Samurai Says: 1/2% SWR...

[HawkeyeNFO]

How about not taking any of those risks and be fiscally responsible.

Majority of voters don't want the candidate who does that. Voters want benefits.

 

[Mo Money]

Exactly. And yet, every time he posts something outrageous, we get another thread, and feed him more clicks, so I guess he's not completely stupid.

His advice is not even worth the time spent reading it.

I think we may actually be agreeing...

I posted and started this thread, knowing full well the FS article was bunk. (Thus all the emojis and my sarcastic tone.)

I figure that the thread (a) provides a certain amount of entertainment value, and (b) enables a discussion of people's recent thoughts on the SWR, which thoughts are revealed while we all shoot at FS.

No one has to read the thread. But yet almost everyone does, and people post both substantively good comments -- as well as laments that this is all a waste of time.

To many people, shooting down an "idiot's" argument is not a waste of time. The guffawing alone at his shamelessness merits the attention of those who elect to read the thread. (I put "idiot" in quotes because I honestly don't think FS really believes his own stuff -- but if he does, then God bless him: he needs a bit of sympathy for such a handicap.)

And yes, we are driving revenue to FS -- and to ER.org for that matter, since our discussion attracts clicks and many ER.org readers see advertisements.

All in good fun.

 

[RapmasterD]

Simple question

Let’s say I’m 60% invested in VOO, 30% in BND, and I’ve got 10% in cash.

Why do I care about bond YIELD alone? Wouldn’t I instead focus on total bond RETURN over a longer period of time?

This is one of many issues that tripped me up on Sam’s article.

 

[Koolau]

Perhaps I am mistaken, but you seem to imply that the existing US debt would be subject to these increased interest rates. Remember that inflation is kind to debtors. I would argue that the value of outstanding debt would plummet, and inflation would make paying these debts off easier. (Of course, there would be ****-tons of other problems.) Or am I misinterpreting your post?

I think you are correct about existing debt (yours, mine or the US Gummint debt.) BUT, the US Gummint never actually pays off its debt! It just borrows MORE (in effect, rolling over its debt). And, of course, the gummint borrows EVEN more than it needs to roll over its current debt. It constantly creates even MORE debt. It is THESE NEW debts which will break the bank (eventually).

I have just told you WAY more than I KNOW or UNDERSTAND about bonds, debt, gummint, etc. etc., so YMMV.

 

[njhowie]

Let’s say I’m 60% invested in VOO, 30% in BND, and I’ve got 10% in cash.

Why do I care about bond YIELD alone? Wouldn’t I instead focus on total bond RETURN over a longer period of time?

This is one of many issues that tripped me up on Sam’s article.

Though Sam supposedly has a financial background and worked in the industry, he is obviously not the sharpest knife in the drawer.

His entire thesis is based on his personal claim that the 4% came about as a result of it being 80% of the 10-year treasury rate of 5% at the time. He then extrapolates that thesis (which had no particular basis to begin with) that this should mean that whatever the 10-year treasury rate is at the time, 80% of that number is the safe withdrawal rate. Who said that the 4% came about because it was 80% of the 10-year then-current 10-year treasury rate in the first place? I am certain that much more went into it - that there was some consideration for long-term interest rates and market returns flowing to an average investors portfolio/retirement fund.

Sam's analysis and claims in the article are quite shallow, and the comments made that very clear.

 

[FireProoof]

Huh

I am not a samurai but even I could make $40 MM last 40 years withdrawing $300 k per year. 40 years of withdrawls even with a 5.4 % inflation rate and zero return makes it. An earlier posted said clickbait and they were right on.

 

[steveark]

I'm not trying to be argumentative but Sam puts out a lot of good stuff. This one post I agree is sensational but it is thought provoking and most of us do secretly fear to some extent that we could see a Japan type period where we go through the doldrums for a prolonged number of years. I think his post raised hackles because it triggered that fear we don't want to address. I do not agree with him on this but I don't mind him making me consider it. My opinion on Sam is he's extremely bright, a great dad, a killer tennis player and an out of the box thinker. His stuff is certainly a lot better than what I post.

 

[Bigdawg]

My first car loan, in 1981, was 21% APR.

Was that dealership right outside the main gate of a military base? LOL

 

[ExFlyBoy5]

i'm not trying to be argumentative but sam used to puts out a lot of good stuff....

fify.