When does contributing to your portfolio start to feel pointless?

[Anonymous]

Anonymous wrote:We are able to save around 100k a year right now with current incomes and have a net worth of 1.5M. The stock market returns 10% on average, so avged out this 1.5M would grow by 150k on its own which is already more than we contribute every year. If had 5M, it would grow an average of 500k. This is 5x our contribution rate.

At some point doesn’t it kind of feel pointless put more money into your account unless your income keeps scaling with your net worth? TBH if we had 5M which isn’t quite enough to retire I might redirect that 100k of earned income into something else like a sports car or fancy vacations, and just let the 5M compound. At this level your growth is more about market performance and not 9-5 salary.

Obviously I know 10% is just a long term average and it doesn’t mean a steady 10% every year, some years it might be up or down by 20%+. But it’s averaged 10%.

Are you deliberately stupid?

Trump is getting us to the great depression. You will not be making 10% or any money in the market by this time next year.

5 million when the dollar will be worth nothing yeah you are genius

[Anonymous]

$16M net worth and I keep investing and have a great lifestyle. But hey you do you.

[Anonymous]

Anonymous wrote:I’m not going to read all the responses and someone may have already told you, but it’s all about the balance between your savings target and lifestyle creep. If you start spending 100k more a year now on yourself and expect to keep the same lifestyle in retirement then you’ve moved the goalposts and the 5M target probably needs to increase

Excellent point and I don't think it was already made. The more you get used to spending now, the more you need to save to maintain your same lifestyle once you are no longer working.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are able to save around 100k a year right now with current incomes and have a net worth of 1.5M. The stock market returns 10% on average, so avged out this 1.5M would grow by 150k on its own which is already more than we contribute every year. If had 5M, it would grow an average of 500k. This is 5x our contribution rate.

At some point doesn’t it kind of feel pointless put more money into your account unless your income keeps scaling with your net worth? TBH if we had 5M which isn’t quite enough to retire I might redirect that 100k of earned income into something else like a sports car or fancy vacations, and just let the 5M compound. At this level your growth is more about market performance and not 9-5 salary.

Obviously I know 10% is just a long term average and it doesn’t mean a steady 10% every year, some years it might be up or down by 20%+. But it’s averaged 10%.

Are you deliberately stupid?

Trump is getting us to the great depression. You will not be making 10% or any money in the market by this time next year.

5 million when the dollar will be worth nothing yeah you are genius

You must have sold everything in April

[Anonymous]

Anonymous wrote:It feels pointless when your saving is causing a situation where you're essentially starving yourself for a prolonged period just to gorge many years down the line.

This is how I feel. Save save save. I’ve saved! I’m 50 and want to spend. I won’t take money out but we are sit significantly slowing down contributions only for husband to get the match.

I retired (DOGE). Net worth is $4.5M and two financial advisors have said we have enough and kids will still inherit $.

[Anonymous]

Anonymous wrote:How about helping someone in need? Could be partially funding a college kid's tuition, donating to the Innocence Project, an animal rescue, etc. You might find purpose in designating a certain portion of overage to someone it could really help.

My mother is 86. She gifts her children & grandchildren $19k/yr, has fully funded five 529s & makes charitable donations to causes & organizations close to her heart to the tune of $100k/year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m not going to read all the responses and someone may have already told you, but it’s all about the balance between your savings target and lifestyle creep. If you start spending 100k more a year now on yourself and expect to keep the same lifestyle in retirement then you’ve moved the goalposts and the 5M target probably needs to increase

Excellent point and I don't think it was already made. The more you get used to spending now, the more you need to save to maintain your same lifestyle once you are no longer working.

Eh, we spend a ton now figuring these are the years when we need it the most. Income is about $1.5M and we save about $150k/year for retirement. We'd need to save more to have the same income in retirement as we do now, but it's more important to us to live large now while our kids are growing up. So lots of travel together, lots of hired help to make sure house is clean, yard is beautiful, family is fed, kid activities, club membership. I envision a quieter life in the future. Kids grow up and people grow old and less adventurous. Of course, I'll still want a high income, and I'll have it - just likely not as high as today.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are able to save around 100k a year right now with current incomes and have a net worth of 1.5M. The stock market returns 10% on average, so avged out this 1.5M would grow by 150k on its own which is already more than we contribute every year. If had 5M, it would grow an average of 500k. This is 5x our contribution rate.

At some point doesn’t it kind of feel pointless put more money into your account unless your income keeps scaling with your net worth? TBH if we had 5M which isn’t quite enough to retire I might redirect that 100k of earned income into something else like a sports car or fancy vacations, and just let the 5M compound. At this level your growth is more about market performance and not 9-5 salary.

Obviously I know 10% is just a long term average and it doesn’t mean a steady 10% every year, some years it might be up or down by 20%+. But it’s averaged 10%.

Are you deliberately stupid?

Trump is getting us to the great depression. You will not be making 10% or any money in the market by this time next year.

