Unbelievably, the S&P 500 and the NASDAQ are at all-time highs in the middle of a pandemic. The billionaires have gotten super rich while millions of Americans are out of work. Here is a bull market checklist to living your best life today.
If you are an investor, your net worth is likely near or at an all-time high as well. As a result, we might as well use some of our gains to enjoy life more. Tomorrow is not guaranteed.
With the Fed now firmly on our side, investors have gained new confidence in taking on more risk. Valuations are crazy expensive, which means precaution is also a must. The last thing you want to do is give up all your gains and go back to the lows of March 2020.
I’d like to offer up some thoughts on how to invest and spend in a bull market to live a better life. Because goodness knows, the good times can’t last forever.
The Bull Market Financial Checklist To Living Your Best Life
1) Take advantage of lower rates.
With the 10-year bond yields at all-tim lows, so are mortgage rates and student loan rates. You should take advantage by refinancing your mortgage and your student loans if you have any. Getting rich of principal and boosting your cash flow is amazing.
2) Make sure you have the proper risk exposure.
Stocks, bonds, and real estate are your friends in a declining interest rate environment. Lower interest rates make owning other assets with higher interest rates or potentially higher returns more attractive. Interest rates are likely to stay low for longer.
I can’t tell you how much risk exposure you should have since everybody’s risk-tolerance and financial situation is different. All I can say is that you need to quantify your risk tolerance and then invest accordingly.
The most logical risk asset for me to invest in is real estate because lower mortgage rates bring in more real estate demand. More people spending more time at home means the intrinsic value of real estate is going up.
With mortgage rates roughly 1% lower than in 2019 coupled with demographic shifts, it is my belief that real estate will rebound or at least stay steady in the coming years. The Fed has telegraphed it is willing to be accommodative (cut rates) to fend off a recession if necessary.
Check out Fundrise, the leading real estate crowdfunding platform today. They have a variety of real estate funds and deals to allow you to diversify your real estate investments and earn income passively without the hassle of managing tenants or maintenance issues. Fundrise is free to sign up and explore.
3) Ask for a raise or change jobs.
We’re currently at a 10% national unemployment rate in America. Before the pandemic began, we were at around 3.6%. Although the unemployment level is high, employers are upgrading employees and purging underperformers. If you are an outperformer, it’s time for you to look.
The general rule of thumb is that you can get at least 20% more if you put yourself on the open market tomorrow. Depending on performance and industry, after about three years on the job in a hot labor market, you could conceivably get 50% or more.
Loyal employees tend to lose out the most. Don’t be like me. I stayed at my old employer for 11 years and probably gave up more than $1 million in earnings as a result. The main positive about loyalty is that it increases your chances for negotiating a juicy severance if you ever want to move on.
4) Take a sabbatical.
If you can’t negotiate a new job with at least a one month break in between, take a long vacation or a sabbatical. Yes, it’s tough to get off the grid when so much money is to be made. But it may be now or never as it might be career suicide to take a sabbatical during a downturn. Because when you get back, your job might not be there!
If you plan to work for at least five more years, please take an extended vacation or sabbatical. Money is working the hardest for you in a bull market, so don’t worry so much about trying to make even more money.
My biggest mistake was not taking at least a one-month sabbatical. I was too worried about my job during a downturn and wanting to make max money during a bull market.
It was a never-ending cycle because I always expected a downturn to be right around the corner. But if I had taken a sabbatical, I would have been refreshed and likely extended my working career by at least a couple more years. This is one of my big regrets as an early retiree.
5) Disclose your disability and feel more free.
The Americans with Disabilities Act forbids employers from discriminating against applicants or employees on the basis of disability. But you never really know how an employer will react once you make the disclosure. As a result, many people with disabilities, especially with invisible disabilities stay silent.
Given the labor market is tight, you should have the highest chance of not experiencing discrimination if you disclose. The benefits of disclosure include getting accommodations you will need to do your job better, reducing the emotional toll from having to hide your disability or accommodate for your disability, and potentially receive a lot of support from your colleagues and managers.
Roughly 1 billion people in the world, or 15% of the population has some sort of disability. You are not alone and I hope more people realize this fact. Once you disclose your disability, make sure your colleagues thoroughly understand what the disability is and what you need through a fact sheet. To be yourself in the workplace or anywhere feels amazing.
6) Start strategically living it up.
