How Old Are You And What Is Your Goal Using The PP?

[brick-house]

40.  Married with Children.  Time flies... Christina Applegate got old and I turned into Al Bundy...

75% PP. 25% VP.  I am a finance/econ guy - worked at Vanguard for several years.  In my 20s, I drank the stock heavy Kool Aid.  Funny thing happened on my way to expected return nirvana.  I learned that I did not like losing money. 

[steve]

Im 59, Married and have a Son in his early 20s.  I have been retired since 2004 and my basic goal is for wealth preservation and too feel additional security if something were to happen to my current income stream. I like watching my portfolio grow and hopefully I will never need to withdraw from it for regular living expenses.

[Lone Wolf]

Another way of looking at this important feature of the PP is that we all need some of that "inner quiet" in order to make good decisions.  When we lose that inner quiet we tend not to make as good a decisions ("no one is wise on horseback", as they say).
...
The "you" you should fear is not the rational you with a sense of inner quiet, it's the frightened "you" who is making decisions out of a sense of panic and not rational calculation.

I think you've got that 100% right.  When I look back at my greatest achievements and most productive moments (a short list and thus easy to review), without exception they took place when I was filled with a sense of inner quiet.

It feels like gently setting aside that part of your brain that clings to fear, obsesses about the past, and frets about the future.  I think this is when we're at our best not only in finance but just about every other area of life as well.

[Odysseusa]

I am 35 and my goal of using the PP + VP is to be able to sleep better at night.

[Jake]

I'm 39 and semi-retired (for now!) after selling my business. My goal in using the PP is to protect my wealth and provide a source of income from my investments. I stumbled upon Harry Browne's investment podcasts about 6 years ago and I am immensely grateful to him for basically providing my investment education. This forum and the crawling road podcast are a fantastic resource for those taking the PP approach.

[Storm]

I'm 39 and semi-retired (for now!) after selling my business. My goal in using the PP is to protect my wealth and provide a source of income from my investments. I stumbled upon Harry Browne's investment podcasts about 6 years ago and I am immensely grateful to him for basically providing my investment education. This forum and the crawling road podcast are a fantastic resource for those taking the PP approach.

Awesome, Jake.  I would be very interested in what type of business you started that allowed you to retire before the age of 40.  If you don't mind sharing, I'm sure a lot of people here would also be interested.  Since most of us are looking to retire early, I think this is great information to share, if, of course, you don't mind sharing.

[Jake]

Awesome, Jake.  I would be very interested in what type of business you started that allowed you to retire before the age of 40.  If you don't mind sharing, I'm sure a lot of people here would also be interested.  Since most of us are looking to retire early, I think this is great information to share, if, of course, you don't mind sharing.

Thanks! I'll try and summarise it briefly: in 2000 I started a niche consultancy doing a specialist type of computer modelling (simulation) in the urban development and transport sector. I had one business partner and we funded the business from our own meagre savings and from some very large loans that we were fully, personally liable for. We had no clue what we were doing at first and made next to nothing for the first 2 years as we learned how to be entrepreneurs. We worked extremely hard in that period and it took us until 2005 to pay off the initial loans and interest. By that point the business was nicely profitable and in 2006 we began exploring the potential of a trade sale to one of the large engineering companies that we had done a lot of sub-consultancy work for. The negotiations took over a year and a half and included us walking away from their offer on the basis that we didn't really need to sell unless the price was right. Eventually the large corporation came back to us and we agreed a sale which completed in 2007, right at the height of the last boom. We were extremely lucky with the timing. I had to work at the corporation for 3 years as part of an "earn-out" agreement after the sale and when that period completed in 2010 I resigned to take a career break and do fun stuff  :)

Although there are risks in entrepreneurship, my opinion is that it is the fastest way to achieve early retirement, if that is your goal. However, it has a big cost on personal life because you simply have so little time and head-space for life outside the business. At least that was the case for me and everyone else I've seen who has done it. I don't think I could have done it if I had had kids.

[Storm]

Although there are risks in entrepreneurship, my opinion is that it is the fastest way to achieve early retirement, if that is your goal. However, it has a big cost on personal life because you simply have so little time and head-space for life outside the business. At least that was the case for me and everyone else I've seen who has done it. I don't think I could have done it if I had had kids.

