SWR of 6.21% for 26 years

Michael:
"If you need to withdraw 10% to survive, the SWR tells you to go back to the drawing board and make a new plan."
If you need 10% to survive, then going back to the drawing board don't hardly help much :)

Either that, or the 10% survival requirements were fictitious. (If you can reorganize your finances to reduce the 10%, then you didn't need that much in the first place.)

For me 'n the wife, something like 4% is just fine, but we can easily cut back to 1 - 2%.
What we need for survival is 0%.

BigMoney:
"... do you hope to gain insight from such a person?"
Nope. I'm curious about so many things ... and that's one of 'em.
Although I think that the 4% Rule is a useful guide, I can't see much use in periodic SWR calculations (while withdrawing).
It's hard believe that anybuddy actually does this. If so, it'd be quite interesting (for me).

***** ... about your book:
Would it be helpful to have a CD inside the back cover (as so many financial books seem to have these days)?
If so, I'd be happy to have you use any or all of the gummy_stuff CD.
I'm not asking for any monetary rewards. It's just that, at my age, my website will self-destruct soon enuff and if a few copies continue to exist (after I stop existing) that'd be great :)

If you think it'd be useful, I'll send y'all a CD (for free)
... and you're free to do with it as you wish. You can even change the name to hocus_stuff
:D
 
Do you really calculate a SWR and use it to determine your withdrawals from a portfolio ... or are you simply reorganizing your finances?

I am currently invested in TIPS, ibonds, and CDs (and my house, if you count that). It's easy to determine SWRs for these asset classes; the returns are highly predictable. Stocks are a tougher case because their returns are volatile. I don't want to limit myself to these predictable-return asset classes for the long term, however, because I also want to take advantage of the growth potential of stocks. So I need to know at what times I can afford (given my 4 percent take-out number) to get into stocks.

It was this question that I was askng in the kick-off post for the Great SWR Debate. On May 13, 2002, prices for stocks had come down a bit from where they were on August 1, 2000 (my retirement date). So the SWR for stocks had gone up. The returns paid on TIPS and ibonds and CDs had come down. So the SWR on those asset classes had gone down. I was trying to determine whether the SWR for stocks had come close enough to the SWR for the alternate asset classes for me to be able to afford a small purchase of stocks.

It helps to know that when I was doing my SWR work in the mid-90s, I was not planning on writing books on how to achieve financial independence early in life. I was doing my research solely for my own benefit, for the purpose of putting together my own plan. I did not need to know all sorts of details about the SWR for stocks. All I needed to know was whether it made sense for me personally to be invested in stocks at the prices then prevailing. I determined that it did not, and I got out. And then I turned my focus to other questions.

I always knew that someday I was going to need to do more work to determine the SWR of stocks at various valuation levels. But I had lots of other things to keep me busy until May 2002. At that time, my desire to add to my knowledge on stock SWRs was getting more intense. It was something I was thinking about a lot in those days. On top of that, the Motley Fool board was suffering from a dearth of on-topic posting and I thought that putting up something on the data-based SWR concept might help out. So I went ahead with it.

Today, I have lots of information to help me come up with a SWR for stocks that I think is more or less on the mark. I have insights from Bernstein, and from raddr, and from JWR1945, and from a number of others. You put all that information together, and I think you can get a number in the right ballpark.

I use that information when I made my annual adjustments to my plan. I don't prepare spreadsheets. I probably would blow up a third-world country if I tried to push the various buttons needed to make that happen. So I am not preparing a formal SWR analysis each time I update my plan. But, yes, I am using the fruits of SWR analysis to inform my portfolio allocation strategies.
 
I'd be happy to have you use any or all of the gummy_stuff CD.

That's an extemely generous offer, Gummy. Thanks so much for putting it forward.

My book is aimed at a general readership, including lots of people who (like me) get an uneasy feeling when they see numbers appear on a printed page. Including a CD with a lot of numbers stuff with the actual book would send the wrong signal.

That said, I can think of other ways in which I might be able to make use of the work you have done in the work that I am doing. I have been doing a lot of prep work for a web site that I now expect to have up by the end of this year. I certainly will be including a link to your site. I believe as most others who know about your site do that the work you have put into it has done a lot of good for a lot of middle-class investors.

