How To Retire At 55

[Brother Bob]

Unless the U.S. and overseas markets collapse, I will retire in less than two years with over 1 million in my 401K plan. I will draw 4% a year and along with my retirement check from Ma Bell, I will draw well over $6,000 a month. How did I do it? It's easy. I put 10 to 15% of my check into savings since I started with Ma Bell. I didn't buy a new car or truck every couple of years and I lived off of a budget. I educated myself in investing and understanding the markets and mutual funds. Regardless of how much you make, you need to put some money away for a rainy day. Most youngsters spend every dime they make when they are young. The dollars you invest now, will be worth a small fortune by the time you are my age(52). Example: If my mom and dad would have invested $5,000 in the S&P 500, when I was born, by the time I was 18, I would have never had to work! That $5,000 would have turned into millions!
The reason I even brought this up is because I want you "youngsters" to "think" before you spend that hard earned dollar. For you younger folks that are blessed with a good job, take advantage of your company's 401K! Your company will match, at a certain percentage, the amount of money that you save. If you are not taking advantage of this "free money", you are missing out! When you decide to get in, diversify! Don't put all your eggs in one basket! Stay away from your company stock, or at least keep your investment in them to a minimum! Remember Enron? Anyone really interested in being able to call it quits at a young age, PM me and let me know what your company offers as far as funds and investment direction. I'll be more than happy to help you make some good decisions that will pay off as you age. I'll explain:
Small caps
Mid caps
Large caps
Growth
Value
Balanced
Price to earning ratios, etc.

By the way, you will have to drop back on your gun buying until you set up your Emergency Fund. Start paying cash for stuff. If you can't afford it, you don't need it! Pay off your credit cards and DON'T MAKE THE MINIMUM PAYMENT!

If some of you really show an interest in this, I'll continue with some common sense stuff that will help you. For the more complicated stuff and personal questions, PM me. Hope some of you show some interest. It's in your interest to do something, I doubt Social Security will be around 25 years from now. It will be up to you how you live in retirement. Act now!

[snuffysmith]

Good advice, Bob.
Wish I had got it many years ago. I'm 65 now and I could've had quite a bit stuck away now.

Snuffy

[iflylow74]

Great advice Brother Bob and congrats on your VERY successfull retirement! My grandpa did much the same as you did. He started as a share cropper with nothing and was able to retire at age 50 very well off. He lived to be 88 so he had 38 work free years!!

Right now, I invest in the Arkansas teacher retirement system. Someone I knew was a retired teacher and he highly recommended it. I will pm you with some question if you dont mind. Thanks Brother Bob!!

[Sooner Shooter]

Rule 72 is something that's interesting.

Suppose you have $10000 in an account and you add nothing to it. At 12% interest that amount will double in 6 years. At 6% interest that amount will double in 12 years.

10000 20000 40000 80000 160000 320,000 30 years at 12% will get you 320000 after 30 years. Another six years (36years) it will get you 640, 000

10000 20000 40000, 80000 At 6% will get you only $80,000 after 36 years.

Getting a good rate of return and always adding to it makes all the difference. I've always understood the numbers. Drove the old junkers, bought a small house but pretty much lived month to month. Divorce, kids, college help etc. plays a big part in this game. I'm okay just not real comfortable.

Good advice Bob! Most of the people living in extreme debt are usually the ones trying to keep up with the Jones'es but don't have the means to actually do it.

[Brother Bob]

Bear in mind that when I say, diversification, I mean you need to spread your "at risk" money between Large U.S. companies, Medium size companies, and Small companies. Remember folks, Microsoft was a small company at one time and the folks who invested in it are now rich! You also need to invest in Overseas funds. China and India are booming! Also, put 10-15% in precious metals. These are a hedge in inflation! If you are getting close to retirement and you're looking for income, consider the "Dog's of The Dow". These are companies that pay high dividends, usually quarterly. You may also want to pull up "Drip" funds on your search engine. "Drip", stands for Dividend Reinvestment Programs. Keep in mind that if the companies dividend is less than inflation, unless the stock appreciates, you are actually losing money! Look at companies like Duke Power and OG&E for good growth and good dividends. Remember that dividends are "short term" capital gains and the stock appreciation are considered long term. Check with your tax adviser so you can capitalize on today's markets.

[ArkansasHunter]

iflylow at one time and still may be, the Arkansas Teachers Retire is one one of the best retirements in the country !!! To be in. Stay in it !!! cuz


EDIT : If your a Born Again Christian and beleive Gods word you can tihes 10% or more of your income and God will mulityply it back 10 to a 100 fold. Even More.
If you also give offerings such as supporting organizations (example) The Christians Childrens fund.
You'll never lack anything in your life...I know !!!

When God said bring yee all your tithes and offerings into my store house (church) I'll open the windows of Heaven and pour you out so many Blessings you want have room for them ALL.

Would you beleive I had to ask God to turn the Blessings off one time. I give you my word !
If your heart is in the right place and you do the above you'll never ever regret it.
...Mike

[Sooner Shooter]

Would of, should of, could of, was pretty much my experience. Just not a gambler or student of the stock market. I sure wish I had been but while in high school I lost $250 in the stock market on what a family relative said was a sure thing and that pretty much soured me for future investments. That $250 was about 250 hours of work back then.

