[RockCrusher]

Originally Posted by IndyRed128i

If saving more for retirement ment delaying your dream car by years, would that be worth the sacrifice to you?

No. I'm retired and I am glad I saved/invested for retirement. For years I max'd out my IRA/401(k) contributions and set aside cash for rainy days.

But I did manage a dream car or two along the way. Just that I had realistic dreams...

When I decided I wanted to experience a mid-engine car while of course there were Ferrari cars around I settled on a more affordable (and I believe more practical) mid-engine car a new (2002) Boxster. Not even the S but the base model. The Boxster proved to be a wonderful car that I owned for 16 years and drove for 317K miles.

When I decided I wanted to experience a 911 I found a nice 2003 996 Turbo. Used. Six years old but with less than 10K miles. And it came from the (Porsche) dealer with a 2 year/100K mile warranty. My dream car didn't cost me $119K (the sticker price of the 2003 Turbo when new) but $57.7K.

(One take away from my 996 Turbo purchase experience is I calculated the original owner paid $6/mile in depreciation for every one of those ~10K miles he drove the car. This is playing a role in my considering buying a (new) 2024 M8 Competition Coupe and that is the huge depreciation hit the car will almost certainly experience.)

My current I guess it could be called dream car is my 2023 M2.

Might add that while I managed to afford and buy my dream cars over the years -- but as I mentioned above realistic dream cars -- I was frugal in other areas of my life. I was perfectly willing to forgo other expensive life style choices in order to keep my savings/retirement savings contributions max'd out and yet drive my dream car. With I might add no car payments.

[tracknut]

I bought a new Ferrari 360 in 2001, and sold it in 2007 for the same amount I paid. It was the cheapest car I ever owned, aside from Ferrari holding my money for six years. I don't know if that's common among Ferraris, but I can't imagine a Ferrari not coming out cheaper than a M8 in the same situation.

[David70]

I sold my 2006 Z4M last week, bought it for $30,500 in 2012, 12 years later sold it for $35,900. Not one repair, roughly $500 a year for insurance. All sounds great until looking at this online site which shows what $30,500 invested in the S&P 500 in 2012 would be worth today -


https://ofdollarsanddata.com/sp500-calculator/

Nominal Price Return: 312.95%
Annualized: 12.36%
Investment Grew To: $125,949.25
Nominal Total Return (with dividends reinvested): 415.48%
Annualized: 14.43%
Investment Grew To: $157,221.81

Inflation Adjusted - Investment Grew To: $115,175.70

I'm glad I did it, at the time could easily afford it, purchased with cash, but shows you what time invested could have done with it. Z4M in 2012 or a used GT3 today?

[JMcLellan]

This thread prompted me to dig in to a couple accounts my wife and I have with a financial advisor that her parents have used for 15 + years. We decided to give him those accounts to manage (these were old ESOP and 401k's from previous jobs).

The online dashboard I can access goes back to September 2021 and our balance was $187K at that time. Today the balance is $201K. That is a crap return. I honestly have not been paying enough attention but basically we lost our ass in 2022 (balance got down to $140K) and since then it has recovered so our quarterly report-out meetings over the last 1.5 years have been very positive with tons of gains-- but, i didn't go back far enough to see how far it had gone down to get the whole story.

Anyone else get their butt kicked in any accounts during that time frame? I didn't want to share this amount of detail with complete strangers but seems like there are some good financial minds on here that can chime in. I'm ready to move my accounts somewhere else.

[UPSROD]

I retired at 53 with a 401K and a pension! Have never touched the 401K!

[tracknut]

Well you picked a pretty tough time slice to measure. Sep 2021 was the peak of a long gain, 1/23 was about the bottom of a pretty big drop, and we've been climbing nicely since. So I wouldn't panic too much from that view where you gained about 7.5%.

That said, my money is largely in S&P and NASDAQ index funds, for which I don't pay a financial manager to do anything, plus a chunk essentially in bonds and cash for short term spending. During that same period my gain was about 13.3%, and corresponds with my belief in index funds, not financial advisors.