I do not have a complete sense at this point as to what all I will be able to include at my site. It might be a good idea to have a section where I provide more detail-oriented stuff, including the sorts of materials set forth at your site. I also am interested in having a section where I hope to offer for sale various PDF reports--the two by intercst, the one by TheBadger, my old Soapbox report, a collection of the best stuff by JWR1945, and so on. It might be a good thing if we could take your materials and collect them in a PDF report. My thought is that you would get a share of the revenues for having prepared the materials in the report, and I would get a share for selling it through my site.

I would love to work with you on that sort of arrangement. If an arrangement along those lines holds appeal, let me know and we can work out details through private-mail messages. I probably will not have too much time to work out details for awhile. But if you wanted to start thinking about how you might organize your material for presentation in a PDF report, that would be great from my perspective.
 
*****:
The CD includes everything on my website
... except pics of my grandkids :)

It's over 100Mbytes and includes over 3000 files.

At my age, just the thought of redoing any of it in some other format (like PDF) gives me coronary tribulations. In fact, the CD was created to avoid e-mail** which asked me to put all that stuff into a book :-/

I've offered to others the opportunity to take what they want ... so long as I don't have to do anything :)

** I actually feel that a webpage style is so much better than (most? all?) other formats since the reader can click on links where a window pops open to explain a term. or provide another tutorial.
 
At my age, just the thought of redoing any of it in some other format  (like PDF) gives me coronary tribulations.

Gummy:

I'll send you a private mail message. I would like to have a copy of the CD if you are willing to send me one.

I don't know today what will be on the site in enough detail to say for sure that I will be able to use the material, but I think there is a good chance that I will. It might be that I could use parts of it in a section of the site reserved for more technical discussions. Or it might be that I could create a PDF report from some of the material myself.

I would need to get some other things out of the way first before I could make a decision. But if you send the CD, I will put a note on my calendar to be back in touch with your at a later date. The agreement would be that I would not go ahead with any ideas without getting your approval. The advantage of having the CD is just that having it on hand and going through it might give me some additional ideas.

Another thought that comes to me now is that we could just offer the CD itself for sale. I know that there are people today who copy materials from your web site for their personal files (I have done so), and that it costs almost nothing to make a CD copy of the material. Just offering the CD for an aspiring early retiree's personal use gives people an option they did not possess yesterday. That would be a no-muss, no-fuss way to expand the reach of the insights.

It might be that the product would not be quite as marketable that way, but I see no possible downside. And it might be that some people would prefer to get the whole shebang on a CD.

If anyone else has ideas of reports or CDs or whatever that they might want to sell on my site, please just send me a private-mail message. My general philosophy is that I would like to provide access to as many possible products dealing with this subject matter as possible. When I started looking for material on how to retire early, there was not a lot out there. There's a lot more available today. But I like to think that there is going to be a whole bunch more five years from now.

There's little financial risk involved in putting something up for sale on a web site and seeing whether people are interested or not. In some cases, there will only be a small number of people interested, but so what? Getting good information on how to retire early out to a small number of people looking for it can make a big difference in those people's lives.
 
I'll just watch for discussions on which brands of dog food taste better to determine which SWR's were really safe. :D
Click to expand...

That expensive mail order stuff "Flint River Ranch" tastes the best, followed by Canidae and Nutro's "Natural Choice".

I did a humongous dog and cat food analysis last year, and came up with a half dozen finalists by ingredients and nutritional composition. Ordered or bought samples of all of them, and then both the dogs and I tasted them.

Whaa? Oh come on, its cereal grains and meat meals...not poop.

I figured the dogs may or may not be objective, but if something tastes better to ME then it probably will taste better to them.

These of course were dry foods, not canned. Not sure I could eat wet by-products.

I ended up settling on the Nutro Natural Choice for availability, cost, and because it tasted good and had all the right ingredients and nutritional bits. The dogs and cats only have to eat half as much because its not full of fillers, so the price ends up the same.

Can anyone tell that I'm trying to get us off of unlucky page #13 on this thread?
 
It's just that, at my age, my website will self-destruct soon enuff and if a few copies continue to exist (after I stop existing) that'd be great :)
Click to expand...

