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Old 02-10-2014, 01:31 AM   #61
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Indeed. My user profile on this website and even my signature under every post clearly state that I am very conservative with my investments. Newbies and others can read, can't they?

Plus, it is interesting to note that those like me outside the mainstream 'way of thinking' on this website are basically told not to give advice. It's a real shame on a so-called public forum. This is my last post under this thread.

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I will point out that the extreme conservatives are way outside the mainstream of the financial profession, academic research as a whole, and how institutional portfolios are managed. That said, it is their money so they can do whatever they want with it.
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Old 02-10-2014, 01:56 AM   #62
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KFJWI = Kindle Fire HD 8.9 WiFi evidently, in case anyone else wonders...I didn't know.

Sent from my (old) iPad2 64GB using my index fingers
Thanks for that. I was wondering what the heck KFJWI was.

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What are crediting rates?
Crediting rate is the interest rate that is credited to your policy account value and pertains principally to deferred annuities (also universal life insurance). Alternatively, it is the IRR on a deferred annuity or a period certain annuity.
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Old 02-10-2014, 03:53 AM   #63
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Plus, it is interesting to note that those like me outside the mainstream 'way of thinking' on this website are basically told not to give advice. It's a real shame on a so-called public forum. This is my last post under this thread.
FWIW: obgyn65 I have no problem with anything I have seen you post (either here or in any other topic/thread). You are much more conservative with your investments than I personally am at this point in my life, but it doesn't mean either one of us is "right" or "wrong" and I value the difference of opinions I see here. I have no problem understanding the "context" that you use when you post, as it seems to be quite clear to me. I do not feel that caveats would be required for your postings of your opinions or providing information on what you do that works for you.

If the financial views here were all the same then I do not think this website would be for me.....and I would also be wondering what "they" were trying to sell.
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Old 02-10-2014, 06:02 AM   #64
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Does this mean that you didn't "win the game" because you could have retirement earlier than you did?
I'm not interested in "winning the game". I'm interested in living my life.
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Old 02-10-2014, 06:33 AM   #65
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People post questions asking for advice, we all offer our suggestions, both in response to the request and also challenging each other. We do so respectfully and the end result is a healthy debate that benefits the OP and many others. Always keep in mind from our community rules
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People who are professionals in a variety of fields post on this forum and share their general knowledge. Many of them are brilliant. Some are doofi.
The only people that are told to not give advice are salescritters here looking to drum up new business, and they are dealt with ruthlessly, by members and site staff alike. All others are welcome to engage and contribute
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Old 02-10-2014, 07:14 AM   #66
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This. A thousand times this. Midpack, Alan, ERD and others - bookmark this please.
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I didn't give any financial advice, and the reason I didn't is because, like you, I have a solid foundation of pensions covering the basic expenses. The point of my post is that when YOU give financial info to a newbie of what your AA is, that you should give the full picture, otherwise they may make the wrong assumptions.
+"1000."

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Plus, it is interesting to note that those like me outside the mainstream 'way of thinking' on this website are basically told not to give advice. It's a real shame on a so-called public forum. This is my last post under this thread.
You weren't told not to give advice. There are risks associated with too much risk, and there are other risks associated with little or none - providing the "fill picture" is more helpful, newbies can be easily misled otherwise.
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Old 02-10-2014, 08:39 AM   #67
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Does this 20-25 year period need to begin at any specific age?
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Yes...the age you decide to retire.
From Dr Bernstein's 2012 eBook on this topic:
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Old 02-10-2014, 09:16 AM   #68
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From Dr Bernstein's 2012 eBook on this topic:
I see that he is stating by age 70, but I would guess that is based on a more traditional retirement age of 65, or maybe even a bit later. I don't remember if his book addresses anything in particular about early retirees. But if you plan to retire 10-20 years earlier than the typical age, you have to make some adjustments to the recommendations in these books.

In general, I remember his theory being to keep enough in fixed income to cover your very basic expenses for 20-25 years, and then invest the rest in equities, with the understanding that your basic expenses will always be covered, and if equities do well, you will have lots of extra for luxuries. If not, you still have your basics covered. I think this makes a lot of sense.
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Old 02-10-2014, 09:19 AM   #69
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If the financial views here were all the same then I do not think this website would be for me.....and I would also be wondering what "they" were trying to sell.
+1

I enjoy reading everyone's viewpoints here. Clearly there are going to be some very conservative investors on a forum this large, and I always enjoy reading their posts.

Obgyn65, I'm glad you continue to post your viewpoints here and I always learn from them. Thanks for sharing your insights. You have to invest in a manner that's comfortable for you, and clearly you are doing so. There's nothing wrong with that.
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Old 02-10-2014, 09:25 AM   #70
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All y'all are whack.

