• Breaking News

    Friday, September 4, 2020

    Home Unlabelled Financial Independence Daily FI discussion thread - September 04, 2020

    Financial Independence Daily FI discussion thread - September 04, 2020

    September 04, 2020

    Financial Independence Daily FI discussion thread - September 04, 2020

    Daily FI discussion thread - September 04, 2020

    Posted: 04 Sep 2020 01:08 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
    [link] [comments]

    Confession: I panicked, it cost me a lot. Don't let it happen to you, even if you have to pay for it.

    Posted: 04 Sep 2020 02:04 PM PDT

    TL;DR I panicked, sold it all, went to US Treasuries, lost about $300k (compared to doing nothing). I'm still not fully back in the market. Don't be like me.

    We all know how it should work. Pick your asset allocation. Squirrel away. Rebalance. Do some roth conversions. Keep living costs low. Build a tent to mitigate sequence of returns risk. Sail off into the sunset.

    I could go into why I decided to sell everything and buy US Treasuries, but by this time in my journey, I should have known better. But I did on April 1, 2020.

    Fortunately I had a plan to get back in, but that plan did not indicate re-entry until August 1, 2020. But by then psychology was already working against my best interests, "I can't get back in now! Near the highs?"

    So I determined to reinvest in 5 chunks. I would set limit orders 2-4% off recent highs and if those didn't trigger by month end I would change them to market orders to ensure entry. Well August saw no such pullback. 7% higher.

    $#@! I put in August's 1/5 chunk and set orders for Sep, which all got filled yesterday in the sell off. So I am 40% back into my standard 80/20 portfolio.

    I made a spreadsheet with my positions on March 31, 2020. I compared that to the same portfolio on August 31, 2020. The portfolio I liquidated was worth $1.4M. That same portfolio would be worth$1.7M untouched on August 31.

    I missed out on $302,659.98 of capital gains. To say nothing of the dividends I missed out on nor the tax implications of what I did in March.

    Some perspective:

    • That money invested would pay for college tuition for my 2 children just about anywhere for 4 years when they turn 18.
    • That loss will likely push off my retirement by 3-5 years
    • Or if I keep the same target date, I will have to spend about $25k/year less in retirement.
    • Or I could have just quit my job, bought a yacht, and sailed the world for the last 5 months and have been better off.

    I know we like to say that financial advisors are too expensive, not worth it, etc, but someone who had simply said "Don't be a muppet and stay the course" would have earned 19 years' worth of fees.

    This is the behavior gap: the difference between what an asset class earns and what an irrational/fearful investor earns investing in the same asset class. It is real. It is expensive. Good luck closing it.

    Stay safe out there. Learn from my stupidity; I hope I have.

    submitted by /u/TA201903200630
    [link] [comments]

    Weekly FI Frugal Friday thread - September 04, 2020

    Posted: 04 Sep 2020 01:08 AM PDT

    Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

    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
    [link] [comments]

    TIL you can't qualify for first-time mortgages unless you've been employed for 30 days, even if your net worth is 10x the size of the loan.

    Posted: 04 Sep 2020 02:51 PM PDT

    For some reason, I assumed mortgage lenders just wanted reasonable evidence you could pay off the loan. Never realized I can't pre-qualify without 30 days working for a company or two years being self-employed. Guess I will continue paying rent unless I get a job.

    submitted by /u/BengaliBoy
    [link] [comments]
    Read more
    at

    No comments:

    Post a Comment