[ezaircon4jc]

One usually doesn't care much about retirement until it's time to retire, forced or otherwise, and then it's too late.

[Esteban]

Originally Posted by ezaircon4jc

One usually doesn't care much about retirement until it's time to retire, forced or otherwise, and then it's too late.

Yeah, definitely. You gotta plan ahead. Thought about it from day 1.

[DrVenture]

Originally Posted by JMcLellan

This thread prompted me to dig in to a couple accounts my wife and I have with a financial advisor that her parents have used for 15 + years. We decided to give him those accounts to manage (these were old ESOP and 401k's from previous jobs).

The online dashboard I can access goes back to September 2021 and our balance was $187K at that time. Today the balance is $201K. That is a crap return. I honestly have not been paying enough attention but basically we lost our ass in 2022 (balance got down to $140K) and since then it has recovered so our quarterly report-out meetings over the last 1.5 years have been very positive with tons of gains-- but, i didn't go back far enough to see how far it had gone down to get the whole story.

Anyone else get their butt kicked in any accounts during that time frame? I didn't want to share this amount of detail with complete strangers but seems like there are some good financial minds on here that can chime in. I'm ready to move my accounts somewhere else.

From Sept 2021 to now the S&P has gained almost 25% (7.861 annualized). A 50/50 porfolio with the FI portion in MMF (not necessarily advisable, but safe @ 5% now), would have returned 6.5% a year. Or a total return of appx 19.5%. With dividends reinvested the S&P for that period returned about 30% (9.425% annualized). Your total return is 7.5% after almost three years. That is 2.5% annualized. Unless I misread something. Keep in mind, few are going to be 100% stocks.

You may have told him you were very risk averse and did not want to lose any money and he put it all in something like T-bills. But, it is not what I would call a great return. That is just a quick "back of envelope" calculation.

2022 was a bad year for both stocks and bonds. But, this is why I don't use a FA. They are better than nothing, but tend to use a "set and forget" process. And always get their fees. When I see a train coming, I get off the tracks. Several things were telegraphed very clearly. First was CoVid. Then inflation. And next, the clear knowledge that rates were going up. All three had logical responses, to those paying attention.

On edit: Right now a 4th event is being telegraphed: rate cuts. That is also useful information that could be acted upon.

[JMcLellan]

Originally Posted by tracknut

Well you picked a pretty tough time slice to measure. Sep 2021 was the peak of a long gain, 1/23 was about the bottom of a pretty big drop, and we've been climbing nicely since. So I wouldn't panic too much from that view where you gained about 7.5%.

That said, my money is largely in S&P and NASDAQ index funds, for which I don't pay a financial manager to do anything, plus a chunk essentially in bonds and cash for short term spending. During that same period my gain was about 13.3%, and corresponds with my belief in index funds, not financial advisors.

Thank you for the perspective. I know that things can't go up unless they also go down but really struggling with a 13k gain over nearly 3 years on a nearly 200k basis. My 401k account thru fidelity has produced at a higher level with the limited investing options they provide. My capital one savings account provides 4% (maybe even a little more) annual return. Makes me question why I'm paying my FA.

[JMcLellan]

Originally Posted by DrVenture

From Sept 2021 to now the S&P has gained almost 25% (7.861 annualized). A 50/50 porfolio with the FI portion in MMF (not necessarily advisable, but safe @ 5% now), would have returned 6.5% a year. Or a total return of appx 19.5%. With dividends reinvested a total return of about 30% (9.425% annualized). Your total return is 7.5% after almost three years. That is 2.5% annualized. Unless I misread something. Keep in mind, few are going to be 100% stocks.

You may have told him you were very risk averse and did not want to lose any money and he put it all in something like T-bills. But, it is not what I would call a great return. That is just a quick "back of envelope" calculation.

