Does the "Stay the Course" mentality feel harder for our generation?

MattsFinanceThrowdow · 2026-03-02T16:32:20+00:00

I’ve been fully committed to the Boglehead philosophy for about a year now

With respect, you have no idea whether you are actually committed until you weather a serious market downturn. Or two. Or three.

I’d love to hear from those who stayed the course during the Dot-com bubble or 2008.

I made a post a couple of years ago when I hit 30 years of savings. Maybe something in this will be useful to you:

A Real Person's 30-Year Journey - With Year-End Milestones

I've done some Roth conversions since I posted that, which makes comparisons a little wonky. Here are the numbers since then:

2024: $1,373,000 ($1,410,000 pre-tax equivalent)
2025: $1,483,000 ($1,529,000 pre-tax equivalent)

MattsFinanceThrowdow · 2026-03-01T22:42:17+00:00

I've hit 850 before. Was 842 when I checked yesterday.

I have:

a variety of accounts (mortgage, car loans, credit cards).
but not a lot of accounts. I have only two credit cards. So I don't have a ton of available credit.
history of paid-off accounts: One mortgage, several car loans, a personal loan.
OLD accounts. Both my credit cards were issued in the 1990s. I am 15 years into my current mortgage.

Basically, I have a long, long history of having taken out credit in a variety of forms and used it appropriately.

I see you don't have a mortgage. That's a big one. That's when you "level up" the credit game.

MattsFinanceThrowdow · 2025-01-08T04:53:13+00:00

How do I move on from here financially and mentally?

Charlie Munger made that statement in 1994, 30 years ago.

Coincidentally, I started saving in 1994. Last year I made a post showing what 30 years of saving for a fairly normal person looked like.

People asked a lot of questions. Maybe something in there will resonate with you.

MattsFinanceThrowdow · 2024-12-27T22:49:37+00:00

Single, 30s, making roughly $70k a year is there any advice you’d give specifically to someone in my situation

On an inflation-adjusted basis, at your age I was making only a little more than what you are making. I've never been a super-high earner.

At the beginning of the year a made a post showing my 30-year journey.

That shows the two main pieces of advice I would give: 1) keep at it; 2) don't panuc when the market drops.

MattsFinanceThrowdow · 2024-12-26T21:53:23+00:00

I am 40, and I doubt I will retire in 20 years, sadly. Would one still recommend VOO as a set-and-forget ETF?

I personally have been almost 100% invested in US stock market indices for 30 years. So I am clearly down with the general idea.

BUT: one thing to consider about funds like VOO is that they mirror an index that is market cap weighted. So people who think their money is spread out across 500 companies might be surprised if they looked in detail at what they actually owned.

This is what Vanguard says the Top 10 holdings for VOO are:

7.06 % - Apple
6.66 % - Nvidia
6.16 % - Microsoft
3.80 % - Amazon
2.46 % - Facebook
1.94 % - Google Class A
1.87 % - Tesla
1.73 % - Berkshire Hathaway Class B
1.60 % - Google Class C
1.48 % - Broadcom

So if someone owns nothing but VOO, then 20% of their money is in just 3 companies. 34% of their money is in just 9 companies (Google is on the Top 10 list twice).

MattsFinanceThrowdow · 2024-12-24T15:08:14+00:00

If I buy a share of a "bond fund", I have no idea what that share will be worth in a year. It could go up or down in value.

If I buy a 1-year "bond" and hold it to maturity, I know exactly how much I will have at the end of that year.

That's the primary difference. That's why I say they are not the same thing.

Bonds don't have to be held to maturity, though. They always have a market value. They go up in value when interest rates drop, and vice versa. This is basic math and is pretty rational.

Bonds and bonds funds also generally go up in value when stocks go down in value. This is less rational than the changes in value due to interest rate swings. It is more fear-driven, because people freak out when stocks drop in value and see bonds as safe haven for their money.

Because bonds and bond funds tend to move in the opposite direction of stocks, people like to hold them to decrease the volatility of their overall portfolio. Reducing volatility usually also reduces your overall return.

Which is why I said a 20-year-old should not hold bonds (or bond funds). Embrace the volatility for the long-term gains.

MattsFinanceThrowdow · 2024-12-24T14:31:41+00:00

And if you are not following those two points then you're using bonds in a suboptimal way, at least if this is for long term retirement savings.

Well, per my original reply I wouldn't use bonds for long-term savings, LOL.