If you can’t live it up when times are good, you certainly won’t be able to live it up when times are bad. When times are bad, you’ll want to save more and take on side hustles. The end result is that you never end up spending any of your money on living the good life.
During a bull market, you’re making money way beyond your normal expected income (day job, side hustle income, passive income). In other words, bull market money feels like “free money” or “funny money.”
Your goal is to calculate how much funny money you’ve made each year from the bull market and proceed to spend some of it on yourself, your family, and your loved ones. You don’t have to spend 100% of your bull market gains each year. However, you should try to allocate and spend at least 10% of the funny money living it up.
For example, in March 2020, I was down about $600,000 in my House Fund portfolio and other investments. That hurt. Luckily, the House Fund portfolio made up all its losses and then gained about $200,000 for a $800,000 swing in six months.
Gaining back $600,000 felt like free money because I had foolishly over-allocated towards stocks. But making $200,000 really feels like free money. Therefore, I took a portion of the $200,000 and bought myself some new underwear. I feel so fresh! But seriously, I made a massive purchase recently and may use my gains to buy a new car and watch.
7) Hunt for unicorns.
During a bull market, bigger bubbles tend to form. If you can catch a bubble and ride it before it implodes, you could potentially make a lot of money.
I would set aside 10% of your cash flow (not existing investments) in search of the next great speculative investment. A speculative investment is usually an unproven product, doesn’t have positive cash flow, and is something not mainstream.
You should expect to lose 100% of your 10% with the chance of making a 1,000%+ return. The likelihood of either happening is probably small. At the very least, you will learn more about investing in assets that are often overlooked.
It’s absolutely fine to invest in index funds for the long term. The vast majority of your funds should be allocated towards a boring S&P 500 and bond index. You just have little chance of ever getting richer faster than the majority of the investing population.
If I hadn’t invested $3,000 in VCSY in 2000, I wouldn’t have been able to make a $120,000 down payment for my first SF property in 2003. If I hadn’t bought my first property in 2003, I may not have had the courage to go all-in on a single family home in SF at the end of 2004.
All you need is one lucky break to supercharge your wealth. But in order to get your lucky break you need to take extra risk with some of your funds.
8) Shop your business around.
Valuations tend to be at their highest during a bull market because expectations are so high for future earnings growth. If you believe expectations are higher than reality, then you should aggressively try and shop your business around to the highest bidder.
But to be able to shop your business around, you must first have your own business. Having a business is great because not only does it have a cash flow component, but it also has an equity component as well. To create next level wealth is all about growing the equity component.
Although the trailing 12-month P/E ratio doesn’t look outrageous yet at 21.9X compared to the 14.75X median multiple, the Shiller P/E ratio is getting up there at 30X compared to the 15.75X median multiple. The Shiller P/E ratio is based on average inflation-adjusted earnings from the previous 10 years.
9) Become a charlatan.
In a bull market, qualifications and credentials are often overlooked because everybody is making so much money. It’s only after people start losing money that folks start carefully reading the fine print and questioning the background of the person.
During the last bull market, I know one guy who wrote a book about how to get rich despite having recently graduated from college with hardly any money. He ended up getting rich partially because of his book. Brilliant!
Today, I know of 25-year-olds with zero financial backgrounds who are teaching people how to invest in the stock market and retire early. It’s impressive how folks are soaking it up.
If you’ve ever wanted to make money as a charlatan, now is the time to take advantage. It doesn’t matter if you’re a failed political consultant trying to position yourself as a financial expert or a company founder with no pertinent experience. If you fake it, chances are higher you will make it during a bull market.
The company, Theranos, is probably the best example of allowing charlatans to get rich if they were able to sell some shares during their $400 million in funding rounds.
10) Calculate your financial independence number.
It’s fun to calculate how much you’ll have if the bull market lasts for X years. It’s also very dangerous to extrapolate massive gains for a long period of time.
Your goal should be to come up with a financial independence number that will produce enough investment income so you never have to work again. Then you should create three scenarios (bear case, normal case, bull case) on how long it will take to achieve that FI number.
Once you have created your three FI scenarios, you will naturally start taking steps to get there. Too many people just wing it when it comes to their finances. Then they wake up 10 years from now wondering where all their money went.
In my case, my FI number keeps growing because of kids. But I believe I will be able to hit my investment income goal of $300,000 a year by the end of 2022 in a conservative scenario. I’ve created an entire saving and investing plan to make it happen.
