Hi Kirk,
I had 6300 shares of BRKS in my IRA account. (with a cost of $10.08 it went to $120.00
I ROLLED OUT OF ALL OF IT WITH ONE SALE IN THE MID 80'S and rolled it into XOM at $58.56 and CVX at $103.60.
Both fortunate trades blew up the value of my IRA FAR beyond ny expectations/dreams.
Now I have RMDs hitting me this year.
Fortunately on September 2 this year I sold my 25% of the last dealership I ws invested in.
That has provided a liquidity event, that will enable me to write a huge check to the government and get tmy IRA reduced to 1 cent in the first year of required RMD's being necessary.
It's crazy to spend that much, but in the end, I made a huge windfall that I never paid a penny on. So I'm considering a transfer of all the shares in my IRA and cutting a six figure check to get my future tax bill down to 20% rates vs 41% rates. If i did that this year my SS income and dividend revenue stream from my taxable stock account will still make my Medicare monthly bill very close to what my employer funded policy is.
I still have income from the sale of the dealership as we funded some of the sale which generates 6.25%.
During all of my liquidity events from selling the partial ownership of the four dealerships and some commercial property that was adjacent to the dealerships I have kept liquid the receipts of those sales in a Money fund ETF which hold a value of $1.00 (and are invested in treasuries and or governmental agency notes), and some cash.
So I have 2/3 of my account in shares that are up 41.3 %. These are shares I owned before I sold assets PLUS the dividends they've earned over the years and cash and money market funds that are 45.5% of my account that are there from the sale of assets.
It is an underutilized account and intentionally ultra conservative.
With having almost a double on the entire account, it is constatly tempting to ring the bell (which will generate a tax liability of almost 20% of the stocks appreciated value, and reduce my dividend revenue stream.
With 45% cash, I'm of the mind that I'll ride some paper equity down, (on a bear market decline) not create a taxble event via selling high and be brutally patient before I start using my cash for adding discounted shares that pay a dividend and add it it to my dividend revenue stream.
Like you, I worked my way thru college - it took me 6 years for BSIA. Whenever I had a stock gain, I've paid my taxes and acted like nothing ever happened. Ditto my long term dealership liquidity events. I'm now where I'll add more shares once my dividends bring my cash up to 50% and /or the dividend yield exceeds my hurdle rate of 7%.
We've always put a lot down on our homes and paid them off early. In our experience wealth accumulation became faster after our homes were paid for. My senior partner' father's partner told me one time that wealth and asset accumulation begins at 50. He was a multi-millionaire and self made with zero inheritance. Once my Dad died, he became my father 2.0. He was the second man in my life I could discuss a problem with and expect a totally honest answer from, Surely do miss them both and know I have been extremely fortunate to have had both of their counsels in life.
We are debt free completely. I have allocated enough fixed income that covers our real estate taxes, utilities,and insurances. We both worked to the age of 70 before going on SS. Our combined SS income is now what my work salary was when I worked. I've been retired for 10 years and have passionately enjoyed watching my portfolio - probably too much of my time. It is a passion for me.that I genuinely enjoy.
I have a clear personal difference between speculating vs. investing.
Investing must always bring a known revenue stream.
Speculating is betting on an advance in value in the future - without a known revenue stream.
Upon retirement I changed to that rather conservative rule.
At 73 I know I can not start over.
I'm on a maintenance mode
I owe Warren Buffet and great big "Thank You". One time during an interview, the reporter asked Warren, "Now that you are a billionaire, and Berkshirehas hundreds of billions in cash, What do you want next?
Warren's answer was a simple but truthful response " Live to be the oldest man on Earth".
Warren Buffet is on the short end of his long life. After a lifetime of conservative investing he has learned,/benefitted from - THE POWER OF COMPOUNDING".
I'M FAR FROM THE SMARTEST MIND HERE ON SI!
If there ever was a post that I'd like to impactful to the most investors here on SI, perhaps it will be this post.
Comfortable retirement can be achieved without having an inheritance or trust fund silver spoon in your mouth.
Live well but frugally.
Getting to work doesn't have to have to include a daily $8.00 sugar coffee drink and a brown bag in your hand is how I ate lunch when I wasn't selling a car or buy ing a dozen trucks at an auction.
My vacations were not luxurious.
I married well and never had a divorce.
I never knew where it would take me, but I can tell you "IT STILL CAN HAPPEN IN THE USA for anyone!
I'm proof!
I'm going to write the US Treasury a preposterous check next month.
I'm going to pay the Treasury with an early out check on my IRA.
I'm going to get my tax rate on the next Dollar of earnings under control, whatever that level of earnings will be.
I'll do that, and "Thank" the US Government for the tax free use of money for a 48 year period of working and paying taxes.
Today's Capitalist System is ALIVE AND WELL. It still provides us with the finer things of life, but it doesn't happen overnight. We must be willing to work wisely. If one thinks it doesn't, it surely won't!
That is a great deal!
Bob |
