Blogger Joe Udo says 25x expenses not enough for early-retirees

[Big_Hitter]

People on here are really sensitive about the retirement definition.

withdrawn from one's position or occupation : having concluded one's working or professional career

 

[daylatedollarshort]

I think he's made mention a couple of times about the "internet police" and not really giving a darn about it.

Name calling is pretty much playbook technique #1 for deflecting valid criticism of facts or assumptions, instead of addressing the actual issue at hand.

 

[MichaelB]

If I am tired of this discussion, once again, does that mean I'm retired?

 

[RobbieB]

It's like this with every hobby, people get so involved.

I'm into home theater and it runs rampant there. The basic idea is you have surround speakers and a subwoofer so you get the effects of stuff flying over your head and when Trex walks the room shakes. But after that it gets a little funny. ex;

If you don't have a projector it's not a real home theater
If you don't have a dedicated room it's not a HT
If you don't use a center channel, it's not a HT
You really have to have 9.2, 5.1 isn't good enough for HT

It never stops and it never will.

 

[Fermion]

And even if you are retired and not doing any job, they still say you did it wrong if you can't afford 4 cruises a year and manage at least two games of bingo and shuffleboard while on them.

 

[REWahoo]

If I am tired of this discussion, once again, does that mean I'm retired?

No, but if you get tired of it a second time, then you are truly re-tired.

 

[Bestwifeever]

If I am tired of this discussion, once again, does that mean I'm retired?

I imagine there is a blogger posting about this right now! I think you should call yourself refatigued just to make it perfectly crystal unclear, though.

 

[FUEGO]

And even if you are retired and not doing any job, they still say you did it wrong if you can't afford 4 cruises a year and manage at least two games of bingo and shuffleboard while on them.

I didn't see any shuffleboard on our last couple of cruises. I think they put the ping pong tables on top of the former shuffleboard court (which is more fun anyway!).

 

[Totoro]

Wonder if I could get paid (or at least free boarding) as a companion male on those ships.

Would that be working?

 

[Spudd]

Wonder if I could get paid (or at least free boarding) as a companion male on those ships.

From speaking to people who are in that position, likely you would not get paid but you would get to cruise for free, and they would likely pay your airfare too. You would have to work almost every night, though, but if you like dancing it wouldn't be much of a burden.

 

[FUEGO]

Wonder if I could get paid (or at least free boarding) as a companion male on those ships.

Would that be working?

I just want to caution you that if you do engage in that sort of activity you have to watch out. You might run afoul of the Internet Retirement Police and inadvertently lose your Early Retired status since some could construe your activity as a form of work. And whatever you do, definitely DO NOT blog about it, because that's an automatic disqualification.

 

[purplesky]

Wonder if I could get paid (or at least free boarding) as a companion male on those ships.

Would that be working?

Several years ago I was involved with a shuffleboard league and we won the regional championship.

Long story short the shuffleboard world leagues were held on a European cruise . We didn't win sadly.

But I danced all night long and made enough in tips from wealthy 60 year old women to cover the cost of the whole trip. I wore a speedo on deck during the day.

So a FERG. Fake early retirement blogger could definitely make it worthwhile to cruise.

 

[purplesky]

Several years ago I was involved with a shuffleboard league and we won the regional championship.

Long story short the shuffleboard world leagues were held on a European cruise . We didn't win sadly.

But I danced all night long and made enough in tips from wealthy 60 year old women to cover the cost of the whole trip. I wore a speedo on deck during the day.

So a FERG. Fake early retirement blogger could definitely make it worthwhile to cruise.

It's FERB. Fake early retirement blogger.

This is from investopedia.

 

[GravitySucks]

Wonder if I could get paid (or at least free boarding) as a companion male on those ships.

Would that be working?

That's my Plan B.

 

[ExFlyBoy5]

It's FERB. Fake early retirement blogger.

This is from investopedia.

Ha! I like it...but I would be afraid that some would confuse that with a "furry"

 

[2Pizzas]

Going back to the RB40 article, I looked at the study linked and found it somewhat disheartening. It goes into the current low bond yield environment along with possible lower stock market returns to conclude that much lower withdrawal rates are needed than the generally accepted 4%. As someone still a decade or so out from FIRE this is making me reevaluate my plans-OMY might become OMD (one more decade).

