Home › Forums › Financial Markets/Economics › QE3 Away!: (EDIT: Now on the special unlimited nights and weekend spending plan)…
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Coronita.
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September 18, 2012 at 1:17 PM #751530September 18, 2012 at 2:53 PM #751531
an
Participant[quote=livinincali]But nobody bought all of their assets at the absolute low. Most 401K investors have been buying every month or twice a month. They bought both at the highs, the lows, and everything in between. They’ve seen their portfolio go up and they’ve seen their portfolio go down. If you we’re to take all of your contributions over the years and compared it to the value of your portfolio now it would be highly unlikely that you’d be ahead by over 100%, unless you successfully timed the market or focused on a narrow set of investments.[/quote]I agree that no one bought all of their assets at the absolute low. But no one bought all of their assets at the absolute high of 2000 either. But that seems to be what you were insinuating with this statement:
[quote=livinincali]Look at the stock market bubble in 2000. If you invested in stocks back in 1980’s or 1990’s you were still way up after the crash but new investors to the market in 2000 going forward would be extremely lucky to be beating CPI over the years even now when we’re approaching the 2008 highs.[/quote]The only reason why I brought up 2001-2002 was to disprove your statement about buying in 2000. It wasn’t meant to say that we all sit in cash and wait for that bottom. If we can truly time the market, we wouldn’t be here today on this forum talking about timing the market.[quote=livinincali]So over the past 12 years you’ve been up almost 40% and down almost 20%. As of right now it look pretty good but if you look at 2001 to 2011 your stock portfolio went up 20.45% yet CPI went from 174 to 226 or 29.8%. So those 10 years of diligent investing in a balanced portfolio left you 10% behind CPI. As of right now CPI is 31.6% so your stock portfolio has performed 7% better than CPI. Have you really successfully done well against inflation if you’re only up 7% versus CPI right now. You’ve barely won and it wouldn’t take much of a stock market correction to have you back in a losing position again.[/quote]Beating CPI during the 12 years where stock is basically flat and we saw one of the major stock market crash this side of the great depression is pretty impressive to me. Now, how would your number look if you extend it to 20 years instead of 12? Here’s a helpful link for you: http://www.moneychimp.com/features/market_cagr.htm
Based on their calculator, your inflation adjusted return for the S&P over the last 11 years is basically 0. However, if you extend that calculator back another 11 years to 1990, your annualized inflation adjusted return is 5.41%. If you extend that back another 10 years to 1980, your annualized inflation adjusted return would be 7.42%. So, the question is, will we see 20-30 more years of what we saw in the last 11 years, or will we see something like the 80s-90s?Also, keep in mind that we might not buy stock in one lump sum, we are essentially doing just that with housing. If we bought at or near the bottom (I say we’ve been there for the last 4 years), lock in the bottom of interest rate, you’re sitting pretty. It’s not like you’re buying a new house every month, like you do with stocks.
[quote=livinincali]Our population is aging as well. Maybe we’re a little further back in the curve, but pretty much everyone agrees that the aging boomer population is the huge problem for Medicare and Social Security. Japan learned that it’s hard to grow when you have an aging population that needs to be supported and we’re going to have the same problems here if not yet, soon. It’s just a numbers game Japan might be 1.8 workers for every retiree, we might be 2.2 workers, but that a far cry from the 5 to 1 that we had just 10 years ago. [/quote]Although we have a lot of aging baby boomer, we also are having a lot of birth. 4 years ago, we had more birth in 2008 than any year during the baby boomer period. So, we do not have similar problem Japan has, which is, birth can’t keep pace with death and retirement. Which is why Japan is paying people to have kids. We also are much more friendlier to immigrations. What you’re seeing now might be bad, in term of workers vs retiree ratio, however, I don’t see it lasting. Since the babies who were born in 2008 will reach their working age in 14 years. That’s a huge population that will enter the work force in the near future, which will offset the retiring baby boomers.
[quote=livinincali]The bottom line is all exponential growth must come to an end at some point. Whether it’s bacteria in a petri dish, or decades of debt.[/quote]I’ll offset this with, the market with “The Market Can Stay Irrational Longer Than You Can Stay Solvent”. We have no idea when or how it will end, but a crash in 2000 & 2008 for stocks and 2005 for housing, changes their trajectory quite a bit.
September 18, 2012 at 2:56 PM #751532CA renter
ParticipantAN,
Don’t have time to address the details of your post just yet, but regarding food, that was for food and household/toiletry items like paper towels, shampoo, soaps, toilet paper, cleaning supplies, etc. These costs do not include eating out. We’re a family of five, and I can assure you that our costs actually run higher than this for these categories, as do all of our friends’ costs when we’ve talked about it.
