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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5069  
Subject: Quarterly update Date: 4/14/2005 10:52 AM
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I thought I might as well do a quarterly update. As of yesterday my 'Freedom from work' portfolio was up 4.2%. However, my ROR was
(-0.3%), which puts me about 2% ahead of the S&P500. My increase is from my donations to the account.

I suppose I should be happy because I am making donations at at least a constant if expensive price, but it's always nice to see your amounts increasing month by month so that you feel you are making progress.

How are the rest of you doing?

Volucris
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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3211 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 11:00 AM
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Personally didn't come close to the 4.2 gain, but I probably am a little closer to my goal and my -.02% might have been a little more painful and a little closer to 1.0<ouch>

With a great deal in Mutual funds due to 401k holdings it is tough to do anything too different from tracking the market. I have been scared out of Europe and Asia at this point except for a touch for diversification so I am going to largely track the market.

A lot is in the Vanguard Windsor so I will have a value skew.

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Author: yttire Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3212 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 11:01 AM
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I thought I might as well do a quarterly update. As of yesterday my 'Freedom from work' portfolio was up 4.2%.

Is this from the start of the year or some other baseline?

I think I am up 4% as well, but would have to look at my records (it may have been 7%). Mostly from contributions as you have been.

How are you doing compared to your "goal growth" values?

I am beating my goals- sort of- my house appreciated way faster than I expected, and I am unsure how to factor this into my FIRE plan. That is, we could move into another neighborhood with less appreciation (I know the one) and free up this cash as either money that no longer needs to be saved or as actual cash back.. but if we are planning on staying in this house than that equity increase is meaningless.

So do I create two alternative plans?

What programs are you all using besides excel to do projections? Does anyone have a program they recommend?

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3213 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 11:27 AM
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-1.8% for Q1 (excluding new money added to 401K and Roths). REITs and small caps killed me, but I have enough in short-term bond funds (-0.4% in that class) and a little in cash and emerging markets that I was able to beat the S&P 500.

Looks like there's a change of leadership among asset classes. It may be time for the S&P 500 to start outperforming the "secondary market" after lagging it since 1999.

#29

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3214 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 12:54 PM
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Is this from the start of the year or some other baseline?

It's from the start of the year. I use Excel to chart my progress and plan for the future. As much as anyone can plan for the future with as little as I control in the world. Of mice and men . . .

I don't include my house in my retirement plans at all. It is a place to live and not an investment. True, it has grown quite a bit in value, but that could also go away. Right now it would be cheaper to rent, but that just isn't me. I like to own a house, or in my case, 1/3 of a house with the other 2/3 leveraged. I also have two kids and one wife, so owning a house is a better way to go for us. Or that's my opinion anyway.

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Author: yttire Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3215 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 4:19 PM
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I don't include my house in my retirement plans at all. It is a place to live and not an investment.

As long as you have outstanding debt, you must service that debt. This raises your requirements for FIRE hugely. lets say you have a 30 year mortgage at a 6.5% interest rate for $160,000 with 25 years left at retirement.

This is $1011 dollars a month.

Now if you need to come up with this money out of investments, you need 303,300 to draw off 4% and meet this payment on a regular basis.

But the house is only worth $160,000!


Now you consider paying down the house early. It is giving you a 6% yield- vs stocks giving you a variable -20 to 30% annual yield. What does this mean? Prepaying your house reduces your average investment yield but increases your expected yield of a minimum amount.

I fail to see how you can exclude it from your investments. It earns a yield like anything else, and further it demands cash payments as long as you hold a mortgage.

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Author: nmckay Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3216 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 4:21 PM
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You're getting 20 to 30% on your stocks each year? Will you manage my money?

nmckay

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Author: Walk3r One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3217 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 4:46 PM
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You're getting 20 to 30% on your stocks each year? Will you manage my money?

nmckay


I believe there was a " - " before the 20. That range covers most of us!

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3218 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 4:56 PM
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I fail to see how you can exclude it from your investments.

The how is easy. I just do.

The why is more difficult. I plan to retire in approximately 7 years. At that time I will have 10 year old and an 8 year old kid and 23 years left on the old mortgage (we just moved). Therefore, I have calculated into my needs the cost of that mortgage, plus taxes and insurance and maintenance for this house. That tells me how large the house bucket needs to be.

