My Retirement Plan

[riptides]

My retirement plan is to hit the lottery or keep working till I die. Which ever comes first.

 

[glgdiggs]

It is interesting to me that through this thread no one has mentioned the consequences of peak oil on retirement planning. We as Americans consume 25% of the worlds energy resources and have based our whole economic structure on abundant and cheap energy supplies. Those conditions for sustainability much less growth are rapidly dwindling. I have been keenly aware that peak oil is the most pressing problem that we face since I started studying it's effects on our lives in 1997. It will change everything. It now appears that world oil production peaked at 84 mbd in 2004. Please study up on this subject as the future assumptions you are counting on may change radically.

 

[EddieWalker]

For how many decades have the so called experts been telling us that oil supplies or dwindling? Yet, every year, and sometimes it happens a few times in a year, new, MASSIVE oil reserves are discovered. We know of more oil in the planet today then we knew of thirty years ago. The biggest problem with oil supply is that the politicians are putting barriers up to stop it from being drilled and refined. There is no energy shortage except for what is created by government. Get rid of them and we can build nuclear plants, clean burning coal generators and cheap gasoline. Since they limit the supply, the price will always remain high.

Eddie

 

[riptides]

... except for what is created by government. Get rid of them ....

Eddie

Well that is not going to happen, so we as consumers are locked in the game others are defining the rules of.

The best way to win, IMHO, is limit your dependancy on relying on others to control your life.
Turn green, become debt free, save some $$$, live within your means, etc. etc. etc.

 

[EddieWalker]

I agree with everything you say except the turn green part. I feel that's the latest con game going on to get people to spend more money on things they don't need, or replace something that's not broken. When doing the numbers on the return, it's just about impossible to make the investment of buying that so called green item worthwhile when figuring in the price of purchasing it and in some cases, having it installed.

Then there is the amount of energy and waste created in making the so called green item. Look at the hybrid cars and how toxic their batteries are. How much energy does it take to build these high dollar vehicles? and what happens to them when they batteries need replacing? Ethanol is supposed to cut down our dependence on oil, but it takes more oil to create it then we get back in gasoline. It's consumes massive quantities of water and corn. It's a huge money pit for tax dollars, and even with the billions of dollars going into the ethanol plants, they are still losing money. The fuel that is created lowers fuel mileage too!!!

I'm all for reducing pollution, but find it incredible that by calling something green, you can do just about anything you want if you can support your claim with a transparent falsehood that it's doing one thing good, while doing a dozen things bad.

It's not the people, most are just trying to do what's right. It's the politicians who pass these laws because a lobbyist gives them money so their company will make money off of selling this crap. The media rarely investigates anything, they just jump on the bandwagon and repeat the latest catch phrase. If it follows their agenda, then they all get behind it, regardless of what anybody else says.

Eddie

 

[smfcpacfp]

It is interesting to me that through this thread no one has mentioned the consequences of peak oil on retirement planning. We as Americans consume 25% of the worlds energy resources and have based our whole economic structure on abundant and cheap energy supplies. Those conditions for sustainability much less growth are rapidly dwindling. I have been keenly aware that peak oil is the most pressing problem that we face since I started studying it's effects on our lives in 1997. It will change everything. It now appears that world oil production peaked at 84 mbd in 2004. Please study up on this subject as the future assumptions you are counting on may change radically.

I always chuckle when I read something like this. Firstly, the most important source of energy is the sun and it is pretty evenly distributed, based upon the size of your land mass. It is essential in all aspects of life including the formation of hydrocarbon fuel. Every other form of energy pales in comparison. My father was a petroleum engineer for Sohio (Standard Oil of Ohio) from the early 50's until the mid 80's. He used to say that well less than 5% of the hydrocarbon fuel stock was in the form of oil. It also comes in the form of tar sand, shale and coal. Sohio was the most "crude poor" of the oil refiners in the US buying most their oil in the middle east. They acquired the rights to oil shale properties in Wyoming and in the mid 60's decided to develop a process for converting oil shale into gasoline, so my father treked off to Wyoming for two years on the project. They did, but it was way too expensive. Back then oil prices were fixed at less than $3 a barrel

Here is the kicker, the US and it allies have enough oil shale resources to equal all of the known oil reserves and all of the oil ever pumped out of the ground thus far. The tar sand reserves in Alberta are twice the size of oil shale resources, and coal resources world wide are practically astronomical.

I don't deny that we shouldn't wean ourselves off of hydrocarbon fuels (I hate sending any of our resources off to middle eastern despots), and waste less energy, but it isn't time to panic. As far as retirement planning - invest in enegy producers both old, and new.