Make The Bull Market Count
Nobody knows how long this bull market will last. All I know is that for the foreseeable future, the Fed is on our side, interest rates are low, and there’s a Presidential election coming up promising us lots of freebies.
It’s conceivable at the rate the candidates are going that our children will never have to work for a living. If so, we may be over-saving for our children’s future.
If we can’t enjoy life to the maximum during a bull market, then we’re never going to enjoy life to the maximum at all. Do your best to live it up today!
Just don’t be delusional into thinking the good times will last forever. The hammer will eventually drop. If we prepare when times are good, maybe only our toes will get bashed instead of our heads.
Readers, I’d love to hear what else should be added to the Bull Market Checklist so we can all live our best lives. How do you feel now that your net worth is at or close to all-time highs? What are you doing more of or differently to improve the quality of your life?
Related: The Average Net Worth For The Above Average Person
Long time reader and fan of your content.
My wife and I are fully embracing item #4 in your checklist! After working for ~12 years in corporate jobs in Manhattan, the stars finally aligned for us to leave our jobs and do some extended international traveling in our mid-30’s. We’re letting our NYC lease expire at the end of August and planning an 8-12 month trip around Europe, Southeast Asia, and Central/South America -beginning with Italy in September-October.
Your blog has been an inspiration over the years as we got our financial house in order to make all of this possible (the bull market helps…). We even started a blog of our own! A little bootleg at this point, but we’re working on it.
Thanks for everything that you do.
Financial Samurai says
Wonderful! You won’t regret it one bit! The time to do so is when you’re young and unencumbered! Travel and see the world until you are sick of traveling! Your trip sounds amazing. I hope you write about it. It will be the time of your lives.
I believe we are already in early recession. Interest rates are low because of fundamentals and not the best of times. Probably only 10 to 20% decline. Cash will be king. I don’t see trade agreement before the election.
Zen Master says
Like some of your other commenters, I focus on being fearful when others are greedy and greedy when others are fearful. Unlike some of them, however, I have no problem enjoying myself in downturns because I know what I’m paying is often a much better value than what I’d get in a rosy economy. I love value and, right now, nobody values value.
As far as investing goes, like others, I’ve seen lots of harbingers of a market top lately and would not be interested in adding any risk assets in this environment. My favorite sign of the apocalypse was someone online who said they got a license plate for their vehicle: VTSAX. Not that there’s anything wrong with investing in VTSAX, of course, but it’s troubling when you start to see those types of things becoming status symbols. In addition, the kind of person who really belongs in VTSAX is not the kind of person who should be getting a personalized license plate in the first place.
markets' job is to hurt the most at worst time says
What’s sad is that most of the Bogleheads don’t realize they have exposure to stocks. All they know is that they have “Vanguard”.
What about the notion that Federal Reserve cuts signal a possible downtown in the works?
For example, this article is worth a read — on the likely predictive implications of a rate cut:
“In the short run, investors are celebrating the likelihood of Federal Reserve rate cuts – producing a knee-jerk, obligatory pop in the market. Historically however, initial rate cuts usually mean that something has gone wrong. The misplaced exuberance of investors is something my friend Danielle DiMartino Booth calls a “Recession Party.” We doubt this party will end well. Blind faith that rate cuts are always positive for the stock market is a mistake. This assumption is likely to be the hook that keeps investors holding on through a 60-65% market collapse over the completion of this market cycle.”
“The fact is that with the exception of 1967 and 1996, every initial easing of monetary policy by the Federal Reserve has been associated with an oncoming or ongoing recession. In the chart below, an initial easing is defined as a cut in the Federal Reserve discount rate amounting to a cumulative reduction of at least 0.5%, following a tightening cycle comprising a cumulative rate hike in excess of 0.5%.”
I’d be more inclined towards caution these days — although, it’s true I am usually pretty cautious overall when it comes to investing.
Financial Samurai says
Check out the conclusion of my post.
I enjoy reading Hussman. Been predicting -60% on the S&P 500 for years now.
Yes, I see that you’ve noted it — but it feels more like a footnote than getting enough emphasis in an otherwise very optimistic view. I think the recent movement on Fed Rates and yield curve are concerning. Maybe you’re still right to be optimistic, but I’m skeptical.
