How Would YOU Retire In 10 Years Round Up
| February 5, 2011 | Posted by Roshawn Watson under Uncategorized |
By: Roshawn Watson
- Money Reasons wrote about getting money from your portfolio now in the form of dividends. Remember, dividend income is typically tax-advantaged income, even if it is not in the form of a 401K, 403b, Roth IRA, etc. Additionally, by receiving part of your total return in the form of a yield, you have hedged against the immediate risk of your paper assets decreasing in value. Alternatively, do you think it would be better if you invest in companies that do not pay a dividend but increase in value astronomically (i.e. Apple or growth funds)
- Krant Cents addressed taking on debt to increase a competitive advantage for a thriving business. When I hear or read about debt, I simultaneously think about risks! I think my risk tolerance has forever been warped in this capacity, which is not a bad thing, but it means approaching problems in a different manner. Thus, while I would love to grow a business as quickly as it make sense to grow, I would not want to assume risks that could threaten its viability should things go wrong. However, most millionaires are business owners, and the income earned via a business can be structured in a tax-advantaged manner. (article link below under personal finance)
- First Generation American discussed horrible experiences with being a landlord, yet subsequently mentions that she did get an extra $15,000 for the hassle that she wouldn’t ordinarily have had.The hassle factor of being a residential property landlord is clear and so are the rewards! Some try to bypass this completely by becoming a commercial landlord; however, the cost of entry and the amount of retained earnings (i.e. think emergency fund for when that expensive real estate sits empty) increases significantly in many cases. Additionally, many commercial landlords were hit pretty badly in the most recent economic downturn. A nice contract may not do much if the business tenant is going under. (article link below under personal finance)
Thought Question: How would your investment strategy change if your entire horizon for investing was 10 years? In addition to the aforementioned ideas: would you be pouring into small cap or emerging markets to get some tremendous growth? Would you become a minimalist?
Uncommon Money News and Round Up
In preparing to write my posts, I often come across noteworthy and sometimes bizarre financial and business news. Below are links to some of these sites. Enjoy!
To my readers: I am so honored by your support. Together, we are telling thousands of the importance of financial literacy. I absolutely could not do it without you: you are vital! Thank you sincerely.
Personal Finance (Yakezie and other PF bloggers)
Investment Fundamental at Retire By Forty – When Investing, Compounding interest is one of your biggest friends. Look at the numbers.
Financing My Dream at Krant Cents – Would you take out a loan to expand your business?
Blending Work And Pleasure at Money Reasons – All too often, we view our jobs merely as a source of provision. Is it reasonable that they can be so much more? I know I already linked to a different story earlier, but I couldn’t resist this one!
How An Improved Economy Can and Should Affect Your Job Situation at Everyday Tips and Thoughts – here’s one that caught me off guard. Kris connects the economy with your current job situation with a twist.
4 Worries About the US Economy at DIY Investor – What are the biggest threats to the U.S. economy today?
Bad Tenants Incidents and Lesson Learned at First Generation American – Completely read with shock about the Maggot Tenant.
You Only Know What You Know at 101 Centavos – How comfortable are you with dynamic data? Under what circumstances would you embrace the new
It’s Pretty Bad When NJ Thinks It Has a Better Business Environment at The Biz Of Life – Find out which state increased taxes by 66% and whose businesses are the target of NJ’s new commercials
Business
Ford Reports Largest Profit in 11 Years – Workers to get an average of $5,000. annual bonus
BP reports $5bn loss after Gulf oil spill
America remains by far the No.1 manufacturing country. It out-produces No. 2 China by more than 40%
Economy
Low-wage jobs dominated hiring so far in job market recovery.
Nearly 11 percent of U.S. houses are empty
Entertainment Money News
Johnny Depp, Kristen Stewart Named Top-Earning Actor and Actress – Vanity Fair
Offbeat Money News
The Economist Argues That You Shouldn’t Bother with an MBA
Only Two Years After Crisis, Wall Street Earns Record Pay
Carnivals that I’ve participated in:
Carnival of Personal Finance #294 Control Your Cash
Round ups that linked to posts from this site
- Don at Money Reasons – MR Review Avoiding Malware Edition
- Kris at Everyday Tips and Thoughts – Link Round Up – Getting Sick of Being Sick Edition
- Andrew at 101 Centavos – Axes Hammers, and Random Links
- Lazy Man and Money – Tax Preparation Weekend and Personal Finance Links
Great points about the intricacies of whether to manufacture locally or international. I think so often things that are touted as the panacea fail to live up to their promises including outsourcing in some cases. Although I don't fear this global economy, I do think we need to make very smart decisions in the future. Competition is fierce, and if American businesses are to get and/or maintain an edge, it is essential not to apply generalities haphazardly. What makes sense for one company may doom another.
