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Old 12-06-2016, 05:58 AM
 
71,907 posts, read 71,942,576 times
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Quote:
Originally Posted by ohio_peasant View Post
And that's the crux of the whole matter!

The difference between being affluent, and "merely" middle-class (in a pecuniary sense), is that the affluent aim to preserve and augment wealth across the generations, whereas the middle-class are primarily motivated by comfort/convenience/appearances/aspirations. In other words, at the very least, the affluent seek to preserve capital.

So, I would respectively submit, that the real question isn't "what's the SWR so that I don't die broke", or "what's the SWR so that I can enjoy a comfortable cash-cushion, plus reserves for emergencies". Rather, that the operative question is, "What's my SWR, so that upon my death, my children could be rich, and their children eventually very-very-rich, and their children's children's children (and so forth) rival the Rothschilds and the Rockefellers?

To be pedantic: if my investments are merely keeping up with inflation (after taxes), and I wish to preserve capital, then my SWR is 0%.

Corollary: no matter how successful we are as savers, or even as investors throughout our working years, how much we can withdraw from our investments in retirement, depends entirely on our rate of return (after inflation and taxes).
the issue is that a safe withdrawal rate only pertains to creating a safe , secure consistent income that lasts as long as you do . it really has nothing to do with legacy money .

the first question a decent financial planner should be asking is who are we investing for ?

if you have a pension and your savings is for fun money ,emergency's and the wants in life , perhaps you are really investing for heirs .

if that is the situation then you have little to do with a safe withdrawal rate . you can invest as aggressively as you would if you were still in your accumulation stage since it is for the heirs and their lifetime .

if you are investing for yourself and income , well that is another issue and would require a different plan . perhaps you want to run two portfolio's if both are a goal and match each one to it's goal and purpose .

we do that . I run two models , a conservative income and capital preservation model and a more aggressive growth and income model .
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Old 12-06-2016, 09:05 AM
 
29,829 posts, read 34,912,438 times
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Quote:
Originally Posted by mathjak107 View Post
if you have a pension and your savings is for fun money ,emergency's and the wants in life , perhaps you are really investing for heirs .

.
And/Or to maximize options for later in life. Yes we both have LTC insurance but we still have to decide where to use it and how to pay for any possible steps prior to.
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Old 12-06-2016, 09:20 AM
 
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yes , anything outside the scope of general income generation should be accounted for separately .

this is why I say when most folks just say they are self insuring for ltc , they really are not .

if it is all lumped in with the big pile of money used for income generation they are making a mistake . it is assumed that pile can go to 1 dollar and still have a high success rate .

money you want for special needs should not be part of the income generation pile
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Old 12-06-2016, 09:41 AM
 
Location: Central IL
15,253 posts, read 8,568,509 times
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Originally Posted by NewbieHere View Post
Thank the the FEDs, they had to do the heavy lifting. Obama did nothing. He plays golf most of the time. Now Trump is elected, they can now raise rate. No more easy money.
...quite out of place...but President Obama only plays golf when on vacation and he takes far less vacation than Bush did. Now, please blather on.
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Old 12-06-2016, 09:55 AM
 
Location: SoCal
13,354 posts, read 6,382,104 times
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Quote:
Originally Posted by reneeh63 View Post
...quite out of place...but President Obama only plays golf when on vacation and he takes far less vacation than Bush did. Now, please blather on.
My statement was still correct. Obama played 186 games of golf while Bush only played 24 games of golf during their years in the White House.
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Old 12-06-2016, 11:15 AM
 
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they both should have stayed on the green and out of the white house.
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Old 12-06-2016, 12:31 PM
 
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Who cares how much vacation those presidents took, as long as the results of their working days were fruitful. I will take Obama golfing and pushing his agenda any day over Bush and his agenda.
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Old 12-06-2016, 01:35 PM
 
7,963 posts, read 5,063,154 times
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Quote:
Originally Posted by mathjak107 View Post
the issue is that a safe withdrawal rate only pertains to creating a safe , secure consistent income that lasts as long as you do . it really has nothing to do with legacy money .

the first question a decent financial planner should be asking is who are we investing for ?

if you have a pension and your savings is for fun money ,emergency's and the wants in life , perhaps you are really investing for heirs .

if that is the situation then you have little to do with a safe withdrawal rate . you can invest as aggressively as you would if you were still in your accumulation stage since it is for the heirs and their lifetime ....
At the risk of veering grossly off-topic, or causing offense to all of the responsible and well-meaning people who are investing to fund their retirement or their children's education or long-term-care or other realities of life, I want to reiterate that if the questions of filling one's belly and mending ones' roof have been addressed, then what remains is a matter of psychology. To an enterprising and clever man like Mathjak, this may be "fun", but to those of us who are so to speak lower on the evolutionary scale, this entails a tremendous psychological burden.