Hussman is an interesting case. He’s very astute, yet his track record over the last 5 years (which has been spotty) has called his longer track record (which is otherwise very good) into question. It will be interesting to see if the >50% declines ever materialize. I take his perspective seriously (as I do with yours!).
Deleveraging Stimulus says
I think Hussman will get his 67% decline in real terms, not nominal. A big tell is the WH pushing the indexing of cap gains to inflation. This is a big tell USD devaluation is the agenda. The only way put to delever the system.
That’s a great point. I know devaluation is the agenda (there are no other real options) but I did not see through the cap gains inflation indexing. Thanks for the post.
Simple Money Man says
My extra risk is BTC….hope it spirals out of control, in a good way!
I believe we are already in early resession. Interest rates are low because of fundamentals and not the best of times. Probably only 10 to 20% decline. Cash will be king. I don’t see trade agreement before election so there will be people in bay area swimming naked and i welcome it but all of this is void if China changes its mind.
Hello Yellow Brick Road says
Cash will be king for a bit but heads of state and central bankers are in the game of competitive devaluation. The latest game of globalization ended in 2014. We’ve been in the netherworld in between systems since. The new game will come out of the blue by political decree like 8/15/71.
The BRICS will likely go their own way with a SWIFT alternative…BRICS Pay. Eventually the US sphere will have to revalue a certain reserve asset if it wants to participate in trade with the Eurasian bloc.
Here one can see Mr. Global setting the stage for this USD/RMB mechanism.
“CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Shanghai Gold Exchange (SGE), the world’s largest physical gold exchange, will grant CME Group a license to use, create and list futures contracts based on SGE’s Shanghai Gold Benchmark PM Price.
In the fourth quarter of 2019, pending regulatory reviews, CME Group will launch two new financially-settled gold futures contracts denominated in U.S. dollars and Renminbi – Shanghai Gold (USD) futures and Shanghai Gold (CNH) futures.”
Love your creative thinking. Wonder if one day we will look back on the title of this post like we have past covers of financial magazines as a top indicator?
Seriously, economic times are as good as I’ve ever seen in my 50 years of life. You present good ideas on how to approach these times. Well done.
Financial Samurai says
Absolutely this article could be a marker for the top of the market.
But at the very least people can lower their mortgage payments, earn more and rest free income, and feel good all their risk assets are booked all time highs.
Life is fleeting, so I encourage people to enjoy it!
Jamie from Financial Starfish says
if this is indeed a market for the top of the market, shouldn’t people start reducing exposure to riskier assets like stocks?
I agree with all the other points about mortgage rates and living it up, but am worried about overexposure knowing that a recession might be around the corner.
Financial Samurai says
Absolutely, if this is what someone thinks.
Cash is paying 2.3% – 2.5% now, which is excellent.
Money Ronin says
2.5% Savings account at WebBank and CDs from 2.65% to 2.95%. I just opened a few accounts. I am holding cash waiting for an opportunity whether it’s a recession or unicorn. But waiting costs money. My cash is from an apartment refi at 4.1%. So I’m losing 1.5% (tax deductible) by sitting on the cash.
… Anticipating my early retirement date of 12/31/19. Started moving my aggressively allocated portfolio of 80% Stocks/20% Bonds/Cash about 5 years ago to what it is now at 60/40. I will be 56 when I retire from corporate work and looking forward to new opportunities that allow me to build more time for play and move to some enjoyable work that I have always been interested in. With a mortgage free home and zero debt, I feel well positioned to move forward with my plan, especially as this bull continues to build me a bit more cushion,albeit moderately. Although, I have taken risk off the table, I can’t but wonder if my timing is all that good riding the historic heights of the markets! The old adage: what goes up must come down keeps bouncing around in my head.
Ed Johnson says
Paul I could retire, however the one thing that holds me back is health insurance. How do you plan to navigate that issue?
Financial Samurai says
Just pay for it on the open market. We pay about $21,000 a year on subsidized for a platinum plan. But if you make less than four times the federal power over the limit in retirement, you can get subsidies.
Ed, as Sam indicated. Cobra for 18 months or open market are my only options if I want to retire early. If I stay for another 5 years and retire, I will be eligible for subsidized/retiree health benefits but that puts me at 61 and honestly, not sure I can survive the politics of my executive role that long. Getting older and trading time for money is not what I want. Seeking more freedom.
