Poll:Percent cash in AA after FIRE

[TromboneAl]

why play the game if you already won?

This is related to a kind of catch-22 situation I often think about.

Let's say that instead of having just enough to retire, you have, say 10 million dollars. In that situation you could be 100% money market, and have no worries that you'd outlive your money. IOW, you have no need for the risk of equity investments.

But, OTOH, because you have so much money you can easily handle the risk of a 100% equity allocation.

When you have more, you need less risk, but can tolerate more.

 

[mathjak107]

Soooo..... if you've "already won," why are you "playing the game and investing as aggressively as if you were 24?"

Ray's system always seems like an oxymoron

because you have the amount of dough in the buckets to generate the amount of income you need but that money you need to eat in 30 years still hyas to grow so you can move it into the buckets for spending...... you won means you have enough to fill the buckets as opposed to still have to save the money to put in

 

[Nords]

This is related to a kind of catch-22 situation I often think about.
Let's say that instead of having just enough to retire, you have, say 10 million dollars. In that situation you could be 100% money market, and have no worries that you'd outlive your money. IOW, you have no need for the risk of equity investments.
But, OTOH, because you have so much money you can easily handle the risk of a 100% equity allocation.
When you have more, you need less risk, but can tolerate more.

Same conundrum here. Especially when you consider that you could give $7-8M of that to charity.

Here's an interesting perspective on an emergency fund from an ER who has an interesting perspective on just about everything:
http://earlyretirementextreme.com/2009/06/when-does-an-emergency-fund-become-superfluous.html

 

[audreyh1]

This is related to a kind of catch-22 situation I often think about.

Let's say that instead of having just enough to retire, you have, say 10 million dollars. In that situation you could be 100% money market, and have no worries that you'd outlive your money. IOW, you have no need for the risk of equity investments.

But, OTOH, because you have so much money you can easily handle the risk of a 100% equity allocation.

When you have more, you need less risk, but can tolerate more.

I think in that situation I would be giving a lot more of it away. Maybe some of it in the form of those charitable "annuities" or whatever they are called that pay you X% a year for life on your donation.

Otherwise hard to say. I suspect some folks put enough of it in safe tax-free fixed income funds to generate oodles of annual income, and some are probably quite aggressive with investing the chunk they don't "really need".

But I have found that when I am feeling "flush" I tend to spread the wealth toward family members as well (parents, siblings, we have no kids), and I also prefer to have enough in reserve to be able to cover things like medical expenses disasters or long-term care needs for a parent. I suspect the super rich also do a lot of annual gifting as well.

In other words, it's easy to find ways to rachet up the spending even if it's not on yourself. So you have to manage the $$$s to support that too.

Of course some of those folks go out and buy a yacht! After their $2M house! LOL!

Audrey