 

[GravitySucks]

Going back to the RB40 article, I looked at the study linked and found it somewhat disheartening. It goes into the current low bond yield environment along with possible lower stock market returns to conclude that much lower withdrawal rates are needed than the generally accepted 4%. As someone still a decade or so out from FIRE this is making me reevaluate my plans-OMY might become OMD (one more decade).

A 1% real return and a 4% withdrawal rate will last about 30 years. All this gloom and doom on low rates / high PEs seem a bit over blown to me. The lower returns will matter more to my heirs.
Sequencing of losses however....

 

[haha]

One thing to keep in mind is that when look-forward returns look likely to be poor, portfolio optionality can pay dividends. Much of my portfolio is taxable, so I don't like to accept the known tax consequences of a profitable sale for the unknown probability of missing a downturn. Nevertheless where bond duration can be shortened, or a lean toward cash made it can mean that damage from a possible downturn can be lessened considerably. My largest bond fund has a 2.4 average duration now, so even a pretty large rise in intermediate interest rates will not hurt for long.

Ha

 

[samclem]

A 1% real return and a 4% withdrawal rate will last about 30 years. All this gloom and doom on low rates / high PEs seem a bit over blown to me. The lower returns will matter more to my heirs.
Sequencing of losses however....

I try to imagine what it would be like to be on one of those FIRECalc lines that is descending through the true starting value and keeps going down for decades. Sure, in the past US history many of them have rebounded, but when you are actually riding the line in real time there's no telling what will happen, the slope of the descent could easily increase as you zoom toward the X-axis.
So, while a 1% real return and 45 WR would last for 30 years, without knowing the line's slope in advance and when the grim reaper will be visiting, worry would significantly degrade my QOL starting at about year 10.

 

[FUEGO]

I try to imagine what it would be like to be on one of those FIRECalc lines that is descending through the true starting value and keeps going down for decades. Sure, in the past US history many of them have rebounded, but when you are actually riding the line in real time there's no telling what will happen, the slope of the descent could easily increase as you zoom toward the X-axis.
So, while a 1% real return and 45 WR would last for 30 years, without knowing the line's slope in advance and when the grim reaper will be visiting, worry would significantly degrade my QOL starting at about year 10.

I'd raise the white flag, admit defeat, regroup, and start making money doing something around year 10 if I found myself sliding down one of those steeply negative sloped lines. In the past, those steep downward slopes are usually followed by upward slopes as the market recovers from many years of mostly negative returns.

Better to work again in your 40's than be penniless and destitute in your 60's.

 

[daylatedollarshort]

Interest rates have been declining globally for decades. There is an interesting chart on the link below called "10 Year Treasury Rates vs. Historical Economic Forecasts" that kind of shows how most economists seem to miss the big picture on where interest rates have been headed and have for some time:

https://www.whitehouse.gov/blog/2015/07/14/decline-long-term-interest-rates

I wish I'd viewed this chart a few years back. I would have bought more 2% real yield 30 year TIPS and 4% Treasury bonds.

 

[Totoro]

Ha! I like it...but I would be afraid that some would confuse that with a "furry"

Furby Official Website | Furby Boom | Hasbro

 

[ExFlyBoy5]

Furby Official Website | Furby Boom | Hasbro

Yeah..there is VERY big difference between a Furby and a Furry.

 

[Markola]

Going back to the RB40 article, I looked at the study linked and found it somewhat disheartening. It goes into the current low bond yield environment along with possible lower stock market returns to conclude that much lower withdrawal rates are needed than the generally accepted 4%. As someone still a decade or so out from FIRE this is making me reevaluate my plans-OMY might become OMD (one more decade).

Doesn't the low inflation rate environment also play into things, maybe offsetting some of the doom and gloom?


Sent from my iPad using Early Retirement Forum

 

[Elbata]

My guess is MMM is now worth $10MM. Yes, blogging has been good for him, but every year he posts his total annual spending for his family.

No matter what he says about his annual spend, his itemizations and his charts, many here won't believe it.

Since retiring at the age of 31, (of course he's not retired by many definitions here) his annual spending is ~$25K.

Something that might be of interest is reading MMM's article about IRP.

Mr. Money Mustache vs. the Internet Retirement Police