I will receive a small pension that I’m eligible to take once I retire as I’m 100% vested in this organization at my 5 year anniversary which is 12/15/19. My plan is to defer until 65 my pension which will double by then, coupled with projected SSN for my wife and I at 67-70 will more than pay for our basic living expenses including annual inflation @3%. We will leave our IRA/401K alone and start to receive distributions at 65-70. This will be a substantial amount and RMD’s will be painful from a tax perspective so we will evaluate advantages of Roth conversions post reaching age 59 1/2. Our small Roth Accounts we will leave alone, let appreciate and hopefully be able to pass to our kids as part of our estate plan in hopefully 35+ years which will be a tidy some of money along with our possessions (home/other assets) if all goes well. If not, will use to self-insure our long-term care or give to others that are in need.
At 56, when I retire, will use our taxable funds to live off which will cover 8-10 years of living, including health insurance and some travel/fun built in. Again, building in 3% inflation Nothing extravagant but we are not extravagant people. By doing so may allow us some flexibility to help receive some subsidies on health care. In our plan, we are not counting on any, so if we do receive some, that will be icing on the cake.
We use Personal Capital to project retirement and we have been using a Financial Advisor for the last 5 years. They both indicate that I’m working, only because I want to work. Which I take as confirmation our plan is working.
To be quite honest, I have been working this plan since I was 22, starting out my career after college in Banking making a little over minimum wage as a Teller. However, it wasn’t until I was 30 that reality hit me when my Dad passed at 60 and my mom shortly after at 64…both of whom never really enjoyed a retirement. At that time, my son was 1 and my daughter 5 and I vowed to balance my life of being a good husband, father while pursuing a goal to be in a position to have leave the workforce by 55.
Time flies. Fast forward to today and here we are. We are truly blessed.
Paper Tiger says
Paul, thank you for sharing all of the details that went behind your thought processes. I think you have a great plan and have done an awesome job preparing for your early retirement. Best of luck in the future and I hope everything runs smoothly for you and your family as you embark on the next chapter.
Hello Paul. You mentioned a financial planner. I’ve been looking for one for years and have never pulled the trigger as I didn’t see a good return for the fees charged. I’ve even talked to Vanguards planners and Personal Capital. I would appreciate your opinion on who you work with and why.
Heath Insurance is a huge issue. Calculate how far you are from Medicare and then open a “Burn” account from which you will pay all your health costs. When I retired I calculated I would need $150,000 health insurance costs before Medicare kicked in. So I funded a $250,000:account to burn. If I have money left I will take some huge vacations and travel first class. If not, I should have isolated my investment portfolio so that’s what money is all about. Fluidity and freedoms
Financial Samurai says
If you have no debt and have been planning for five years, I’m pretty sure you’ll be fine. Just make sure to negotiate a severance if you’re not getting a pension.
Your analysis will also depend on your available income throughout your retirement years plus your asset base and maybe your genetic (family) longevity history. Factor in your retirement travel, hobby and life goals and you will get a good optic.
I would add one – Share the wealth! In the last few years, we’re giving both sets of parents some money as gifts. We always intended to support our parents as they become older, but even though we love them dearly, who knows how when exactly we’ll be called upon to help – And what competing demands there will be on our finances when the time does come when they are wholly dependent on us. Doing a a moderate amount now when things are so great makes it a bit easier and also means they’ll maybe need less all at once down the road. Plus its a lot easier giving away “free money”, isn’t it :)
It means we’ll retire a year later than planned, but honestly I don’t mind because I know a year’s extra earnings is a small effort for us and a huge impact on their quality of life in older age.
Financial Samurai says
Yes indeed. Maybe I’ll add a specific segment about your suggestion instead of rolling it into one.
“Your goal is to calculate how much funny money you’ve made each year from the bull market and proceed to spend some of it on yourself, your family, and your loved ones. You don’t have to spend 100% of your bull market gains each year. However, you should try to allocate and spend at least 10% of the funny money living it up.”
I personally still will take a cautious approach during this stage of an incredibly long bull run. Trying to ride a bubble till right before it bursts is a dangerous game because greed plays a factor and you are more than likely to hold on too long and stuck when the bubble bursts. Thinking you can get out before that happens is market timing which hardly anyone gets right.