 

[glgdiggs]

For how many decades have the so called experts been telling us that oil supplies or dwindling? Yet, every year, and sometimes it happens a few times in a year, new, MASSIVE oil reserves are discovered. We know of more oil in the planet today then we knew of thirty years ago. The biggest problem with oil supply is that the politicians are putting barriers up to stop it from being drilled and refined. There is no energy shortage except for what is created by government. Get rid of them and we can build nuclear plants, clean burning coal generators and cheap gasoline. Since they limit the supply, the price will always remain high.

Eddie

There are not new massive oil reserves being found every year. The last "massive reserves" were found in AK & the gulf of Mexico 30 years ago. We have been using 4 barrels of oil for each discovered for the last 20 years. Look carefully at the difference between reserves and recoverable oil. You live in a state where production peaked in 1971. Chevron ran ads in 2004 stating that it took 125 years to use the first trillon barrels and we will take 30 years to use the next trillion. I did not say we are running out, I said cheap and abundant. The decline rate of oil reserves around the world will increase the price and reduce the abundace. Oil is a finite resouce. Check the CIA factbook or USGS and other sources and real reserves hover at a trillion barrels. The world uses 30 billion barrels a year, the US uses 20 million per day with total recoverable reserves of 23 to 30 billion barrels. As I said study the issue carefully, and I believe you may change your mind. Also look at EROEI (energy returned on energy invested) for alternate energy sources and you may find that the alternatives are lacking. Most people who explore this problem are stumped to any easy solutions.

 

[glgdiggs]

I always chuckle when I read something like this. Firstly, the most important source of energy is the sun and it is pretty evenly distributed, based upon the size of your land mass. It is essential in all aspects of life including the formation of hydrocarbon fuel. Every other form of energy pales in comparison. My father was a petroleum engineer for Sohio (Standard Oil of Ohio) from the early 50's until the mid 80's. He used to say that well less than 5% of the hydrocarbon fuel stock was in the form of oil. It also comes in the form of tar sand, shale and coal. Sohio was the most "crude poor" of the oil refiners in the US buying most their oil in the middle east. They acquired the rights oil shale properties in Wyoming and in the mid 60's decided to develop a process for converting oil shale into gasoline, so my father treked off to Wyoming for two years on the project. They did, but it was way too expensive. Back then oil prices were fixed at less than $3 a barrel

Here is the kicker, the US and it allies have enough oil shale resources to equal all of the known oil reserves and all of the oil ever pumped out of the ground thus far. The tar sand reserves in Alberta are twice the size of oil shale resources, and coal resources world wide are practically astronomical.

I don't deny that we shouldn't wean ourselves off of hydrocarbon fuels (I hate sending any of our resources off to middle eastern despots), and waste less energy, but it isn't time to panic. As far as retirement planning - invest in enegy producers both old, and new.

The point again is cheap and abundant and as conventional oil reserves decline unconventional oil will not take its place. If unconventional oil was an easy solution we would not import a barrel of oil today.

 

[smfcpacfp]

The point again is cheap and abundant and as conventional oil reserves decline unconventional oil will not take its place. If unconventional oil was an easy solution we would not import a barrel of oil today.

My how little you know, and you have hijacked this thread with your little triad on oil. Take it to a new thread if you want to rant and rave.

 

[Cat_Driver]

Virtually all of my wealth was invested in stocks and remains so today. Stocks have provided the best long run return and the best return for any ten years period that you care to chose, for retirement type savings. Many investmetn advisors say that you should switch to fixed income investments as you get older. My philosophy is a bit different. I have always felt that if you stay invested in stocks, the additional wealth accumulation over time will more than compensate for market downturns like the one we are experiencing now.

I had a huge argument with my investment professional that I pay HUGE money to manage my funds who pretty much said the same thing. But right before the 50% drop in stocks I told him to take all my stocks and go to cash - his argument was like yours, NO you should stay invested. After arguing back and forth he sold everything to cash.

The stocks dropped by 50% but I kept 100% of my cash contrary to the professionals advice.

So I don't get why people keep saying STAY INVESTED, when NOT STAYING INVESTED made me a few hundred thousand dollars.

The poor investment professional who does one thing - make people money, almost cost me plenty....and on top of that he charged me to lose money.

Now I have twice as much money as I WOULD have had after the drop to buy back the same stocks but at a 50% discount.

Anyway just my 2 cents.

 

[glgdiggs]

I am sorry if I seemed to be on a rant, that certainly was not my intention, but this subject changed my retirement plans completely. It brought me to TractorByNet as I aquired land and needed the tools to manage it. I have spent the last 12 years looking at the topic, doing some significant research and have come to my own conclusions. It changed my investment strategies, vehicle choices, and how my home is heated, all for the better in my opinion. My rural retirement and peace of mind it brings is the direct result of my understanding of the long term consequences of peak oil. I was not highjacking only commenting. Again my appology for offending anyone.

 

[riptides]

....
So I don't get why people keep saying STAY INVESTED, when NOT STAYING INVESTED made me a few hundred thousand dollars.

