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Jim Otar’s Pearls of Wisdom
Old 03-16-2011, 11:50 AM   #1
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Jim Otar’s Pearls of Wisdom

Steve Thorpe has condensed some of Jim Otar's best lines at the Portfolioist. I know Otar has been discussed here but this was worth reading to me. His book had more influence on my decision to retire than all the other reading I did combined.

Portfolio Investing Blog: Portfolioist
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Old 03-16-2011, 02:00 PM   #2
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A good list. I expect the Otar fans here can add a few more.

I don't know if Otar ever said it, but this connects to a lot of discussion here:

- If you're planning to use your portfolio to fund "nice to have" stuff in addition to just "have to have" stuff, then you can probably justify a higher initial withdrawal rate.
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Old 03-16-2011, 03:15 PM   #3
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Good article, thank you for posting it. I grabbed a few points that I feel are important:

· In a distribution portfolio, the withdrawal rate is the most important contributor of portfolio longevity.
· If you thought you were safe withdrawing 4% starting at the beginning of 2008, you are likely in for a rude awakening.
· The concept of “long–term” exists only in accumulation portfolios. There is no such thing as “long term” in a distribution portfolio. As soon as your periodic withdrawals start, “long–term” ceases to exist, and the “luck factor” takes control of the outcome.

The last emphasis is mine.

Ha
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Old 03-16-2011, 04:48 PM   #4
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Nice to read the blog guy is a 'Boglehead.' Adds to his credibility in my book.

I who have been lucky enough to get canned in the wonderful 90's and rode into ER with index funds as the 'big dog'.

heh heh heh - also Mr. B's Index 500 was our company's main 401k stock fund. Lucky? Hindsight says 'Yeah you rite!'
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Old 03-16-2011, 08:59 PM   #5
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Quote:
Originally Posted by haha View Post
Good article, thank you for posting it. I grabbed a few points that I feel are important:

· In a distribution portfolio, the withdrawal rate is the most important contributor of portfolio longevity.
· If you thought you were safe withdrawing 4% starting at the beginning of 2008, you are likely in for a rude awakening.
· The concept of “long–term” exists only in accumulation portfolios. There is no such thing as “long term” in a distribution portfolio. As soon as your periodic withdrawals start, “long–term” ceases to exist, and the “luck factor” takes control of the outcome.

The last emphasis is mine.

Ha
Very good points. I would say the first one is my mantra.
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