twaddle
Thinks s/he gets paid by the post
- Joined
- Jun 16, 2006
- Messages
- 1,703
The latest version of FIREcalc has a "leave some money in my portfolio" option on the "investigate" tab. You can set whatever threshold for failure you like.
The latest version of FIREcalc has a "leave some money in my portfolio" option on the "investigate" tab. You can set whatever threshold for failure you like.
That is how I see it, ERD50. I've been living from a portfolio for a long time. I know at least some of the mental pitfalls. It's like a sports bettor who works out an historical data-tested method for betting say college football. He tests it on data outside his discovery range; he knows the games are not correlated. Still, if he loses 10 straight bets at $1000 each, unless is very rich he pulls back. He thinks something has changed that throws his method into question. This could be just a statistically expected variance, or it could be that the linesmakers have changed the way they operate.Yep, that is the scary part. Not so much the concern of what you (your heirs/charities actually) would end up with, but what you would see on your NW statement along the way.
-ERD50
CFB, what is your quote in reference to please. ty.When one has tasted it, he knows what the angels eat.
I've been doing some FireCalc runs, and looking at that 'minimum' number that pops up. When I get it organized, I'll start a thread on that with some test cases, ....
-ERD50
By this do you mean the nadir reached on any non-failing trip?
I posted on this about three years ago; there was zero interest.
Here is one earlier thread- I believe there is at least one other dealing more particularly with FireCalc.
http://www.early-retirement.org/forums/f28/worst-draw-down-15925.html
Ha
IMHO - Pay down the mortgage. But make sure you have an emergency fund before you pay it down. People get caught in cash crunches by unexpected expenses.
believe it or not, I am a card carrying risk taker ... but now that I am FIREd, I think that a $5K buffer may be a little smallish, unless you are living on $20K a year. IMO one should have at least 3 -4 months (or maybe 6 if you are really risk adverse) of living minimal expenses as an emergency fund.Good point. Katrina taught me that a $1,000 emergency fund, even if only that small for a few days, is not enough and I should have kept $5,000. Thank goodness Frank helped me out during those difficult days.
believe it or not, I am a card carrying risk taker ... but now that I am FIREd, I think that a $5K buffer may be a little smallish, unless you are living on $20K a year. IMO one should have at least 3 -4 months (or maybe 6 if you are really risk adverse) of living minimal expenses as an emergency fund.
believe it or not, I am a card carrying risk taker ... but now that I am FIREd, I think that a $5K buffer may be a little smallish, unless you are living on $20K a year. IMO one should have at least 3 -4 months (or maybe 6 if you are really risk adverse) of living minimal expenses as an emergency fund.
Agreed, and I do (have a 5 year bucket)If you have a few years living expenses in MMkt, CD's, etc. as many of us FIREd profess to have, I think that would more than cover the need for an emergency fund.
Agreed, and I do (have a 5 year bucket)
... I was responding to W2R's post on increasing an emergency fund while (I think in her case) still PRE-FIRE (i.e. w*rking).
CFB, what is your quote in reference to please. ty.
LOL a man of simple (but good) tastes.Watermelon.
Watermelon.
Watermelon.
IMHO - Pay down the mortgage. But make sure you have an emergency fund before you pay it down. People get caught in cash crunches by unexpected expenses.
mmmmmmm ... fatty pig meat ... I LOVE BACON.I was thinking "bacon"...
So, there are many ways to play this game:
1) Play the odds, like Nords.
2) Play it safe, and find a risk-free return higher than your mortgage rate.
3) Play it safe, and pay down your mortgage.
Of course, there are a bunch of hybrids, too. For example, clifp indicated he would probably buy high-yield financials with his proceeds. That puts the principal at risk, but he has an excellent chance of sustaining a yield that will be sufficient to cover the interest on his loan.
In general, the larger your nest egg, the less you need to worry about matching specific liabilities to specific investment assets.