Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 02-11-2014, 09:13 AM   #121
Alan's Avatar
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 18,933
Originally Posted by Spanky View Post
Thanks for the succinct explanation of your approach. I concur that exposure to equity or any risky investment is not needed when there are future streams of income (e.g, pension) and a sizable nest egg or portfolio.

Originally Posted by ShokWaveRider View Post

Where do you find 10 year CDs these days? Are they better than Penfeds 3% 5 Year?

BTW, I am in your camp. Here is an Example:

I am 60 so I am basing the case on this Age, home paid for and no debt. IMHO Where one should be when retired.

Hypothetically let us use a ~$2m portfolio. Not $1m nor $4m right in the middle.

$2m @ 3% is 60k PA (Before Taxes)

SS Estimated taken at 62 = $20k (my Estimated SS from

That is $80k. Personally this is 2 x what we spend right now and our RE taxes and Insurance costs are above the norm.

OK that said. I have 2 BIG CD's maturing this month at PenFed, and am struggling with renewing them for another 5 years at 3% (Old money).

OBGYN65 Again, do you have any recommendations? Should I just get over it. I cannot find any predictions that show interest rates dramatically rising in the next 5 years.
He has said in the past that he buys brokered CD's, through Edward Jones.

10 year. 2.75% CD

Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-11-2014, 09:48 AM   #122
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
Join Date: Jan 2008
Location: Chicagoland
Posts: 10,664
Originally Posted by daylatedollarshort View Post
I probably won't post any more in this thread because at this point I am just repeating myself, and I don't know any way to make my points clearer.
Agreed. We don't disagree's only how the (ultra) conservative approach is sometimes presented here that brings this debate up repeatedly. Hopefully you realize I am not concerned on my own behalf for what that's worth.

And I also agree threads like this offer a lot of valuable, thought provoking ideas from all POVs - that's the primary benefit here to me.

No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 02-11-2014, 10:02 AM   #123
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 16,449
Originally Posted by Spanky View Post
... I concur that exposure to equity or any risky investment is not needed when there are future streams of income (e.g, pension) and a sizable nest egg or portfolio.
And taking this to its logical conclusion - with a small enough WR% (or stating the same thing another way - a large enough nest egg for a given spend $ amount), a portfolio could be designed to lose money every year, and still survive for more than 45 years!

Originally Posted by daylatedollarshort View Post
Midpack your insights and charts are very valuable contributions here. However I do not always think it is clear from your posts and some other posters that what you post is data based on past results, ...

It certainly is not clear to me that anyone has access to future results! So of course these numbers are based on past results. If you know of a source for future results, please, please, please share! On second thought, PM me, if we let everyone know any advantages will get arbitraged away!

Originally Posted by daylatedollarshort View Post
...when IRS estate data has shown that those with $2M+ net worth only had 12.6% of their assets in publicly traded stocks -
You are really stretching (and cherry-picking) to get confirmation for your beliefs, IMO. This data is not relevant to a portfolio AA analysis. Many of the richest made their money in businesses and/or real estate investments, a few inherited it. That has absolutely nothing to do with the WR% that various AA are likely to support for a 45 year retirement.

If you want to use this as 'proof', then what does it say about fixed income:

The rank and the percentage of the aggregate wealth held in the top ten asset categories are as follows: 1. investment real estate (17.7); 2. closely held stocks (14.5); 3. publicly traded stock (12.6); 4. retirement assets (11.4); 5. personal residence (9.2); 6. insurance (7.2); 7. cash assets (6.9); 8. limited partnerships (4.1); 9. tax-exempt bonds (3.9), and 10. farms (3.1).

Hmmm, '2. closely held stocks (14.5); 3. publicly traded stock (12.6)' so stocks add up to 27.1% of wealth, and '7. cash assets (6.9); ... and 9. tax-exempt bonds (3.9),' and fixed income adds up to only 10.8%. Even adding in 'insurance' gets to only 18%.

And what are the 11.4% 'retirement assets'? 401Ks? IRAs? These could very likely be in a balanced fund on average, so maybe add in another 5% or so of stocks to the total?

So let's see - about 32.1 % in stocks, about 18% in fixed and insurance... that is about the same ratio as a 64/36 AA of stocks/fixed. A very long way from 0/100 AA, and right in the ballpark of the historical best case for portfolio survive-ability in bad times. Maybe those rich folks know a thing or two about money?

