Investing strategies?

[LivingAlmostLarge]

How long did it take you to get to the front of your investments where you started making more in returns on the amount invested versus how much you are contributing?

Also do you keep investing in the market when it is tanking? Do you try to time the market?

I think we are starting to get ahead of our investments. It's taken us about 7 years to get ahead and I feel like now we are starting to see some serious returns and increases. Based on what we make and what we live on, to retire we need $1.5M based on our spending. Based on our income we need $3.25M, and based on what we have now we definitely will hit the $1.5M by 50 I think in retirement accounts sooner if we count taxable accounts, and $3.25M I think potentially 65. But there are too many variables.

Our biggest problem will be college. That and not being certain when we will finish having kids.

[disneysteve]

How long did it take you to get to the front of your investments where you started making more in returns on the amount invested versus how much you are contributing?

Interesting question but I have absolutely no idea. And the answer would also partly depend on the year. In a great year when funds were up 15 or 20 or 30%, it was different than when returns were much lower.

At this point, my Roth has about $120,000 in it and I can only contribute $5,500/year so the return, even at a modest 5%, would be more than I'm contributing, and it typically earns more than that. Year to date, one fund in my Roth is up 25% and another is up 34% so I'm definitely making more in returns than the amount contributed.

[QuarterMillionMan]

Take profits whenever possible and reinvest it. With that being said, now as for my own portfolio my investments since I have started investing since about 2007 have gone down, not up even with the markets sky rocketing since about 2009 to the present 2013. In my retirement accounts I estimate that I lost a total of $25,000 in some risky investments. I'm rethinking my investment strategies to be more conservative and invest in some mutual funds or index funds. It feels like I have been jumping from ship to sinking ship everytime I got into an ETF or individual stock purchase. Or it feels like I'm the whack-a-mole game where everytime I pop my head up I get whacked back down. I'm crying "Uncle," and enough is enough already (lol).

[jIM_Ohio]

How long did it take you to get to the front of your investments where you started making more in returns on the amount invested versus how much you are contributing?

Also do you keep investing in the market when it is tanking? Do you try to time the market?

I think we are starting to get ahead of our investments. It's taken us about 7 years to get ahead and I feel like now we are starting to see some serious returns and increases. Based on what we make and what we live on, to retire we need $1.5M based on our spending. Based on our income we need $3.25M, and based on what we have now we definitely will hit the $1.5M by 50 I think in retirement accounts sooner if we count taxable accounts, and $3.25M I think potentially 65. But there are too many variables.

Our biggest problem will be college. That and not being certain when we will finish having kids.

10+ years first time around
expect similar second time around

[ZZZ]

Also do you keep investing in the market when it is tanking? Do you try to time the market?

I suggest people avoid timing the market. The market is far too unpredictable. I know people that pulled out of stocks in September expecting a crash and have since missed a 4% gain. There were big funds starting to pull out as early as May... and look how silly they look.

Look at the big picture. Whether you buy in at DOW 16k or 10k... in ten years it will be far greater than both.

If the market is tanking... generally, you should be buying. Stocks at a discount!!

[snafu]

In my experience knowing what you're investing in is critical. What are the fees you paying? What are the top 10 holdings in any MF you are buying? If you were as rich as Warren Buffet, would you buy those specific stocks? If your retirement fund is cash-like, you are losing to inflation.

[moneysma]

I've been regularly contributing to my investments, both retirement and non-retirement every month for over 10 years regardless if the market is up or down. To me, it's more important to get my money into the market than what price is I buy at. This is because I am investing for 30-plus years. The sooner I get money into the market, the sooner time starts working in my favor.

Trying to time the market to get an ETF or fund for $0.05 less won't make a difference in 30 years.

[feh]

How long did it take you to get to the front of your investments where you started making more in returns on the amount invested versus how much you are contributing?

This question could be interpreted many different ways. Are you asking at what point your annual gain exceeded your contributions as a dollar amount? If so, the answer hinges much more on the performance of the market in any one year than anything else. Our accounts have appreciated 6 figures this year, much more than our contributions. Of course, the value of our accounts could decrease 6 figures in some future year also.

Also do you keep investing in the market when it is tanking?

Yes. Monthly 401K contributions. Annual contributions to IRAs and/or taxable account also.

Do you try to time the market?

No.

I think we are starting to get ahead of our investments. It's taken us about 7 years to get ahead and I feel like now we are starting to see some serious returns and increases. Based on what we make and what we live on, to retire we need $1.5M based on our spending. Based on our income we need $3.25M, and based on what we have now we definitely will hit the $1.5M by 50 I think in retirement accounts sooner if we count taxable accounts, and $3.25M I think potentially 65. But there are too many variables.

Very similar to us. Our "number" is $1.45-1.5M, and we should be there in 3 years. I plan on retiring at that time. Basing your number on income does not make sense - base it on expenses.

Our biggest problem will be college. That and not being certain when we will finish having kids.

firecalc.com lets you model things like this.

[LivingAlmostLarge]

I've used firecalc and again it asks a lot of questions about income still. I find it hard to use calculators because we should have a lot more based on income and a lot more spending. But our reality is the spending is a lot lower than expected.

[feh]

I've used firecalc and again it asks a lot of questions about income still. I find it hard to use calculators because we should have a lot more based on income and a lot more spending. But our reality is the spending is a lot lower than expected.

On the first page it asks for your spending level. That's really the first step for using firecalc - estimating annual expenses in retirement.

[LivingAlmostLarge]

I think our spending will go up right? It's hard to say because i feel so at lost since we are starting having kids and I assume our expenses will still go up more. I feel like we could easily spend 50% more than we are spending now.

[jIM_Ohio]

I think our spending will go up right? It's hard to say because i feel so at lost since we are starting having kids and I assume our expenses will still go up more. I feel like we could easily spend 50% more than we are spending now.

If you are still 15-30 years from retiring, I would focus less on calculators and more on other planning issues. Most of which are education (financial education) about subjects like social security, medicare, long term care, taxes and estate planning.

If you know what you spend, you need 33X-25X of that amount, and until you have 12X that saved, most calculators are more shooting numbers at you left and right which are meaningless, than they will actually help.

For example, if you spend 60k now, the 25X number is $1.5M and the 33X number is $1.9M
If your spending goes up to $80k because of kids and life, you are now looking at $2M and $2.6M.

The difference in range from 1.5 to 2.6 Million is HUGE. Don't worry about that... if you get half way to the first number (half way to lowest amount, which is $750k, then start seriously looking at "do you want to retire" and put times/years/ages on the goals at that point.

For example, I am 40, and want to retire by 60. The year is more important than the amount I have saved, so I do the best I can saving and investing, but the year of my retirement is more important, and I also know some SS techniques which allows me to tap into that at 62 with a higher benefit at 70. I also know if I save 30% of my income, I likely will have my same income I do now in retirement.

[feh]

I agree with Jim. If you're that far from retirement, it's too soon to be thinking about a specific number. Instead, focus on saving at least 15% of your income. If you want to retire early, you'll probably need to save more than that.

PS - the annual expense number that firecalc wants you to provide is during retirement, not pre-retirement.