Reply to Checked 401K today after not looking in 3 months

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[quote=Anonymous][quote=Anonymous]I've also lost everything that I put in this year. Funds have only lost money despite aggressively saving. I wish that I'd not bothered to put anything in and instead invested in real estate, my home, or other. I know that it may come back in a few years but it is difficult not to be completely disheartened by it. We don't have a ton of savings to begin with so to watch it disappear immediately is upsetting. [/quote]

I have no sympathy for you or others like you – you know why? Because you were either greedy or dumb or both.

I’ve always been a big fan of focusing first on paying off your mortgage because if you “don’t have a ton of savings to begin with,” you need to focus on the very basics like having a roof over your head secured. You probably knew that but didn’t do it because everyone on DCUM and all of your coworkers or neighbors were saying how great it was to be in the stock market because it was going up.  You had FOMO and didn’t want to settle for the sensible 3% return you get by paying off your mortgage.

This goes against conventional wisdom, but I view stocks as just “funny money“ for rich people.  My stocks are down for the year like everyone else’s, but I don’t care because I have a paid-off house and cars, and tons of I bonds for short term cash. Beyond that, I just try to maximize my money and you do that in stocks, but I only did that after I had the basics of a middle-class life secured.

No one these days knows if/when you can even retire. The traditional guide used to be the 4% rule, where you can withdraw in retirement 4% of your assets. Go over to the Bogleheads form – some people think that’s now 2.5%.  In other words, if you save $2 million, *maybe* you’ll have $50,000/year in retirement income. And the younger generations more than likely won’t have Social Security in the same form that exists today.

That’s why I say it’s funny money - nobody knows how much you really need and you can lose 40% of it at any given time, etc.  Sorry but you have to just work and save, work and save, work and save and don’t think stocks are going to bail you out.[/quote]

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