no rent. My Jomtien condo is paid for as well as her house in Loei province. I give my lady 20,000 baht a month. She pays all the utilities and household bills including my UBC TV and my Ipstar Internet. She normally has about 5,000 baht left to put in her bank account. She doesn't pay for my several times a week visits to my favorite watering hole nor my infrequent trips to Bangkok and Jomtien to see my friends. I pay all the annual insurance premiums for two cars and my health insurance. Insurance is about 40,000 baht per year. I need two vehicles like I need another hole in my head but that's what I wanted. We also have a motorbike.

 

Don't say it can't be done because I do it and live quite well. We did talk about building a new house but she told me the new house would be bigger and it would just make her more work cleaning. Her house is a western style two bedroom on a slab. I use the second bedroom for my computer room and a spare bedroom for when guests come to visit. I'm quite content.

[JohnnyK 28]

Guys, this is touched on now and again on the board and I will hit it once more because it is so very important and only a couple of years of error would screw you for life.

 

A poster above suggested the guy with the 2 million could get 8% on his money. That Doesn't Matter. This is about two things. Crashes and Inflation.

 

The 4% number comes from a study of all 30 yr periods of time from 1890 onward. During those periods the stock markets declined in some years and rose in others. That guy with the 2 million, spending maybe 120K/yr (only 6%), is likely going to run out of money long before he dies. A sequence of 3 years like 2000-2002 would reduce him to 1.4 million (from the 30% decline) minus 120K (living expenses) X 3 (even with no inflationary bump the 2nd and 3rd years) or 1.4 million - .36 million = 1.04 million.

 

Think about what you'd be feeling in 2003 if you were him. You started at 2 million, intending to last 30 yrs with it. Just three years later you're almost cut in half. You think he's gonna take 120K out again in 2003?

 

Now I amplified things to make the point, but properly he would have only had 1/2 his money in stocks and the rest in bonds. But . . . there are periods of history a lot longer than 3 years when stocks did poorly.

 

The study is clear. If you pull more than 4-5% out in year one, your odds plummet of dying before your money does.

 

End of babble.

 

Soi7 and Alan are retired there. There is more to this than money. You have to fill your time. It's an interest and a concern.

 

Are you guys still feeling out the situation or are the hobbies (like lawn bowling) becoming serious.

What Owen says here about Crashes and Inflation is bang on.

In my own experience, In 1991 we sold everything, my wife closed her biz and we fucked off from Canada to a French village.

Money was stashed offshore in GB pounds.

 

We were getting 10.25% interest and 10.5 Francs/Pound. We owned our home and had about CDN$36K a year clear. Good wine and good food, happy as shit.

Life was good until Aug/Sept 1992.

 

One night, watching TV that little smarmy cunt John Major and his equally squalid dwarf of a finance minister came on to say they had devalued the pound by 20%.

Great news. We now had 80% of our stash.

Over the next 7-8 months they proceeded to chop away at interest rates, getting them down to about 5.5%.

Fabulous, we were now getting half the income on 80% of the stash.

Basic math= our income was 40% of what it had been just months before.

 

Well, you could live nicely on CDN$36K a year in rural France...we were fucking poor on 18K. Had to think twice about cafe sitting, that winter we discovered we could buy duck carcasses in the market that still had quite a bit of meat on them.

Carrots and onions are cheap. We ate a lot of duck soup the winter of 92/93.

So, beware you may not have as much money as you think.

I still really like duck soup, though.