Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Hi to all,

I have been a member of Motley Fool since Feb 1998. Currently a Stock Advisor subscriber. I have benefited greatly from the education and advice I have received thru the Motley Fool.

Some Observations - When I first started visiting the Motley Fool there were several principles being espoused.
1) Never own anything international. Only buy stocks listed on the Dow or NASDAQ.
2) Never hold more than 4 stocks. Use the Foolish Four.
3) Never pay for investment advice or brokerage management fees.
4) Never buy Mutual Funds.

There were good solid reasons for all of these. Now, it appears, the Motley Fool advocates diversifying with international stocks/funds. Hold at least 15 stocks. The Motley Fool sells and investment advice and Mutual funds. Understand, I'm still a paying member and to repeat, I have benefited greatly from the Motley Fool. It's just very interesting to reflect on how perspective and advice has evolved since 1998.

Some info about me. I just turned 59. I started with a modest amount of $ and split it between the Foolish Four stocks and followed that strategy for a bit. I got more into mechanical stock screening and bought a couple of books thru the fool. Including one by , I think, Robert Sheard. After some time that whole mech stick screening approach did not resonate with me. Too much trading and other factors. I transitioned into individual stocks. It's been a bit of a roller coaster but following core Foolish principles, buying and holding solid companies I have done surprisingly well.

All my stock holdings are in a Roth IRA with an online brokerage account. I converted my IRA to a Roth the first year Roth was available. At the time of converting, my IRA was worth $35K. Since then I have invested another $35K. That total $70K invested is now worth +/- $475K.

I have been selling off some stock in the last year or two and building some cash reserve. I'm holding roughly 25K each of BRKB, AMZN, NFLX, APPL, NVDA, DIS, FDX, NKE, UNH and an S&P 500 fund, for a total of 250K in stocks. I have roughly 225K in cash in the account.

Outside of the IRA I have another $55K in cash accounts. I have no debt other than I very small 40K mortgage balance at 4.25% interest. I've been self employed for @ 20 years. I have a specialized skill and work as a consultant to builders, developers, architects. My income is sporadic over the course of a year. I seem to make about 30K a year, pre tax, on average. I bet on an annual basis, I work about half time.

I'm single w/ long term GF. No kids, pets or houseplants. I own a 800 sq ft home in a very desirable winter/summer rocky mountain resort. Purchased in 1985 for $75K now worth $1 million +. I've been renovating out of pocket and have the entire house in pretty solid modernized condition. I have the skills and experience to do most of the work myself. Maybe another 10-15K to redo kitchen and update heating system. There is no other place I would rather live.

I live surprisingly well on this modest income. I eat good food, engage in constant high quality outdoor recreation and do not really want for much. If I made twice as much per year, I doubt my life style would substantially change. I've been able to live well and continue to update my home out of pocket. Health is excellent.

I have been keeping $35K in cash as an emergency fund bucket. Another $20K-$30K bucket of cash I consider my living, home improvement, annual operating reserve bucket. My IRA and home equity are detailed above. Now I'm approaching 59.5 and will be able to tap the IRA without tax consequence. I'm re-thinking how I have my assets arranged and planning for the future. I'm seeking advice, critique, suggestions, whatever on my thinking below.

I've considered consulting with a financial planner but I'm not convinced I need that or want to spend the $ on it.

I'm considering my IRA as now, upon turning 59.5, being able to include/constitute my emergency fund $'s.

I stopped contributing to the IRA in 2009. My income and home improvement expense did not leave enough for that. I'm thinking of starting to add yearly contributions to the IRA again. I love the tax free earnings aspect.

I'm thinking of keeping @ 250K in stocks transitioning to more in the S&P 500 fund and less in the individual stocks.

That leaves me with $225 cash in the IRA and $55K outside of the IRA. I'm thinking of paying off my $40K mortgage with the cash outside of the IRA. I probably need a new vehicle soon and I'm thinking $30K for that. That leaves $210K. I'm thinking to take $100 - $125K of that and build a 5 year CD ladder. The rest stays in the account as emergency money and annual living expenses cushion.

I've ran two simple scenarios thru the Fool Retirement Calculator:
http://www.calcxml.com/calculators/are-my-current-retirement...

Both scenarios use (I think) pretty conservative values: annual income 30K, current savings $450K, number of years retirement income 23, pre and post investment return 4%, Income replacement at retirement $120%, SS included with actual values.

In one scenario I retire at 62. 23 years later at 85 I still have $24K.

In the other scenario I retire at 67 (full SS retirement age). 23 years later at 90 I still have $398K. This is my preferred scenario. I like my work, love my lifestyle and if I can maintain my current modest income level the results from this calc are pretty astonishing to me.

Plus when I get into my later 80's I will probably have to sell my house and move. It's a high altitude and tough mountain conditions environment. Not many folks over 80 here. So there is another source of future money by finally tapping the significant home equity.

My proposed strategy calls for keeping $250K in stocks, $125K CD Ladder, $100K cash. Am I missing something here? Is it realistic that my intended/possible financial structure listed above would really return the 4% based on $450K?

Sorry for the length of this post. I've been considering all of this for some time. Just writing it all out here has been a very helpful exercise. Getting outside opinions would be great, I don't have anyone else I can effectively discuss this with. Any thoughts, critique, suggestions, input or feedback of any kind will be most welcome.

Thank you Fools!
Print the post Back To Top
No. of Recommendations: 0
Any thoughts, critique, suggestions, input or feedback of any kind will be most welcome.

Hey markf2. It looks like you have put a lot of thought and effort into your retirement planning and I applaud you. Here is a suggestion. If I were you I would copy and paste your entire message into a different board. Here is my suggestion:

Retirement-this board has a total of 302 messages. It's not very active.

Retire Early Campfire-this board has a total of 872,640 messages. It is a very active board with posts almost daily. If you are concerned or worried about your subject or the content I don't think you should worry.

Again just copy and paste your message to the "Retire Early Campfire" board and I bet you will receive a suggestion or two.

Regards,

ImAGolfer (retire '03)
Print the post Back To Top
No. of Recommendations: 0
Thank you so much! I was wondering about which board to post it to. I am copy/paste to Retire Early Campfire now.
Print the post Back To Top