Scott Burns nails it

[CCdaCE]

Good point LOL. Of course that is after thay have already paid fees, commissions etc when it went into the 401(k). Fees on top of fees, on top of fees,eon top...

When people do stuff like this, it makes ME feel like a genius.

This sounds like stories from my bro-in-law or a mother-in-law. You try to steer 'em away from this behavior, but they still make lobotomized decisions. Back to "you can't fix stupid".

-CC

 

[rmark]

"The probability of success"
http://www.efficientfrontier.com/ef/103/probable.htm

 

[Cut-Throat]

"The probability of success"
http://www.efficientfrontier.com/ef/103/probable.htm

We are a minority here! - When you think about we have around 2,000 members. Pretty small group for something that I would consider as essential as breathing.

 

[jerryo]

Actually, a 25% drop in the first year may be pretty difficult to recover from, even with a 4% withdrawal rate. It's the drops right at the beginning that hurt you most and 25% must be pretty close to the historical extreme!

 

[rs0460a]

We are a minority here! - When you think about we have around 2,000 members. Pretty small group for something that I would consider as essential as breathing.

Being that my DW/me are going to ER within the next 4-8 months (age 59), I keep on thinking we must be doing something wrong.  The numbers "work" using 5+ forecast tools, and I don't consider us (at least me) "smart"....

Why can't others do the same?

- Ron (AKA "Confused")

 

[REWahoo]

Why can't others do the same?

Here is one reason according to Bernstein: "Take a look around after every bubble and you'll find that the only investors left reasonably intact have gray hair."

 

[rs0460a]

Here is one reason according to Bernstein: "Take a look around after every bubble and you'll find that the only investors left reasonably intact have gray hair."

Darn, U saw my picture!

- Ron

 

[Cut-Throat]

Actually, a 25% drop in the first year may be pretty difficult to recover from, even with a 4% withdrawal rate. It's the drops right at the beginning that hurt you most and 25% must be pretty close to the historical extreme!

Not even close! Stocks dropped in the Depression about 80% from 1929-1933.

Then lost about 50% in 1973-1974

 

[unclemick]

Others can and do - going back to one of my favorites - Benjamin Franklin.

But as CT mentioned a distinctly small minority.

heh heh heh - and he didn't even have index funds!

 

[Rich_by_the_Bay]

Here is one reason according to Bernstein: "Take a look around after every bubble and you'll find that the only investors left reasonably intact have gray hair."

Yep, or who have virtual gray hair from hanging around places like this forum.

This doomsday scenario came up in another thread and convinced me that I would put together my cash bucket ASAP before I FIRE while the gettin's good or at least decent, just in case I need it sooner than expected.

 

[Zipper]

Why would 68 year olds still owe $75 000 on a $200 000 home.

That debt should have been gone years ago.

Buy your first house at 30.

Move to the best you can afford at 40.

Pay it all off by the time you are 50.

Retire mortgage free.

 

[Nords]

Retire mortgage free.

I won't accuse them of being savvy enough to analyze the options, but it's a choice.

We won't pay off our mortgage until I'm 74.

And if a better interest rate comes along in the next 29 years, we'll get another one.

 

[unclemick]

Mine will be paid off at age 92 in 29 years also.

heh heh heh heh heh

 

[Zipper]

A couple of reasons why Canadians rated #10 and the U.S. #23 on the happiness scale.

#1 Mortgage payments are not deductible on income tax in Canada so anyone with a brain kills the mortgage before they retire.

#2 Universal Healthcare.

 

[Cut-Throat]

A couple of reasons why Canadians rated #10 and the U.S. #23 on the happiness scale.

Bigger trout too! 8)

 

[GolferAndy]

What happiness scale are you refering to Zipper?

 

[Alex]

they could always go back to, gasp, work.

 

[astromeria]

Actually, a 25% drop in the first year may be pretty difficult to recover from, even with a 4% withdrawal rate. It's the drops right at the beginning that hurt you most and 25% must be pretty close to the historical extreme!

By using a 9.75% WR, the couple in the Scott Burns article created their own mini-market-disaster at the beginning of their retirement. To add insult to injury, they have to pay $1,000 toward debt every month (and maybe credit card debt as well...I'm suspicious of that extra $15k they need to withdraw every year--restaurants they can't afford? country club? gifts for the grandchildren? expensive travel?).

Unless I had a reliable COLAd pension that covered most of my expenses, I wouldn't want to cope with a mortgage--I would rather pay rent if I didn't have such a pension or couldn't own a house free & clear.

 

[samclem]

A couple of reasons why Canadians rated #10 and the U.S. #23 on the happiness scale.

If only some Dane (#1 on the "happiness scale") would join this forum and regale us with incessant observations on his superior country. Why can't Canada be more like Denmark? Happy--and blissfully silent.

 

[mountaintosea]

"Oh it's a math thing...now you tell us!"

I've spent the last couple of weeks telling people I know "it's the math." I buy them a little notebook and tell them to write down everything they spend. They are horrified! The thought of seeing what they spend is too depressing. They would rather complain they can't retire. :
I say "look you spend less then what you get. It's simple math." More has to come in than what goes out. They don't get it. They don't want to get it.

 

[2B]

Bigger trout too! 8)

Canuks don't get decent stripers although they have some great strippers. There was this one place in Vancouver....

 

[Cut-Throat]

I've spent the last couple of weeks telling people I know "it's the math." I buy them a little notebook and tell them to write down everything they spend. They are horrified! The thought of seeing what they spend is too depressing. They would rather complain they can't retire. :
I say "look you spend less then what you get. It's simple math." More has to come in than what goes out. They don't get it. They don't want to get it.

Yup, it's denial! - Look at what some politicians get away with. "We're gonna cut taxes and not cut any programs and fund an expensive war!'- And they actually get elected! And people recount their 'successful administrations' :

People want to believe in fantasies!

 

[2B]

I used to think it took 50 years before an administration could be objectively evaluated. Unfortunately, there are a large number of fossils posing as newsmen/newswomen that still talk about "Camalot." I'm thinking the new paradigm is 75 years to make sure everyone in the popular media has been dead at least 10 years.

I haven't seen either party do anything to really fix the "budget." The "balanced" budget during the Clinton administion was a totally "projected" budget that any normal person would have laughed at.

Bush II can balance the budget in 2010 if only taxes go up 20% and his successor doesn't drive us into a recession which is pretty much guaranteed if taxes go up 20%. Now if the economy explodes to the upside, Bush II can do it without raising taxes but God won't be able to help his successor when the economic cycle turns down.

The ultimate measure of a president is how well he rises to the challanges of his administration. It will take decades to decide how well Bill or George really did. No one has repealed the business cycle. Presidents don't control it -- Herbert Hoover came close but he had help from Europe.

2B

 

[Cut-Throat]

It will take decades to decide how well Bill or George really did.

Not if you have a brain or live outside of Texas.

 

[Beststash]

Not if you have a brain or live outside of Texas.

Funny!!! I live in Texas and I totally agree with CT - it doesn't take a rocket scientist to see how screwed up this country has become ---yea, I will keep my fingers crossed for the next 2 years but from this administration's track record - not a rosy outlook.