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Old 08-16-2020, 01:27 PM   #21
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Yes, I remember that miniseries. As shown in one episode, a real samurai would not hesitate to lop off the head of a peasant who does not show respect.

And nowadays, a real samurai does not worry about any stinkin' SWR. He's always on top of the food chain.
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Old 08-16-2020, 01:29 PM   #22
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Ha ha ha ha. That is amusing. Yes. I will take the advice of someone who failed spectacularly.
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Old 08-16-2020, 01:44 PM   #23
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~6.5%WR has been the historical safe withdrawal %, except for the worst 5 or 6 starting periods in history and thus the 4% guidance.
If you retired in 1982, it would be over 10%, but you didn't know it at that time of course.
And therein lies the problem! My wife and I are fortunate enough that we have things in our professional lives we want to accomplish and those will carry us well beyond 4% (we're there) and probably even 3.5%... but if I were planning to stop working the instant we could do so financially, I'd aim for 4% at the worst. I can imagine nothing worse than being forced to go back to finding work when I thought I was dunzo.
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Old 08-16-2020, 01:53 PM   #24
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~6.5%WR has been the historical safe withdrawal %, except for the worst 5 or 6 starting periods in history and thus the 4% guidance.
Uh, not if you think FIREcalc is accurate (which I do).

The 4% rule succeeds in all but the worst 6 starting periods in history.

I believe a 6.5% WR is approximately the average safe withdrawal rate, so if you use a 6.5% WR you're about as likely to succeed as you are to fail.

If you go to FIREcalc and put in a 6.5% withdrawal rate on the first page (using $65,000 as the spending level and $1M as the portfolio level) and leave the rest default, FIREcalc will tell you that you have a 45% success rate:

"Here is how your portfolio would have fared in each of the 120 cycles. The lowest and highest portfolio balance at the end of your retirement was $-4,044,946 to $3,415,537, with an average at the end of $-169,561. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 66 cycles failed, for a success rate of 45.0%."

(emphasis added)
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Old 08-16-2020, 02:19 PM   #25
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Uh, not if you think FIREcalc is accurate (which I do).
No matter what happens, FIREcalc will be "accurate" because everything it does is about probabilities based on history. Even if it gives 100% success, again, that is based on historical events and returns - which does not guarantee what may happen in the future and that your retirement funds may not last through the remainder of your life.

I personally do not put much "faith" in FIREcalc. It's just a bunch of formulas and calculations based on a set of assumptions. Many investment firms do exactly the same - they have their own models and systems which are similar in nature to FIREcalc. When they crash and burn, they are quick to say "Well, we just experienced a once in a 100 (or 1000) year event and we weren't prepared for that" - and neither is FIREcalc.
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Old 08-16-2020, 02:48 PM   #26
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Uh, not if you think FIREcalc is accurate (which I do).

The 4% rule succeeds in all but the worst 6 starting periods in history.

I believe a 6.5% WR is approximately the average safe withdrawal rate, so if you use a 6.5% WR you're about as likely to succeed as you are to fail.

If you go to FIREcalc and put in a 6.5% withdrawal rate on the first page (using $65,000 as the spending level and $1M as the portfolio level) and leave the rest default, FIREcalc will tell you that you have a 45% success rate:

"Here is how your portfolio would have fared in each of the 120 cycles. The lowest and highest portfolio balance at the end of your retirement was $-4,044,946 to $3,415,537, with an average at the end of $-169,561. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 66 cycles failed, for a success rate of 45.0%."

(emphasis added)
Ah ha, okay the average safe withdrawal rate.
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Old 08-16-2020, 04:23 PM   #27
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Originally Posted by njhowie View Post
No matter what happens, FIREcalc will be "accurate" because everything it does is about probabilities based on history. Even if it gives 100% success, again, that is based on historical events and returns - which does not guarantee what may happen in the future and that your retirement funds may not last through the remainder of your life.

I personally do not put much "faith" in FIREcalc. It's just a bunch of formulas and calculations based on a set of assumptions. Many investment firms do exactly the same - they have their own models and systems which are similar in nature to FIREcalc. When they crash and burn, they are quick to say "Well, we just experienced a once in a 100 (or 1000) year event and we weren't prepared for that" - and neither is FIREcalc.
I understand your point that FIREcalc is historical and giving answers based on the past and not predictions about the future.