...

Like everything else, timing and goals. Who has a goal for their dollars? Over what period of time?

I bailed on certain mutal funds, even when my fund manager said not too. Why? I had reached my goal.

 

[smfcpacfp]

I had a huge argument with my investment professional that I pay HUGE money to manage my funds who pretty much said the same thing. But right before the 50% drop in stocks I told him to take all my stocks and go to cash - his argument was like yours, NO you should stay invested. After arguing back and forth he sold everything to cash.

The stocks dropped by 50% but I kept 100% of my cash contrary to the professionals advice.

So I don't get why people keep saying STAY INVESTED, when NOT STAYING INVESTED made me a few hundred thousand dollars.

The poor investment professional who does one thing - make people money, almost cost me plenty....and on top of that he charged me to lose money.

Now I have twice as much money as I WOULD have had after the drop to buy back the same stocks but at a 50% discount.

Anyway just my 2 cents.

Few people have your insight as to the correct time to buy and sell. You should become the investment professional! The world will beat a path paved with money to the door of the person who can corrctly predict the future.

 

[foggy1111]

I do agree that if you can call a turn in the markets and get out...and then back in at an oportune time you are better off than the masses. However, now you have a second decision to make....when to re-enter the market. With the recent run up in the markets (and some good diversification of stocks, bonds and cash) I am currently about 25% off from the peak about 2 years ago. Painfull???.....quite...but by no means unexpected as I have lived through many ups and downs....and I expect alot more volitility over the next years. Meanwhile if your now in cash...when are you going to re-enter?

 

[ultrarunner]

Maybe it's my peasant/farmer heritage... I have a hard time trusting things I can't see... and even more putting faith in people I don't know... especially those in the money business.

God Bless you if it works for you...

Most of those I know with comfortable retirements have a Real Estate Component in the mix... it might only be the building they now rent to the buyer of the business they sold or it could be timber or AG land and even commercial.

I do not lots of people that have lost much if not close to everything they have in the market. Some would say they didn't invest right and that maybe... yet it's still a lost they may never recover from.

I also know a few that seem to do real well... it's something they enjoy and they move money into and out of the market and I can't argue with their success.

An old guy told me many years ago that a fellow can get by OK with 5 rentals... either a 5 plex or 5 single family homes that are paid for and rented...

 

[Patriotic Stabilist]

Real estate is a nice addition if you don't mind the work. Hubby can do all the fixin', I can do a lot. Since I was an accountant, managing the money and the tax issues are no problem for me. I also got a real estate license so I would know what I'm doing, in buying and selling, though I'm inactive, didn't like the less then honest salespeople so got out quick, but it was a good education. So between hubby and I it works well, for us its something we enjoy, to take a place that is a dump, but structurally sound and make it back into a nice place again. Gives you a feeling of accomplishment.

 

[EddieWalker]

There are not new massive oil reserves being found every year. The last "massive reserves" were found in AK & the gulf of Mexico 30 years ago...

What about Brazil?

Brazil's giant offshore oil discoveries

I'm not the only one who has doubts about the experts claim that oils is a limited quantity.

Discovery backs theory oil not 'fossil fuel'


There was the discovery of oil in the Dakotas that came out last year. Then there was a big oil field discovered in the arctic ocean a few years ago. How much oil is off the coast of California? It's reported to be significant. What about Florida? The Chinese are talking about drilling off the coast in International waters to get the oil that our politicians wont let us drill. Cuba is drilling in the Gulf, near the Keys because we're worried about the environment, yet their isn't a single case of an oil leak off an oil platform. Even after all sorts of Hurricanes, nothing!!! In fact, the platforms increase sea life.

Did you see the article about the bugs who excrete crude oil?

http://www.timesonline.co.uk/tol/news/environment/article4133668.ece

The verdict is not in on oil. In fact, it's not even close. Nobody knows for sure where it came from, or how it was created. There are allot of theories, but that's all they are. Don't take a theory and try to prove it. Instead, look at the theory and try to see if it makes any sense. For me, the dinosaur theory is full of holes. I don't believe it.

Kind of like global warming. That's been so discredited that they have now changed the name to climate change. So now that the planet has been cooling for the last decade, they can change their theory to anything they want and make up more silly science to support their theory.

Eddie

 

[Patriotic Stabilist]

I don't know but my husband works in oil and gas, they have lots of work coming up. He thinks his next project will be in Saudi, Angola, or New Guinea, they have other jobs too. Now whether they will still be available when he is done with this one we shall see. He said they just took one superintendent to a job that was almost age 70. These guys are dying off and they didn't develop people to replace them. He has 3 buddies over the last year that have died or are unable to work, and they are younger than us. I'm 63 , he will be in August. Thank goodness he and I are still healthy. We think its due to hard physical work. That's one of the reasons I do all the mowing, plant a garden, and work on houses. If I just sat down I would be big as a house and in misery with aches and pains.