2022 was a bad year for both stocks and bonds. But, this is why I don't use a FA. They are better than nothing, but tend to use a "set and forget" process. And always get their fees. When I see a train coming, I get off the tracks. Several things were telegraphed very clearly. First was CoVid. Then inflation. And next, the clear knowledge that rates were going up. All three had logical responses, to those paying attention.

This outfit has our money spread across multiple funds/stocks and we have our profile set at medium risk. We have a quarterly review coming up and I'm going to press into them a bit. Luckily, the bulk of our retirement money is managed elsewhere and things are performing much better.

[DrVenture]

Originally Posted by JMcLellan

This outfit has our money spread across multiple funds/stocks and we have our profile set at medium risk. We have a quarterly review coming up and I'm going to press into them a bit. Luckily, the bulk of our retirement money is managed elsewhere and things are performing much better.

I guess then they have no excuse.

[David70]

Originally Posted by tracknut

Well you picked a pretty tough time slice to measure. Sep 2021 was the peak of a long gain, 1/23 was about the bottom of a pretty big drop, and we've been climbing nicely since. So I wouldn't panic too much from that view where you gained about 7.5%.

That said, my money is largely in S&P and NASDAQ index funds, for which I don't pay a financial manager to do anything, plus a chunk essentially in bonds and cash for short term spending. During that same period my gain was about 13.3%, and corresponds with my belief in index funds, not financial advisors.

We have about 1/2 our money with a financial advisor, did it for a lot of reasons, he's a good friend of mine (couples go on vacation together), gives good advice & technically somewhat managing all my money but fees are on half, we also have no kids, he's 15 years younger than me & there is the potential of needing more help with finances as I get really old (hopefully 25 years away?).

100% agree you don't need one & probably wouldn't have one if it wasn't for this odd situation. I will say it's like anything else that you debate between DIY/hiring a professional - taxes (i hire), plumbing (I sometimes DIY), to building a new deck (I DIY), always cheaper to DIY you just have to be educated on what you are doing & want to do it. Neither he or I believe in trying to time the market when it comes to drastic moves over short periods of time but for timing we have followed some general trends with balancing things out, small enough to not make a huge difference, large enough to pick up gains.

Potential trends like Growth stocks possibly slowing down, interest rates dropping - bond prices go up, Small Caps generally do better when interest rates are lower.

As to whether I have come out ahead with him, hard to say.

[W///]

Originally Posted by vreihen16

I am going to ditto the above, with a footnote that I'm living the nightmare right now.

I spent my younger days "investing" all of my money in rubber, trophy futures, and racing expenses. Got married around age 40, to a wife who is younger than me and also had not planned for retirement.

Long story short, my employer of almost 39 years made me an early retirement offer that I *shouldn't* refuse (as in take this deal or else layoff) in June.

My retirement account is severely under-funded for me, and will still need to support my younger wife after I'm gone. As you can see in my forum signature, I had to sell my BMW rather than pay insurance on it to sit in the driveway with nowhere to go. My dream car (purchased new when I was young/stupid) is sitting in my enclosed race car hauler, and will qualify for NY State historic license plates in January. It hasn't even been started since 2019, and will likely be the living room centerpiece if I can scrape up enough money to build our retirement Garage Mahal down south without incurring any more debt.

If that isn't enough motivation to start saving, let me tell you about a colleague that I used to work with. In the 1970's, he had a job in college that made him open a retirement account. He put $1,500 into that account, and totally forgot about it. When it came time for him to retire, he discovered the long-forgotten retirement account. How much do you think was in it? $87,000! Yes, enough cash to buy a pretty nice dream car if he wanted one. (His primary retirement account had over $2 million in it when he retired, and using the 4% rule he can pull out almost $7,000/month to live on without touching his balance.)

Back about 10 years ago, I went on a campaign to get all of my younger colleagues at work to sign up for the retirement plan and get the employer match. Don't make me have to come and hit you over the head!!!!!

Like most people here, I hope everything works out for you in the end. Thank you for sharing your story because real stories like these can really help people.

