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We, too, enjoy what we've earned. Aside from doing something massively out of character such as buying a Gulfstream G650 for cash -- which I have no interest in -- our assets greatly exceed our rational consumption. We find no utility in $500,000 necklaces, $1 Million wrist watches nor $20 Million pieces of art. Endowing chairs at Alma Maters, funding full-ride scholarships for the economically disadvantaged, and helping fund new Science Centers at major research universities, coupled with significant general philanthropy, provides much more pleasure.
I'd love to encourage you to fund another worthy cause if you find some extra monies: finding treatments and hopefully a cure for some K9 cancers, particularly a silent and 100% fatal one called Hemangiosarcoma.
I don't get the "never spending down any part of a portfolio when there are no heirs" as being some kind of measurement of success. To me that means someone is being self-limiting for the sake of some imaginary benchmark or as some kind of self-punishment. Why have a portfolio at all if the goal is to spend none of it and be miserable or miserly? By that definition the average poor person has already reached that benchmark as they too are not spending down "a portfolio."
That's a fair question, and here's my best attempt to answer it. A portfolio is a hidden (because it's not publicly displayed, unlike say mansions or yachts) measure of having gotten on in the world. If the portfolio diminishes, owing to market-crashes or being spent-down, then one's standing, as it were, also diminishes. And because it's a private matter, the diminution is private... not in how others view one, but in how one views oneself.
Let me give another example. Suppose that a person diets and exercises vigorously, to obtain a flat, washboard-looking stomach. This person never goes to the beach or the swimming pool, and tends to wear baggy, unflattering clothing. So, the washboard stomach isn't revealed to anyone. It's not used as an instrument of prideful condescension over those who are less fit. Nor is it even used from some practical end, such as scoring a modeling-contract or to appeal (on physical grounds) to a romantic-mate. Indeed, the dieting isn't necessarily helpful for advancing one's health... it's just cosmetic... for the sheer pleasure of looking in the mirror, and liking what one sees.
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Originally Posted by NewbieHere
I agree, not call anybody here idiot. But in my book, they are idiots. I enjoy looking at my balance as much as the next person, but I think when I’m dead, the high balance does do Chit to me. My hiers will be ok regardless of my balance.
Nothing that we do here matters (to us) for what happens after we're dead. In a secular viewpoint, death is death, and that's it. In most religious viewpoints, our prospects in the afterlife are contingent on receipt of dispensation from the Deity, which is not contingent on our personal achievements. So, said achievements are moot.
But here's the thing. Whether my technical publications are read after I'm dead, won't affect me after I' dead... but the thought of what happens after I'm dead, most assuredly affects my psyche in the present. Indeed, I'd rather be shunned, scorned and vilified while I'm alive, in exchange for glorious veneration after I'm dead.
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Originally Posted by mathjak107
there is nothing ever going to be 100% guaranteed ...
You’re of course quite right, about the impossibility of true guarantees. Divine wrath can smite even the most devoted acolyte, who thinks of himself as being righteous. We have some memorable examples in literature.
But the key dilemma is the “have your cake vs. eat it too”. Let me elaborate. We admire the cake, the baker’s craftsmanship and the beauty of the result. Yet we’re also hungry, not to mention eager for the pleasure of consuming that luscious dough, icing and filling. In the first case, we realize that cakes are for eating. Their beauty is incidental to their ultimate purpose as food. We don’t wish to waste the food diving into the cake face-first, with voracious abandon. We consume gingerly, savoring the flavor of each mouthful, each spoonful, realizing that in so doing, part of the cake has been compromised. So be it.
In the second case, we’re so entranced by the cake’s symmetry, its elegance and balance of the various layers and coverings and flourishes, that to eat it strikes us as being an offense against the cake’s Platonic cake-ness, the ultimate Form of “cake”. We therefore content ourselves with hungry stare, admiring the cake while our stomach gurgles and our mouth froths with appetite’s saliva.
