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its uncanny how it always works out that those who need to count on the income the most and need all the bang for the buck are the most gun shy and those who need the income the least get aggressive.
Because when you take a risk you "could" lose it. You don't gamble with money you cannot afford to lose.
While i do agree with you as i no longer like risk i dont have to take, the fact is there are investments that are lower risk and can generate more income.
There is a big difference between gambling and investing with a stratagy.
I know if i couldnt generate the income i needed i wouldnt hesitate to take it up a notch.
Heck the biggest risk could be doing nothing, a bank or cd is a guaranteed loss after inflation and taxes unless your in the lowest brackets.
Im not a fan though of taking more risk though then needed to insure our money lasts as long as we do.
While i do agree with you as i no longer like risk i dont have to take, the fact is there are investments that are lower risk and can generate more income.
There is a big difference between gambling and investing with a stratagy.
I know if i couldnt generate the income i needed i wouldnt hesitate to take it up a notch.
Heck the biggest risk could be doing nothing, a bank or cd is a guaranteed loss after inflation and taxes unless your in the lowest brackets.
Im not a fan though of taking more risk though then needed to insure our money lasts as long as we do.
Yes I agree. It's all about finding that "sweet spot". As you get older that sweet spot usually moves in the conservative direction.
The portfolio i have been following via newletter the last few years made the decision to become even more income oriented and for the first time ever in that model we hold no equities.
While i love the conservativeness of it the reality is it works for us in retirement because of other income sources.
I do question the model now for those without other sources of income because there is a good chance if they bought into the 4%swr theory they could get burned with not enough growth components.
More and more as i read the papers by wade d. pfau im beginning to understand why more and more the industry buzz word of planning around a 4% safe withdrawal rate is just not the way to do it.
Last edited by mathjak107; 09-02-2012 at 06:19 PM..
While i do agree with you as i no longer like risk i dont have to take, the fact is there are investments that are lower risk and can generate more income.
There is a big difference between gambling and investing with a stratagy.
I know if i couldnt generate the income i needed i wouldnt hesitate to take it up a notch.
Heck the biggest risk could be doing nothing, a bank or cd is a guaranteed loss after inflation and taxes unless your in the lowest brackets.
Im not a fan though of taking more risk though then needed to insure our money lasts as long as we do.
It seems your position (POV) has shifted in the last few months (?) and I'm wondering why...what economic indicators (that haven't been with us for quite some time) have you much more averse to risk at this time?
The portfolio i have been following via newletter the last few years made the decision to become even more income oriented and for the first time ever in that model we hold no equities.
While i love the conservativeness of it the reality is it works for us in retirement because of other income sources.
I do question the model now for those without other sources of income because there is a good chance if they bought into the 4%swr theory they could get burned with not enough growth components.
More and more as i read the papers by wade d. pfau im beginning to understand why more and more the industry buzz word of planning around a 4% safe withdrawal rate is just not the way to do it.
It would be imo more like a 2.5–3% WR, at the same time cutting back on outflow (expenditure) - a two-way direction.
It seems your position (POV) has shifted in the last few months (?) and I'm wondering why...what economic indicators (that haven't been with us for quite some time) have you much more averse to risk at this time?
Im still the same but my newsletter has gotten more conservative. im fine with it as the numbers will still work for us.
It would be imo more like a 2.5–3% WR, at the same time cutting back on outflow (expenditure) - a two-way direction.
Imo, the 'withdrawal rate(s)' that float around the web finance areas are simply talking points and opins based on that writer's model, assumptions, parameters and crystal ball.
I am not suggesting that one needs to not be aware of their own WR, and not do some projections based on current port, finances and their own crystal ball. But, I don't get excited or go to the calc to do a 're-evaluation' when the next, 'new' report/ WR percentage waddles across the web.
Everyone has a slightly similar goal, but very different finances, expenditures, port size, type of port, etc.
Add in potential inheritance from still living older parent(s), guess about inflation, guess/project about future health and those costs, a rainy day fund, and the real unknown of how long any of us will be around...thus, the conventional wisdom 'WR %', or a new 'number', is for me simply another weatherman guess to fill some space in the 'finance' section of most media.
YMMV...
GL, mD
Im still the same but my newsletter has gotten more conservative. im fine with it as the numbers will still work for us.
So your investments refect your newletters and your statement often conflict with what your really doing. You where a growth investor at higher risk over lifetime not that long ago by your statements. Quite a change really.
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