I'm glad it worked out for you.  I guess there really isn't any path to retiring early without working extremely hard for at least a decade of your life, or sacrificing enough that you have very little expenses.  But, in the end, I think this is a good trade, a decade of no life outside of work for a chance to do what you want the rest of your life.  The price is, of course, very high, because you're sacrificing the years when you are younger and healthier.  I guess each of us needs to choose if this is worth it or not.  A lot of us chose to start families and this life is no less rewarding.

Thanks for sharing.

[rhymenocerous]

I'm 25, and I am using the PP to save for retirement.  I started saving 3 years ago, and switched over to the PP 6 months ago.  I haven't regretted my decision one bit so far, and am quite comfortable with the allocation.  I recall a quote that said something like, "You are not really diversified if your entire portfolio always moves in the same direction."  That's what I felt like I had with a stock heavy portfolio, and what prompted me to switch.  Also, I'm 100% PP with no VP.

[Freedom_Found]

I'm 35, using the PP to save up for retirement or whatever may come. I started a small business in 2003, took a few years but it grew tremendously. By the boom of 2006-2008, it was making a ton of money. Even after 2-3 years of making good money and thinking I was making the right decisions, I just never seemed to have much in savings. I started reading some books on investments, and that's when I found Harry. The business isn't crazy anymore, but it's still decent. Now I am saving 50% of my income and the portfolio is growing fast.

[LonerMatt]

I'm 22 and am starting to use the PP to grow my wealth so I can retire early (or when I choose to, really). Referred here from ERE!

Inadvertently, the PP is helping me learn a lot about economics. I'd already started learning about personal finance, but this forum is exposing me to many new things.

Given the lack of knowledge and resources the PP has for Australians, I'm considering starting a blog documenting how I go about things and what happens with the PP in Australia - just because there's not one out there, and I know a few frustrated Australians wondering about the PP.

[patrickjhall]

Similar story. 35, making decent money from an entrepreneurial venture that took off in '06, and really took off the past 2 years. I want to keep as much of it as best I can. I am pretty much 100% PP at this point and consider business ventures to be my VP.

I spent most of my 20s working directly for the founder of a high growth company, and watched him lose a few fortunes on stock "bets." He always "made it back" by selling off more equity in his company, but it was weird to watch. I also had a bad experience in my 20s with a financial "adviser," who steered me into annuities, which he made commissions on, of course. That went poorly but in the grand scheme of things, I didn't lose that much. I backed out of that but I didn't really have an answer other than all-in on stocks.

So I started doing some research on how to best handle my money myself. That led me to the Get Rich Slowly blog, which led me to Bogleheads, which led me to The Giant Permanent Portfolio Thread That Will Live Forever.  Really resonated as my 401k tanked in 2008, all stocks of course, as did my parents (who hadn't saved much to begin with) and realized that diversification didn't exist in much of the portfolios espoused anywhere else. Commingle that with the fact that our company pretty much profits on the mismanagement of huge multinationals, and I realized I wanted to figure out how to diversify as efficiently as possible.

As others have echoed, this portfolio and strategy really opened my eyes to a lot of new ways of thinking, and exposed me to a lot of economic theory that I would never have come across. 

[alvinroast]

44, married, no kids, wife is 51. She's got the stable job and desire to work forever. I've got the wacky business ideas that (so far) haven't paid off and a desire to retire to Belize (or any number of other places) .

I've got pretty much complete adrenal burnout and really need to cut the stress out of my life as much as possible. My wife doesn't want to lose any more money after a bad experience with an "advisor". I think the PP is perfect for both of us.

[steve]

This is an additional goal that I may not have mentioned before in previous post but it is very important to me.
I have with the goal of not lossing sleep over what the market is doing.

[Straight Ays]

I'm 32 and found the PP thread in 2009 and then read HB's Fail-Safe.  As they say, I was SOLD!  I then immediately bought TIPS   But I got the other 3 allocations right.  So then I sold TIPS and bought a precious metals fund.  Finally I sold that and I am now a proud owner of a gold ETF.  Gold scared the crap out of me, the price had gone up so much I wanted nothing to do with it.  But I came around in the end, and my goal, now that I'm in the PP is to protect and save money to make more time for family and friends.

