Quote:
Originally Posted by jacob
First, 500 ... your cash is not part of the [historically based] market fluctuations. Think of what the answer would be in the limit ... if you had 500 in cash and 50 in the market, surely, you wouldn't plug in 550 in firecalc.
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You're not the typical FIRECalc user and you may be over-thinking its design, but its database uses a number of Shiller's asset classes. One of the options is to enter a portfolio of mixed assets like one-month Treasuries. Another fixed-income asset is "commercial paper"... close enough to cash for most.
A user with $500K cash would choose one of those options and realize that they needed to either cut back spending or move a little further out along the risk/reward curve.
Regardless, your second point is the important one!