The 4% rule is a method of gingerly consuming the cake, such that we forestall hunger pangs. But it disregards the cake-ness as an independent end, as something to be cherished and venerated as itself an ultimate end.
In the ideal scenario, along comes a second cake, store-bought and nondescript, useful as nourishment but parlously unsuited for art. We consume it, without regret or scruples, taking joy in the eating, as the only legitimate end of the second cake. The first cake – the artistically crafted one – remains intact. Then our only concern is good preservation of the artistic cake… refrigeration, protection from insects or rodents and so forth. But in less than ideal circumstances, there is no second cake, and we’re eventually forced to nibble on the first. We do so, perhaps, from underneath its center, in a place least visible, ever so fastidiously, hoping for arrival of that second cake, before too much molestation of the first. And if that second cake never arrives, we’re saddled with the dilemma of how much to eat, and from where, with every bite savory and delicious to our senses, but harrowingly oppressive to our psyche.
You see, the crucial matter is how we regard ourselves as cake-owners. Surely somebody down the street, if not just in the next house, has a larger or more beautiful cake. I can’t compete with theirs; that’s not my aim. But even though my cake is modestly sized and perhaps sparsely decorated, it’s mine. It was custom-ordered. To dig into it with errant knife or spoon, feels offensive to my identity as cake-owner.
A portfolio is a hidden (because it's not publicly displayed, unlike say mansions or yachts) measure of having gotten on in the world. If the portfolio diminishes, owing to market-crashes or being spent-down, then one's standing, as it were, also diminishes. And because it's a private matter, the diminution is private... not in how others view one, but in how one views oneself.
One can have the most optimal portfolio ever designed, but if they're batcrap crazy, at the end of the day they're still crazy and still think in ways that are skewed. The portfolio performance becomes a tool for self-flagellation in this example, since crazy is in control and running the script.
Likewise, someone with an eating disorder may see themselves in the mirror, at a mere 70 lbs, as looking fat still, because they have a mental illness which gives them a false reality.
Wow this guy! He's so easy to understand and makes so much sense. I tried to figure this out before with social security and assigning it a dollar amount but got the feeling that was a silly thing to do (couldn't figure it out ). He's suggesting Capitalizing Social Security, put it on the bond side of the equation, and adjust AA accordingly. I'm assuming the same would hold true for a pension. If a person had both they could be 100$ equities and still be underweight equities. Right?
Wow this guy! He's so easy to understand and makes so much sense. I tried to figure this out before with social security and assigning it a dollar amount but got the feeling that was a silly thing to do (couldn't figure it out ). He's suggesting Capitalizing Social Security, put it on the bond side of the equation, and adjust AA accordingly. I'm assuming the same would hold true for a pension. If a person had both they could be 100$ equities and still be underweight equities. Right?
i would not count ss as anything but an income stream .. it is an annuity . you cannot rebalance social security or sell social security to raise cash for unexpected expenses . you can't shift social security from one type of bond fund to another .
people skew things all the time trying to take different things and reclassifying them as something they shouldn't be . like when they count cost cutting as rising income. or they try to add a dollar value to their pension and count it like a lump sum asset .
i hardly doubt many retirees want to be 100% equities and have social security as the bond portion of an allocation .
pensions , alimony , social security , income from working , etc , are not calculated as an asset for passive investing purposes or stress testing portfolio's , they are income streams and they reduce demand on your passive income requirements , not replace the asset
Last edited by mathjak107; 02-07-2019 at 02:01 AM..
While money and savings are very important, your health is the most important thing. Without good health, the other things mean little.
without good health or lets take it a step further , LIFE , nothing else matters so we can assume in financial discussions this is already a given .
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)of us that are still trying to understand what's going on.
). He's suggesting Capitalizing Social Security, put it on the bond side of the equation, and adjust AA accordingly. I'm assuming the same would hold true for a pension. If a person had both they could be 100$ equities and still be underweight equities. Right?