Glad to hear that somebodies state teacher retirement is doing well. Oklahoma legislators took out a ton of our money in the 80's or 90's to help out the highway patrol and the firefighters and never replaced the money. Now their retirement funds are flourishing and ours is not.

[Brother Bob]

Originally Posted by Sooner Shooter

Would of, should of, could of, was pretty much my experience. Just not a gambler or student of the stock market. I sure wish I had been but while in high school I lost $250 in the stock market on what a family relative said was a sure thing and that pretty much soured me for future investments. That $250 was about 250 hours of work back then.

Glad to hear that somebodies state teacher retirement is doing well. Oklahoma legislators took out a ton of our money in the 80's or 90's to help out the highway patrol and the firefighters and never replaced the money. Now their retirement funds are flourishing and ours is not.

Investing only becomes gambling when you buy a stock that no one has done their homework on and is said to be "A Sure Thing". Stay away from "Penny" stocks. Stocks of unknown companies, with questionable backgrounds, are a gamble. Stay away from these! Invest your money in a four or five star Small Cap stock fund and let the fund manager do the worrying for you.

[Oxford]

BB...Congratulations on having the long range foresight and perserverence to stick with your savings plan and ultimate retirement plan. I won't give details of my finances...other than to say my wife and I have "always' saved regularly, and invested as much as we could possibly do since we were married...and that's been 47 years ago.

Several factors made it work for us. First off, we were in agreement most times with high dollar purchases and planned ahead so we could pay cash...excpet for our home. Vacations were frugal by many people's standards. Oftentimes when our two daughters were young we did driving vacations, stopped at roadside parks for picnics, and enjoyed going to fun places together. Plane rides were not an option, then, for us.

My retirement program required that I pay 11% of my paycheck into a retirement fund, and my employer matched that amount, and it all together was invested in a huge retirement investment trust fund earning 7% most of the time.

At the same time, when IRA's and Tax Sheltered Annuity's were made available for me, we bought close to the maximum in these investments. We've gone through three different Financial Advisors, each time reorganizing our investments into categories of risk, and re-investing in an attempt to keep our portfolio "balanced".

We've survived the stock market crash of 1989, and two or three other huge downslides...but each time our investments have recovered and continued on to higher values.

The largest investment we made was in our home. It has appreciated in value several times over since it was bought and was paid off completely before I retired in 1998. All of our cars we have paid cash for and kept them for 10 years if at possible.

When it was time for our two daughters to begin college, we were able to pay their expenses without dipping into our savings. They chose schools which offered excellent educations without depleting our savings. I believe their education has been our best investment, too.

Upon retirement age we felt financially secure enough to begin enjoying life more in many ways. Traveling around the globe was something we both wanted to do and since that time we have enjoyed going to Europe three times, Australia, and several cruises, and more.

Yes, financial security is a lifestyle. Can't buy on impulses. Gotta keep ourselves in control. Gotta save regularly. At the end of each day we feel blessed to have had it all work out for us.

Maybe when we end our time on this earth we'll be able to pass on a few assets to our children. However, we're not holding back on our spending for that purpose. We're already making future travel plans. Life is good...if you plan for it and "stay the course."

[HARDERTR]

Thanks for bringing up the topic Brother Bob!

My mother turned her 401K over to me to manage about 5 years ago. She was 52 at the time....AND ONLY HAD $100K in it. She wasn't even maxing out her contribution that could be matched by her employer. I did a MAJOR overhaul.....and she's doing much better now.

My step-dad was old-school. He had my mom putting everything in savings (safer?) and had her adjusting what she contributed pretty much on a montly basis. They pissed away more money by buying "stuff" and lost the money the employer would have matched.

THANK GOD my mom gave me full access to her account. She trusted me enough to change her password so she (and my step-dad) couldn't touch it unless I knew about it.

My mom and step-dad would throw a FIT if they knew I had them invested in overseas markets!

It's pretty stressful knowing my mom's retirement is completely in my hands. But I feel better knowing she was brave enough to ask for help from her own son. Besides, the bigger her nest egg, the better the chances of her being "independant" until the end.

I don't think a lot of folks realize just how much money you need to live a decent life without having to work.

[Chris]

I'm about to get involved in some hedge funds...

Some people who are in charge of hedge funds can get 30-60% returns.
Being a young guy, I try to save...but it isn't a lot because of school...

I appreciate the tips Brother Bob!

[Brother Bob]

Thanks. As you age and draw near to retirement, you need to start moving some money into Bond and Guaranteed Interest funds. I know an awful lot of folks that have pulled out at the wrong time and lost hundreds of thousands of dollars. At a 4% withdrawal rate on that retirement money, that adds up to $8,000 a year or $666.67 per month on a loss of $200,000 in just a three day market slide! Remember, this is the money you will have to live off of for the rest of your life! Remember that the goal here is to run out of life before you run out of money.

[9mmfan]

Great advice Brother Bob, thanks.

[Amarksman]

Just throwin this out there. It can be in your best interest to find a Financial Advisor you can trust. Trust if a big part of it, as some can take advantage. I am a big advocate of insurance as well, and the emergency fund is VERY important! For all of you 50 and up at least look at Long Term Care insurance. It can save your retirement assets in the case that you need help in the case of illness or injury. There are many options available, so do your homework! There have been some great points brought up here. Try to live within your means, and get a plan together.
There are som many things to talk about. I could ramble on all night!