Gummy...I'd be pleased to provide a mirror of your stuff providing I can get it to all fit within the web site limitations comcast provides me...if you would identify the most important parts to mirror in (near) perpetuity, I'll get to that sometime next week.

It would continue to be referred to as "gummy stuff" of course.
 
Whaa? Oh come on, its cereal grains and meat meals...not poop.

I figured the dogs may or may not be objective, but if something tastes better to ME then it probably will taste better to them.
Click to expand...
:) TH, you really need to pay closer attention to where your dogs put their noses and what they put in their mouths besides toys and what we consider food. I suspect some of your dogs' tastes would put you off of eating for a few days. :p

Or perhaps you aren't as confident in your SWR as you want and were evaluating future contingincies? :D
 
There's little financial risk involved in putting something up for sale on a web site and seeing whether people are interested or not. In some cases, there will only be a small number of people interested, but so what? Getting good information on how to retire early out to a small number of people looking for it can make a big difference in those people's lives.
Click to expand...

Offer them on ebay. Virtually no cost unless someone buys them. People pay $10-20 for cd's with pretty much nothing of use on them... :eek: ;)
 
TH:
If you send me e-mail we can discuss some ritual for putting the stuff on your site.

I'm afraid it'd be impossible for me to identify the ... uh, most important stuff. (You could do that, eh?)

I've spent ten years and 10,000 hours on my website and every hour is so very important ::)

About eBay:
I did describe the CD there (for a week) and gave the URL of my website (hoping that they'd go there to buy it).

My weekly sales doubled that week - from two to four?)
 
:) TH, you really need to pay closer attention to where your dogs put their noses and what they put in their mouth besides toys and what we consider food. I suspect some of your dogs' tastes would put you off of eating for a few days. :p

Or perhaps you aren't as confident in your SWR as you want and were evaluating future possibilities? :D
Click to expand...


Uhh...having both cats and dogs gives me an excellent opportunity to see what kinds of things dogs like to eat.

My cats regularly "produce" "treats" for the dogs, which led to my putting their litter box in the bathtub in the spare bathroom. A nice tip if you have cats and a spare tub, keeps the litter contained and cleanup is easy...dump the litter into a bag, turn on the shower. I also have to check the yard every morning for the usual rash of deceased rodents that can be quickly converted into a mid morning treat.

There is a 2 hour and a big drink of water moratorium between eating cat provided "treats" and licking my face however.

I dont think I'll ever get forced to eat dog food. A few hours a day behind the counter at the quick-e mart will suffice if it all goes to hell. However it wasnt bad. Mild cereal taste of rice or oats (whichever was the main cereal), little bit of a greasy mouthfeel, different levels of crunch, and a mild aftertaste of whatever meat protein was the main ingredient. Surprisingly mild and bland. I can see why they like our food better.

The biscuits I get them are GOOD though ;)
 
Gummy...email sent. I get 25MB from comcast, not enough for the whole shebang but I might get the "best of..." to fit.

COME ON folks, we're almost off of nasty page #13...thank god its not a market open day...
 
Opposite here...the dogs LOVE the cats. The affection is not quite mutual, but a frequent sight is one of the cats getting scared by a noise outside, running in and standing underneath my mastiff/rottweller combination, who goes right into "protect" mode. Very cute.
 
Ahhh, TH, I tried so hard to tiptoe around that particular example in my last post, but oh well. ::)

Oh, I meant to ask you which wine you were drinking before sampling your dogs' food. I'll have to try and avoid that one. :D
 
Oh come now, we've all learned by now that I have the subtlety of a buick through a plate glass storefront.

The wine question is easy. Pinot Noir with the lamb, chardonnay with the chicken, and Cabernet Sauvignon with the beef. 8)
 
My book is aimed at a general readership, including lots of people who (like me) get an uneasy feeling when they see numbers appear on a printed page.
Click to expand...
*****,

Been there and done that. What you're saying is true. There are very few who will be able to get their minds wrapped around the big picture, let alone the math behind it. If you're selling to the general public, you must account for that. Example: my sister-in-law emailed recently. She and her husband wanted to retire, but had not the slightest clue about how to determine if they could. "No problem", I said, "just input your numbers into FIRECalc and you will get a rough idea." I sent the link. Two days later... another email. They checked FIRECalc and didn't understand it. They took one look and simply shut down! "Bob, would you just tell us what to do?" These are bright, world-traveling, college educated school teachers.

