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Re: FIRE Financial cushions against unforeseen events. What did you do?
Old 10-24-2005, 04:46 PM   #21
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Re: FIRE Financial cushions against unforeseen events. What did you do?

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Originally Posted by REWahoo!
It doesn't "put you back into positive net worth".* That one year (1929 in the case you stated) would simply prevent you from having a 100% success rate.*
See http://www.fireseeker.com/explain.htm for an explanation of how FIREcalc works.
I understand that if I retired in year 1929 I would run out of money before the end of my 40-year retirement, but how does it bring my portfolio back up to $17,446 in year 40 when it was negative in years 38 and 39? If you deplete all your money and do not add to the pot, how can your portfolio go up? Or are the numbers after the first negative meaningless?

year 38 -49241
year 39 -18787
year 40 17446

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Re: FIRE Financial cushions against unforeseen events. What did you do?
Old 10-24-2005, 04:58 PM   #22
 
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Re: FIRE Financial cushions against unforeseen events. What did you do?

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Originally Posted by retire@40
I understand that if I retired in year 1929 I would run out of money before the end of my 40-year retirement, but how does it bring my portfolio back up to $17,446 in year 40 when it was negative in years 38 and 39?* If you deplete all your money and do not add to the pot, how can your portfolio go up?* Or are the numbers after the first negative meaningless?

* * year 38* -49241
* * year 39* -18787
* * year 40* *17446

I tried this and could not get it to go positive, once it went negative.

Do you have any other income streams that are kicking in down the road? Or less spending that would cause a surpluss to be invested again?
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Re: FIRE Financial cushions against unforeseen events. What did you do?
Old 10-24-2005, 05:19 PM   #23
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Re: FIRE Financial cushions against unforeseen events. What did you do?

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Originally Posted by Cut-Throat
I tried this and could not get it to go positive, once it went negative.

Do you have any other income streams that are kicking in down the road? Or less spending that would cause a surpluss to be invested again?
That's exactly what it was. I had put in $18K of social security and that made it go back up. Without it, it stayed negative.

Interestingly, even in my worst-case scenario in a 1929 situation, if I could borrow enough to keep me afloat in a few of the bad years, I could end on a positive note assuming I get social security.
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Re: FIRE Financial cushions against unforeseen events. What did you do?
Old 10-24-2005, 05:37 PM   #24
 
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Re: FIRE Financial cushions against unforeseen events. What did you do?

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Originally Posted by retire@40
That's exactly what it was.* I had put in $18K of social security and that made it go back up.* Without it, it stayed negative.

Interestingly, even in my worst-case scenario in a 1929 situation, if I could borrow enough to keep me afloat in a few of the bad years, I could end on a positive note assuming I get social security.
And in reality, we'd all cut our spending to uncle mick levels in a 1929 situation and die with 8 figure net worths!
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