[Gosso]

27 years old, no kids (that I know of), no wife or gf.  I have been a happy PP customer for over nine months.  I make decent money as an engineer.

For me the PP is a simple way to achieve an investment return of 3-5% above inflation.  Some years will be better, some more lean.  I have accepted this.  This investment strategy needs to back-test well, but also make sense moving forward into an uncertain and sometimes terrifying future.  I have satisfied all my doubts regarding the PP holding up under the four major economic scenarios of prosperity, inflation, recession, and deflation.  To me this felt like the end of my search for an investment strategy.  This has allowed my mind to be free to pursue other interests such as personal and spiritual growth.  The past few months have been great and I can honestly say that the time I have spent on myself is worth a hundred times more to me than worrying about which stocks I should pick next.

I know MediumTex has talked about how once you understand and internalize the PP, that there will be a huge burden lifted from your shoulders.  I have experienced this and it is wonderful!  I like to compare the search for an investment strategy to the journey of Frodo (NERD AND SPOILER ALERT!!).  The ring represents your ego which contains all your doubts, greed, fear, etc.  So you must carry this ring with you on your journey and it will constantly talk to you and make you question everything, which in some ways is healthy and good.  But at some point you get to the heart of Mount Doom and you are holding the ring out over the molten lava, you are so close to letting go, but the power of the ring is too great and it pulls you back into it.  You think to yourself “I can get a better return than this”?, “What if I just buy dividend stocks”?, “Gold is too volatile”?, "I think TIPS should replace gold", etc.  This is a journey everyone must undertake and there is no real roadmap to it, you just got to go with what feels right.  Hopefully at some point you can overpower it. (EDIT: if you need a reminder of the Mount Doom scene, "LOTR The Return of the King - The Crack of Doom" -- it's so epic!)

Now it is also possible that the PP stops working or needs to be adjusted in the future.  I don’t think any of us are so blind that we would continue to use the PP if it fails to deliver, or circumstances change.  I for one will be pounding the table if things start to go screwy.

[moda0306]

I like the LOTR analogy a lot.  Interestingly, the movie/book highlighted the cooperation of four races that were completely different than one another and that have a history of almost downright hating each other, but come together in the end to destroy the ring.  

Those 4 races (men, hobbits, dwarfs, and elves) seem so fundamentally different from each other.  Also, a couple of them (men and hobbits) had huge drawbacks, one being a very laid back, unambitious, noncombatitve society with seemingly no real value to a war against an evil entity, yet they happen to be invaluable in their ability to resist the ring's power.  The other having been in decline for a long time and simply unable to pull out of a rut.    

Yet the 4 races unite and do the jobs they need to do.  In spite of all their individual failings, they succeed as much more than a sum of their parts.  I even liken the utter hatred between dwarves and elves to the gold bug vs treasury bond debates.

[Gosso]

I like the LOTR analogy a lot.  Interestingly, the movie/book highlighted the cooperation of four races that were completely different than one another and that have a history of almost downright hating each other, but come together in the end to destroy the ring.  

Those 4 races (men, hobbits, dwarfs, and elves) seem so fundamentally different from each other.  Also, a couple of them (men and hobbits) had huge drawbacks, one being a very laid back, unambitious, noncombatitve society with seemingly no real value to a war against an evil entity, yet they happen to be invaluable in their ability to resist the ring's power.  The other having been in decline for a long time and simply unable to pull out of a rut.    

Yet the 4 races unite and do the jobs they need to do.  In spite of all their individual failings, they succeed as much more than a sum of their parts.  I even liken the utter hatred between dwarves and elves to the gold bug vs treasury bond debates.

Love it!  I didn't even think of that.

After listening to the Power of Myth series with Joe Campbell I have been reevaluating the classic hero adventures that I have read or seen.  There is a lot of wisdom that can be pulled out of these stories, and they can be applied to almost any life situation.  There is a reason why these stories stimulate our emotions and imagination.