You might want to closely track your expenses for a couple of months to see what you’re spending. If you can manage to spend under $1,000/month for food/toiletry/household items for a family of four, please let us know how you’re doing it. Seriously, this type of cost inflation is killing lots of families. It costs around $5 for a gallon of milk if it’s organic/without hormones!
September 18, 2012 at 4:06 PM #751533Participant[quote=CA renter]AN,
Don’t have time to address the details of your post just yet, but regarding food, that was for food and household/toiletry items like paper towels, shampoo, soaps, toilet paper, cleaning supplies, etc. These costs do not include eating out. We’re a family of five, and I can assure you that our costs actually run higher than this for these categories, as do all of our friends’ costs when we’ve talked about it.
You might want to closely track your expenses for a couple of months to see what you’re spending. If you can manage to spend under $1,000/month for food/toiletry/household items for a family of four, please let us know how you’re doing it. Seriously, this type of cost inflation is killing lots of families. It costs around $5 for a gallon of milk if it’s organic/without hormones![/quote]I don’t keep close eye on exactly what I spend on each item. However, I put everything on 1 credit card and my credit card monthly bill average ~$2k most of the time. I just look at the detail expense over the last couple of months and my grocery have been around $200-250, restaurant have been $100-200, toiletries, I buy in bulk from Costco when they have coupons and stock up in my garage. I go to Costco once a month and I spend around $100-150 there for both toiletries and food. So, on average, my food + household goods range between $400-600. Over the past year, I never spend more than $1k in food + household goods, even the month where I have family coming to visit and I have to feed 10+ people.
How we do it? I have to refer that question to my wife. She’s the COO of the family. She does a great job in buying stuff that’s on sale. Figure out what to cook with those items. Her meals area better than most restaurants out there (except for the 5 stars places). So we don’t go out much. It’s also very helpful with my aunt assisting us (i.e. telling us when and where the sales are). She’s able to feed a family of 6 on an income that’s probably 50-70% of ours AND they’re able to save. If I have to guess, her food + household goods expense is most likely be less than $400/month. Based on the type of food she cooks and how she buys her groceries. She grows most of her veggies, she buys meat when they’re on sale and freeze them.
September 18, 2012 at 5:59 PM #751537scaredyclassic
Participant(SPOKEN:) Dear God, you made many, many poor people. I realize, of course, that
it’s no great shame to be poor… but it’s no great honor, either. So what would have
been the difference if I had… a small fortune?If I were a rich man,
Daidle deedle daidle
Daidle daidle deedle daidle dum
All day long I’d biddy-biddy-bum
If I were a wealthy man.
I wouldn’t have to work hard,
Daidle deedle daidle
Daidle daidle deedle daidle dum
If I were a biddy-biddy rich,
Daidle deedle daidle daidle man.I’d build a big tall house with rooms by the dozen
Right in the middle of the town,
A fine tin roof with real wooden floors below.
There would be one long staircase just going up
And one even longer coming down,
And one more leading nowhere, just for show.I’d fill my yard with chicks and turkeys and geese
And ducks for the town to see and hear,
Squawking just as noisily as they can,
And each loud “pa-pa-geeee! pa-pa-gaack! pa-pa-geeee! pa-pa-gaack!”
Would land like a trumpet on the ear,
As if to say, “Here lives a wealthy man.”
Oy!If I were a rich man,
Daidle deedle daidle
Daidle daidle deedle daidle dum
All day long I’d biddy-biddy-bum
If I were a wealthy man.
I wouldn’t have to work hard,
Daidle deedle daidle
Daidle daidle deedle daidle dum
If I were a biddy-biddy rich,
Daidle deedle daidle daidle man.I see my wife, my Golde, looking like a rich man’s wife,
With a proper double chin,
Supervising meals to her heart’s delight.
I see her putting on airs and strutting like a peacock,
Oy! What a happy mood she’s in,
Screaming at the servants day and night.The most important men in town will come to fawn on me–
They will ask me to advise them,
Like a Solomon the Wise–
“If you please, Reb Tevye?”–
“Pardon me, Reb Tevye?”–
Posing problems that would cross a rabbi’s eyes–
(chanting) Ya va voy, ya va voy voy vum…
And it won’t make one bit of difference
If I answer right or wrong–
When you’re rich, they think you really know.If I were rich, I’d have the time that I lack
To sit in the synagogue and pray,
And maybe have a seat by the Eastern wall,
And I’d discuss the learned books with the holy men
Seven hours every day–
That would be the sweetest thing of all…
Oy!If I were a rich man,
Daidle deedle daidle
Daidle daidle deedle daidle dum
All day long I’d biddy-biddy-bum
If I were a wealthy man.
