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January 14, 2013


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Good post.

"It all starts with savings" - Financial Samurai

Great post.

A TON of good information here. I can tell on my own quest for more income streams that I've got a long ways to go. But its nice to see someone else succeed and know that I am on the right track.

"You’ve got to figure out your own healthy balance between saving and spending." Right, don't start with the assumption you should save 10-15%, b/c that's from the same people with the assumption that you have to be a slave to your profession until you're 65. Its really weird that people who make $30K seem to always spend $27-$33K and people who make $100K spend $90K-$110K, etc.

Without considering your salary at all, think about what you really 'need' and go from there. If it turns out to be $30K, and you make $80K, then you get to decide if each additional cost is worth the sacrifice of time it does cost.

Our passive income streams at the age of 78 are:

7.0% - Two Social Security checks
10.6% - Two monthly pensions
15.6% - Tax deferred CDs purchased in October 2008 with 5% coupons
24.9% - Tax deferred Corporate Bonds, average yield 5.19%
41.9% - Tax exempt Muni bonds, average yield 4.96%
0.0% - Debt

If I had to start my working life today rather than in 1956 I am doubtful that I would have been able to duplicate my success. In this age of automation far fewer workers are needed than in my day, and those that are needed need exceptionally good skills and/or education.

Last night's "60 minutes" program showed how robots are being used widely to do very repetitive tasks in factories, warehouses, and assembly shops. The hospital where my wife spent two weeks last month was using robotic vehicles all over to move supplies of various kinds. It was fascinating that they had the intelligence to stop and let human beings go on their way down a corridor. It's a similar technology to the robotic vacuum cleaners that are available.

I still have several years of debt ahead of me before I can invest in my future.

Do you live on/spend all of your passive income or is your CD income continually reinvested?

Do you reinvest the earned income in to the same area (CD interest in to more CDs and rental income into more investment properties) to keep your portfolio balanced?

I have almost $5,000 invested for my future. I have a long way to go and a short time to get there.

In our case the majority of our income is reinvested. I no longer buy CDs for obvious reasons. With bonds I can still find 5% coupons in the secondary market but the prices have edged up a few percent.

We don't spend much these days, especially since giving up foreign travel after our 2010 trip which was a cruise down the Rhine and Mosel rivers from Basle in Switzerland, through Germany, to Antwerp in Belgium.

Our largest expense these days is paying the state and federal taxes on the minimum required distributions we have to make in our IRAs when we move money from the IRAs into our Trust account.

He mentions that you can't withdraw 401K money until age 59, but that's not true. If you retire, you can actually withdraw 401k money at age 55.

Old Limey: You are really right about the situation with automation. It's one of the things that's destroying the middle class that often goes unmentioned. I have a feeling I will be one of automation's victims at some point. I don't know if my portfolio will hit the goal I need in time.


If you don't mind me asking, what is your profession? It's never too late to learn some additional skills for your future :)

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