Your post personally made me revisit my finances and run the numbers last night just to make sure I'm on track.

[vreihen16]

The saddest thing is realizing that I stupidly passed on 20 years of *crazy* matches that my employer was offering, like I put in 5% and they matched with 9.5 - 12%!!!!!

[fakca38]

If delaying my dream car means I’m more secure in the future, I’d probably do it. But I’d also look for ways to save smartly so I don’t have to put off my dream for too long.

[DrVenture]

Originally Posted by vreihen16

The saddest thing is realizing that I stupidly passed on 20 years of *crazy* matches that my employer was offering, like I put in 5% and they matched with 9.5 - 12%!!!!!

A policy that some companies implemented in lieu of pension plans.

[DrVenture]

Originally Posted by vreihen16

...

If that isn't enough motivation to start saving, let me tell you about a colleague that I used to work with. In the 1970's, he had a job in college that made him open a retirement account. He put $1,500 into that account, and totally forgot about it. When it came time for him to retire, he discovered the long-forgotten retirement account. How much do you think was in it? $87,000! Yes, enough cash to buy a pretty nice dream car if he wanted one. (His primary retirement account had over $2 million in it when he retired, and using the 4% rule he can pull out almost $7,000/month to live on without touching his balance.)
...

Just for clarity: the 4% rule isn't necessarily about leaving the balance untouched. It is a safe withdrawal strategy that involves not running entirely out of funds down the road. I mention this because a person can have far less and still take $7k, for instance.

IRT your colleague example, My wife quit working when our son was born. She left a data entry job of 13 years. It was not a high paying job. She had a 401K that I invested her into (6% w/ 6% match) long before we even got married. And a small pension buyout. I was still in college at the time. She was scraping by, but did it anyhow for the match.

When she left the company, I did a proper rollover to avoid taxes. That $20K is now nearly half a million, 30 years later. She doesn't even know that she has it! lol This illustrates the power of time, company match and tax deferment in a real world scenario.

The funny thing about people who say they cannot save, is that if they made $20K more, they would say the same thing. And complain about taxes, while ignoring tax advantages available to them.

[XutvJet]

Originally Posted by tracknut

Well you picked a pretty tough time slice to measure. Sep 2021 was the peak of a long gain, 1/23 was about the bottom of a pretty big drop, and we've been climbing nicely since. So I wouldn't panic too much from that view where you gained about 7.5%.

That said, my money is largely in S&P and NASDAQ index funds, for which I don't pay a financial manager to do anything, plus a chunk essentially in bonds and cash for short term spending. During that same period my gain was about 13.3%, and corresponds with my belief in index funds, not financial advisors.

Right there with you. I fired my FA about 10 years ago after reading the short and overly redundant book called "The Little Book of Common Sense Investing" and realizing that my FA/Morgan Stanley was taking way more than 1% when I actually looked into all the various fees and crap I was paying them (more like nearly 2%/yr) plus I was mostly in actively managed accounts largely because I didn't know any better. My FA and Morgan Stanley amounted to tens of thousands of dollars a year in broker/management fees ON TOP of the actively managed fund fees. Worse yet, my portfolio wasn't anywhere close to tracking or exceeding the S&P and my FA always had BS excuses as to why. I also hated having to request him to do simple things to my account. I did a bunch of research and got up the guts to invest myself, then fired my FA, and went to Vanguard and invested mostly in S&P500 index funds and a bit of Berkshire Class B and never looked back.

My 79 y/o mother, who still has the same FA I fired, still thinks I'm crazy for moving my money and repeatedly says I don't know what I'm doing or why I would risk such a thing. I don't have the heart to tell her my portfolio went from being 30% less than hers to exceeded hers 4 years ago and is now worth double what hers is. She just assumes I'm losing money and will learn a hard lesson.