By my reckoning, the scenario devolves to questions of personal vanity; of emotion, self-regard, peace of mind vs. rapacious desire for increase – or, fear vs. greed. They are not practical financial questions… how to afford health-insurance, how to put food on the table, how to leave something for a dignified funeral.

If I am too timorous and conservative in my investments, by relying say on short-term bonds or CDs in lieu of heavy weighting in stocks, that jeopardizes cumulative long-term gains, but assuages feelings of loathsome and ghastly dread, whenever the market drops. Note that such drops do not (for me) bring pressure to sell; I never sell. Instead, the drops or stasis-and-fluctuations trigger feelings that the whole venture is bogus and fraught with contradiction, that my life's endeavor is dumb and ill-posed. But this timid conservatism leads to guaranteed setback and enervation of one's portfolio, and so one finds oneself in a different self-hatred: that for being too cowardly and foregoing the zesty promise of the human potential to rise.

And so we oscillate between dread of suffering a loss in our precious portfolio, or seeing it wither away from inflation.

Note that these stresses increase with increase in one's portfolio. This is because the greater the accumulation (either by additional savings or success in the market), and thereby the higher the ratio of holdings to salary, the less control one has. Even a quiet day's fluctuation can be months of salary. This means that an additional bout of frugality can't possible compensate for market-losses with more savings. But at the same time, if the investment-horizon is infinite, it feels silly to fret over such minutiae, and it becomes incumbent upon one to take the long-view. But this long-view becomes progressively untenable, the longer we see waves of sub-par returns, as has happened for example with European stocks for the past decade. In other words, experience may be a good teacher in preventing us from doing stupid deeds, but it does nothing to guard against stupid thoughts.

So then why bother checking the day's financial news? Why not tune out? Well, on a daily basis one could. In longer time-spans it's harder. Step into any airport lounge, and there's CNBC (or whatever) on-screen, with that dastardly stock-ticker offending our privacy. NPR reports on the markets during All Things Considered, and sometimes I'm too slow in slamming the radio off-button before the report's Sirens inflame my ears. So what about a total news blackout, it being not enough to lash oneself to the mast? OK, not a bad idea. But then one feels disconnected. Eventually one gets infused with the perverse belief, that what we are, what we're worth, is literally what we're worth. Did the market fall today? Then today, my friend, you're a lesser man. Not merely the decline of age has done you in, but the decline of daily vicissitude. It chipped away a bit that formerly was yours. John Donne's Europe has lost a clod, and the whole continent is diminished.

The more that we have, the more our having comes to consume us. We become quotidian machines, a clanking apparatus for spewing out money, insensible to why or where, but merely fed the raw material and outputting the product. And then we ponder that same fact, and grow embarrassed of our own mechanical contrivance, soulless and unnatural.

Taking this to its logical conclusion, one becomes a multi-billionaire locked in a dark padded room, lying in a fetal position on the floor, drooling, whimpering softly, with knees worn raw from knocking rhythmically together – wishing that one's wealth could be expropriated by a tyrannical government, which would send one to the Gulag, penniless and starving, to break rocks in a frozen wasteland, hand-digging a White Sea Canal, and thereby through flinty striving learn a higher morality, a morality beyond self-elevation through parsimonious self-abnegation.

Perhaps, then, the best SWR is 100%?
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Old 12-06-2016, 02:02 PM
 
Location: Charleston, SC
1,369 posts, read 771,752 times
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Quote:
Originally Posted by NewbieHere View Post
My statement was still correct. Obama played 186 games of golf while Bush only played 24 games of golf during their years in the White House.
I wanted to look up the stats on Presidential vacations. Not just golf games, but posted vacations.

WOW....what an eye-opener. all the recent presidents from Eisenhower up thru Bush the Elder, Bill Clinton and Barack Obama all took between 150 and 400 days off, each averaging between 20 and 80 days per year.

George W. Bush took a total of 1020 days off, an average of 128 days off per year in office.

It's good to be the King, eh George ?
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Old 12-06-2016, 02:18 PM
 
6,319 posts, read 4,762,537 times
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Ohio-peasant, I am all but speechless. I cannot imagine such stress due to investing. Investing wisely should mean considering goals, and allocations and choices. It is a rational process. Stress and ghastly dread and whimpering and self hatred should not be involved....
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