He takes no meds other than vitamins and that stuff for your joints. Has good blood pressure and heart rate, is somewhat overweight but not obese. We are both like that. My blood pressure is usually 116/65 or less and I just take stuff for arthritus at times and for my sinuses. We are really fortunate. We both had blood work done this year and are looken good. We do have colonoscopies done every few years as we have both had polyps.

And we've spent a fortune keeping our teeth. I just got the caps for 2 implants I've had done. With getting the old bridge out, a bone graft and now the caps, took almost a year. I finally can chew again on both sides. They feel like your real teeth. I had at least 3 bridges on that side and they wouldn't stay, so finally went with this. But its very expensive to have done, I didn't want to spend the money, but hubby thought it would be 100% better than a partial and I can't disagree.

 

[skidoo]

Retirements will likely be re-defined in the upcoming years. The fact that when the worker to retiree ratio gets to 2 to 3, the average retiree may not be comfortable and the worker will soon get tired of giving such as high percentage to support a retiree. Doesn't matter how many dollars involved. The value of the dollars will change until a balance reflects the ratio.

Retirees will likely need to continue working at least part time. That is how I intend to do my retirement. Not counting on SS. Getting that would be gravy. Not counting on stocks. Owning your own business where you can decide when or if you work any particular day can help.

And then, aiming to have the house paid for and no debts will go a long way if you have some land too... Being as self sufficient as practical will help one survive the turmoil. But, then being self sufficient takes a lot of hard work; something one may not be able to do long into a retirement. In that case, downsizing ones needs will be key...

 

[Richard]

I tend to stay out of these topics since it can usually lead to nothing but a headache for me as well as sometimes having someone jump me for "soliciting" when in fact, I've only been trying to help and give back to a forum that has given so much to me over the years.

My background just so you know...

I've been a financial advisor, stock broker, investment advisor, registered investment advisor representative...what EVER you want to call me, for 23 years now. I have helped start and managed the investment center for a bank here in Knoxville, another bank in Sevierville and yet a third bank in Athens (TN). I have also run a small local broker/dealer for 5 years, supervising the business and sales of other reps. I have numerous registrations that to some mean nothing and to others, mean only slightly more than nothing

I have accounts with people where some of them listen to everything I say and other accounts where they don't listen to anything I say.

I have some accounts that are actually UP over the last 12 months. Meaning, the entire market decline has missed them AND they are up about 11%.

I have yet another account who is taking roughly 10% of her value out each year to live on, yet her account balance over the last 5 years (including the past 12 months) has stayed within 12% of the SAME value, even AFTER her distributions (IRA) are accounted for. Meaning, go back 5 years and have a value. Her account has been no less than 12% of that value for 5 years even while taking out about 10% each year (not always 10% for full disclosure)

I also have an account with someone who sat in my office 15 months ago or so, I strongly urged him to do as I was doing and move to cash and if not, at LEAST further diversify some of his holdings (he inherited a large account when his wife passed away and he's "married" to her holdings). He refused to listen to me and he has LOST over a million dollars.

I only mention the above good/bad stories to be above board and say I have experiences with both sides of them and am not trying to only say something 'good' to sucker someone.

With all that said, there are indeed some things you can do to protect your money while also garnering a decent rate of return. I'll let someone else argue what is decent.

There are also some things you can do (at least here in Tennessee) that will garner you income while at the same time, avoid Tennessee's state income tax. This same item will be taxed at the federal level but will have some 'tax favored' component in it.

You don't HAVE to be bashed in the head with your investments however, if you are already bashed, then like being pregnant, there's not much anyone can do until the process is over.

The best thing to have done was to avoid the problem in the beginning. Now that you are in the boat you are in, you need to re-evaluate not only what you are in but what you might do next.

I won't get into details here so please don't ask. I am ALWAYS happy to help my tractor pals since I've taken SO much more out of this site than I could ever put back in. For those one or two people who think I'm here fishing around for clients, I'll never change your mind so I won't try. Otherwise, I'll point out that I'm only registered here in Tennessee (well, ok, and Ohio, Georgia, Alabama) to do business so if you are not in one of those states, then you can rest assured that I'm not going to try to sell you anything because I CANT!!

Here's the offer...

If you have any questions in the investment world, I would be more than happy to give you my opinion and/or suggestion as to what I think you might want to contemplate doing. If you live outside one of the above states, then you can breath a sigh of relief and know I'll be upfront and unbiased since I can't sell to you anyway. If you ARE in one of those states, then don't email me if you think I'm being a sleezebag here by making this offer. Or, take me up on the email and see if I'm not true to my words.

I would want it done via PM's or email or heck... you can even call me. This way it would be private and you can have specific questions answered.