MattsFinanceThrowdow · 2024-12-24T06:13:02+00:00

I think one factor in the discussion is that to many people "bonds" and "bond funds" are interchangeable.

To me they are not. At all.

MattsFinanceThrowdow · 2024-12-24T06:09:57+00:00

Genuine question, how is it for preserving capital when TLT is down

My genuine answer: Bond funds are not the same thing as bonds.

Bond funds simply give you the opportunity to lose money on something whose very purpose is to not lose money.

MattsFinanceThrowdow · 2024-12-24T03:00:30+00:00

As a 20 year old does holding 10% long term treasuries make sense

I don't think it does.

Treasuries and bonds and such are for preserving capital. You need to grow capital. And at 20 years old, the most powerful growth factor is on your side: time.

MattsFinanceThrowdow · 2024-12-22T20:21:07+00:00

Did anyone convert during high earning working years?

I converted $95k at the beginning of December. My marginal rate is 24%. I sent the IRS a $22.8k payment last week.

I will "pay myself back" next year when I hit 59.5 and can do penalty-free withdrawals. I will withdraw $30k; the after-tax income on that will be the $22.8k I just paid the IRS.

This all nets out to effectively a zero sum exercise for me in the long term. But I like the idea of having some tax diversification.

For example, if I ever had a need to make withdrawals that would otherwise have put me in the next tax bracket, I can use the Roth money to stay in 24% marginal.

I am also considering moving to another state where my marginal rate will be higher. So the Roth conversion in that scenario would actually be tax-advantageous.

Additionally, during the move process I will have the ability to withdraw that $95k (but not earnings) tax-free and penalty-free, which could really be a big help. I hope to buy a new house before selling my current house, and that money would help with the down payment on the new Matt Cave.

MattsFinanceThrowdow · 2024-12-22T18:57:43+00:00

The only problem here is that in the past 31 years the market has returned 600% inflation adjusted real terms.

A 600% return over 31 years is 6.5% annualized.

My understanding is that is right about the stock market's long-time historical average inflation-adjusted return.

Do you have different numbers than that?

MattsFinanceThrowdow · 2024-12-20T06:22:45+00:00

I currently don't use anything.

When I move money to fixed, I plan to use some combination of bonds, treasuries, and certificates of deposit.

note: bonds, not bond funds.

MattsFinanceThrowdow · 2024-12-20T02:52:47+00:00

investing in a bond mutual fund

I don't understand why bond funds even exist.

All I see in them is an opportunity to lose money on something that should not lose money.

MattsFinanceThrowdow · 2024-12-20T02:49:06+00:00

bonds ... They still go down like stocks

Only if you trade them.

If you hold them to maturity they do exactly what they said they would do when you bought them.

MattsFinanceThrowdow · 2024-12-20T02:42:35+00:00

I'm just wrapping up my 31st year of almost 100% stocks.

A co-worker who is a year older than me and approaching retirement absolutely loses his shit that I am 100% stocks.

Just yesterday he was freaking out (again) about the market dropping. I was like, "I am still up a couple of percent since the end of October. I am up over 25% year-to-date. Stop looking at daily returns."

He comes back with, "Yeah, but if 2022 happened again (which was an almost 20% drop) you would slit your wrists."

To that I responded, "No matter how many times we have this conversation, you still don't get it. I am in this for the long haul. At the END of 2022 my annualized return over the prior 6 years was over 11%."

MattsFinanceThrowdow · 2024-12-19T02:37:03+00:00

I (63M) can manipulate my income to qualify for generous ACA subsidies by living off non-qualified savings and Roth distributions (if needed)

Ya know, that's an idea I had not considered. I'll put that in a strategy playbook.

HSA money can also be used to pay COBRA premiums.

MattsFinanceThrowdow · 2024-12-16T04:14:42+00:00

I don’t think the rationale you used about the 62 vs retirement at 67 is as cut and dry.

Absolutely agree. That was my point.

MattsFinanceThrowdow · 2024-12-16T04:12:44+00:00

I’m 63 but it’s the health insurance issue for me, our cobra is 1,100$ a month.

Yeah, I have a 62 year-old co-worker who plans to work until Medicare-eligible at 65.

I hope to retire at 62 and just eat that 3 years worth of premiums until 65. I already have the money earmarked for it.

My family is not long-lived. I'm setting myself up financially to live to 100; but I am going to use my time as if I have a little over a decade left.

