Join Early Retirement Today
Reply
 
Thread Tools Display Modes
have phone meeting tonight with ray lucia
Old 03-23-2009, 02:29 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
have phone meeting tonight with ray lucia

tonights the night ray lucia is going to call me off the air to discuss the concerns alot of us had about the re-balancing of the buckets in times like these.... we will also discuss the percentage in returns that ray figures built in to his calculations..

it seems that going forward those numbers may not be achievable....

anyway i know quite a few of you here follow rays system of buckets or take his system and modify it to fit themselves better sooooo if you want me to ask ray anything just post your questions, just do it before 6:30 pm est as thats when hes calling
mathjak107 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!

Old 03-23-2009, 04:57 AM   #2
Thinks s/he gets paid by the post
teejayevans's Avatar
 
Join Date: Sep 2006
Posts: 1,691
Quote:
Originally Posted by mathjak107 View Post
tonights the night ray lucia is going to call me off the air to discuss the concerns alot of us had about the re-balancing of the buckets in times like these.... we will also discuss the percentage in returns that ray figures built in to his calculations..

it seems that going forward those numbers may not be achievable....
One of the tidbits of info he mentions alot is the stock market has never
lost money in a 15 year period, which is still true, the dow has basically
double since 1993, 3600->7200.

He has always skirted the question "when do I rebalance?", since he
always talks about the science of money, I would like more definitive
answer like "whenever your bucket 3 increases by 25%".

BTW, if you are thinking that non-traded REITs are the way to go (I
think he now uses them in a 4 bucket system, with stocks in the
4th bucket with a 25 yr time horizon), you might want to take the
opportunity to ask him about specific recommendations, something
he can't do on the air.
TJ
teejayevans is offline   Reply With Quote
Old 03-23-2009, 05:47 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
I will
mathjak107 is offline   Reply With Quote
Old 03-23-2009, 05:59 AM   #4
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Should be interesting to see how he advises avoiding being 85-90% in stocks as bucket 2 dwindles 12 years down the road. Thanks for setting up the call with him.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 03-23-2009, 06:14 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
AND THE ANSWERE IS: had our little phone chat, basically dont wait to rebalance, when your retired most of us want to trade larger gains for more security and by rebalancing whenever buckets 1 and 2 need money and bucket 3 is higher your cutting gain potential and getting more security by having full buckets....

as far as achieving the numbers that the planner assumes they use alot of various gic and annuity products to supply high levels of income... they use the high dividend pay out rates of the untraded reits coupled with individual investment grade corporate bonds to meet those returns..

quite frankly though im not convinced the high fees, commissions and other charges of alot of these products dont eat up alot of the benefits of using these products... pretty much they want to make you a client....


in this case they wanted to handle setting up and administrating bucket 2 while i did bucket 3 on my own.... i probley will pass but i think for someone without any knowledge of investing they could be well served by the brain power of this group... there is no question in my mind these guys are top notch at what they do... the question is at the end of the day when all expenses are paid is it better then i can do.
mathjak107 is offline   Reply With Quote
Old 03-23-2009, 07:02 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by mathjak107 View Post
quite frankly though im not convinced the high fees, commissions and other charges of alot of these products dont eat up alot of the benefits of using these products... pretty much they want to make you a client....
Now there's a shock.

ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 03-23-2009, 07:08 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,746
Did Ray Lucia actually speak with you the whole phone call?
FUEGO is offline   Reply With Quote
Old 03-23-2009, 07:19 PM   #8
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by mathjak107 View Post
AND THE ANSWERE IS: had our little phone chat, basically dont wait to rebalance, when your retired most of us want to trade larger gains for more security and by rebalancing whenever buckets 1 and 2 need money and bucket 3 is higher your cutting gain potential and getting more security by having full buckets....
So Ray's OK with 85% stock allocation at age 75? I guess with hefty SS and annuity income, that risk isn't as bad as it sounds (unless the market happens to be in the throes of its next recession that year).

Thanks for passing the information along. Was he basically doing his "Ray" thing or did you get the feeling he was listening to you?
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 03-23-2009, 10:28 PM   #9
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 17,773
Sounds like you have to be on top of rebalancing into the immediate buckets all the time (which would make one sleep better at night, I imagine).

