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    Financial Independence Daily FI discussion thread - October 24, 2019

    October 24, 2019

    Financial Independence Daily FI discussion thread - October 24, 2019

    Daily FI discussion thread - October 24, 2019

    Posted: 24 Oct 2019 01:07 AM PDT

    Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

    Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked.

    Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts.

    submitted by /u/AutoModerator
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    Economists at investing giant Vanguard predict over the next 10 years annual U.S. stock market returns will likely average 3% to 5%

    Posted: 24 Oct 2019 03:11 PM PDT

    I generally disregard the very fluffy content published by CNBC Save and Invest but today's article pointed to great research to consider for investing. This research (linked in the article) from various renowned institutional and academic entities like MIT and Vanguard concluded US market returns will be 'far lower' than that of historical returns. They predict over the next decade US markets will average 3% to 5% returns vs the historical average of 10%. How has research like this impact your allocation? Is a standard response to underperformance expectations like this is to gain more international exposure? Or further diversification and where? Curious this subs thoughts on the matter

    I'm fully aware this research is entirely speculation and history is no indication of future performance, but I think this research definitely falls in line with 'reversion to the mean' Bogle philosophy on performance. US markets have had an outstanding run over the last 20 years.

    submitted by /u/Per_Aspera_Ad_Astra
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    Fearmongering article?

    Posted: 24 Oct 2019 12:47 PM PDT

    I ran across this article in another sub: To retire at 65, millennials will need to save nearly half of their paycheck

    If you want to live off even half of your final salary in retirement, you need to save 40% of your income over the next 30 years, she says.

    At a 40% SR, MMM's estimate is 22 years for FIRE. 30 years is certainly an increase that could represent lower return rates, but the article headline seems unnecessarily alarmist. Saving for 30 years to retire at 65 represents starting at age 35, which (and I think speak for more than just myself) should be considered a late start. Of course, their analysis also includes Social Security.

    "Most people are not told by financial advisors that their future returns will likely be much lower than in the past, and their future taxes will likely be much higher," Mitchell tells CNBC

    And what is the basis for this? I certainly do expect taxes to go up (we are at historical lows, if I'm not mistaken), but what is the basis for lower returns?

    The most important thing is to invest in your health

    I do agree with this, but my intent to stay healthy isn't so that I can work longer.

    Mitchell says she prefers deferred annuities because they are one of the few products available that take some of the uncertainty out of the equation and provide some protection to those who are living longer.

    Aren't deferred annuities one of the ones to avoid? I thought SPIA were the only ones worth a look.

    submitted by /u/StorkSlayer
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    Are you guys mainly pro Prenups?

    Posted: 24 Oct 2019 04:07 PM PDT

    I make a fairly decent salary while living in a relatively LCOL area in CA. I plan to save and invest a significant amount, retiring around 50-57 years old with around 3m networth roughly.

    My current girlfriend isn't too financially savvy, in a low income job (she's searching for a better one), spending most of her money on unnecessary stuff and helping out friends and family at her own expense because she can't help being nice/helpful. She insists on getting married one day and I'd rather not, but if I do it will be on the condition we have a prenup that states my savings, checking, pension, 457/other retirement accounts and inheritance won't be given to her in the event of a divorce. She'll only be entitled to half the net profit sale of my house and child support should we have a child.

    I want to keep our finances separate. I'll cover the mortgage, utilities, food, which should allow her to save money. If she decides to waste her money, that's on her.

    Divorce can fuck up peoples FIRE goals so hard, I was wondering if most of you feel like me and plan to neutralize that risk or not.

    submitted by /u/Throwawayacctobvi08
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