ERD50 is offline   Reply With Quote
Old 02-11-2014, 10:24 AM   #124
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
Join Date: Apr 2003
Location: Hooverville
Posts: 21,833
This thread is so much fun! It reminds of an old hand held game my sons had back in the early 80s, which featured a football game between the Bears and the Rhinos.

haha is offline   Reply With Quote
Old 02-11-2014, 10:34 AM   #125
Thinks s/he gets paid by the post
Major Tom's Avatar
Join Date: Nov 2009
Location: SF East Bay
Posts: 2,864
Originally Posted by obgyn65 View Post
I said I was not going to post again under this thread, but happy to make an exception.

Hi Tom

I am writing this post at about 1am. Had a long day. Feeling tired but taking a few minutes to answer. Unlike many of you I don't have much time to post, since I still work, hence short on details.

Your four points below are correct. I can confirm that I have a small pension from a consulting activity in the US outside of seeing patients. I also mentioned in the past that I worked for a few years in two European counties - therefore I also expect some pension money from there also, including the UK state pension. My US pension is not cola'd but the UK state pension will be, hopefully. I turn 49 this year and many things can happen in the next 20 years.

Also planning to continue with buying small deferred annuities for the next few years starting at age 62. Then, planning to buy scattered SPIAs in my 70s or 80s to optimize taxes. Keeping about $1mm cash in Europe because I worked there for a few years. The rest from my US income - more cash - invested here in CDs and munis mainly. Always buying 10-year CDs to get the best rates. With this strategy, I can withdraw about $100k a year until age 95, possibly $120k if I work for another year.

Trying to find ideas by participating here and Bogleheads on how to reduce or optimize taxes with passive income and future pensions coming in from three countries. But it is difficult to share details in an open forum when others have mentioned I should use "caveats" when answering questions from newbies who maybe better off than I am, or simply "ignore" equity risk - knowing that, like many others, I hate financial risk but OK with inflation risk -, or even show "hubris" for mentioning my frugal annual expenditure - some of these threads have been permanently deleted, so no need to look for them.

I think the key is to live below one's means, which is what I have been doing - except for my mission trips abroad or the support of my free clinics. And that is a lot of money given away but it has helped improve the lives of thousands over the years. And there is nothing like it.

So yes, it may be possible to FIRE without taking any equity risk. I am not alone and my net worth is not that great when i look at the Bogleheads survey where there are senior business people, law firm partners and audit firm partners, and MDs owning their own practice (I don't and I don't work as many hours as my colleagues) who have a lot more than me. And that's fine - only trying to live my own life. The point is that it may be possible to FIRE without taking equity risk, assuming you have a large enough nest egg and that you keep living below your means.

Ok, going to bed now. Good night.
Thank you for taking the time to reply, Obgyn. I appreciate that you're busy, and know that a reply like this at the end of your workday requires a fair amount of effort. I wasn't sure whether you appreciated that a very low-risk approach such as yours requires a greater multiple of annual expenses than a portfolio containing a good dose of equities in order for it to survive over the retirement period. I suspected that you did, and like others here, that was all I really needed to hear.

I know you're very busy and don't have the time to take part in lengthy discussions online but the sheer number of your posts in the past, combined with their brevity, helped to create a "vacuum of information" (from my POV, at least), which left me wondering. You often state that you're very conservative and risk-averse, but I wasn't sure whether you were aware of the risks inherent with your approach and were incorporating those risks into your planning. Now I see that you are. Thanks for the confirmation.

Regardless, we can all take comfort in the knowledge that we are providing entertainment for ha. If nothing else, this makes our time spent typing worth it right?

Originally Posted by haha View Post
This thread is so much fun! It reminds of an old hand held game my sons had back in the early 80s, which featured a football game between the Bears and the Rhinos.


ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is online now   Reply With Quote

risk averse

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
mid-40s, risk averse, low-ish income, way behind you guys shorn Hi, I am... 29 03-21-2013 08:53 AM
Risk Averse Boomers mickeyd FIRE and Money 2 07-03-2011 05:51 AM
So what is a risk averse investor to do? brewer12345 FIRE and Money 87 04-03-2011 01:02 AM
suggestions for my risk-averse mom kevink FIRE and Money 29 08-09-2007 07:17 PM
Risk? What risk? REWahoo FIRE and Money 3 08-16-2006 08:39 AM


All times are GMT -6. The time now is 11:08 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.