Search found 22 matches

by konic
Mon Sep 30, 2019 10:18 pm
Forum: Personal Investments
Topic: Early semi-retirement abroad
Replies: 26
Views: 3477

Re: Early semi-retirement abroad

OP, You have access to a lot of tax-deferred space which can be maximally utilized to reduce current taxes and also accelerate savings. Since your estimated expenses in early retirement 5 years from now is ~22k, you taxes will be close to 0 then. Why pay more taxes now to pay low taxes later? What ...
by konic
Mon Sep 30, 2019 9:26 pm
Forum: Personal Investments
Topic: Early semi-retirement abroad
Replies: 26
Views: 3477

Re: Early semi-retirement abroad

OP, You have access to a lot of tax-deferred space which can be maximally utilized to reduce current taxes and also accelerate savings. Since your estimated expenses in early retirement 5 years from now is ~22k, you taxes will be close to 0 then. Why pay more taxes now to pay low taxes later? What a...
by konic
Sat Sep 21, 2019 12:05 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

We have this discussion every few months. I don't think a single mind has been changed. But, it is illuminating. My only goal is to keep a random 65-year old from dying at her desk at age 70, because she was new here, and read some silly 2% thread that got her scared and thinking she needed to work...
by konic
Sat Sep 21, 2019 9:35 am
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

We have this discussion every few months. I don't think a single mind has been changed. But, it is illuminating. My only goal is to keep a random 65-year old from dying at her desk at age 70, because she was new here, and read some silly 2% thread that got her scared and thinking she needed to work...
by konic
Fri Sep 20, 2019 10:48 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

No, do not try to take refuge by deflecting your poor inputs into a model by trying to pass it off as Damodaran’s or anybody else’s predictions for the future. As far as I know, Damodaran has made no claims like you have regarding very poor returns couple with high volatility for the NEXT 50 YEARS....
by konic
Fri Sep 20, 2019 12:30 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

No, do not try to take refuge by deflecting your poor inputs into a model by trying to pass it off as Damodaran’s or anybody else’s predictions for the future. As far as I know, Damodaran has made no claims like you have regarding very poor returns couple with high volatility for the NEXT 50 YEARS....
by konic
Thu Sep 19, 2019 10:57 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

~2ish SWRs for 50 year periods. Using blocks of years can help with the overestimation of SORR but to employ that technique you've got to use historical data which is not ideal (esp if only back to 1972) because it assumes we've already been exposed to all risks/worst outcomes in that limited datas...
by konic
Thu Sep 19, 2019 8:29 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

countmein is stating that his model is showing less than 2% SWR... Somehow, 50 years of expenses may not last 30 years. It's possible, but something is seriously broken in that world. Nothing will be safe at that point. A random Monte-Carlo system (those are notoriously bad at overstating sequence ...
by konic
Thu Sep 19, 2019 8:06 pm
Forum: Personal Finance (Not Investing)
Topic: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules
Replies: 274
Views: 20134

Re: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules

PWR leaves you with atleast as much portfolio as you started with in real terms, regardless of the time period. Yes to the first part, no to the second part. The PWR changes depending on time period. :oops: Did you actually pay attention to the PWR graph in the link I provided upthread? What did yo...
by konic
Thu Sep 19, 2019 7:59 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 149
Views: 11525

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

countmein is stating that his model is showing less than 2% SWR... Somehow, 50 years of expenses may not last 30 years. It's possible, but something is seriously broken in that world. Nothing will be safe at that point. A random Monte-Carlo system (those are notoriously bad at overstating sequence ...
by konic
Tue Sep 10, 2019 9:58 pm
Forum: Personal Finance (Not Investing)
Topic: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules
Replies: 274
Views: 20134

Re: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules

The MC modeling makes very little sense. As an alternative look at a simple 3-fund 60:40 Portfolio with a Mean real return of 5.7 and a higher volatility of 10.7 at the below link: https://portfoliocharts.com/portfolio/three-fund-portfolio/ This has a PWR of 3.5%!!! If 2% SWR is meant as a serious ...
by konic
Tue Sep 10, 2019 9:35 pm
Forum: Personal Finance (Not Investing)
Topic: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules
Replies: 274
Views: 20134

Re: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules

The MC modeling makes very little sense. As an alternative look at a simple 3-fund 60:40 Portfolio with a Mean real return of 5.7 and a higher volatility of 10.7 at the below link: https://portfoliocharts.com/portfolio/three-fund-portfolio/ This has a PWR of 3.5%!!! If 2% SWR is meant as a serious ...
by konic
Tue Sep 10, 2019 9:29 pm
Forum: Investing - Theory, News & General
Topic: Rich people are hoarding cash
Replies: 101
Views: 15604