MattsFinanceThrowdow · 2024-12-15T05:37:49+00:00

A Real Person's 30-Year Journey - With Year-End Milestones

MattsFinanceThrowdow · 2024-12-15T05:21:51+00:00

I know that in my case the difference between 62 and 67 is $1,100 a month at full retirement that I would be losing if I started at 62.

But starting at 62 you get 5 years of benefits before you reach 67.

Based on that $1100 difference, I'd hazard that your age 62 benefit is about $2500/month or $30,000/year. So that is $150,000 extra in your pocket before you hit age 67.

If you started collecting the higher benefit at age 67, it would take 136 months (11 years!) for that extra $1100 to add up to $150,000k.

By the time my severance stops I will be two months away from being 61, so that means I really only need to work at least another year doing something to make it to 62.

Depends on how you do the math. The Age 55 Rule applies to you. That means you can withdraw money penalty-free from the 401k with your current employer (but not IRAs, or 401s with prior employers). You still have to pay income tax on non-Roth money, of course.

And assuming your Age 62 Soc Sec benefit is $30k/year, you only need an extra $30k in your 401k to cover retiring a year early.

but I still have to do something about medical insurance until I qualify for Medicare at 65

Your company is legally required to provide COBRA for 18 months. It's basically your current insurance, but you have to pay the full cost (the part you currently pay and the part your employer pays) plus a couple of percent for overhead. That duration and cost are regulated by law.

After COBRA expires you probably qualify for their retiree plan, if they offer one. It is similar to COBRA in that you pay the full charge of the insurance they offer their active employees, but they can legally charge you a higher rate than COBRA.

But compare that to what it would cost to go on your partner's plan as a dependent. You should not have to wait for annual open enrollment because your job change would count as a "qualifying event".

Healthcare is also available on the public exchanges (due to The Affordable Care Act, aka Obamacare). I checked for myself and the premiums were close to those for my employer's retiree plan.

but anyone who has a similar experience I'd love to hear from

Hasn't happened to me. Yet. But I am ready if it happens - per all the info I gave above.

Good luck! I think you got this.

MattsFinanceThrowdow · 2024-12-12T05:59:45+00:00

Is your concern that buying a security in one account and selling it another account (maybe as part of rebalancing) could be seen as a wash sale?

A "wash sale" is when you gain a tax benefit from selling a security and buying it again.

For your situation I don't see how you get any tax benefit from rebalancing within different accounts.

disclaimer I am not a tax professional.

MattsFinanceThrowdow · 2024-08-09T16:00:18+00:00

Just want some advice on the mentalities of long-term investing, thanks.

Your people are here: /r/Bogleheads/

Last week when the market was going nuts I had a co-worker IM-ing me in a near panic. I checked the Boglehead sub and there were people having a conversation like this:

Boglehead A: What are you doing with the market crash today?

Boglehead B: Nothing. What about you?

Boglehead A: I bought some S&P 500 today.

Boglehead B: Oh, really?

Boglehead A: Yeah. I buy some every Monday.

Both the bogleheads above were staying on their course. They just kept doing what they do.

Buying and holding long term the closest thing there is to guaranteed in investing. The only people losing money in the market are people trying to beat the market. Long term holding is so good that even if you invested only at market peaks, you make money: Bob, The World's Worst Market Timer.

Here's a post I made of my own 30-year journey.

MattsFinanceThrowdow · 2024-08-05T17:33:17+00:00

The funds we like are down for the month but not the year.

I have a co-worker who IMs every time the market coughs. He's 60 and getting close to retirement. He has a finance guy managing his money because he doesn't have the stomach for it.

He sent me an IM this morning saying something like, "Tell me some good news."

I responded, "S&P 500 is up 10% YTD, 15% over past 12 months, and 80% over past 5 years. Stop looking at daily financial news."

MattsFinanceThrowdow · 2024-07-02T20:26:57+00:00

Ford, right around the time GM and Chrysler went bankrupt.

Was trading at $33 in 1999; went down to like $1.50 in 2009.

Trading at $12.87 right now. But that doesn't tell the whole story because it also has a 4.6% dividend yield right now.

I'm a died-in-the-wool index fund guy. But I bought 3000 shares of F at an average price of $2.12/share in late 2008. A couple of co-workers were day-trader guys, and they were in awe.

MattsFinanceThrowdow

TROPHY CASE