Best thing in this thread is "Pandemic of pension woes is plaguing the nation". I can hear my financial adviser, Danny Kaye, repeating that after his famous maxim: "The pellet with the poison's in the vessel with the pestle; the chalice from the palace has the brew that is true!"

Only safe investing style is zero pension, SS enough to feed a cat, an unerring buy high,sell low history in the stock market, and rental real estate. Works for me, and I'm the authority. on me.
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Old 02-10-2014, 10:30 AM   #71
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I guess I am with you. I cringe when I see first time, newly retired posters asking for conservative portfolio advice and they are told to put over half their money in stocks, with no mention of sequence of returns risk or pros and cons of that approach. ...
Maybe I've missed them, or maybe my viewpoint filters them out, but is it really common for posters here to 'tell others to put over half their money in stocks, with no mention of sequence of returns risk or pros and cons of that approach.'?

First - no one can really 'tell someone what to do'. We can express opinions, share information, share viewpoints (hopefully provide data to back it up), whatever - but then the reader needs to figure out what to do for themselves.

Second - The default for FIRECalc (and the general advice from a wide range of sources) is 75% stocks. I think it is pretty well understood that some volatility is to be expected. So maybe it doesn't get explicitly called out each and every time. But when someone is expressing a very different approach, there is more reason to spell out the pros and cons.


If I were to promote the advantages of a 100% stock portfolio (approx 2X average and maximum returns over a 45 year period) my post would be misleading if I didn't also point out the disadvantages (increased volatility, slightly lower success rate ( 99% versus 100% for a 3.2% WR) of the approach over the default 75%. Stating only the positives is just noise.

And conversely, If I were to promote the advantages of a 0% stock portfolio (lower volatility) my post would be misleading if I didn't also point out the disadvantages (much lower success rate - only 30% compared to 99% and 100% above, and much lower/negative min/max.avg returns ) of the approach over the default 75%. Stating only the positives is just noise.

To put numbers to this - FIRECalc reports that for the same success rate as 75% stocks for a 45 year period, a 0% stock portfolio would need to start with a portfolio 1.8X the size (or cut WR by that ratio).

So I think it's fine if someone were to post that they just can't handle volatility, so they chose to wait to build their portfolio to 1.8X in order to do that. That is a personal choice, and people should do what suits them. We can disagree on whether it suits each individual or not, that's not a problem, that's just acknowledging that one size does not fit all. Neither approach is 'better', they are different, with different 'risks'.

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Old 02-10-2014, 10:33 AM   #72
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I see that he is stating by age 70, but I would guess that is based on a more traditional retirement age of 65, or maybe even a bit later. I don't remember if his book addresses anything in particular about early retirees. But if you plan to retire 10-20 years earlier than the typical age, you have to make some adjustments to the recommendations in these books.

In general, I remember his theory being to keep enough in fixed income to cover your very basic expenses for 20-25 years, and then invest the rest in equities, with the understanding that your basic expenses will always be covered, and if equities do well, you will have lots of extra for luxuries. If not, you still have your basics covered. I think this makes a lot of sense.
He doesn't talk about early retirement as I recall (don't think he advocates in general), though your interpretation make sense to me.

I've spent some time reading Dr B's more recent posts on LMP's and he concedes it's even harder/more expensive (and not without other risks) in the current low yield environment than it was in 2009-2012 when he formulated some of this thinking. Times are tough, no way around it, and he says as much more recently.

In his eBook and elsewhere he notes that part of his LMP writing comes from watching his clients somewhat unexpectedly panic sell (to some extent) in the 08-09 meltdown.

Having more money than you'll ever need always makes it easier...
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Old 02-10-2014, 12:11 PM   #73
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+1

I enjoy reading everyone's viewpoints here. Clearly there are going to be some very conservative investors on a forum this large, and I always enjoy reading their posts.

Obgyn65, I'm glad you continue to post your viewpoints here and I always learn from them. Thanks for sharing your insights. You have to invest in a manner that's comfortable for you, and clearly you are doing so. There's nothing wrong with that.
+2. I think we live in a very consumer oriented country, and it is refreshing to find someone who lives way below his means, and has the financial ability and foresight to invest very conservatively and does not need to take any risks in the stock market.