Thanks so much for passing his comments along. That is very informative.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 03-24-2009, 02:20 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
Quote:
Originally Posted by Rich_in_Tampa View Post
So Ray's OK with 85% stock allocation at age 75? I guess with hefty SS and annuity income, that risk isn't as bad as it sounds (unless the market happens to be in the throes of its next recession that year).

Thanks for passing the information along. Was he basically doing his "Ray" thing or did you get the feeling he was listening to you?

actually he wants you to rebalance regularly,,, the wait 15 years was more for illustration
mathjak107 is offline   Reply With Quote
Old 03-24-2009, 11:58 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
 
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
Quote:
Originally Posted by Rich_in_Tampa View Post
So Ray's OK with 85% stock allocation at age 75? I guess with hefty SS and annuity income, that risk isn't as bad as it sounds (unless the market happens to be in the throes of its next recession that year).
That's what I'm thinking. If you look at AA in terms of how many years of "safe" income you need instead of a typical percentage, the AA of someone who is rather old can be much higher than the conventional wisdom IF they need a very small portion of their portfolio for current income. I think that's where the "bucketizing" approach is a little different than conventional AA; you don't say "55 stocks / 45 bonds" but instead you say "15 years of income in safer stuff and the rest in stocks" -- or something like that.

So to use your example, if this 75-yo is only withdrawing 1% of his/her portfolio each year for income, you could have 15 years of more secure income even with an 85/15 allocation. (Of course, such a person is also in the position of not needing to take much stock market risk, if any. so it would really come down to their risk tolerance and how much they're willing to "gamble" for higher expected long-term returns. Chances are most of it would go to heirs anyway.) And if the market happens to recover strongly, then you may want to load up on your buckets 1 and 2.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 03-24-2009, 01:01 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Quote:
Originally Posted by ziggy29 View Post
That's what I'm thinking. If you look at AA in terms of how many years of "safe" income you need instead of a typical percentage, the AA of someone who is rather old can be much higher than the conventional wisdom IF they need a very small portion of their portfolio for current income. I think that's where the "bucketizing" approach is a little different than conventional AA; you don't say "55 stocks / 45 bonds" but instead you say "15 years of income in safer stuff and the rest in stocks" -- or something like that.

So to use your example, if this 75-yo is only withdrawing 1% of his/her portfolio each year for income, you could have 15 years of more secure income even with an 85/15 allocation. (Of course, such a person is also in the position of not needing to take much stock market risk, if any. so it would really come down to their risk tolerance and how much they're willing to "gamble" for higher expected long-term returns. Chances are most of it would go to heirs anyway.) And if the market happens to recover strongly, then you may want to load up on your buckets 1 and 2.
Ray's scheme is no different than an AA scheme. Only new jargon and a different way of looking and naming the same things......

I've never failed to learn something by considering another person's (including "advisors" or financial subject matter authors, etc.) views and outlooks, Ray is no exception. But, to me, there is absolutely no difference between saying a person with an extrmemly generous retirement portfolio could safely have a 85/15 AA and saying that 15 years of expenses respresents only 15% of that person's portfolio. It's just a different way, new jargon, of looking at the same thing.

The only negatives I find about Ray are:

1. He seems to want you to follow his methodology/terminology/jargon exclusively without understanding it's relationship to other approaches. I'm concerned for folks who have bought in on his scheme in a manner where they simply want to fill in the blanks, turn the handle and be guarateed optimum results.

2. He's too flexible. He frequently uses hindsight to say that in many cases you would have "of course" done something differently than he seems to be prescribing after time shows that his prescription wasn't optimum. "Well in that case you would have....blaaah....blaaah....blaaah."

But, all in all, understanding what he's trying to do (other than the part where he's simply trying to reel you in as a client) as it relates to other schemes and theories adds to one's body of knowledge. I highly recommend understanding his stuff and especially how it relates to other approaches.