Re: Rich people are hoarding cash

FT Report Rich people are hoarding cash, and wealth managers are getting frustrated ....Yet perception of risk is an emotional thing. If people feel comfortable paying extra money in the form of negative rates for the known loss they will suffer on cash versus the unknown and potentially larger los...
by konic
Sat Sep 07, 2019 6:21 pm
Forum: Personal Finance (Not Investing)
Topic: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules
Replies: 274
Views: 20134

Re: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules

Aswath Damodaran who is arguably the world's foremost authority on valuation and who does not hang around in the "my forecast is more pessimistic than your forecast" circles currently estimates the Equity Risk Premium as being 5.3%. So, if long term bonds yield .4% real, then a reasonable expectati...
by konic
Sat Sep 07, 2019 10:37 am
Forum: Personal Finance (Not Investing)
Topic: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules
Replies: 274
Views: 20134

Re: Kitces: The Problem with FIREing at 4% and the Need for Flexible Spending Rules

I was using their stated 4.5% from the podcast and subtracted 2% for inflation. Could use Rick's old 30 year forecast but you've got to set the bond side to 0 real. Stocks are 5% so that's 3% real for the portfolio. The PV model at 3% real expected return gives you an SWR of 2.0 . So you really bel...
by konic
Wed Jul 31, 2019 10:41 pm
Forum: Investing - Theory, News & General
Topic: Why Mr. Bogle prefers U.S stocks
Replies: 241
Views: 18073

Re: Why Mr. Bogle prefers U.S stocks

Whatever you do regarding International, don't spend hours reading about it. If that's you, you probably need to be at the 20% level and just forget it and stick to it and rebalance every year or so. I realized this was me several years ago and chose 25% as I wanted to be right down the middle betw...
by konic
Fri Jul 26, 2019 6:23 pm
Forum: Personal Investments
Topic: What rate of return do you use when calculating long term investments?
Replies: 32
Views: 2996

Re: What rate of return do you use when calculating long term investments?

Rick Ferri wrote:
Fri Jul 26, 2019 6:18 pm
2% for cash
3% for bonds
6% for stocks

Rick Ferri
Rick,

Are this estimates nominal or real? I am assuming these are mean returns and not extreme ones.
by konic
Fri Jul 26, 2019 6:20 pm
Forum: Personal Investments
Topic: Laid Off - Want to Retire / Am I OK
Replies: 145
Views: 18925

Re: Laid Off - Want to Retire / Am I OK

All these replies are very helpful. My primary concern is sequence of risk, that is why I want to try and live on mostly dividends / income in the initial years. My current estimate of dividend and interest income is about 130K. The individual stocks I have pay above average dividends. So the rest ...
by konic
Fri Jul 26, 2019 6:17 pm
Forum: Personal Investments
Topic: What rate of return do you use when calculating long term investments?
Replies: 32
Views: 2996

Re: What rate of return do you use when calculating long term investments?

Tdubs wrote:
Fri Jul 26, 2019 4:01 pm

For me, it is the pessimistic scenarios that are useful--zero nominal. It tells me the minimum I need to save.
In this context, isn’t this the maximum you need to save?
by konic
Fri Jul 26, 2019 6:09 pm
Forum: Personal Investments
Topic: What rate of return do you use when calculating long term investments?
Replies: 32
Views: 2996

Re: What rate of return do you use when calculating long term investments?

I think it is much more important to focus on "how much uncertainty, what's a good range to use in planning? For example, if we look at the annualized (CAGR) real return (inflation-adjusted) of the S&P 500 over thirty-year periods from 1926 through 2017, it has been as low as 4.35% (1965-1994) and ...
by konic
Fri May 17, 2019 4:41 pm
Forum: Investing - Theory, News & General
Topic: Investment return assumptions for periodic contribution plans
Replies: 5
Views: 317

Re: Investment return assumptions for periodic contribution plans

Central to my point was the observation that the ‘money weighted rate of return’, for a balanced global portfolio, due to continual contributions seems to be smoother and within a narrower range than the statistical distribution of possible returns for different asset classes. This observation makes...
by konic
Fri May 17, 2019 10:14 am
Forum: Investing - Theory, News & General
Topic: Investment return assumptions for periodic contribution plans
Replies: 5
Views: 317

Investment return assumptions for periodic contribution plans

Longtime lurker posting first time. I thank everyone here that share their knowledge and wisdom regarding investing, personal finance and all other topics.Today, I am setting this post up to discuss the assumptions various people make regarding the expectation of returns on investing in the market. ...