So, I have the house in there as a cost. But it does nothing to add to my retirment income, so in that regard I do not list it as a retirement asset.

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3219 of 5069
Subject: Re: Quarterly update Date: 4/14/2005 6:24 PM
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>> -1.8% for Q1 (excluding new money added to 401K and Roths). REITs and small caps killed me, but I have enough in short-term bond funds (-0.4% in that class) and a little in cash and emerging markets that I was able to beat the S&P 500. <<

Actually, looking at the records at home now, I was down 0.6% overall for Q1 (ending 3/31), not -1.8%. I was down 1.8% as of a couple days ago, and down 3.2% after today. It's been a pretty ugly year except for a few weeks in February.

#29


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Author: LuckyDog2002 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3220 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 7:30 AM
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Just checked my records and from the 1st of the yr. to the end of March 05, my portfolio is down 2%. argh!

LuckyDog

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Author: LuckyDog2002 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3221 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 7:31 AM
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ooops, and I'm retired.

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Author: nmckay Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3222 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 8:46 AM
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I'll use a smiley face next time. Hope everyone caught the humor. Didn't mean to offend anyone.

I'm pretty much flat for the year(grrrrrrr). I weeded out some bad stocks (MHK, CMN, why have you forsaken me!) and added a few defensive positions ("he's BAC!") since I'm pretty flummoxed by the market at the moment.

I'm looking at COH which has amazing spring merchandise in the stores and dabbling in AIG since I think the whole thing is over blown. If I'm right on either, I should catch up this quarter or next. And of course I could be dead wrong.

nmckay

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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3223 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 12:02 PM
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How are the rest of you doing?

At April 11th, my portfolio was down 1.41% year-to-date--that doesn't include contributions. I'm currently trying to build the bond portion of my port, via Series I and Series EE bonds--they're not earning much, but at least their returns are positive.

The past few days have been terrible...so I'm sure I'm down even more at the present time. I'll be doing my mid-month numbers tomorrow--I'm not looking forward to it :-(

2old


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Author: jmcjls Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3224 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 2:22 PM
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I'm currently trying to build the bond portion of my port, via Series I and Series EE bonds--they're not earning much, but at least their returns are positive.

Have you heard the news RE: EE bonds? Beginning May 1st the interest rate at issue will remain the interest rate of the bond for the entire time the bond is held. No adjustments.

This from the bond board. Someone provided a link to the savingsbond.gov site -- press release available there.

jmc


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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3225 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 3:08 PM
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>> Have you heard the news RE: EE bonds? Beginning May 1st the interest rate at issue will remain the interest rate of the bond for the entire time the bond is held. No adjustments. <<

But only for bonds issued on or after that date. EE bonds already issued before then comtinue to earn interest according to the formula in place at the time of that bond's issue.

So now not only can the government cook the inflation numbers for I-bonds and COLAs by understating inflation...now they can try to lock in lower rates while they are rising for EE bonds, too. No doubt this will change again to some other formula if we get 1980ish interest rates again. No way will they allow THOSE rates to be locked in.

#29

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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3226 of 5069
Subject: Re: Quarterly update Date: 4/15/2005 11:47 PM
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Have you heard the news RE: EE bonds?

Yes, we discussed it on the bond board--it's too bad, I was hoping to buy more with my next chunk of cash.

2old


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Author: foolkath Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3229 of 5069
Subject: Re: Quarterly update Date: 5/24/2005 8:28 AM
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"it's too bad, I was hoping to buy more with my next chunk of cash."

2old

Buy I bonds instead. The interest rate has increased.


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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3236 of 5069
Subject: Re: Quarterly update Date: 5/24/2005 10:07 AM
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Buy I bonds instead. The interest rate has increased.

That's what I did--bought them yesterday. Thanks,

2old






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Author: foolkath Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3242 of 5069
Subject: Re: Quarterly update Date: 5/24/2005 11:58 AM
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"That's what I did--bought them yesterday. Thanks,"2old



I am able to withdraw from my 401k at 55 due to retirement. I may do this and slowly buy some I bonds. I don't want to take out too much each year. The amount I take out is added to my pension. So I have been thinking about approx. 6 percent a yr. I will use some of it for my car fund, and the rest I will re invest. So far, we have been able to live on our one pension. But we haven't needed a car or repairs on our house yet. And we have had no major medical bills since retirement.