I give him a lot of credit for the amount of product differentiation he's gotten out of his "system." It's not all that different, you can easily do the same things within a more generic AA system, but his jargon sets it apart and gives him something to sell. Bright guy.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 03-24-2009, 02:16 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
The difference i see is you rebalance based on years of money left not by the traditional way which is market performance.... we may have an awesome few years but if i dont need to add money to buckets 1 and 2 i dont rebalance.... the conventional way you would rebalance regardless once things go out of percentages
mathjak107 is offline   Reply With Quote
Old 03-24-2009, 02:49 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,483
Quote:
Originally Posted by mathjak107 View Post
AND THE ANSWERE IS: had our little phone chat, basically dont wait to rebalance, when your retired most of us want to trade larger gains for more security and by rebalancing whenever buckets 1 and 2 need money and bucket 3 is higher your cutting gain potential and getting more security by having full buckets....

as far as achieving the numbers that the planner assumes they use alot of various gic and annuity products to supply high levels of income... they use the high dividend pay out rates of the untraded reits coupled with individual investment grade corporate bonds to meet those returns..

quite frankly though im not convinced the high fees, commissions and other charges of alot of these products dont eat up alot of the benefits of using these products... pretty much they want to make you a client....


in this case they wanted to handle setting up and administrating bucket 2 while i did bucket 3 on my own.... i probley will pass but i think for someone without any knowledge of investing they could be well served by the brain power of this group... there is no question in my mind these guys are top notch at what they do... the question is at the end of the day when all expenses are paid is it better then i can do.
Hedge fund guys are supposedly "top-notch" too,how well did they do?
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 03-24-2009, 04:26 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
exactley why i cant see paying all those fees although with all due credit to them their income buckets are made of of all cash and various types of guaranteed annuity and gic vehicles and high quality investment grade bonds ..... they probley held up well thru this........ they do have a brilliant tax attorney and cpa as part of their team so if you need those services its probley a good deal for the less knowledgable folks out there,.... as far as the equities bucket i prefer to loose money the old fashion way... by myself
mathjak107 is offline   Reply With Quote
Old 03-24-2009, 08:13 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,483
Quote:
Originally Posted by mathjak107 View Post
exactley why i cant see paying all those fees although with all due credit to them their income buckets are made of of all cash and various types of guaranteed annuity and gic vehicles and high quality investment grade bonds ..... they probley held up well thru this........ they do have a brilliant tax attorney and cpa as part of their team so if you need those services its probley a good deal for the less knowledgable folks out there,.... as far as the equities bucket i prefer to loose money the old fashion way... by myself
I would only ask said "gurus" one question: WHEN did you adopt this strategy, may I see the date you were moving folks to the "safe bucket"? If it was after mid September 2008, they are no smarter than anyone else out there........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 03-24-2009, 09:40 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Quote:
Originally Posted by mathjak107 View Post
with all due credit to them their income buckets are made of of all cash and various types of guaranteed annuity and gic vehicles and high quality investment grade bonds ..... they probley held up well thru this........
You can be sure that a "bucket" of cash and various types of guaranteed annuity and gic vehicles and high quality investment grade bonds did no better than an AA fixed category of cash and various types of guaranteed annuity and gic vehicles and high quality investment grades bonds.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 03-25-2009, 01:56 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 6,115
Quote:
Originally Posted by FinanceDude View Post
I would only ask said "gurus" one question: WHEN did you adopt this strategy, may I see the date you were moving folks to the "safe bucket"? If it was after mid September 2008, they are no smarter than anyone else out there........

well we started following rays system back in 2006 after going to a seminar and never hearing of him.. it was something to do that day as i remember it was soooo cold out.... it made sense to us and after being a 90% equities kind of guy my entire life we thought it was finally prudent of us to scale back.. Rays system forced us to cut back and establish 15 years worth of withdrawls.. we set it up as if we were retiring tomorrow even though we still had a few years left... its not to say a traditional system would be better or worse but for us i liked the security in knowing i could go 15 years without selling equities and it used a nice easy structure that gave me discipline...

needless to say when things were rising i was kicking myself for scaling back in equities to a lower percentage but then when the debacle struck man what a great thing we did by being in the buckets ....
mathjak107 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
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
Ray Lucia now doing Hyundai Commercials? FinanceDude FIRE and Money 20 07-28-2008 09:48 PM
(FAQ Archive) Ray Lucia and his buckets Nords Early Retirement FAQs 0 10-18-2007 11:40 AM
ray lucia refined strategy mathjak107 FIRE and Money 27 10-11-2006 05:07 PM
Ray Lucia...Buckets of Money ferco FIRE and Money 122 10-04-2006 05:15 PM
Just returned from from Ray Lucia Show modhatter FIRE and Money 38 09-21-2006 04:47 PM

» Quick Links

 
All times are GMT -6. The time now is 12:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.