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08-16-2020, 01:27 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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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.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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08-16-2020, 01:29 PM
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#22
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Recycles dryer sheets
Join Date: Mar 2018
Location: Baltimore
Posts: 77
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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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08-16-2020, 01:44 PM
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#23
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Location: Bonita (San Diego)
Posts: 1,795
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Quote:
Originally Posted by Dtail
~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.
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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.
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
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08-16-2020, 01:53 PM
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#24
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Quote:
Originally Posted by Dtail
~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.
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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)
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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08-16-2020, 02:19 PM
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#25
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,931
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Quote:
Originally Posted by SecondCor521
Uh, not if you think FIREcalc is accurate (which I do).
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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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08-16-2020, 02:48 PM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,300
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Quote:
Originally Posted by SecondCor521
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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Ah ha, okay the average safe withdrawal rate.
__________________
TGIM
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08-16-2020, 04:23 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Quote:
Originally Posted by njhowie
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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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.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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08-16-2020, 05:27 PM
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#28
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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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.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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08-16-2020, 10:18 PM
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#29
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Recycles dryer sheets
Join Date: Apr 2011
Location: New Hampshire
Posts: 214
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I told my Google News feed a while back to ignore Financial Samurai.
__________________
Done 1/5/21, age 49
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08-17-2020, 05:32 AM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,154
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__________________
Retired since summer 1999.
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08-17-2020, 03:03 PM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,930
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Quote:
Originally Posted by NW-Bound
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.
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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
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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08-17-2020, 03:06 PM
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#32
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: ATL --> Flyover Country
Posts: 6,649
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Quote:
Originally Posted by njhowie
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.
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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.
__________________
FIRE'd in 2014 @ 40 Years Old
Professional Retiree
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08-17-2020, 03:52 PM
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#33
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,931
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Quote:
Originally Posted by njhowie
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".
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And just a day later, there you have it...
https://www.marketwatch.com/story/th...ion-2020-08-17
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08-17-2020, 04:08 PM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: ATL --> Flyover Country
Posts: 6,649
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Quote:
Originally Posted by njhowie
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Oye. I really think he should change his name to Financial Idiot.
__________________
FIRE'd in 2014 @ 40 Years Old
Professional Retiree
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08-17-2020, 04:13 PM
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#35
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,919
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__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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08-17-2020, 05:19 PM
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#36
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Posts: 1,336
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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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08-17-2020, 05:38 PM
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#37
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Thinks s/he gets paid by the post
Join Date: Aug 2018
Posts: 1,021
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Quote:
Originally Posted by FREE866
... and this whole fixation on the "perfect SWR" needs to go away already...
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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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08-17-2020, 06:27 PM
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#38
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Just another con man like all the other bloggers on the web.
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08-17-2020, 06:42 PM
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#39
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Thinks s/he gets paid by the post
Join Date: Dec 2017
Posts: 2,555
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Quote:
Originally Posted by RobbieB
Just another con man like all the other bloggers on the web.
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I think that's a bit extreme. I like the White Coat Investor.
__________________
Balance in everything.
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08-17-2020, 07:22 PM
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#40
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Recycles dryer sheets
Join Date: Sep 2018
Location: High Plains Non-Drifter
Posts: 314
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Quote:
Originally Posted by CardsFan
Read the comments
My favorite so far:
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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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