My recent post How Would YOU Retire In 10 Years Round Up
I would first be certain that what I really wanted was to "retire" in ten years or not. In most cases, that is not what people REALLY want. What most people really want when they chase "retirement" is a better balance between how much they work and how much free time they have.
I achieved total financial independence almost four years ago. But in retrospect, I could have just worked less years before I saved enough to be FI, and working LESS is what I really wanted NOT no working at all (for pay, I mean).
Most people could have their same lifestyle working only three days a week — which means they could have a four-day weekend every week until they actually did retire to zero earned income.
So why wait for ten years? Make the switch to the four-day weekend now and get on with your life! By the way, real estate helped me achieve FI and I have still have a rental property.
If I only had 10 years I would be considerably more conservative. As it is I'm pretty aggressive because I feel I understand the risks and have a longer time horizon. Also I would probably lighten up on small cap foreign.
Thanks for the mention.
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Robert,
I suspect this is actually going to be dicey: people who are closer to retirement (financially-speaking) are going to want to be more conservative whereas people who don't haven't accumulated enough wealth to reasonably retire in 10 years (in their opinion) may be willing to take on even more risk.
I completely understand your rationale for being aggressive, as the longer time horizon makes that type of allocation feasible.
My recent post How Would YOU Retire In 10 Years Round Up
Thanks for the inclusion. Many (26 yrs ago), I set out to be financially independent. I accomplished that goal seven years and ten months. Who's counting! It was important for me to be "free" before I turned 40. I made it with time to spare. I did it investing in income property (34 units), fast food restaurant, and studio catering company. I sold it all off. Now I plan on retiring for the second time using retirement funds.
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Fabulous accomplishment! It just goes to show what people can accomplish when they are disciplined and have a reasonable plan. Good luck with your second retirement!
My recent post How Would YOU Retire In 10 Years Round Up
Wow, that's really impressive! Have you written about these investments?
My recent post Yakezie Blog Swap 2 – Best Day To Day Saving Tips
Thanks for including my link!
My plan is to leave the corporate job, but make just enough money to cover living expense. This way I can still have the time to take advantage of compound interest before I draw on my saving.
My recent post Yakezie Blog Swap 2 – Best Day To Day Saving Tips
Thanks for the mention. Stock market appreciate of about 30% from here would put me at my retirement goal.
My recent post How to Do Things Faster
Shawn,
Thought provoking post. Because I am already retired (mostly), my answer is theoretical. So…here it is: Because 10 years is not enough time to make huge gains with compound interest, my advice would be to get rid of all debt, including the mortgage. Not having a $1000 per month house payment is similar to earning 5% annually on a $240,000 nest egg. Another tip is to find something you love to do and continue to do it for as long as you are able.
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I was wondering the same thing!
My recent post How Would YOU Retire In 10 Years Round Up
You are more than welcome.
I think achieving your financial goals early will give you a distinct advantage, as your decisions will not be ruled by money. That's a great place to be, and long-term your investments will continue to grow!
My recent post How Would YOU Retire In 10 Years Round Up
You are welcome. 30% more sound like a lot, but given the fact that we are in a recovery, it could be a lot sooner than many would think. I wish you well on this journey!
My recent post How Would YOU Retire In 10 Years Round Up
Thanks so much Joe, and your comments are just phenomenal. i don't really think of mortgage debt that way, but I think I should. That's just a great example. Thanks so much for contributing to the discussion. Very insightful!
With regards to doing something you love: I couldn't agree more. I think people who chase money rather than fulfillment and meaning have a very difficult journey indeed.
My recent post How Would YOU Retire In 10 Years Round Up
Thanks for the feature..I don't know how I missed it…must have been because I was knee deep in my vacation rental fiasco.
Anyway, I'm 37 and the thought of working another 25 years is just depressing, so I am living like I'm going to retire in 10 years. I think the biggest hurdle is the lifestyle creep. Upgrading to a bigger house being the big budget buster.
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About outsourcing, in software development it is really no panacea. More often than not, once you add up the costs of poor code quality, difficulty of management, and the fact that you need to use more brute force, then the cost savings aren't so great in the end!
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Oh, re: compound interest: what happens when everyone tries to compound. 😉 That's what I always wonder about…
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Very informative article the idea is really good. but it is very difficult to carry out the plans for retirement in only 10 years. for that you need a certified financial planner who ca guide you the best.