Jonathan Hoenig Tweeted out "the average 50 year old has $160,000 in their 401k, how do you compare?" Don't get caught up in comparisons, the amount that others have will not impact your outcome, it's just wasted time and energy. At 50 though, you do need to have some context for how viable your idea of retirement is. A $20,000/mo lifestyle isn't a reasonable outcome for a 50 year old with $160,000 in the bank. Certainly not from that account balance, a bunch of cash flow positive real estate could be a different story.
Being 50 leaves a lot of time to get things in order in terms of figuring out how to save more or cut back on expenses as maybe income goes up, kids move out and the mortgage could be close to paid off. Something I have been saying for years is to forget about rules of thumb that call for replacing 70% of your income or 80% or anything else. Get out a spreadsheet, list your fixed expenses, list out what you typically spend on discretionary stuff, add it all up and pad it by $1000 or maybe $2000 depending on how lucky you are/are not with one-off expenses like vet bills, new tires and all the rest of things like that.
That's the number you need to cover. Do your various, projected income sources cover that? If not, then something has to give. You keep some sort of job, you spend less, maybe you downsize, the answer will be something you have to figure out and can live with.
Nassim Taleb fumbled through trying to get an idea out on Twitter that started as saying IQ tests are useless, the best test is whether you're rich at 35. Someone must have called him out effectively because he sort of backtracked to being "financially satisfied" and not envious of others and then seemed to imply that being 55 and rich is the better measure. I'm not sure what point he was actually trying to make but the way I have long viewed it is that if you own your time, healthy enough to still get it done, have a little savings, able to cover emergencies and have let go of envy then it's easy to argue that you're rich, you're certainly free. That doesn't specify age nor does it specify some amount of money in the bank. Time and health are more important than money.
Blogger Nomadic Samuel put out a call to FinTwit for a how I invest my money series. Not sure I will participate because of how uninteresting our accounts are. I've talked about my asset allocation before being overwhelmingly in cash or cash proxies, about 25% in "normal" equity investments, my exposure to crypto these days might be 2-3% up from 1/2 of a percent from when I bought Bitcoin in late 2018 but down from 6-7% when Bitcoin was higher. I am determined to hold on to it until it either goes to a bazillion or goes to zero as I've been framing the asymmetry for a long time.
My reasoning is as it has always been, my income is levered to the ups and downs of the stock market, I don't ever want to retire, we have been living below our means for ages and now all the more so having just paid off our mortgage. The income from our Airbnb about covers our fixed expenses. Fixed expenses would go up by another $1000/mo if our hand was forced to get decent health insurance (we get away with lousy insurance thanks to being healthy). We have a handful of annual expenses like property tax that amortize out to about $600/mo plus maybe another $1000-$2000/mo in discretionary and one-offs.
Tying in to the top of this post, that's all the product of the type of spreadsheet work I referenced in the second paragraph. For a while, I've thought in terms of "if it all blows up, how long can we last, can we avoid taking Social Security earlier than I plan to take it at 70, or possibly 69?" My primary source of income may start to erode (we're all getting older) but should still be viable relative to our financial needs for an awfully long time. I've talked before about Plan B and Plan C if things don't go well. The back ups rely on my preserving optionality by maintaining relationships and the ability to bend down and pick up heavy things (a good way to frame staying able bodied). These are all things to incorporate into retirement planning in case every assumption we make at 40 or 50 turns out to be wrong.
Speaking of which, we had a tiny wildfire yesterday caused by a downed power line. The line was still charged when we got there, you could hear it humming, so we had to wait for the utility company to cut the power and then confirm it was off. It go so hot though that it melted some of the rocks.
It was a fun fire, up a crazy steep hill.
Also related, I had to approve a small item on the new Type 3 Engine Walker is having built and got my first mockup of the truck. I added the lettering with Microsoft Paint to use the image for further fundraising.
Please consider going to walkerfire.org to make a donation toward the new truck. We're about 70% of the way there, plus have about $24,000 worth of equipment that the truck will need.
Lastly, I will be giving a virtual presentation next Thursday August 25th at 10:05am east/7:05am west on bond replacements. It's been a while since I gave a presentation at a conference, virtual or otherwise so this should be fun. When I get the attendee link I will share it, hope everyone can sit in and ask questions.
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