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Old 12-15-2015, 01:23 PM   #41
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It's not just the short-term..after hearing Bernstein (and others) project <2% "Real" return on equities for the next 20 years or so, the risk/reward ratio is rapidly not becoming worth it to ..

A 2% real return will allow a 4% WR to last about 35 years. Add in SS and lowering expenses in later years and I'd end up a happy camper. Sequence of returns and asteroids not included....
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Old 12-15-2015, 03:24 PM   #42
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@Ozstache - would you mind sharing what FI position you picked up that's .gov guaranteed? I'm looking for reliable, safe harbors at the moment and am thinking the market is not headed for a great outcome in '16.

Tx..
Sorry, I should have qualified that .gov guarantee is actually .gov.au. Bank deposits up to $250k per institution here in Australia were guaranteed by the Oz government back in 08 and it still stands. I can currently get 3.5% return against inflation of < 2%, so after tax it still gains slightly nominally if I don't touch it. My pension is also Oz federal government funded.
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Old 12-15-2015, 03:31 PM   #43
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If you worked until you had enough money to not need the stock market, then most likely you have lost, not won.

Last time I checked, extra years of life were more than even Buffett can afford.
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Old 12-15-2015, 04:29 PM   #44
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If you worked until you had enough money to not need the stock market, then most likely you have lost, not won.

Last time I checked, extra years of life were more than even Buffett can afford.


Jan 1993. 60/40. Katrina, lost of house. Lost of spouse. 1000 miles inland. New house. New spouse. Mr Market has a few ups and downs.

Change is certain. Nowadays 50/50 lifecycle fund ala Vanguard for real retirement plus a few good stocks for the male hormones while in season.

Life's really big question - should I stick with the Saint's after 2010 FINALLY! or go with the Chiefs here in KC?

heh heh heh - stay agile mobile and hostile and adjust to life as reguired. And yes I did vary withdrawal rate and expenses over the years.
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Old 12-15-2015, 04:43 PM   #45
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If you worked until you had enough money to not need the stock market, then most likely you have lost, not won.
If anyone retires and needs (depends on) the stock market then they are bigger gamblers than I am. Or, maybe I don't understand your comment?

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Last time I checked, extra years of life were more than even Buffett can afford.
I assume you mean Warrren can't buy more years of life? If not, did they legalize marijuana sales in Washington?
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Old 12-15-2015, 05:11 PM   #46
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If you worked until you had enough money to not need the stock market, then most likely you have lost, not won.
I think this post from the sage Nisprius over at Bogleheads shaped my thinking on the matter:

"The great thing about stocks versus bonds is that historically the distribution of outcomes over long holding periods has been almost all upside. But the thing stock enthusiasts continually miss is that the lower end of that distribution is about the same as bonds. What this means is that you need to save about the same amount no matter what your asset allocation is...

The amount you need to save is the same no matter what your asset allocation is. To say "it's very hard to save enough to retire just using Treasury bonds and TIPs" is just to say that it's very hard to save enough. If you aren't saving enough to retire just using Treasury bonds and TIPs, you aren't saving enough if you add stocks. You're counting on luck, and luck is not a strategy."

https://www.bogleheads.org/forum/viewtopic.php?t=93245
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Old 12-15-2015, 05:12 PM   #47
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If anyone retires and needs (depends on) the stock market then they are bigger gamblers than I am. Or, maybe I don't understand your comment?
Most of us invest in the market, we don't play in the market or gamble with it. I don't know why you refer to it that way. Frankly, it's getting annoying, but that's my issue, and I can always put you on ignore when I've hit my limit. Maybe you're investing in a lot riskier stocks than I am.
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Old 12-15-2015, 05:17 PM   #48
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When I got to that point I actually felt even more that staying 100% in equities is a way to go and had even less reasons to get out .
You don't need to get out once dividend yield covers your living expenses.
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Old 12-15-2015, 05:21 PM   #49
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If anyone retires and needs (depends on) the stock market then they are bigger gamblers than I am. Or, maybe I don't understand your comment?...
If you think of the stock market as gambling then you don't understand investing.
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Old 12-15-2015, 05:25 PM   #50
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...The amount you need to save is the same no matter what your asset allocation is. ...
Nonsense. Very few people who know about retirement planning would agree with that statement.
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Old 12-15-2015, 05:36 PM   #51
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My parents retired on a company pension, UK social security, a small amount of personal savings invested in the UK equivalent of CDs and a paid off home. Of course interest rates were a lot higher in the 1980s, still my approach is similar to that of my parents except that some of my savings are in equities.