I do agree with the concept of trying to spend some more during the good times on stuff that is enjoyable because you do need to enjoy life at some point and a bull run is as good an opportunity to do so
Financial Samurai says
The biggest amounts of wealth are created during a bull market. I strongly believe it’s worth taking a portion of cash flow and trying to hit home runs.
It feels risky and bad to lose, but you have to take risk to receive outsized returns.
Money Ronin says
Perhaps you can write an article on how to find unicorn investments (not specific recommendations). I’ve been all in on real estate and stocks but I’m pushing the pause button on these traditional investments. I’m ready to invest in something non-traditional but don’t know where to look.
Sam I respect your blog a lot but this post is crazy.
This line is astounding: “The vast majority of your funds should be allocated towards a boring S&P 500 and bond index. You just have little chance of ever getting richer faster than the majority of the investing population.”
First off, I didn’t realize the goal was to get rich faster than everyone else! Just getting rich (gradually) is more than the majority of humanity gets.
Secondly, a lot of people time the market, consciously or unconsciously. “Steady Eddys” who keep investing in broad indexes (like S&P 500) through thick and thin do much better than than others. So, they ARE getting rich faster than the majority. It’s simply not a “get rich quick” scheme like hunting unicorns.
Finally, I’m frightened to hear you were overweight in tech stocks! I’m really glad they bounced back, and it worked out for you — this time! I hope it won’t be a repeat mistake.
Was it Warren Buffett who said “You don’t know who’s been swimming naked until the tide goes out”? Well, the tide will eventually go out. Well-diversified folks with good income-producing assets will be fine, but speculators will be spectacularly burned.
I’m overweight, too … in Vanguard’s dividend appreciation fund. Because when the chips are down, and they will be soon, dividend payers will outperform.
I fear passive investing will end up hurting people due to the buyback scam most companies are running. It’s like the whole system is on the Enron model.
WannabeTrophyHubster says says
“First off, I didn’t realize the goal was to get rich faster than everyone else! Just getting rich (gradually) is more than the majority of humanity gets.”
But… but… you already ARE Rich!
Financial Samurai says
As someone who wanted to get out of the rat race sooner, rather than later, trying to get rich at an early age and before the average person definitely was a goal of mine since 22 years old.
I think it’s great if you want to be average. I just wanted to have the option of leaving work by the time I was 40. Therefore, I logically took more risk than the average person.
It is true that for almost 20 years I’ve been biased towards growth stocks, San Francisco real estate, and entrepreneurship. I need to be more conservative and I have been for the most part to protect my gains.
How about you? At what age did you retire and how do you invest your money in retirement?
Not retired yet, Sam. I like the pay and benefits of my job on Wall Street, and for a few more years I will stick with it.
However, I’ve stashed a few million away in Vanguard funds, Midwest rental properties and triple-tax-free munis, so that I can walk away at any point. That day probably isn’t far off. I just don’t want to leave with any regrets.
Tech stocks have been one of the best performing sectors over the past 10 years.
Most of peoples goals here is to get rich before the majority. Why would you want to be average?
“In my case, my FI number keeps growing because of kids.”
Are congratulations in order?
I also am looking to extend my family in my 40’s- through IVF. Scary to do but really want to give my daughter someone to play with when they are young and count on when they are old.
The continuing bull market has made it an easy decision.
Thanks, as always, for your perspective!
Financial Samurai says
Congratulations and best of luck to you!
I’m always looking ahead. So if a second kid arrives, we’ll be financially and mentally prepared.
Paper Tiger says
I think I’m going to use this opportunity to de-risk my portfolio. Sell some winners at a high point and re-invest those funds in lower risk, income producing products. I will turn 62 in a few months and our portfolio is currently 84% in equities which is probably too aggressive for someone my age.
This just seems like a great time to rebalance our portfolio to something more in line with age-appropriate risk.
Financial Samurai says
Sounds good to me. That’s a pretty high weighting at 62 years old. Did you retire yet? What are your lives plans going forward?
Paper Tiger says
I retired from my corporate career 4 years ago at 57, after 36 years. I’ve spent the last 4 years developing a startup company with some guys I used to work with. I become fully vested in my common shares in September and plan to step away and let my younger partners take over and cheer them on from the sidelines. Hopefully, they can guide the ship to a successful exit in 3 years or so and everyone can recoup a nice payoff on their investments in the company.