The level of financial/mathematical illiteracy among the general public is staggering. It's easy for those of us who are submerged in this stuff to underestimate that. Furthermore, most folks just don't care too much about all of this. They just want some "expert" to tell them what to do..."Susie, you need to work until you're 70, and in the meantime, just turn your savings over to me and I'll invest it for you. Don't worry your pretty little head about it." They hear this and then they go happily on their way to fulfill their marching orders.

They don't "get it" and they aren't willing to devote much effort to it. They'd rather work 10 more years than have to deal with boring math and complicated investments. They certainly aren't clamoring for another book - you will have to sell it to them. The market for your book is small, and it will be largely up to you to find and target those who will buy it. The publisher will know this, and whether they buy your book, or not, will likely hinge upon their assessment of your ability to market the book. Content will be important, but will take a back seat to marketing.

So I'd suggest that you spend less time on the content of the book (I think you said earlier that you have spent thousands of hours on content), and more time focused upon how you will convince the publisher that you are both willing AND able to market the book. I didn't even start writing the book until the publisher put the first of three advance installments in my hand. I had to come up with 5 sample chapters to submit with the proposal, but that's all I had written before the book was sold. That's fairly typical for non-fiction.

Just friendly advice from someone who has been there. And by the way, in my opinion you are a good writer. Just keep the chapters short. You have a tendency to get a little long sometimes. I do too, and I had to work on cutting it down. This is stuff people will only consume in small bite-sized pieces, so keep the chapters at 5-6 pages or so. Good luck.
 
For Bob_Smith:

*****'s book is about Passion Savings. It barely mentions things such as Safe Withdrawal Rates.

I had expected Passion Savings to be a dull topic. I was wrong. ***** has lots of new and exciting ideas, things that you would never imagine.

To get a taste of what *****'s book is like, read his post about the New Luxuries.

To read his comments about Safe Withdrawal Rates, you will have to wait for a year or two.

Have fun.

John R.
 
You can find The New Luxuries post in the Young Dreamers section.

Have fun.

John R.
 
Hey Bob_Smith, your response to ***** was
outstanding; one of the best posts I've read,
in re. advice on writing as well as attitudes
vis-a-vis retirement. Re. the former, I have 100
books at least in my head. Alas, it is unlikely any will
see the light of day (lazy). Re. finances/retirement/
planning your future, IMHO very few people
"get it". It's okay though, the important thing is that
I get it.

John Galt
 
For Bob_Smith:

*****'s book is about Passion Savings. It barely mentions things such as Safe Withdrawal Rates.

I had expected Passion Savings to be a dull topic. I was wrong. ***** has lots of new and exciting ideas, things that you would never imagine.

To get a taste of what *****'s book is like, read his post about the New Luxuries.
Click to expand...
Yup, I already read it. In fact, I saw it the day he posted it, thought it was good, and assumed this was the type of thing he planned to publish. But that's not the point. What I'm saying is that the market, even for the type of insights described in New Luxuries, is relatively small and has already been mined. That doesn't mean there isn't room for one more book, and I'm sure it is very well written and full of new ideas. But there are thousands of excellent books that languish forever on the slush pile, while mediocre books sell millions. And the masses really don't share our enthusiasm for financial freedom. So it's all about marketing, generating exposure, and, to some extent, timing. Master those things and you can sell a book. Content is important too, but without the others, it doesn't really matter how good the book is.

I'd like to see ***** succeed, I believe it is doable for him, and I hope he takes my suggestions in that spirit. Good luck *****!
 
Hey Bob_Smith, your response to ***** was
outstanding;  one of the best posts I've read,
in re. advice on writing as well as attitudes
vis-a-vis retirement.
Click to expand...
Thanks John!
 
I'd like to see ***** succeed, I believe it is doable for him, and I hope he takes my suggestions in that spirit. Good luck *****!

Thanks very much. I appreciate you taking the time to set forth your comments, especially since you have been through the process.

