I understand why you have 1/2 your money at FIDO, if your online info is correct, you were CIO there for 5 years..........
Anyway, nice to know a Wall Street vet.........share some knowledge with us about things really work.........
These are great articles. I make a motion to put them on FAQ here.
I think the difference in reception between grfiv website and Millionaire Mom Next Door's website is remarkable.
We must all be a bunch of male chauvinist pigs.
So... I clicked through to some of George's articles and eventually found my way here:
Capital Needs Analysis spreadsheet
This is a capital needs calculator that helps you figure (in a purely deterministic way) how much money you'll need to safely retire given a set of assumption about various factors. In playing with the calculator, something struck me as odd and I was hoping you guys could help.
If I assume that I have, say, 60 years remaining in my life, and I run the calculator for 30 years until retirement/30 years after retirement,
20/40, or 10/50 but I hold all other variables the same, then... The projected nest egg that I need *decreases* with earlier retirement/long post-retirement.
Sure, you need to save more per month to get there given the shorter timeframe, but still... This seems wrong to me. Shouldn't you need *more* money to retire sooner?
Is the calculator wrong? Or am I missing something?
So... I clicked through to some of George's articles and eventually found my way here:
Capital Needs Analysis spreadsheet
This is a capital needs calculator that helps you figure (in a purely deterministic way) how much money you'll need to safely retire given a set of assumption about various factors. In playing with the calculator, something struck me as odd and I was hoping you guys could help.
If I assume that I have, say, 60 years remaining in my life, and I run the calculator for 30 years until retirement/30 years after retirement,
20/40, or 10/50 but I hold all other variables the same, then... The projected nest egg that I need *decreases* with earlier retirement/long post-retirement.
Sure, you need to save more per month to get there given the shorter timeframe, but still... This seems wrong to me. Shouldn't you need *more* money to retire sooner?
Is the calculator wrong? Or am I missing something?
Since we know that a determinsitic scenario is also an unrealistic one, why not try these different scenarios, just as they are presented, in FireCalc?
Ha
I hope no one is making plans based on the odd idea that you need less money to fund a 50 year retirement than you would to fund a 20 year one. Just isn't so, folks.
These spreadsheets and the anti-intuitive result are based on a fallacy- the use of nominal rather than real amounts at the various withdrawal starting dates. Of course you will need more nominal dollars to fund the nominally larger year one withdrawal at time t+30 than you would at time t+10. Absolutely. But your savings, and your annual income neded to create this fund will also be much larger.
To make this clear, just imagine that you decided to trick the charts. You will tell them, at age 40, "I am retiring", and you will start taking your annual draw just as the chart tells you to do. But secretely you keep working, and with your earnings you set up a whole new savings program, putting 100% of it after taxes into this program also at 7%. Then 20 years down the road at age 60 you decide to really retire, and start to draw from your new fund, as well to continue drawing from the old fund.
Who do you think will have a greater income at this point? You, or the guy who actually retired 20 years earlier?
Ha
I think you are more interested in posting than in reading.
I think you are more interested in posting than in reading.
I think that's about one of the best one-liners I've seen here to deflate a "one-upper" post.
Well, I am not interested enough in taking you by the hand to spend any more time on this. I read enough of your stuff to know I am not interested in reading any more.
But as an old debater, I recognize your ad hominem attack above as a sign of weakness.
If you have nothing valid to say, attack the opponent!
Ha
I think my thoughts were more along the lines of volunteer teacher. Showing people how to understand the choices and make decisions themselves. No way I want to be a volunteer account manager or expect anyone to have me make decisions on their behalf. Too much like w*rk. Too much like liability. I'd think a volunteer teacher with real world experience would be a valued helper.
The projected nest egg that I need *decreases* with earlier retirement/long post-retirement.
Is the calculator wrong? Or am I missing something?