[MediumTex]

I know MediumTex has talked about how once you understand and internalize the PP, that there will be a huge burden lifted from your shoulders.  I have experienced this and it is wonderful!  I like to compare the search for an investment strategy to the journey of Frodo (NERD AND SPOILER ALERT!!).  The ring represents your ego which contains all your doubts, greed, fear, etc.  So you must carry this ring with you on your journey and it will constantly talk to you and make you question everything, which in some ways is healthy and good.  But at some point you get to the heart of Mount Doom and you are holding the ring out over the molten lava, you are so close to letting go, but the power of the ring is too great and it pulls you back into it.  You think to yourself “I can get a better return than this”?, “What if I just buy dividend stocks”?, “Gold is too volatile”?, "I think TIPS should replace gold", etc.  This is a journey everyone must undertake and there is no real roadmap to it, you just got to go with what feels right.  Hopefully at some point you can overpower it. (EDIT: if you need a reminder of the Mount Doom scene, "LOTR The Return of the King - The Crack of Doom" -- it's so epic!)

You should have seen the time Larry Swedroe came here and tried to bite off MT's finger.

I gave him a Vulcan neck pinch which caused him to instantly release his grip on my finger.  I then let out a primal scream followed by "NOT IN MY HOUSE!"

[clacy]

37, married, 2 young kids.  Goals are the same as everyone on here:

Make as much as possible, with the least risk possible.

[hogtied]

61 years old and retired for 2 years.  PP is supplying us with a 4% withdrawal rate without going into principle.  This along with our pension allows my wife and I to live extremely well and comfortably.  Thanks to all on this board and the earlier Bogleheads PP thread who educated me on the benefits of the PP.  Let's keep it rolling for more rookies.

[Greg]

24 and just starting out my PP. Been in about 80% stocks/20% bonds for the past year and decided that there was too much manic-depression in the markets. Found the Fail-Safe Investing book and finally decided I wanted to do it. Purchasing gold next week (have gold ETFs already), and slowly buying treasury bonds.

My main goal is to be a minimalist who tries to get as much wealth as possible. I'd like to travel during retirement to various different countries and never have to worry about money.

My ideal end goal is creating my own foundation or institute/school. Whichever the case for being able to help the community towards prospering in their goals. Can't think of anything better to do with wealth than to give a bit to your kids and use the rest for helping others.

[Bean]

Age: 28
Goal: 25 x annual expenses, then 25 x annual income

[WiseOne]

It is a delight that there is such a mix of ages/life stages and backgrounds on this board.  I do have the impression, though, that are very few women posting here...why is that??

I am 49, saving about 30% of my income for retirement, with some going to prepay the mortgage.  It is probably true that investment returns beat the interest on the mortgage with the tax benefit, but the latter is guaranteed while the former is not.  Like several other people, I had a horrific experience with a professional investment advisor in 1999-2000, which has made me very risk-averse.

One of the consequences of that experience is that I'm not nearly as far along in retirement savings as I'd expected to be, since I'd been a conscientious saver since I started working.  So, I've needed to balance that risk averse side with the need to get a return on investments that beats inflation.  The PP is hands down the best way to accomplish that goal that I've found.  And, I love how it's appropriate for all life stages....from 20's to retirement.  Phooey to target date retirement funds.

[MediumTex]

It is a delight that there is such a mix of ages/life stages and backgrounds on this board.  I do have the impression, though, that are very few women posting here...why is that??

Internet investment discussions with overtones of Austrian economics and Thomas Paine-style conceptions of liberty just don't seem to pull in the ladies.

Seriously, though, I get the impression that most internet investment discussions tend to be mostly made up of men, probably because men seem to be more fascinated by market risks and are more willing to engage in lengthy arguments with people they don't know over things that don't matter.

It's funny how no matter how intelligent and sophisticated a man may be, he can often be reduced to little more than a dog chasing a ball if you pull him into a certain kind of competitive situation, whether or not it even makes any sense.  Think of all the men in the history of the world who have gotten into violent conflicts and been killed over little more than a perceived insult or other indignity.

I have a lovely wife and daughter who I think long ago grew tired of hearing the words "permanent" and "portfolio" used together.

I certainly think things would be more interesting around here if there were more women around, and I encourage all female lurkers to register and join the conversation.