My commentary was alluding to a different point. I was in software and firmware development and testing for about 20 years, and have seen plenty of bugs in code and formulas. It would be possible, indeed probable that a historical SWR calculator would have bugs in their calculations that would produce inaccurate historical answers. In the early days, FIREcalc had some of those, although it has always been pretty good. I think that FIREcalc today is written mostly correctly and gives accurate historical answers.
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Old 08-16-2020, 05:27 PM   #28
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If one has a portfolio that just keeps up with inflation, the 40 year safe withdrawal rate would be 2.5%. not .5% (100 / 40 years = 2.5%). Current interest rates are low, but then so is inflation, and most retirees who go this route are going to use ladders, so they would get a rolling average of returns in their portfolios and not just the super low returns we're seeing today on fixed income investments. At our ages now we could go to over 3.33%, as we don't have as long a retirement to plan for (100 / 30 years = 3.33%) and because of our past investments we should be able to plan on a blended real return better than a 0% real return.
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Old 08-16-2020, 10:18 PM   #29
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I told my Google News feed a while back to ignore Financial Samurai.
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Old 08-17-2020, 05:32 AM   #30
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I told my Google News feed a while back to ignore Financial Samurai.
Smart move!
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Old 08-17-2020, 03:03 PM   #31
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Yep, 0.5% WR would be a real problem for youngsters who want to ER, but I have grown old enough to be past that phase. See my signature line below.
Yes, old(er) age has some advantages. I stopped planning for 30 years (more) retirement at age 70! I now think in terms of 100 minus my age. Haven't refigured what my "new" SWR is. Honestly, I can't spend my RMDs now. Fortunately, there are enough charities in my heart to absorb the excess. YMMV
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Old 08-17-2020, 03:06 PM   #32
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Exactly.

Since he did an about-face a couple years ago (a few years into FIRE), he now relies on shock journalism, panning FIRE, getting the articles picked up by CNBC, Marketwatch, Yahoo, and any other outlet that will pay him...I call it "Whore Journalism".

Always, always remember - here's "an expert" who makes excuses and justifies why he is unable to get by on $265,000 a year in passive income. Does anyone not start laughing uncontrollably? Who really listens to such a person for advice?

In contrast, it's my belief that the SWR is actually higher than 4% - probably more like 6% for those who have FIREd appropriately.
I was thinking of what I could clearly articulate about this clown without running afoul of the forum rules and was having a difficult time...until I read your post. I wholeheartedly agree 110% with all you have said about him.
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Old 08-17-2020, 03:52 PM   #33
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Since he did an about-face a couple years ago (a few years into FIRE), he now relies on shock journalism, panning FIRE, getting the articles picked up by CNBC, Marketwatch, Yahoo, and any other outlet that will pay him...I call it "Whore Journalism".
And just a day later, there you have it...

https://www.marketwatch.com/story/th...ion-2020-08-17
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Old 08-17-2020, 04:08 PM   #34
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And just a day later, there you have it...

https://www.marketwatch.com/story/th...ion-2020-08-17
Oye. I really think he should change his name to Financial Idiot.
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Old 08-17-2020, 04:13 PM   #35
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And just a day later, there you have it...

https://www.marketwatch.com/story/th...ion-2020-08-17
Read the comments

My favorite so far:

Quote:
If I was a self-proclaimed "Financial Samurai" and I was unable to live an AMAZING lifestyle, even in San Francisco, on less than $8 million I would commit hari-kari and be done with it.
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Old 08-17-2020, 05:19 PM   #36
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that article is so stupid


and this whole fixation on the "perfect SWR" needs to go away already...
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Old 08-17-2020, 05:38 PM   #37
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... and this whole fixation on the "perfect SWR" needs to go away already...
Everyone does have a perfect SWR. Unfortunately, we can't know exactly what it is until we die. So we have to just pick a WR we are comfortable with and stand by to adjust as necessary.
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Old 08-17-2020, 06:27 PM   #38
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Just another con man like all the other bloggers on the web.
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Old 08-17-2020, 06:42 PM   #39
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Just another con man like all the other bloggers on the web.
I think that's a bit extreme. I like the White Coat Investor.
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Old 08-17-2020, 07:22 PM   #40
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Read the comments

My favorite so far:
The comments over there are in fact priceless. It is as if the entire MW audience has grabbed their pitch forks.

Fame and notoriety are opposite sides of the same coin.

Here is my fav exchange from over there so far:

“Maryland Royal
6h ago
I only need a modest corn field and a dozen chickens for some eggs every morning. Do I still need 8 mil?

“Douglas Schofield
6h ago
6 and a half million should work in that case, MR.
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