ERD50
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Your situation doesn’t necessarily translate to a good strategy for others. You got lucky with timing. Taking on debt to cover expenses in a falling market? Double whammy.Originally Posted by RetiredAt49 View Post
Your first three words might sum it up best (just kidding). However, what exactly is there to explain?
To cover our expenses, we could have done the following:
1) Sell equities while their prices are falling. Pretty obvious why that’s not ideal.
2) Leverage a no-interest, minimum payment, 18-month credit card + HELOC during a bear market and only sell minimal equities (actually dividends covered it) until the market improved.
Again, Firecalc and others show a 100% success rate (using option 1) but using other financial vehicles (especially during a bear market) can help protect a nest egg and reduce SORR. YMMV
What's the problem? Where's the 'whammy' (let alone 'double-whammy')?
He avoided cap gains tax with the HELOC, he said "dividends covered it (the payments to the HELOC)". So what's the problem? What's luck got to do with it?
-ERD50