5 million when the dollar will be worth nothing yeah you are genius

Another DCUMer suffering from T….D….S

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m not going to read all the responses and someone may have already told you, but it’s all about the balance between your savings target and lifestyle creep. If you start spending 100k more a year now on yourself and expect to keep the same lifestyle in retirement then you’ve moved the goalposts and the 5M target probably needs to increase

Excellent point and I don't think it was already made. The more you get used to spending now, the more you need to save to maintain your same lifestyle once you are no longer working.

Eh, we spend a ton now figuring these are the years when we need it the most. Income is about $1.5M and we save about $150k/year for retirement. We'd need to save more to have the same income in retirement as we do now, but it's more important to us to live large now while our kids are growing up. So lots of travel together, lots of hired help to make sure house is clean, yard is beautiful, family is fed, kid activities, club membership. I envision a quieter life in the future. Kids grow up and people grow old and less adventurous. Of course, I'll still want a high income, and I'll have it - just likely not as high as today.

Oh sure. Some expenses will drop off as the kids get out of the house/out of college. Same if you pay off a mortgage. Not including those in your retirement spending estimates is normal. But if you are adding a level of coddling in your lifestyle today hiring extra help/etc that you won’t be able to afford in retirement, it’s a personal physiological test whether your “I’m spending now because these years are important and I’ll live leaner later” logic will survive the transition. I believe there are some it works for and some it doesn’t. Good luck. The point is that you have some control over how abrupt your financial change between working and retirement will be (and remember if you ask anyone older who’s done it that they may have had things softened by a 20 year bull market). There’s also a transition your kids will face between their lifestyle in your home and what they will be able to afford on their own in a few years.

[Anonymous]

Anonymous wrote:I'm not one of the doomsdayers who is going to say Remember 2008? But remember 2008 ha ha.

2008-2010 were my best investing years.

[Anonymous]

Anonymous wrote:We are able to save around 100k a year right now with current incomes and have a net worth of 1.5M. The stock market returns 10% on average, so avged out this 1.5M would grow by 150k on its own which is already more than we contribute every year. If had 5M, it would grow an average of 500k. This is 5x our contribution rate.

At some point doesn’t it kind of feel pointless put more money into your account unless your income keeps scaling with your net worth? TBH if we had 5M which isn’t quite enough to retire I might redirect that 100k of earned income into something else like a sports car or fancy vacations, and just let the 5M compound. At this level your growth is more about market performance and not 9-5 salary.

Obviously I know 10% is just a long term average and it doesn’t mean a steady 10% every year, some years it might be up or down by 20%+. But it’s averaged 10%.

I'm with you. That's why we've stopped contributing to TSP / 401K. There is no employer match, though which I would never skip.

[Anonymous]

[b]

Anonymous wrote:

Anonymous wrote:We are able to save around 100k a year right now with current incomes and have a net worth of 1.5M. The stock market returns 10% on average, so avged out this 1.5M would grow by 150k on its own which is already more than we contribute every year. If had 5M, it would grow an average of 500k. This is 5x our contribution rate.

At some point doesn’t it kind of feel pointless put more money into your account unless your income keeps scaling with your net worth? TBH if we had 5M which isn’t quite enough to retire I might redirect that 100k of earned income into something else like a sports car or fancy vacations, and just let the 5M compound. At this level your growth is more about market performance and not 9-5 salary.

Obviously I know 10% is just a long term average and it doesn’t mean a steady 10% every year, some years it might be up or down by 20%+. But it’s averaged 10%.

Are you deliberately stupid?

Trump is getting us to the great depression. You will not be making 10% or any money in the market by this time next year.

5 million when the dollar will be worth nothing yeah you are genius

Despite all the DOGE hysteria, there's actually been few spending cuts. The deficit rolls on out of control. You'll actually want to be in the market when they devalue the USD to be on par with toilet paper.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It feels pointless when your saving is causing a situation where you're essentially starving yourself for a prolonged period just to gorge many years down the line.

This is how I feel. Save save save. I’ve saved! I’m 50 and want to spend. I won’t take money out but we are sit significantly slowing down contributions only for husband to get the match.

I retired (DOGE). Net worth is $4.5M and two financial advisors have said we have enough and kids will still inherit $.

I hear ya! I'm 60 and still working full time and our kids are grown and our NW is higher than yours. Some earlier poster said it, it's just a reflex.

[Anonymous]

If you have 1M at 30, the difference between saving 5k a month and 10k a month until age 60 is $13M vs $18M (7% returns).

You save twice as much from your paycheck but it only yields about 37% more money in the end. Compounding does a lot more at a certain point than you working a job.

If you have 2M at 40, the difference between saving 5k a month and 10k a month until age 60 is $10M vs $12M

[Anonymous]

Anonymous wrote:I'm pretty old, and I've never known a time when the future felt more uncertain. My advice would be, keep saving and diversify for a number of possible outcomes.

Also don't underestimate the cost of maintaining a comfortable old age if/when illness or disability strike.

not that old

2008 was worse

AIG going from AAA to junk bond in a week.
money market funds almost breaking the dollar
stock market going down 50%

or how about 1969 to 1979 when the stock market was flat for a decade?

once we get rid of Trump the response will be overwhelming and we will tax rich people again.