Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Strategy for a (substantially) higher withdraw
Old 05-23-2004, 10:45 AM   #81
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Strategy for a (substantially) higher withdraw

Quote:
That's more than one question
Now you know why I was so successful at marketing...
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny 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 Early-Retirement.org 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!

Re: Strategy for a (substantially) higher withdraw
Old 05-23-2004, 12:57 PM   #82
Dryer sheet aficionado
 
Join Date: May 2004
Posts: 25
Re: Strategy for a (substantially) higher withdraw

TH

Quote:
Since much of what I buy (food and monthly utilities) arent greatly affected by run of the mill inflation, and I'm not likely to pay much if anything in taxes for the next 3-5 years, like I said, inflation doesnt scare me much.
TH, can you elaborate on food and utilities not being greatly affected by run of the mill inflation? I was under the impression (perhaps wrong) that food and utility costs are expected to rise faster than run of the mill inflation (especially since some utilities are energy related - such as natural gas and electricity.) Or were you referring to other types of utilities like water and sewer, phone bill, trash pickup, etc.

If I am wrong about this I would be pleased because food and utilities are also a significant part of my monthly expenses.
__________________

__________________
mccl is offline   Reply With Quote
Re: Strategy for a (substantially) higher withdraw
Old 05-23-2004, 03:10 PM   #83
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Strategy for a (substantially) higher withdraw

Well beefs gone up, but I dont eat it. Milks gone up a little, but I dont drink much.

Mostly what I eat are grains from the bulk section of my local cheapo cash only market, fruits and vegetables. I honestly havent seen much of a price change in those, aside from ordinary seasonal adjustments, in at least 5 years. I'm still paying the same price for crab and fish as I was almost 10 years ago.

Probably because I live smack in the middle of one of the worlds largest growing areas, and close to where a lot of native fish and shellfish come from. In fact if you're eating a peach, a plum, a tomato, a prune, an almond or a walnut anywhere in north america, chances are I drove by the tree it came off of this week.

No packing, shipping, gasoline, etc. costs helps I guess.

My electricity has gone up a little, but I've found ways to use less. My water bill in the area I live in now is half what it was 10 years ago, and I'm on a septic tank so no sewer charges. I work constantly on whatever new deals I can get on internet and cable/satellite tv.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Strategy for a (substantially) higher withdraw
Old 05-23-2004, 03:15 PM   #84
 
Posts: n/a
Re: Strategy for a (substantially) higher withdraw

TH,

Got any good receipes using the grains you are buying :P
__________________
  Reply With Quote
Re: Strategy for a (substantially) higher withdraw
Old 05-23-2004, 08:42 PM   #85
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Strategy for a (substantially) higher withdraw

Yes I do, in fact. Of course some of the 'grains' i'm buying are pastas, rice, whole wheat berries, etc.

I make up some tasty dishes, and the raw materials cost me about a buck a pound on average...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Strategy for a (substantially) higher withdraw
Old 05-24-2004, 08:07 AM   #86
Recycles dryer sheets
 
Join Date: Dec 2002
Posts: 290
Re: Strategy for a (substantially) higher withdraw

*****
Quote:
My question is--What statistically based conclusions re HanjJoy's idea can be drawn from looking at earnings yield? Is it reasonable to conclude from looking at earnings yield for stocks meeting the characteristics listed by HankJoy to up one's SWR for a stock investment significantly above the SWR that applies for investing in a broad stock index? Or are there not enough companies around meeting HankJoy's requirements to be able to form any useful conclusions about whether assigning a higher SWR to this sort of stock investment is at all reasonable?
I recommend that you read Mikey's post on page 2 of this thread very carefully. (In fact, it is a good idea to read everything on this thread several times, with great care.)

Mikey started out by describing the S&P500 index.
Quote:
You may be OK. But it is risky. At the same time, 70% S&P 500 allocation is not only risky, it is like laying 3:5 at the track on a horse with a limp.
I think that he is right.

Mikey went on to address the specific investment classes and their potential hazards.

HankJoy has mentioned that there is a lot of work to do before buying. There is discipline as well. You have to wait for an attractive price.

Earnings yield is part of a good screening process. Just remember that it is only a part. For example, with a royalty trust, the big issue is when it will be depleted. Mikey seems to know a lot about those that he mentioned, but I don't know what he had to do to find his information.

It seems clear to me that HankJoy's approach is attractive enough to retirees so as to attract Wall Street. They could easily charge 2% of the initial purchase price (annually) and still provide a retiree with a 6% income stream or even more. There are too many Baby Boomers getting close to retirement for reliable income streams of 8% to 12% of their initial purchase prices to escape unnoticed forever. They look like good infomercial material as well.

I think that HankJoy has hit upon something worth looking into. He has been up front about the need for careful investigation and due diligence. I think that there are things that retirees can do to improve their safe withdrawal rates as compared to owning the S&P500 index.

I have mentioned this thread at the NoFeeBoards site. In my post, I wrote:
Quote:
One thing that I will probably do (to quote unclemick) is "invest 45 bucks or so in Mergents Handbook of Dividend Achievers." I am also interested in finding out about Hankjoy's favorite book, "The Single Best Investment" by Lowell Miller.
I ordered my books yesterday.

