Investing General Discussion

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Sanrith Descartes

Sanrith Descartes

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fris said:
Unless you're counting car and insurance, those early years were more expensive. For a few years, day care was more than my mortgage
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Oh you know I was paying car insurance for an under 18 driver. It was/is painful.
 
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Gravel

Gravel

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tugofpeace said:
Well think of it this way. Let's say for some reason the tech sector takes a bloodbath. Could be China takes control of Taiwan, or something of that nature. Or let's say AI reaches a saturation point, or EVs become undesirable due to production costs, etc etc.

What would SPY's valuation look like if the tech sector dropped 50%, considering SPY is heavily weighted towards 7-10 stocks?

I would imagine if we are gainfully employed, we would simply ignore it and keep DCAing into the fund.. but that's where my doubt is.
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So the beauty of something like the S&P 500 is that it's self cleansing. It's always going to be the top 500 market cap companies (more or less, won't go into the actual intricacies of being added to it). Which means as long as something is still making money, you make money.

Basically, betting against it is betting against the entire US economy. And if it comes tumbling down, well, there wasn't anything safe anyway. If all the companies in the S&P 500 go into the shitter, you think there's a safe haven...anywhere? It's certainly not international, we've seen that play out with the 2008 recession and covid where everyone got hit way harder. It's definitely not bonds, because if equities crash, everything else has gone to shit.

Essentially what I always say is, your contingency for the market collapsing is guns and ammo. That's it. If things get so bad your portfolio is worthless, we're in a real shit show and I hope you're a prepper.
 
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Gravel

Gravel

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Speaking of car insurance, my niece t-boned someone and wrecked her car. Borrowed her grandmothers car and flipped it.

Yeah, they're paying a fortune for car insurance.
 
Cad

Cad

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tugofpeace said:
On another note.. I diligently track my finances in excel. Having projections of my net worth is nothing new, but today I started wondering when I could retire at the soonest.. not that I want to.

What's really surprising to me is that the number is much lower than I thought. I could conceivably retire with $1.7M if I wanted which, if I stayed single, would take me until 45 (assuming 6% yearly return).. but that's crazy. I always thought it would be close to $3M+. What's really mind boggling is that with a 4% return on that $1.7M, which means I'd pretty much go into 100% bonds at that age, I'd be able to sustain myself with an $8k/month spend for 30-40 years.. wtf!

If I just continue until 55 I'd have between $4-5M assuming 6% yearly return. Makes me question why I've been pinching pennies so long. I need to start being less frugal.
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Your situation is actually the argument to stay in equities rather than go to bonds. Even if you got 4% in bonds and your safe withdrawal rate is 4%, that eliminates any increase in your budget for the rest of your life. If you stay in equities and still live off 4% but make 9-10% (on average, I know there will be down years) you will account for inflation and allow your budget to naturally increase as your principal increases as you age. The risk is that if you retire in June 1929 on this strategy, you could end up broke or living like a pauper before the market recovers. On the other hand we haven't had any 1929 events since 1929.

I also wouldn't try retiring below 50 with $1.7M, you're going to end up having to be too frugal for too long. You want to enjoy your retirement and be able to do things, not sit at home watching TV and eating ramen.
 
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