In a country of failed pension plans, unprecedented mortgage foreclosures, a trillion dollars in student debt, and a large percent of the population financially unprepared to retire, I'd rather be a conservative financial outlier like obgyn65 than broke with the mainstream.
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Old 02-10-2014, 12:14 PM   #74
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Having more money than you'll ever need always makes it easier...
or a guaranteed stream of inflation adjusted income that will cover all expected and unexpected expenses will definitely help.
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Old 02-10-2014, 12:20 PM   #75
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I think we live in a very consumer oriented country, and it is refreshing to find someone who lives way below his means, and has the financial ability and foresight to invest very conservatively and does not need to take any risks in the stock market.
Only a handful of people fit this profile, however. For most, exposure to equity is needed.
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Old 02-10-2014, 12:21 PM   #76
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In general, I remember his theory being to keep enough in fixed income to cover your very basic expenses for 20-25 years, and then invest the rest in equities, with the understanding that your basic expenses will always be covered, and if equities do well, you will have lots of extra for luxuries. If not, you still have your basics covered. I think this makes a lot of sense.
I think it makes perfect sense, too, and I am always surprised his ideas have not been embraced readily by more of the posters here, or suggested more often by other posters in response to thread for requests for conservative investment advice.
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Old 02-10-2014, 12:37 PM   #77
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Only a handful of people fit this profile, however. For most, exposure to equity is needed.
Logically, the probability is high that with stocks you will make more than a less conservative portfolio, but stocks and the future do not come with the same guarantees as TIPS, I bonds or CD ladders.

With stocks you are playing the odds you will make more, not less over the long term.

There is also a certain chance that stock may underperform a fixed income portfolio for extended periods -

"Where is the wealth creation implied by the Ibbotson data? Stock market investors took the risk—riding out every bubble, every crash, every spectacular bankruptcy and bear market, over a 30-year stretch. How much were they compensated for the blood, sweat, and tears spilled with all this volatility? A measly 53 basis points per annum! Indeed, those that have incurred the ups and downs over the past decade have lost money compared to what they could have earned from long-term government bonds. They’ve paid for the privilege of incurring stomach-churning risk. Not only did Treasury bond investors sleep better, they ate better too!?"

From The Biggest Urban Legend In Finance

https://www.researchaffiliates.com/O...an_Legend.aspx

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Old 02-10-2014, 12:39 PM   #78
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I'm not interested in "winning the game". I'm interested in living my life.
+1
Loved that.

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+1

I enjoy reading everyone's viewpoints here. Clearly there are going to be some very conservative investors on a forum this large, and I always enjoy reading their posts.

Obgyn65, I'm glad you continue to post your viewpoints here and I always learn from them. Thanks for sharing your insights. You have to invest in a manner that's comfortable for you, and clearly you are doing so. There's nothing wrong with that.
Differing viewpoints are always appreciated on my part, as they're food for thought. Midpack, for one, has an excellent way of putting into words what might be rambling around my brain without my quite being able to crystalize it.
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Old 02-10-2014, 12:54 PM   #79
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This site would crap out pretty quickly if it were not for the delicious opportunity provided to members to tell others what they ought to do. So few of us can get our spouses, lovers, children, friends, etc to even listen to the wisdom we are sure we are full of.

It's human nature, and the questioners play their part by sometimes asking (IMO) uniquely personal or sometimes global questions. (Should I move to Timbuktu?) Sure, especially if you want to be in Timbuktu, for reasons best known to you and researched by you.

I would say very few if any of us should really be telling others what to do, but this seems to be a main feature of this business, so if we play here will see and perhaps do a lot of this.

What if every time someone who obviously knows next to nothing about any of this asks some very general question, or some question that requires a psychotherapist or an oracle rather than a reference to some sources, all who answered could only say. "Well, these are my conditions, and this is what I do." Rather than "everybody needs to blah blah blah?

Well, I can tell you what- traffic would plummet. So this is not in the interest of any of us who like to waste time here, (at least our short term interest)and certainly it is not in the interests of ownership and management of the site.

The site is also very useful for straightforward questions like what is good way to stream video, or what car do you like for what reasons.

Ha
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Old 02-10-2014, 01:03 PM   #80
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I am reading a book on decision analysis right now. We have found making decision trees very helpful in making many of our financial decisions.

If you aren't familiar with the tree method, to make the tree, you list the possible paths and the probability percent of each outcome.

I think the difference that strikes me between the approach in the book and some of the posts here is that coming out ahead with stocks is often treated like a sure thing, i.e. you need 1.8 times more if you don't invest in stocks. I think this is where the decision tree methodology and Firecalc diverge. In the decision tree there would be no 100% assurances on any given path, just probabilities assigned to each path.

In the tree methodology, if you need the type of returns from stocks to retire, then there would be perhaps a small, but nonzero, possibility you may also end up with less than you need.
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