I wouldn’t have to work hard,
Daidle deedle daidle
Daidle daidle deedle daidle dum
Lord who made the lion and the lamb,
You decreed I should be what I am–
Would it spoil some vast, eternal plan,
If I were a wealthy man?September 18, 2012 at 6:14 PM #751538Participanti played fyedke in a 1978 JHS production of fiddler on the roof, whcih according to some, is a production which has really never been equaled in overall effect, merriment and pathos.
September 18, 2012 at 8:54 PM #751540all
Participant[quote=AN] I just look at the detail expense over the last couple of months and my grocery have been around $200-250, restaurant have been $100-200, toiletries, I buy in bulk from Costco when they have coupons and stock up in my garage. I go to Costco once a month and I spend around $100-150 there for both toiletries and food. So, on average, my food + household goods range between $400-600. Over the past year, I never spend more than $1k in food + household goods, even the month where I have family coming to visit and I have to feed 10+ people.
[/quote]That’s awesome. We shop at Costco and spend $200+/month on fruit, milk and eggs for 5 of us.
September 18, 2012 at 9:17 PM #751541Participant[quote=craptcha]
That’s awesome. We shop at Costco and spend $200+/month on fruit, milk and eggs for 5 of us.[/quote]
We don’t buy fruit from Costco. I find that a lot of times, Costco fruits are more expensive. If you look at the circular for the various supermarkets, you see the fruits they have on sale are cheaper than Costco and not all sales items are cheap. We also find Zion market veggies and fruit, a lot of time are cheaper too. Though not always. You just have to keep a mental note on what price is good for certain product and wait to see when a supermarket have it on sale at that price and you buy it. We tend to only buy non perishable stuff and frozen stuff from Costco. Eggs are often not the cheapest at Costco either. Costco eggs comes out to about $1.1/dozen. A lot of times, you can find eggs on sale for $0.99/dozen somewhere else.September 18, 2012 at 9:20 PM #751542Participantshoot. i buy eggs only from chickens that are allegedly given psychotherapy if they’re feeling blah. i just feel so damn guilty about the stupid chickens…
September 19, 2012 at 2:13 AM #751544ParticipantScaredy, how much do you guys spend on food, toiletries, and household goods in a month, on average? This is assuming that everyone is home and eats ~3 meals/day at home.
Anyone else have numbers for their families?
September 19, 2012 at 2:35 AM #751545Participant[quote=AN][quote=craptcha]
That’s awesome. We shop at Costco and spend $200+/month on fruit, milk and eggs for 5 of us.[/quote]
We don’t buy fruit from Costco. I find that a lot of times, Costco fruits are more expensive. If you look at the circular for the various supermarkets, you see the fruits they have on sale are cheaper than Costco and not all sales items are cheap. We also find Zion market veggies and fruit, a lot of time are cheaper too. Though not always. You just have to keep a mental note on what price is good for certain product and wait to see when a supermarket have it on sale at that price and you buy it. We tend to only buy non perishable stuff and frozen stuff from Costco. Eggs are often not the cheapest at Costco either. Costco eggs comes out to about $1.1/dozen. A lot of times, you can find eggs on sale for $0.99/dozen somewhere else.[/quote]Wow, we must go through more food than you both do and probably spend more per item, too. We buy organic milk, eggs and fruit. We don’t spend money on much else, but food is the one area where we buy good quality and we really enjoy cooking and entertaining. Just checked on Vons.com, and the organic milk is over $6/gal., though we can get comparable milk for around $5/gal. Eggs run between $4-$5/dz. for the organic/hormone-free eggs. Needless to say, organic produce isn’t cheap, either.
AN, do your kids eat “adult-sized” meals, yet? That might be one factor that’s keeping your bills down. Of course, some kids eat very little. Ours…not so much.
We tried the Costco route but found that we couldn’t get out of there for less than ~$300, and still had to shop a week or so after that. Maybe we’ll have to try it again if you’re so successful doing it that way. Still, we have friends who shop at Costco, and their bills are as high as ours, or higher.
Good job on keeping your bills low!
September 19, 2012 at 7:30 AM #751550livinincali
Participant[quote=AN]Beating CPI during the 12 years where stock is basically flat and we saw one of the major stock market crash this side of the great depression is pretty impressive to me. Now, how would your number look if you extend it to 20 years instead of 12? Here’s a helpful link for you: http://www.moneychimp.com/features/market_cagr.htm
Based on their calculator, your inflation adjusted return for the S&P over the last 11 years is basically 0. However, if you extend that calculator back another 11 years to 1990, your annualized inflation adjusted return is 5.41%. If you extend that back another 10 years to 1980, your annualized inflation adjusted return would be 7.42%. So, the question is, will we see 20-30 more years of what we saw in the last 11 years, or will we see something like the 80s-90s?