My wife is 4 years younger and intends to continue on with her career for another 5-7 years. She was recently promoted to a VP role and continues to be passionate about her work. I do think she will start to slow down at some point so we’ll see if she really lasts as long as she thinks before joining me in retirement. I’m fine with whatever makes her happy. The longer she works and covers our expenses/benefits the less we have to use our portfolio to cover it so I think there are pluses and minuses either way.
We are blessed to have 3 pensions, of which mine kicked in at 60, and a solid net worth so her career is more about fulfillment than necessity right now. We should be just fine whenever she decides to pull the trigger and in the meantime, I will continue to figure out retirement running solo for a while. I also have a chance to join her on some of her domestic and international travel for work and much of those expenses can be covered by the company so that is another perk with her continuing to work.
I’ve been unloading debt and delaying some large purchases. Basically I don’t invest with market timing but I do tend to purchase with market timing. If a recession hits in the next year the travel trailer we want to buy will be cheaper. We don’t necessarily need it today so I’d rather sit the cash in safe money and perhaps buy for less next year.
Dr. McFrugal says
” There’s a Presidential election coming up promising us lots of freebies…”
Really? Which freebies are you talking about? To me, it seems like they want raise taxes on take more of my money. I haven’t heard about these freebies you speak of :)
Mark Shields says
It’s similar to the $750 billion/yr defense budget, we just don’t call that free. Instead, the plan is to reduce that ungodly amount some, tax super high earners to better help middle America and the economy.
If your net worth is over $50 million, taxes would go up for you I guess.
Well- that’s a silly response. In order to get the funding all the Dems want and for the Repubs who want to responsibly decrease the national debt, taxes will be raised on all but particularly the middle class (well below 50M) because that is where the brunt of the available money is.
Financial Samurai says
Student debt elimination and free healthcare are two big ones.
If we get these two, will end up saving about $40,000 a year. Would be so seeet!
Going the other way says
God, I’m making so much money. So far the last 3 weeks I’m up 24% and that’s just the beginning. I expect my investments to go up 20 fold over the next few years as the general stock market loses probably 67-90%.
I have been sketchy about sabbatical. Where I work offers one and I definitely qualify for at least having it considered. The only wonder is, since the US doesn’t have a great tradition of long vacations like they do in Europe, if you’re gone for a month and the place doesn’t fall apart, they’d simply use it as an excuse to reduce headcount later one when they figure things held together with one less person. I cant recall anyone I work with ever taking it either, and I’ve been here a while. The only times you heard about it, it was some DIR or MD who took it. Too low on the food chain….caveat emptor. But, it sounds great, IF I thought I could take one without repercussions.
Financial Samurai says
Have a honest conversation with your boss about it. It is tougher if a sabbatical is not part of your company culture. But if you have earned it, you should take it.
It really does feel like the best of times. I just checked my investments after a month and I’m gobsmacked by home much more is there!
Best to take advantage of lower rates and reduce expenses.
Great heads up about a recession coming within 12 months after the Fed starts cutting rates. It seems like the market is baking in one cut by end of this year and another in 2020.
the lemmings are all in says
Time stamp this blog post. It will go down in infamy.
I missed out on the huge bull run so I need others to suffer!
I can’t believe homeowners have made so much money and now get to refinance to lower rates and save even more money. Life is not fair!
Financial Samurai says
Sorry you missed out on the bull run.
There’s always the next 10 years.
I’m very curious about your big purchase. What is it? A new car? Maybe a new house?
I have a hard time living it up, but I’m definitely loosening up as I get older. Maybe it’s the strong economy. This summer, I’m spending more on entertainment. My son is out of school and we’re buying some fun toys. Normally, I go for free/cheap entertainment, but what the heck. We’re doing pretty well financially. Why not enjoy it a little?
Anyway, it’s way easier to spend money on my son that on myself. Maybe add that to the list? Spend money on your loved ones while you can.
Financial Samurai says
With a multi million dollar net worth and a wife who is still working and provides subsidized healthcare, and a moneymaking blog, I think you have every ability to live it up.
It sure is nice when the markets are going in our favor! Less stressful for sure than during tanks. I think you said it right that if you can’t enjoy yourself during good times in the markets you never will because it just feels awful to spend during downturns. Very thorough checklist! Im hoping to use this ride to splurge a little and go on a nice vacation. I’ve never regretted the memories and experiences from vacations especially because trips don’t happen often enough. Thanks for the post!