I concur that it looks like the world is going to be "lower for longer", from inflation, to interest rates to investment returns. My thoughts are:
- Lower nominal returns are partially offset by lower inflation, with a smaller impact on real returns.
- There isn't a lot I can do about it, as all asset classes seem to be impacted. In accumulation phase, it isn't changing a lot.
- Perhaps the one difference is from how cheap debt and leverage is. I'm less focused on paying down investment debt at the moment - I'm paying 4% interest and getting 6+% yield (including franking etc). That means I can bank a 2% spread per year, and keep exposure to any potential upside
- It might impact on how I feel about draw down rates. However, I've been aiming at having a ~2% SWR rather than 4%, so not intending on changing this. Even with no real returns, 2% SWR gives 50 years coverage.
(for anyone interested, the rationale for a lower SWR for me is mostly because I feel I'm on a very high income at the moment, and for various reasons I'd struggle to replicate it if I came back to work after FIRE. An extra year working now would be like 3-4 extra years working then. Hence I'd rather have a couple more years padding now, and lower risk of needing to return to work).