Excellent post, CharlesInCharge. These threads come up regularly at BITOG. They attract the "chest beaters" and often ignore real life and the curve balls that many encounter.
Thoughts on retirement savings in the US
- Thread starter ATex7239
- Start date
Thanks. Yeah, I look around at these wealthy folks who claim they "just invested smartly" so they can now live in $5,000,000 houses and drive a fleet of $100,000 cars. No, sorry. No "smart investments" bringing 5% returns on money THEY PERSONALLY EARNED delivering pizzas nets those types of returns.
They are the benefactor of one or more of generally various types of luck that cannot be repeated:
* Starting WAY ahead with wealth in life, college paid for, free cars, expenses paid for in life, etc.
* Starting WAY ahead with stable parents, excellent mentors, etc.
* Did not have any major setbacks (no bad career choices, terrible bosses, unexpected job losses, deaths that were major setbacks, companies going under, victim of crimes, victims of accidents, health issues, etc.)
* Made some really lucky bets on the markets (gambled and won on Bitcoin, Apple, IBM, etc. on the 5% of companies or investments that soared)
* Avoided really bad bets in the markets (gambled and lost on Level 3, MCI, or the 95% of companies that no longer exist)
Then folks claim, they're so hard working and smart... blah blah blah. Totally ignoring all the massive amounts of LUCK they had in getting their successes/
My parents didn't have a pot to piss in or a window (of their own) to throw it out of. My parents constantly fought about paying the bills and money. My father was a fall-down drunk work-o-holic who worked 70 hours per week making no real money right up until the day he died at 47 leaving my mother with nothing. I remember at 19 sitting at the funeral home with my mother and selecting the cheapest options possible and it was still $8K dollars and neither I nor my mother had it. I had to go speak to my uncle and grandfather who were great and took over from there.
I made up my mind that day I wasn't going to live that way. At the time I was in community college with a solid C average. Next semester I had a 4.0 and transferred to a 4-year state school where I maintained my 4.0 and graduate as a double major in biology and chemistry with honors. I went to dental school and completed two residencies and graduated with honors. I make a great living but it pales in comparison to others who taught me "the secret".
What was "the secret"? I met a girl who I married who grew up in a town with FU money. At some point I realized something after meeting and befriending many many people with tens of millions of dollars (some hundreds of millions) - assuming normal intelligence and a great work ethic, wealth is a choice. Now I don't make Wall Street money like those people but I make a hell of living and it is by design - a plan concocted when I was 19 and couldn't bury my father without asking for help. While the day-to-day has been challenging, the basic design is easy - do what other wealthy people do. It's really not all that much more complicated. If you can find something other wealthy people do that you also really enjoy - double bonus!
Have I had setbacks? You bet! My first practice was in Newtown CT and after 9 of my patients were murdered I couldn't stay and I left my partnership, liquidated all my equity, cashed out all my retirement savings with a huge penalty, and started all over. I basically started my professional life over starting at square one at 35.
What is the secret to my success? I'm a great imitator with the ability to look around, identify what works and doesn't work, and do what works. This extends well beyond my profession and income. There...I just shared "the secret".
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I was laid off 3 times. I had ****ty bosses. I came from a middle, to below middle income family. I saw young people go into other fields and earn more than I. But I hustled. Started two side businesses. Fack, I was tired. Darm tired.
Even tougher: My wife did NOT work while our kids were in grade school.
I thought my post at least was pretty clear: It's NOT EASY. No easy decisions. It was tough, and yes I made some stupid investment mistakes.
MOST importantly: We led a pretty simple life, still do. Not buying boats, RV's, etc.............our houses were adequate in safe hoods.
I'm not particularly smart- not that lucky. Just dedicated to do this thing.
Even tougher: My wife did NOT work while our kids were in grade school.
I thought my post at least was pretty clear: It's NOT EASY. No easy decisions. It was tough, and yes I made some stupid investment mistakes.
MOST importantly: We led a pretty simple life, still do. Not buying boats, RV's, etc.............our houses were adequate in safe hoods.
I'm not particularly smart- not that lucky. Just dedicated to do this thing.
This sentence provides about 10+ examples of luck. You cannot "work" your way to meeting a rich person you are compatible with to marry, nor "work" your way into the elite socialite group with endless money. It's not typically possible, and for every 1 person who can do it (actors, musicians, the ultra talented), there's 1 million who cannot. L.U.C.K. + no more work than the next person who worked just as hard but didn't get there.
So, your hard work landed you a healthy wife, and healthy kids? I doubt it. That's 99.9% luck. You had a team, and that makes a big difference. She may not have "worked" in the traditional sense but she likely made a home, did the housework, did the shopping, made the meals. When you're single, you do all that stuff ON TOP OF working, going to school, doing all the house work, etc.
Your businesses succeeded? That's 50/50 hard work and luck that you weren't crushed by competition, made obsolete by automation or technology, etc.
Other than the ability to make observations I have received nothing from my in-laws or from my friendships in that town - we never lived in that town, and we have always lived in a very squarely middle-class town. We will likely inherit a lot of money but I’m in mid-40’s and my wife is almost 50 - we made this life.