Back in 1987 I started to save for retirement and put everything into TIAA-Traditional deferred annuity. I also decided to contribute to both US and UK social security schemes as I reasoned that two inflation linked social security checks would be better than one. When I changed jobs I lost access to TIAA-CREF for retirement savings and so went with low cost index funds, but my plan was always to retire on TIAA-Traditional and SS payments. I also started to make extra mortgage principal payments when I bought a home and also bought a rental property to diversify my income. My last job came with a pension so now I can retire on the pension and the rental income. TIAA-Traditional gives a nice 4% annual return for unexpected expenditures and when UK and US SS start they will provide around $40k of surplus annual income which will be reinvested. I do not plan on spending any of my equity investments and will leave my estate to my nieces and several charities.
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Old 12-15-2015, 05:40 PM   #52
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One example. Go to https://retirementplans.vanguard.com...estEggCalc.jsf

Leave the default of 30 years, $1 million and change withdrawals to $40k a year (4% WR).

50/45/5 ~ 93% success rate
0/95/5 ~ 74% success rate
0/50/50 ~ 58% success rate

So if you want a 95% success rate you need $1.05 million for the 50/45/5 portfolio and $1.25 million for the two more conservative portfolios... almost 20% more and many more years of work to save that additional $200k.
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Old 12-15-2015, 05:51 PM   #53
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If you worked until you had enough money to not need the stock market, then most likely you have lost, not won.

Last time I checked, extra years of life were more than even Buffett can afford.
It is funny that Buffett had about 1% net worth at 50 as compared to what he has now at 85. And he did not get there by buying Bonds and CD Ladders.

Many people here retire at 50.
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Old 12-15-2015, 05:59 PM   #54
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"There's no 20-year period where you've lost money in stocks, even after inflation."

http://www.fool.com/investing/genera...ck-market.aspx
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Old 12-15-2015, 06:11 PM   #55
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There is no definite amount, because the sustainability of wealth is always tied to your expenses. Look at Nicolas Cage, he probably had $300 million in assets and he almost went bankrupt because he spent so much money on buying castles and stuff. How about the billionaire who lost almost everything during the recession. How about the multi-millionaire who committed suicide because Bernie Maddoff took it all.
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Old 12-15-2015, 06:19 PM   #56
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There is no definite amount, because the sustainability of wealth is always tied to your expenses. Look at Nicolas Cage, he probably had $300 million in assets and he almost went bankrupt because he spent so much money on buying castles and stuff. How about the billionaire who lost almost everything during the recession. How about the multi-millionaire who committed suicide because Bernie Maddoff took it all.
But you also know if for example you are spending 75k a year then 1.5 million in VTI and 1.5 million in VXUS is all you need no matter what happens without any rebalancing, selling or "thinking" and you can live for 1000 years without running out of money......

Increasing withdrawals above inflation rate...hence having more and more money every year.
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Old 12-15-2015, 06:24 PM   #57
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Most of us invest in the market, we don't play in the market or gamble with it. I don't know why you refer to it that way. Maybe you're investing in a lot riskier stocks than I am.
I give my money to a guy, and give him instructions about what I want done with it. He and I agree that the amount he gives me back later will be related to some results that happen between now and then. I have studied the process that my return will be related to...I understand the mechanism of how it works, and I understand the statistics of people who have done similar things with their money in the past. I know that I can take the high-risk, high-reward option or a low-risk, low-reward option when I give the instructions to this guy, and am comfortable with the level of risk I am taking now. This understanding notwithstanding, I have absolutely no control over the outcome and how much I will get back, only a historical record of what has happened previously in similar situations.

So did I give my money to my Vanguard rep and ask him to invest it all in Wellesley with dividends reinvested? Or did I give my money to the croupier and tell him to put it on red, and let it ride two times if I win? Could you look at investing as informed and well considered gambling? The process is pretty similar.

I watched my brother's portfolio get completely wiped out during the dotcom bust, while mine took a 20% hit. I realized then that while I had taken a more conservative (lower risk, lower reward) approach to investing, I had absolutely no more control over the results than my brother did. The mechanism of what he did and what I did were identical. We both could have been completely wiped out. We were playing the same game...I just took less risk than he did. Was he gambling, while I was investing, just because the results turned out the way they did?
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Old 12-15-2015, 06:35 PM   #58
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We both could have been completely wiped out. We were playing the same game...I just took less risk than he did. Was he gambling, while I was investing, just because the results turned out the way they did?
Can you tell me please how can I be completely wiped out with for example 3 Million dollar portfolio split between VXUS and VTI? I mean short of US-Russia Nuclear War

BTW I don't give my money to any guy because that 0.5% or 1% fee is huge money that I want to keep in my pocket.
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Old 12-15-2015, 06:35 PM   #59
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None of us know the future. I guess our investing style depends on how much faith we have in tools like Firecalc and the 4% rule and what our plan B is if future results are less. I am not going to bet the farm that people like Bogle and Shiller are wrong about future returns.

We're starting out with plan B for our baseline living expenses in the event that past performance is not indicative of future results, and have in the market what we can afford to lose / gamble on for extra discretionary spending.
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Old 12-15-2015, 06:36 PM   #60
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Most of us invest in the market, we don't play in the market or gamble with it.
I'm an outlier (contrarian) on this board, no doubt about it.
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