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NOT a serious SWR discussion, just dreaming
Old 09-19-2017, 08:31 AM   #1
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NOT a serious SWR discussion, just dreaming

I am a buy and hold mutual fund kind of guy. I have, pretty much, the same funds you do. I have between 60% and 65% equities.

I wrote down the ticker symbols on my top 10 or so mutual funds comprising the bulk of my portfolio (equities and fixed). Looked up their 15 year total returns. When they had been around less than 15 years, I used whatever benchmark Morningstar suggested. Averaged them to 8%.

Then I dreamed what I could do with an 8% SWR instead of whatever conservative rate I am using.

Naysayers, please breath deep, as I already know the negatives. Just dream with me....
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Old 09-19-2017, 08:43 AM   #2
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Well, I'm looking to get off this ride called "w*rk" around the $2M net worth mark. So for me, that 8% would be $160K per year.

$160K per year is probably fairly low for some of the more successful members here, but for me, I don't know how I'd find a way to spend that much! It would be a nice problem to have, though...and definitely fun to think about.
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Old 09-19-2017, 09:07 AM   #3
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Quote:
Originally Posted by Z3Dreamer View Post
I am a buy and hold mutual fund kind of guy. I have, pretty much, the same funds you do. I have between 60% and 65% equities.

I wrote down the ticker symbols on my top 10 or so mutual funds comprising the bulk of my portfolio (equities and fixed). Looked up their 15 year total returns. When they had been around less than 15 years, I used whatever benchmark Morningstar suggested. Averaged them to 8%.

Then I dreamed what I could do with an 8% SWR instead of whatever conservative rate I am using.

Naysayers, please breath deep, as I already know the negatives. Just dream with me....
I first joined my jobs 457k(like a 401k) plan in 1994. I think I used 18 % for forward looking returns. Yeah we know how that turned out.
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Old 09-19-2017, 09:10 AM   #4
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I first joined my jobs 457k(like a 401k) plan in 1994. I think I used 18 % for forward looking returns. Yeah we know how that turned out.
How did it turn out with continued investments and your asset allocation? I know it is not 18% (would be nice), but what was the return with your monthly or bi-weekly DCA contributions?
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Old 09-19-2017, 10:14 AM   #5
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I first joined my jobs 457k(like a 401k) plan in 1994. I think I used 18 % for forward looking returns. Yeah we know how that turned out.


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Old 09-19-2017, 10:30 AM   #6
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Well, using that same logic I am projecting what my future net worth will be at retirement based on continuing to invest at my current rate and estimated returns based on the average of all my fund's lifetime averages minus 1%.
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Old 09-19-2017, 10:42 AM   #7
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Naysayers, please breath deep, as I already know the negatives. Just dream with me....
If you are going to dream, you might as well dream big.

Find a ticker symbol representing a stock which had a great return last year.
For example: AKS = 359%

Dreams can be fun... until you have to wake up.
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Old 09-19-2017, 10:59 AM   #8
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Originally Posted by Andre1969 View Post
Well, I'm looking to get off this ride called "w*rk" around the $2M net worth mark. So for me, that 8% would be $160K per year.

$160K per year is probably fairly low for some of the more successful members here, but for me, I don't know how I'd find a way to spend that much! It would be a nice problem to have, though...and definitely fun to think about.
For this community:

Withdrawal rate poll Withdrawal Rate: your personal comfort zone.

Monthly retirement spending poll Poll:What was (is) your planned monthly spend rate?

Net worth poll What's your net worth?
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Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 09-19-2017, 12:55 PM   #9
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Originally Posted by Midpack View Post
For this community:

Withdrawal rate poll Withdrawal Rate: your personal comfort zone.

Monthly retirement spending poll Poll:What was (is) your planned monthly spend rate?

Net worth poll What's your net worth?
So, for this group it seems like I'm roughly average. While my goals have been shifting as the years have passed, I had been figuring roughly $2M portfolio, ~$60K spending per year, and that actually comes out to a fairly conservative 3% SWR...less, once SS kicks in.

Anyway, once the time comes, I have a feeling I'll have problems spending $60K per year, let alone $160k. But, who knows, maybe I'll find a way to adapt?
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Old 09-20-2017, 09:15 PM   #10
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Quote:
Originally Posted by Z3Dreamer View Post
I am a buy and hold mutual fund kind of guy. I have, pretty much, the same funds you do. I have between 60% and 65% equities.

I wrote down the ticker symbols on my top 10 or so mutual funds comprising the bulk of my portfolio (equities and fixed). Looked up their 15 year total returns. When they had been around less than 15 years, I used whatever benchmark Morningstar suggested. Averaged them to 8%.

Then I dreamed what I could do with an 8% SWR instead of whatever conservative rate I am using.

Naysayers, please breath deep, as I already know the negatives. Just dream with me....
Well it's either:

Lawyers Guns & Money

https://youtu.be/lP5Xv7QqXiM

or Money for Nothing Chicks for Free

https://youtu.be/ZC1Pdsppch4
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Old 09-21-2017, 04:58 AM   #11
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Doubling the SWR .. basically enables me to jump around the world a bit more, specifically snowbirding to New Zealand and such.

But the bigger dream is actually having more comfort vs. drawdowns. How pedestrian, I know. 10 years of 4% extra SWR means +40% net worth
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Old 09-21-2017, 05:30 AM   #12
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I'm not sure about an 8% WR. But, I see two ways to get above 4% (without reducing portfolio survival rates).

1) The 4% SWR is based on 30 years. As we age, shorter time horizons can be used. And, shorter time frames historically support higher WR's. Depending on your age, 5% or 6% might work.

2) Also, the historical SWR is based on worst case scenarios. After several years of retirement, you will likely have substantially more assets than when you retired. 4% of this larger number may give you your 8% WR (based on your original portfolio value).

Combine the two points above and you may get to 8% of your original portfolio value at some point.


FN
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Old 09-21-2017, 06:42 AM   #13
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We usually think of "dreaming" about something as a thing that is surely unattainable, or at least very, very slim odds (like a big win in the lottery).

But historically, FIRECalc report that an 8% WR provides "success rate of 21.4%.", so a better than 1 in 5 chance of success.

Somewhere around 10%-11% WR hits the edge of zero success.

-ERD50
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