I am excited about the trips we have planned. Just the thought of planning another, especially with travel partners who may want to do things differently and are inflexible about a few things, just seems like … work.
We may kick the portugal trip down the road to maybe next spring. We already know we will have travel plans next Jan, Feb and March.
The ups and down of the market, while they are taking a big hit on our investments, won’t change our lifestyle. Thats a good thing.
And despite the market, we just gifted $$$ to our kids and their spouses. Would rather see them be able to use/enjoy it while we are alive.
I’m reading this as primarily investing in bonds and dividends stocks and getting 4% from yield without selling, and this 4% ($120k) is enough to sustain expenses, so capital is preserved. One problem with this approach is inflation. $120k might have the spending power of $40k in 30 years in normal inflation and under $30k spending power if there is abnormally high inflation.
Also there is nothing magical about dividends / dividend stocks. Paying dividends to shareholders is associated with a corresponding decrease in value and share price. One could have similar expected returns with more flexibility by buying a fund that pays fewer dividends and selling to receive cash at times you choose in the amounts you choose, instead of on dividend schedule.
The crazy thing is - if you are looking at the S&P high, the downturn hasn’t been that severe. But individual stock fluctuations have - many down 50% or more.
And the gyrations the show have not helped but that’s because every day something so opposite the norm happen. .
The S&P is down but not to a depressed, or even a correction level…. yet.
But what everyone hears is that markets will crash and it seems all economists not named Peter Navarro think the average person’s expenses are going up….by thousands.
The emotions are looser than markets have been…thus far.
Historically dividend stocks have been the bulk of the markets gain - so while what you say is technically true it’s not how the world has worked. Or rather owning companies that have the cash to share with shareholders has been a winning play. From 1940-2024, dividends were accountable for 1/3 of returns. Even more if people reinvested.
My $10k a month includes excess income so that I can buy more each year and grow it to keep pace with inflation - which historically has run at 3%, not the 2% fed target.
In reality I will crush my goal but that was my minimum. My retirement is all in funds but funds have expenses so technically that is not good but they remove me from the stock picking process. Heck I even remove them. 90% of my stuff is in indexes with a little active for small cap and international.
Historically dividend stocks are more likely to be mature companies that are on average lower volatility, and with that lower volatility comes lower expected average returns per CAPM type theory. Low/no dividend stocks are more likely to be less mature companies that invest in their future growth – higher volatility on average, and with the higher volatility comes higher expected returns on average, as investors require extra compensation for the increased risk.
One example is tech stocks. Tech has been a key component of US equity growth in recent decades. However, until recently tech stocks typically paid low dividends. For example, Google and Facebook didn’t pay any dividends at all prior to 2024. Amazon, Tesla, Netflix and others still do not pay dividends.
Or one can invest in both low and high dividend stocks by choosing a broad market index fund rather than betting on tech, dividend stocks, or other market sector; theoretically getting the highest average expected return for a given risk level.
This type of mindset is fairly common. People who have high wealth towards retirement tend to be frugal savers, rather than persons who spend the bulk of their income, living paycheck to paycheck. The author of the Millionaire Next Door finds that the overwhelming majority of millionaires (>$2M in 2025 $) are frugal and goes in to great detail about their frugal habits. If you focus on saving and getting a good value for decades with hopes of being able to successfully retire, your mindset is unlikely to suddenly change when you hit retirement and want to spend wastefully. Some financial advisors have mentioned one of the most challenging part of their jobs is getting their clients to spend.
I am in this group. My NW is above the discussed numbers, but I still take pleasure in getting good value for the $ I do spend. It’s similar to a hobby. For example, earlier today, I ordered groceries from Instacart. With the combination of stacking deals/discounts, my total was $7, yet the receipt that came with the grocery bags showed the the shopper spent $49, which does not include sale prices. Solving/optimizing to get the best value such that I receive >$50 worth of groceries for $7 of spending gives me a sense of pleasure, even though saving $50 on groceries isn’t going to have a significant impact on my overall financial situation.
However, I consider the restaurant with friends situation different. If avoiding spending starts negatively impacting others in life and reducing your happiness, then that is clearly a problem.
Absolutely, I feel the same way. I was excited about planning “my trips” over the next decade and when we could possibly afford to take the kids and pay their way - now I think I may be dreaming of family trips. Hoping this is a bad wind that will blow over in a few years.
Also @jym626 perhaps consider taking trips just you and your husband. Do guided/group tour trips if you don’t want to travel completely solo that also offer flexibility on the days you want to be solo.
@jym626 I’m hesitant to plan a lot of expensive travel. We have a big trip coming up in a few weeks and if I wasn’t in so deep I’d consider not going. My logical mind tells me this doesn’t make sense. A good portion is paid for, it’s an area I’ve long wanted to explore. While we will have some decline in income this year due to big capital improvements on some rental properties it will be just a one year blip. My husband also book a semi costly trip for December that we can afford but still don’t feel anticipatory joy.
I’m fairly confident that we have to worries going into these later years. We have a lot of real estate investments in high demand areas that provide a good cash flow. If we want we could sell several and have plenty. We don’t invest heavily in the stock or bond market outside of our IRA as it’s not an area we are as comfortable as real estate. Real estate can be risky if you don’t know what you are doing. I do want to explore helping my kids more.
I have a lot of anxiety about our country and I think that tempers my joy about taking pleasure trips when so many things I care about are being dismantled.
Just curious - is that number for 1 person or a couple? I get frustrated when I read magazine articles that “throw out numbers” but I can’t tell what they are basing that on/how many people they are looking to support.
It really is a personal thing. I told my kids that after paying for college and a starter car, I felt like we could be “done” paying for them financially. Of course we help along the way when we can, “give with warm hands, not cold” and would be happy if we had money left over when we die, but one of my main goals is not to cost the kids anything.
These are supposed to be our “big travel years,” but I’ve kind of lost the desire to travel as much, especially if crossing borders is involved. Plus I do worry about the stock market, and how much we “really need” to feel comfortable in retirement (which just to be clear, is very different than how much we need to retire - we are retired already, and we will be fine just living on pensions and social security - not taken yet - if we have to). We have 2 international trips planned right now, and I don’t plan to schedule any others until/if “things settle down.”
Because of your post I’m adding - we don’t necessarily “travel well with others.” We do enjoy guided trips, which are of course groups, but we don’t have to be with anyone in particular if we don’t want to be. We have one couple we’ve found we can travel well with, and one single person, but in general we, especially my husband, prefer to travel as just the two of us.
I know it’s a little complicated, but the stock market discussion seems just as related to this thread as many other topics we’ve been through. If something doesn’t interest you, there is the option to just scroll on by.
What worries me is those retirees (if any are) specifically relying on stocks vs other classes like fixed income - to fund retirement - die to the uncontrolled valuations.
One shouldn’t need to have to rely on immediate or continual stock gains to fund retirement. If they need to, they should continue working.