Bingo. A team.
You did not "work" your way to a teammate for life. Meeting your wife was probably entirely luck, and mostly luck to make it work.
Having a team mate is a huge deal, as the burdens are shared and division of labor is shared.
As much as people claim their own success, meeting the right people (friends, spouses) or the wrong people who screw you over, is almost entirely good or bad luck, respectively. Deny the reality if it makes you feel better to be "self made."
By contrast, a huge percentage of men have been economically RUINED by meeting and marrying having kids with the wrong woman. Again, this is largely luck.
Just one example of where you’re wrong. In my profession 98% of businesses succeed and I knew that going in. How? I opened a book and surfed the web. If given the choice between a profession where success is 50/50 or 98/2 what would you pick? Most people don’t look at their choice of profession that way but wealthy people do.
Sounds like sour grapes. I won't go into, but people will believe what they want to believe.
You're also misconstruing some of the hard working/smart bit of some of the advice given. Some of that comes from the bad luck of picking bad stocks/funds. But you don't get wiped out from it, you learn like I dumped all my bond funds after holding them years and then realizing they were really worthless as an investment vehicle. You don't have to work hard at all to pick good stocks/funds. Or you could work really hard and pick bad ones. The real trick is to balance risk/reward.
Who I married was also just a choice on my way to wealth.
Look I get it, lots of people don’t have the clarity to see the good choices, in schooling, mate selection, profession, but that still doesn’t mean success isn’t just a choice (well series of choices).
Weird. Something close to 100% of small businesses fail in 5 years.
Something like 50% of marriages fail. So, again, it's a LOT of luck.
Ignoring the luck involved in all your successes, pretending it's all YOUR choices, and YOUR hard work, etc. is just not grounded in reality. The hands of fate and fortune control probably most of what occurs in your (and my, and everyones') lives. Your wife could be diagnosed with terminal cancer tomorrow and send you into a 5 year emotionally crippling spiral and bankrupt you... or not. It's luck or bad luck.
How would you explain my real estate business? That's just buying rental property and managing them. Not all tenants have worked out, but I've managed the business enough that the value of the properties have really increased since I bought them. And I knew that would happen because when I bought them I knew other people who had bought real estate long before I did and their holdings increased.
I believe he's a dentist. Have you seen many dental businesses fail? I see bad landlords fail too, but mostly because they don't know what they're doing.
Literally not the benefactor of any of those!
Didn’t start ahead
My parents were a mess
Restarted my career
My “portfolio” is made of bread and butter mutual funds that anyone has access to right now
I invest in no load index funds - the market goes up my portfolio goes up the market goes down my portfolio goes down.
It really ain’t all that complicated.
I think you give luck too big a weighing on things. The universe is inherently random, but you can do research and various things to minimize bad luck. For instance, I chose to invest in property where the rents cover the expenses. Property appreciation is slower in those places. Or you can just go for the fancy places where the rent barely covers the expenses, but the values go up way faster. Success isn't always luck. Luck isn't 100% of the reason why people succeed or fail, but it's a part of it. Not as much as you think though, hence my sour grapes comment earlier.
Born in the right time, right location, with the credit and liquidity to get rental property, probably low interest, in the right areas, that appreciated. And the macro economics favored you.
I bought a gorgeous 3600s/f new high quality construction house in a beautiful neighborhood. Bad property management, bad tenants who cost me money, bad government policies for which I had no control, and macro-economic forces where builders over-built the area meant an 8 year investment led to a break even situation... Plus bad luck in business, cost me capital, which forced my hand on the house I had to sell or lose in foreclosure after 8 years of a stagnant market and long periods of vacancy because builders overbuilt the area.
Was that a bad investment, or bad luck?
You, apparently, had a lot of good luck and not the bad luck I experienced. L.U.C.K. has more to do with it than "hard work."
Oh I’ve had plenty of people die in my life too - my sister at 44, my best friend blew his brains out, 9 patients in Sandy Hook, my father - I live my life knowing it can go sideways at any point and I also know life goes on. Is there some “luck”? Perhaps, but my marriage was also the product of good CHOICE and hard work. It’s like you want to ding me for not intentionally marrying an incompatible person and then ding me again because it worked out and call it luck. Who you choose to marry shouldn’t be a gamble. I didn’t marry her until I was sure of who she was…this was again MY CHOICE.
Earlier I commented that time and discipline were needed to achieve success in investing. Here in this link I used $50 a month as a example. You can change the numbers around. See what $100 a month does. $200 a month.
You’ll see the point. Also, look closely at the graph. A lot of years go by before any big movement happens.
https://www.saving.org/regular-savings/50/month
You’ll see the point. Also, look closely at the graph. A lot of years go by before any big movement happens.
https://www.saving.org/regular-savings/50/month
So, you chose the era you were born in?
You chose the area you lived in to invest in, or did you move hundreds or thousands of miles to get there?
You chose to be born in a situation where as an adult you'd be in a position to not be over-leveraged and have good credit?
Major examples of luck.
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