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Author: PosFCF Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46825  
Subject: Re: What to do AFTER the house? Date: 5/5/2005 10:56 PM
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PaulEngr

Congratulations on the problem you have! <GGGG> An odd thing to say, but you appear to have been prudently managing your personal cash flow to get you to this point.

I think your idea with home improvements is good placement for some of the excess, as long as you don't overbuild for the neighborhood.

I'm not sure that cutting back on the retirement plan funding when you have no better allocation for the money is prudent. At least with the plan you get a discount to your current tax liability.

I would give some thought to the notion of whether paying off the mortgage is the best use for your money. The reason is the 5% rate. If that is a fixed rate, that's cheaper than the cost of living increases. That means you will be paying this back with cheaper and cheaper dollars as time goes on. I think I would, rather, perhaps save that money in a separate account and build up the reserve to pay it off if you wanted to. A good investment advisor ought to be able to help you get better than that 5% as a return on your money.

We have also built up a non-cash savings/investment portfolio that exceeds the retirement plans assets. Our thinking is that in our retirement we may have to depend entirely on what we have put away.

Once those things are addressed, have you done a thorough review of your insurances? Long Term Care and also Disability insurance are often not given full attention until one can afford to do so.

Mrs Poz has convinced me that we need to take time off to "smell the roses" and her favorite manner of doing that is cruises to various parts of the world. To the savers, it may seem extravagant. However, if one were to do a thorough comparison that included travel costs, entertainment, meals at nice places, an exotic places visited, we have found that cruising offers a very nice value.

I used to scoff at the whole idea. I don't any longer because I have been to many countries, many ports, and seen and experienced so many different people and cultures that my life has been quite enriched in the process. There is also the benefit of "time off, well spent" that makes a whole lot of the tedium of daily grind just melt away.

There is nothing wrong with the accumulation of assets. You grandfather lived the life he wanted to. Whether or not it would be the life you would choose is secondary. If you, too, become a millionare and want to buy your nails new, then do it! But your heirs will not likely live their lives the way you did and that, too, is OK. One of the hardest things for me to realize has been that just because I wouldn't be happy living the way someone else is, it does not not automatically follow that they are unhappy.

Finally, just because the numbers seem large to you, it doesn't mean they are in the overall scheme of things. I was looking at house prices in San Diego when I was out there recently and got a dose of humility. It's all a question of perspective. Keep accumulating and taking care of insurance and the home and experiencing quality vacations until the need for a new investment direction makes itself known to you.

I agree about not getting the "toys" unless you really, really have the particluar lifestyle. It is better to rent them at first to see if the joy lasts before investing big bucks for something you end up keeping under a tarp.

Just was dropping by and looking in the window and saw this wonderful problem you have and figured I'd toss a few redneck cents at it.

PosFCF
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