Quoting Mikey once again:
Quote:
As a very general rule, it is hard to get safe long-term high yielding investments during a period of historic low interest rates. Maybe not impossible, but it tends to be fishing in fished out water.
If you are only looking for 6% as opposed to 8% to 12%, there might be something out there already. It is probably worth waiting for your own price even if it takes a couple of years.

Have fun.

John R.
__________________
JWR1945 is offline   Reply With Quote
Re: Strategy for a (substantially) higher withdraw
Old 05-24-2004, 09:25 AM   #87
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 570
Re: Strategy for a (substantially) higher withdraw

They look like good infomercial material as well.

Sign me up!

(I'm joshing here, of course.)

I recommend that you read Mikey's post on page 2 of this thread very carefully. *(In fact, it is a good idea to read everything on this thread several times, with great care.)

This sounds like good advice to me.

I ordered my books yesterday.

I'm going to see if I can find out more about the Lowell Miller book at Amazon.com. I already have a good number of books on my "Wish List" there, but it may be that I need to make room for one more.

Thanks for your response, JWR1945.
__________________
hocus is offline   Reply With Quote
Re: Strategy for a (substantially) higher withdraw
Old 05-24-2004, 09:18 PM   #88
Dryer sheet wannabe
 
Join Date: May 2004
Posts: 20
Re: Strategy for a (substantially) higher withdraw

JWR1945 and *****:
Mikey "started out by describing the S&P500 index.
I think that he is right."

I agree, the S&P500 is too volatile for someone in retirement unless you could live on only the 1.6% yield, you would have depleted your portfolio if you retired in "73, '87' or 2000 and were taking out any reasonable amount to live on.

Mikey went on to address the specific investment classes and their potential hazards.

HankJoy "has mentioned that there is a lot of work to do before buying. There is discipline as well. You have to wait for an attractive price."

Most of the time my limit price hits within a few days to a few weeks, but I sometimes miss owning a growing high yielder by only a few pennies.

"Earnings yield is part of a good screening process. Just remember that it is only a part."

The problem with using earnings yield to do a study to find a safe withdrawal rate is some with very good and consistantly high earnings yielders pay little or no dividends so they would be poor candidates for a retiree needing current income. youe would have to sell shares in a down market to maintain withdrawals and could deplete your portfolio just like the SP500. While sustained high dividend yields come from long term earning yields less than half of high earnings yielders pay out growing, sustained high dividend yields.

"For example, with a royalty trust, the big issue is when it will be depleted. Mikey seems to know a lot about those that he mentioned, but I don't know what he had to do to find his information."

U.S. royalty trusts are not allowed to reinvest earnings or borrow to add to depleting assets but Canadian ones (canroys) can and most do, so they can continue on indefinitly!

"It seems clear to me that HankJoy's approach is attractive enough to retirees so as to attract Wall Street. They could easily charge 2% of the initial purchase price (annually) and still provide a retiree with a 6% income stream or even more. There are too many Baby Boomers getting close to retirement for reliable income streams of 8% to 12% of their initial purchase prices to escape unnoticed forever."

There are some smaller firms offering such growing high yield accounts for their customers but they are not well known or publicized. For example Lowell Miller offers such a service and you can read about it at his website. But steady dividend payouts are not as sexy as fast money from buying a stock and flipping for 30% in a month so even brokers who know about it won't want to offer it to clients when high commissions and fees can be made in rapid buying and selling.

"I think that HankJoy has hit upon something worth looking into. He has been up front about the need for careful investigation and due diligence. I think that there are things that retirees can do to improve their safe withdrawal rates as compared to owning the *S&P500 index."

Yes, because you will rarely sell an SBI stock the due diligence on the buy side to get in is much more important, but after purchase there is substantially less time needed.

"If you are only looking for 6% as opposed to 8% to 12%, there might be something out there already."

There are sustained, reliable, 8-11% yield investments that are growing the dividend regularly in today's market (I bought some this week) Whey would you settle for 6% when 10% is right there waiting to be bought, that makes no sense?


" It is probably worth waiting for your own price even if it takes a couple of years."

Yes it would be worth it but I only having to wait days, weeks or a few months usually for my limit orders to hit.
an interesting site to look at is the dividenddiscountmodel.com,
I really appreciate your thought provoking questions, HankJoy

__________________

__________________
hankjoy is offline   Reply With Quote
Reply


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
Do you agree with Bengen's "Layer Cake" withdrawal rate MikeK FIRE and Money 23 12-16-2006 11:50 AM
Withdrawal Strategy Variation Rich_by_the_Bay FIRE and Money 25 02-22-2006 01:59 PM
What about this for higher withdrawal rates? Roger_R FIRE and Money 11 11-21-2004 01:29 PM
TIPS funds: FIREcalc inputs, withdrawal strategy.. Cb FIRE and Money 2 09-28-2004 02:13 PM
Need Help With Withdrawal Strategy Bob Smith FIRE and Money 54 12-22-2003 06:12 AM

 

 
All times are GMT -6. The time now is 09:11 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.