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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3244 of 5069
Subject: Re: Quarterly update Date: 5/24/2005 12:21 PM
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Hi, I'm currently using the I Bonds as my e-fund. I had to buy them gradually over 12 months due to the 1 year holding period. When I do buy them I do so in various denominations--for example, if my living expenses are ~ $3500/mo, I buy 1 for $2000, 1 for $1000 and 1 for $500. That way, if I only need $500 or $1000 in any one month, I don't have to cash in a full $3500 bond.

I noticed that you also live in NY, since I'm in NYC, I love the fact that the interest isn't taxable at all on the local level.

I am able to withdraw from my 401k at 55 due to retirement. I may do this and slowly buy some I bonds. I don't want to take out too much each year. The amount I take out is added to my pension.

I guess you mean it's added to your pension for tax purposes, right?

So I have been thinking about approx. 6 percent a yr. I will use some of it for my car fund, and the rest I will re invest.

Why wouldn't you leave it in the 401K, or roll all/most of it into an IRA where you would most likely have more investment choices? Or are you thinking of the I-Bonds for your car and e-fund (i.e. medical expenses)?

Also keep in mind there is a maximum limit on the amount of I bonds you can purchase in any calendar year--I think it's $30,000.

2old


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Author: foolkath Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3249 of 5069
Subject: Re: Quarterly update Date: 5/24/2005 3:45 PM
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"Why wouldn't you leave it in the 401K, or roll all/most of it into an IRA where you would most likely have more investment choices? Or are you thinking of the I-Bonds for your car and e-fund (i.e. medical expenses)?"

The rules of our 401k is that you must annuitize it or roll ov er the whole thing. Then I wouldn't be able to use it until I was 59 and half.

There is a way around this for us. We worked at a different local(union) for a short time. We can roll over the larger annuity into that one. The rules on that one: You can take out a certain amount( regularly scheduled) each year. I didn't want to take out too much at one time. It would mean a larger tax amount would come out of the pension I don't mind paying the tax if I need the money.

This is why I thought I would take a certain percentage out each yr, whether I needed it or not. This way I would build up an after tax fund for a car and/or medical needs. After I reach 59 and half, I will roll over the balance into the IRA


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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3257 of 5069
Subject: Re: Quarterly update Date: 5/25/2005 4:20 AM
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The rules of our 401k is that you must annuitize it or roll ov er the whole thing. Then I wouldn't be able to use it until I was 59 and half.

Wrong.

If by "annuitize it" they mean buy an annuity from an insurance company, REALLY wrong for three reasons reasons - (1) never buy "investments" from an insurance company until after you buy insurance from the clerk at the grocery store and groceries at a new-car dealership; and (2) never buy a tax-sheltered investment (such as an annuity supposedly is) inside a tax-sheltered account (such as a 401K); and (3) you CAN withdraw from an IRA before age 59.5.

If those are your only options, roll the 401K over into a conventional IRA and read up on 72(t) "SEPP" withdrawals. Here's an overview of the latter: http://www.retireearlyhomepage.com/wdraw59.html

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Author: foolkath Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3258 of 5069
Subject: Re: Quarterly update Date: 5/26/2005 8:40 AM
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The rules of our 401k is that you must annuitize it or roll ov er the whole thing. Then I wouldn't be able to use it until I was 59 and half.


The key word there was our, warrl.

Actually it is something other then a 401k. I just used the term to simplify it. They have their own set of rules. It is through a union.


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Author: foolkath Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3259 of 5069
Subject: Re: Quarterly update Date: 5/26/2005 8:48 AM
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I have the option of rolling that tax sheltered investment into another union's 401k. Then I would be able to withdraw as needed.

But I am not using the money right now. My husband turns 59 and half in less then 4 yrs. I am not sure I want to bother with sepp.

But thanks for all the information. I am now considering moving it to the IRA just so I can manage it myself.


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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3260 of 5069
Subject: Re: Quarterly update Date: 5/26/2005 11:13 AM
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<i.The rules of our 401k is that you must annuitize it or roll ov er the whole thing. Then I wouldn't be able to use it until I was 59 and half.


The key word there was our, warrl.

No, the key word was "roll it over into an IRA".

The place where it is may have messed-up silly rules. Once it's in an IRA, you get more sensible ones.

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