Anyone older (45+) that is long term unemployed?

Newman is that way.

No but if I don't stop looking at these boards I will be.

brofest wrote:

The impetus to this thread is that I was chatting with some friends (who aren't that young) who have nothing saved. NOTHING, no 401K, no checking account, no portfolio. Seems incredibly irresponsible.

How much did you have saved when you get laid off? I am single in my mid 20s and I am furiously trying to save and invest into dividend paying stocks, equity indexes or fixed income mutual funds to get put my money to work. I have a steady paying job but things happen. Honestly I am hoping to generate $50K in dividends by age 40. Would be amazing to be able to pay for a kids school, mortage, etc using the savings from now.

Question for older people (especially unemployed), when did you start saving? If you did get laid off did you drain your savings?

So, you want to generate $50,000 a year in dividends by the time you are 50? Good goal.

Some things to do along with that if you haven't already:

1) Get and stay debt free. Can have mortgage if reasonable, but all other debt needs to be attacked and slayed.

2) Have 3-6 months of expenses saved in liquid funds. Could be cash, CD, even a Money Market Fund if you watch it and don't let it drop too much. Idea is that this money is for emergencies and NOT an investment.

Good stuff. Also preface I live in NYC, and while you can rip real estate prices all you want I basically have zero utility, home insurance and car payments.

Flagpole wrote:

So, you want to generate $50,000 a year in dividends by the time you are 50? Good goal.

Some things to do along with that if you haven't already:

1) Get and stay debt free. Can have mortgage if reasonable, but all other debt needs to be attacked and slayed.

2) Have 3-6 months of expenses saved in liquid funds. Could be cash, CD, even a Money Market Fund if you watch it and don't let it drop too much. Idea is that this money is for emergencies and NOT an investment.

Flagpole, I have all these things. Can I just pump a lot of money into the Vanguard 500 Index Fund and an IRA + 401k?

Once you invest a lot of money into an index fund and it grows over the course of many years, do you just get paid & survive off the dividends?

According to Flagpole, there are no long term unemployed people. The unemployment rate is at it's lowest since 2008 and he personally doesn't know anyone in this situation. Therefore, it is impossible.

brofest wrote:

Good stuff. Also preface I live in NYC, and while you can rip real estate prices all you want I basically have zero utility, home insurance and car payments.

Sounds like you're setting yourself up nicely. Good job, brother.

Boss Hoggin' OUtlaw wrote:

Flagpole wrote:

So, you want to generate $50,000 a year in dividends by the time you are 50? Good goal.

Some things to do along with that if you haven't already:

1) Get and stay debt free. Can have mortgage if reasonable, but all other debt needs to be attacked and slayed.

2) Have 3-6 months of expenses saved in liquid funds. Could be cash, CD, even a Money Market Fund if you watch it and don't let it drop too much. Idea is that this money is for emergencies and NOT an investment.

Flagpole, I have all these things. Can I just pump a lot of money into the Vanguard 500 Index Fund and an IRA + 401k?

Once you invest a lot of money into an index fund and it grows over the course of many years, do you just get paid & survive off the dividends?

I'm not a big fan of first entry into the market being a HUGE amount. Can scare a person away if it goes bad for a while, and consistent giving is what builds wealth over time.

You could fully fund an IRA for 2014 right now if you have the cash, and then I would pick a percentage of your income to go into the 401k. If your company doesn't have too many restrictions, you could choose an index fund, yes. I like a little more control than that and prefer the growth, aggressive growth, growth and income and international route, but you could do worse than choosing index funds.

Goal should ultimately be at least 15% of your income going to retirement accounts, so if you can't do that, you should consider working up to it. Beyond that, either pay off house, save for college or another big expense, or buy non-retirement mutual funds. Once you have ZERO debt (including a paid for house), you can start to buy individual stocks if you so choose. That's how I would go about it all.

observer of threads wrote:

According to Flagpole, there are no long term unemployed people. The unemployment rate is at it's lowest since 2008 and he personally doesn't know anyone in this situation. Therefore, it is impossible.

The point I wanted to know was that for people in this situation did they have enough where they could live off of coupon dividend payments or did they drain retirement savings.

I'm unfamiliar with dividend paying accounts. Couldn't I also get to $50k in annual cashflows through interest?

What are the pros and cons of dividend paying investments vs. interest paying investments?

Well fixed income has very minimal upside (only really if you want to try and trade rates and I wouldn't recommend it) as it only pays interest plus principal back (slightly different in a mutual fund or ETF) nothing more and nothing else. Stocks that pay dividends (ignore MLPs for the moment) is still equity in the company and can appreciate in value as the company does shareholder friendly activities (increase dividends, buy back stock, increase enterprise value through earnings growth and acquisitions) so it has more upside.

yo man wrote:

I'm unfamiliar with dividend paying accounts. Couldn't I also get to $50k in annual cashflows through interest?

What are the pros and cons of dividend paying investments vs. interest paying investments?

Go look up the Mr Money Moustache blog and do what he does. I am 38 and about to "retire". It takes perseverance and a new mindset but now I am basses frugal and free.

I'm almost 60. I have nothing saved and am about $100,000 in debt, most of it on credit cards. I don't know if I would call it irresponsible. I got married. I got divorced. That's what happened. I had a good paying job (still do), low expenses and a lot saved but it's all gone now. I'll be paying off credit cards until I die. I only get to keep a small percentage of my pay to live on. I'm actually lucky that I have always lived a simple lifestyle. Others have suffered similar tragedies-medical calamities and the like. This is life. Stuff happens. So to answer your question...my ex-wife drained all my savings. Stay single.

MrMoney wrote:

Go look up the Mr Money Moustache blog and do what he does. I am 38 and about to "retire". It takes perseverance and a new mindset but now I am basses frugal and free.

When did you start saving? how much do you make a year?

Fat Boy wrote:

I'm almost 60. I have nothing saved and am about $100,000 in debt, most of it on credit cards. I don't know if I would call it irresponsible. I got married. I got divorced. That's what happened. I had a good paying job (still do), low expenses and a lot saved but it's all gone now. I'll be paying off credit cards until I die. I only get to keep a small percentage of my pay to live on. I'm actually lucky that I have always lived a simple lifestyle. Others have suffered similar tragedies-medical calamities and the like. This is life. Stuff happens. So to answer your question...my ex-wife drained all my savings. Stay single.

How does this happen? At most shouldn't she get half, how did she drain all the savings?

If it is attorney's fees, well...I don't know, can't you sit down and say "We have $200,000 in savings combined. We can either split $100k down the middle now, or spend $150k in attorney's fees combined, and end up with only $25k a piece a the end." Seems like a no-brainer.

I know I am oversimplifying it since I am young and have not gone through it. But maybe you can explain to me so I know what to look out for if it ever happens to me. Thanks.