I understand that statistically it's a long shot that the book will connect. And I appreciate the importance that publishers place on marketing. The long odds that apply is what pushed me into studying how to save in the first place. I had saved nothing at age 35, when I realized that my dream of writing a book was not going to come true unless I started getting serious about it. It didn't seem responsible to give up the secure paycheck without any financial backing, so that was when I started my efforts to discover new ways to save. The focus of my book is motivation questions--how to get others to desire as much as I came to the rewards of effective saving.

The financial backing I have gives me the chance not to have to jump at any deal that I am offered and not to have to give up if things don't click right away. By no means does it assure me of success, but it gives me a fighting chance. I didn't seek an advance first because I decided that I was going to write the book and publish it regardless of whether a major publisher is interested. I would prefer to go with a major publisher. But if none are interested, I will self-publish. Then if I have success with that, I will go back to the major publishers.

There's no question that people on these boards are "special" and "different" in the intensity that they bring to the quest for financial independence. I think everyone agrees that there is great power in that intensity. My goal is to open up the secrets to those who do not now have access to them. I certainly agree that many do not "get" the saving idea today. My project is to present the ideas in ways that will make sense to those who do not now get it.

My belief is that, if it doesn't work out, the experience of trying it will lead to something else that does. For example, I certainly stretched my writing skills in organizing the material for a book-length manuscript. And I now am focusing on a lot of marketing questions in planning my web site. I expect that I will learn some useful stuff doing that as well.

None of us possesses perfect security. Had I stayed with the boring big-paycheck job, I expect that I would have ended up an alcoholic or something worse. Everyone would have said "I wonder what happened," and no one would have said that I was imprudent in staying at the "safe" job. I came to believe that, so long as I built a financial cushion first, it was ultimately safer to take a bit of a leap into the unknown and stretch myself. That's sort of the point of my approach, that money today can be used to buy new experiences as well as new products and services.

Ultimately, I have the same philosophical attitude that many have re their investment hopes. If it doesn't work out, I will not die. I will be smarter for it all. And I will have had a growth experience. And I will always know that I actually did write a book that I thought was good enough to allow others to read, even if it never sells six copies. It won't be the worst thing in the world if I have to deliver newspapers to bring in that $10,000 per year, and I think that odds of things getting that bleak are not so great. In the worst-case scenario, it'll be OK.

I do understand the points you make, however, and I think they are good ones to keep in mind. There's no question but that the marketing is key. I spend most of my mental energies thinking about that aspect because that is where I have less experience and confidence. I intend to give it a real good shot, though. If I fail, it won't be because I didn't work it hard enough. I enjoy the work, both the writing side and the marketing side.
 
*****:

The all-time #1 best selling Canadian book (after the Bible) is "the Wealthy Barber".
It's about a fictional barber who gives financial advice ... on everything, to everyone.
Because it's a story, because it reads like a novel, because it's down-to-earth prose, because
it's humorous and unpretentious as well as informative - it's a big hit !

Worth considering that format, eh?

(In order to delay the onset of boredom, on my website, I had to introduce my sidekick ... so my tutorials are really a discussion between two people.)
 
Hey gummy, are you sure about 'The Wealthy Barber'
being that popular in Canada? What is the source of this
information? I've always believed Canadian intellect
was suspect (otherwise why would they live there?)..........but still........

John Galt
 
Canada

You know what they say about Canada...

A man walked into the produce section of his local supermarket and asked to buy half a head of lettuce. The boy working in that department told him that they only sold whole heads of lettuce. The man was insistent that the boy ask his manager about the matter...

Walking into the back room, the boy said to his manager, "Some jerk wants to buy a half a head of lettuce." As he finished his sentence, the boy turned to find the man standing right behind him, so he added, "And this gentleman kindly offered to buy the other half."

The manager approved the deal, and the man went on his way satisfied.

Later, the manager found the boy and said, "I was impressed with the way you got yourself out of that difficult situation earlier. We like people who think on their feet here. Where are you from, son?"

"Canada, sir," the boy replied.

"Well, why did you leave Canada?" the manager asked.

The boy answered, "Sir, there's nothing but whores and hockey players up there."

"Really," said the manager. "My wife is from Canada!"

The boy replied, "No s---!!! Who did she play for?"
Click to expand...
(Have seen variants of this story many places; I copied this version from http://www.blogdom.org/archives/000869.php#000869 after searching Google for key words of the joke.)

By the way, I like Canada.
 
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