I can't stress enough that the easy path to being a successful investor with the goal of retiring with $1M-5M is as simple as investing 80-95% in S&P500 index funds and some bond funds and keeping it there long-term; the investment percentages varying with age and risk tolerance. Once you exceed $3M-ish, then it may be wise to look at other investment vehicles and also use the occasional help of fiduciary, a tax person, and attorney to sift through tax stuff, trusts, etc.

What I find a bit funny about my wife and I is that, while we've accumulated some pretty dang good wealth for our ages, we often evaluate even $100 purchases and ask ourselves "Do we really need/want this?" It seems to have gotten worse too the larger our portfolio has grown

[vreihen16]

Originally Posted by DrVenture

A policy that some companies implemented in lieu of pension plans.

It was purely a recruiting thing, since I worked in a non-profit that couldn't compete against the corporate world on salary.

Originally Posted by DrVenture

Just for clarity: the 4% rule isn't necessarily about leaving the balance untouched. It is a safe withdrawal strategy that involves not running entirely out of funds down the road. I mention this because a person can have far less and still take $7k, for instance.

I'm using it for planning purposes, since my account will also need to take care of a younger wife after I'm gone. My personal rate of return has never been below 7% per year.

My now-former employer has a third-party financial/retirement consulting company on retainer for free consultations, in addition to the retirement fund's agents. When I met with the consultant in June and asked what I should do differently, he advised me to leave everything as-is because my return is on par with their canned recommendations.....

[JMcLellan]

Originally Posted by XutvJet

R

My 79 y/o mother, who still has the same FA I fired, still thinks I'm crazy for moving my money and repeatedly says I don't know what I'm doing or why I would risk such a thing.

I'm sort of in a similar situation but with more personal ties to my FA. My inlaws have been using the same guy for 15 years who happens to be the best friend of their son. I know the guy too from high school and we've golfed together, been to family weddings, etc. My inlaws are insistent that he has done an excellent job with their money but I also believe that they don't have the financial literacy to know what good or bad would look like, and also allowing the personal connection to cloud their perception. I heard a long time ago it isn't a good idea to hire someone you know personally to manage your money but it happened anyways. Bad on me. We'll see what the next couple quarters bring before I look at other options.

I do like the idea of managing some of my retirement savings independently and will have a chance to do more of that once my wife and I have our vehicles paid off in about a year. Until then we are aggressively throwing dollars at our loans to avoid as much interest as possible while in parallel we have our employer 401K's maxed out. I hope to never have a car loan again after this but it's pretty nice having the vehicles we have.

[David70]

Originally Posted by JMcLellan

I'm sort of in a similar situation but with more personal ties to my FA. My inlaws have been using the same guy for 15 years who happens to be the best friend of their son. I know the guy too from high school and we've golfed together, been to family weddings, etc. My inlaws are insistent that he has done an excellent job with their money but I also believe that they don't have the financial literacy to know what good or bad would look like, and also allowing the personal connection to cloud their perception. I heard a long time ago it isn't a good idea to hire someone you know personally to manage your money but it happened anyways. Bad on me. We'll see what the next couple quarters bring before I look at other options.

I do like the idea of managing some of my retirement savings independently and will have a chance to do more of that once my wife and I have our vehicles paid off in about a year. Until then we are aggressively throwing dollars at our loans to avoid as much interest as possible while in parallel we have our employer 401K's maxed out. I hope to never have a car loan again after this but it's pretty nice having the vehicles we have.

Hard to tell if the FA was better for them or not. If they knew nothing about investing & had no interest in learning they might have made a good choice. Possible the person they are working with is charging a reasonable amount for the work he does.

In general I think it is a bad idea to mix any business with friends/family (new roof, taxes, bathroom remodel, whatever), decent chance you will end up with a problem, then if it's a random person you can just walk away, may not want to lose a friend this way. On the other hand, if it works out, maybe it is someone you can trust more than a random person. Just knowing them doesn't make them a problem. I agree it hard to judge what they do objectively.

If you have a 401k & you decide where the money goes you are already managing your money. Not completely independent but you make choices.