[/quote]I would bet that we’d continue to see what we have been seeing rather than a repeat of the 80’s and 90’s. The primary reason being that the 80 and 90’s were fueled by a large new group of stock investors (the boomers and their 401Ks). In the generation prior to the boomers maybe 10% of the population owned stocks as the boomers bought stocks through their 401Ks the ownership rate of stocks went up to probably 50%. Again a cycle of exponential growth that came to an end in 2000 or so. Honestly what’s the next driver of growth for stocks. You have all the boomers looking to collect dividends or sell principle and the next generation deeply indebted to college and wanting to buy homes that are still 5x median incomes. Where’s the left over productivity coming from to invest in stocks from the next generation.
I can honestly think of 2 possibilities that could drive our stock market through 1 more exponential growth cycle from these levels. A significant foreign middle class forming and choosing to invest in US based stocks (i.e. a China, Brazil of India middle class that quickly catches up to our standard of living). Or some kind of forced medical savings plan that puts the remaining 50% of the relatively poor into the stock market. Neither seems likely to me so I expect at best a sideways choppy market and at worst a declining market at least inflation adjusted.
My expected scenario would be a significant collapse in the stock market and a significant deleveraging that results in a depression before we see another growth cycle, but I could be wrong about that. Obviously you have a vested interest in it playing out how you’re positioned but really think about what kind of things need to happen for it to play out that way.
Exponential economic growth is going to come from a new cheap energy source (i.e. thorium nuclear, hydrogen fusion) or a population increase. So far we have neither. We have some new expensive energy sources in renewables, and population growth is only slightly positive.
September 19, 2012 at 7:49 AM #751553Participantim not sure how much we spend.
sometimes my wife goes to farmer’s market and spends $9 for like a tomato we need to hand down to our children.
i try to counter that by purchasing quantities of supercheap spaghetti and average things out in dollar per kcal calculations.
stuff those little people full of cheap calories.
September 19, 2012 at 9:00 AM #751555Participant[quote=AN][quote=craptcha]
That’s awesome. We shop at Costco and spend $200+/month on fruit, milk and eggs for 5 of us.[/quote]
We don’t buy fruit from Costco. I find that a lot of times, Costco fruits are more expensive. If you look at the circular for the various supermarkets, you see the fruits they have on sale are cheaper than Costco and not all sales items are cheap. We also find Zion market veggies and fruit, a lot of time are cheaper too. Though not always. You just have to keep a mental note on what price is good for certain product and wait to see when a supermarket have it on sale at that price and you buy it. We tend to only buy non perishable stuff and frozen stuff from Costco. Eggs are often not the cheapest at Costco either. Costco eggs comes out to about $1.1/dozen. A lot of times, you can find eggs on sale for $0.99/dozen somewhere else.[/quote]We get organic milk/eggs at Costco, their price for that is not bad. We get feta cheese/pita bread/phyllo dough/pickled food and some fruit/veggies at North Park Produce in Poway, but that place is unreliable – oranges or bananas at 30c, but 3 out of 4 runs they’ll have only the rotten stuff left. Henry’s/Sprouts for some bulk/produce, but their prices are up. Costco is the most reliable, the engineered mushrooms are nice and big, blueberries, blackberries and grapes ripe and sushi fresh. The kids also get to dine out 🙂
Our food column is ~$500 and misc household (toiletries, chemicals…) another $300.
You are controlling your expenses much better than we do, congrats.
September 19, 2012 at 9:24 AM #751558ParticipantI think the type of food you eat/cook makes a huge difference. Here are some examples:
Pho:
– Whole chicken (~1-5, depending on if you buy on sale or not)
– Veggies ($2-5)
– Noodle ($2)
So, for $12, you can easily feed 4-8 people, depending on how much chicken you eat.Spring roll:
– 1 lb of sliced pork ($3-4)
– 1 lb of shrimp (~$4)
– Veggies ($2-5)
– Noodle ($2)
For $11-15, you can easily feed 6-8 people.Or you can go for less fancy meals and get make stir fry beef + soup & rice:
– 1 lb of beef $3-5
– Veggies for soup ($2)
– Rice ($1)
For $6-8, you can easily feed 8-10 people, depending on your beef to rice consumption ratio.This is might be why our food bill is much lower than yours. Although CAR’s is right that we don’t have 2 full grown kids. Our oldest is already eating almost as much as my wife. But this won’t affect the cost much, because as you can see above, the type of food we cook can feed a lot of people for very little money. It’s better and cheaper than your $1 burger + fries at McDonald. CAR, like I said, my aunt does an even better job than us, since she cooks 95% Asian food while we’re closer to 50%. She also only buy stuff that are on sale and freeze them for future usage. She grows most of the veggies they eat. She feeds two teenage boys and two teenage girls. So, her food consumption is A LOT higher than ours. But, just based on the food she cooks, I don’t think her food bill is nearly as high as ours, even with more people eating.
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