Author Topic: Bogleheads Forum  (Read 9008 times)

Boofinator

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Re: Bogleheads Forum
« Reply #50 on: December 19, 2018, 03:57:38 PM »
For the record, my definition of living well would come in well below $40,000 for a family of 4. My figure for what dollar amount would constitute maximum happiness would be well over $40,000.

Agreed. The secret for hitting FI (in my opinion) is to hit the sustainable amount of money that puts your family in the sweet spot that is somewhere between living well and maximum happiness. Because you sure don't want to fall below "living well".

Boofinator

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Re: Bogleheads Forum
« Reply #51 on: December 19, 2018, 04:06:16 PM »
I see very few people on boggleheads say you should work for a long time. I've read it every day for close to a year now and these comments are rare.

What I like about boghleads is they are a non-stop machine of people criticising bullshit
  • The bullshit of market timing.
  • The bullshit of dividend investing.
  • The bullshit that people can sector/market pick implying they know something the market doesn't.
  • The bullshit that average people can stock pick.
  • The bullshit that (all or even most) can live without bonds and see a substantial net worth that took them 15 years or more of sacrifice halve in front of their eyes.
  • The bullshit that "it will be ok because I can get a job if there is a recession" even though in a recession the economy is stuffed and unemployment rises sharply at the time you need it.
  • The bullshit that you can just "adjust your spending" in a recession or bad sequence of returns, especially for those living a frugal life where there is not much slack in spending to cut from.
There is non-stop bullshit on just about every forum, and most forums have sheeple supporting the bullshit because most people are incapable of critical thinking to try and poke holes before accepting what they read as truth. It is nice to have a forum that consistently and relentlessly calls out the bullshit over and over again, and I haven't found another forum that even comes close.

In regards to the post mentioned, for a withdrawal rates, I use this. I don't see how anyone can not consider it the definitive guide.
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

Good post.  Amidst a thread full of bullshit posts attacking someone for disagreeing with anything MMM has to say (Boofinator).  this is why i spend my time at BH now.

I don't mind the disagreements (I wouldn't characterize anything posted in this thread as an attack), as long as they don't enter dogma territory, which they generally don't here or on BH. Disagreements are healthy for growing and refining your thoughts.

But yes, as Andy R has highlighted very well, BH and MMM have very different approaches, with BH being much more conservative than MMM in their retirement plans. I like both places. Remember the Realist from the beginning of MMM's blog? Well, that's bogleheads. The Optimist kicked the Realist to the curb pretty quickly on the MMM blog.
« Last Edit: December 19, 2018, 06:38:46 PM by Boofinator »

maizeman

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Re: Bogleheads Forum
« Reply #52 on: December 19, 2018, 04:12:47 PM »
I think you're pegged it. I don't consider MMM the most badass, but I consider him to have a very strong balance between frugality and happiness, and he's definitely cheaper than me (and I'm probably the most frugal person I know IRL... though stealth wealth has a habit of being stealthy).

Wow to that last bit!

So there is absolutely nothing wrong with this, but I am guessing that the combination of your (undoubtedly accurate) view that your own family would not be happy without the ability to spend significantly more than $40k/year and being the most frugal person you yourself know IRL means the people you interact with on a day to day basis both make and spend substantially more than the median household income.

When I was in college I knew a lot of folks from rich families in NYC and Boston who would tell you that $250k/year was pretty much just getting by. Dated a girl for a little while whose parents made a combined $500k/year but didn't consider her family rich. And the thing was, based on the people they'd know growing up that was accurate assessment. (These are all in first decade of the 21st century dollars FWIW.) It just wasn't accurate when you compared them to the country as a whole. Or even the population of those two cities as a whole.

We're getting more and more effective as a society at mostly interacting with other people with similar socioeconomic status (and sometime political views as well). That worries me sometimes.

bacchi

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Re: Bogleheads Forum
« Reply #53 on: December 19, 2018, 04:24:40 PM »
I see very few people on boggleheads say you should work for a long time. I've read it every day for close to a year now and these comments are rare.

What I like about boghleads is they are a non-stop machine of people criticising bullshit
  • The bullshit of market timing.
  • The bullshit of dividend investing.
  • The bullshit that people can sector/market pick implying they know something the market doesn't.
  • The bullshit that average people can stock pick.
  • The bullshit that (all or even most) can live without bonds and see a substantial net worth that took them 15 years or more of sacrifice halve in front of their eyes.
  • The bullshit that "it will be ok because I can get a job if there is a recession" even though in a recession the economy is stuffed and unemployment rises sharply at the time you need it.
  • The bullshit that you can just "adjust your spending" in a recession or bad sequence of returns, especially for those living a frugal life where there is not much slack in spending to cut from.
There is non-stop bullshit on just about every forum, and most forums have sheeple supporting the bullshit because most people are incapable of critical thinking to try and poke holes before accepting what they read as truth. It is nice to have a forum that consistently and relentlessly calls out the bullshit over and over again, and I haven't found another forum that even comes close.

In regards to the post mentioned, for a withdrawal rates, I use this. I don't see how anyone can not consider it the definitive guide.
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

Good post.  Amidst a thread full of bullshit posts attacking someone for disagreeing with anything MMM has to say (Boofinator).  this is why i spend my time at BH now.


The MMM forums are generally hostile to the first 4 in that list, too. It's not "non-stop" because, as has been pointed out, MMM is more about the lifestyle rather than the numbers.

I don't see point 5 (bonds) as being a particular MMM stipulation. The bond tent has been discussed in these forums and it's recognized that bonds do yield less volatility when withdrawing.

Point 6 -- agreed. This is one of the specific "optimisms" that I'm skeptical about. However, a FIRE failure takes years and getting a job doesn't have to happen immediately at the height of a recession. It can happen when the economy starts to recover.* Take a look at the Y2k retiree (at the bottom of the page):

http://www.retireearlyhomepage.com/reallife18.html

This retiree will make it to 30 years on a 75/25 portfolio but getting a part-time job in, say, 2014-5, would lengthen the timeline and make the portfolio last for 40 years pretty easily.

Point 7 -- in BH land, there's no slack if you're spending $40k/year because they're high rollers. There are threads titled, "Net worth of $3.7M at age 47 - can I retire?" that would receive a far different response on the MMM forums.


* "randomguy" on BH just made a similar comment.
« Last Edit: December 19, 2018, 04:29:21 PM by bacchi »

maizeman

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Re: Bogleheads Forum
« Reply #54 on: December 19, 2018, 04:34:35 PM »
@bacchi and @Andy R I also agree that point #6 is questionable. Depending on your exact field you likely won't be able to get a job earning nearly as much money as you did before, and you may well not be able to get any job at all DURING a recession.

However I don't think that there is strong consensus on this point on the forums either. Here's a nice long debate on the exact topic: https://forum.mrmoneymustache.com/welcome-to-the-forum/jobs-you-can-realistically-get-in-a-fire-failure-situation/

So it boils down to your specific skillset, and for most of us how much the idea of working a relatively low skill job (likely several years after the recovery from a recession) bothers you. I really REALLY don't care for that kind of work, so I don't factor "I could always get a new job" into my calculations at all.

Good post.  Amidst a thread full of bullshit posts attacking someone for disagreeing with anything MMM has to say (Boofinator).  this is why i spend my time at BH now.

So just to clarify @wannabe-stache, when you say bullshit posts, you're talking about me, right? I just don't want there to be any ambiguity here.

bacchi

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Re: Bogleheads Forum
« Reply #55 on: December 19, 2018, 04:51:01 PM »
@bacchi and @Andy R I also agree that point #6 is questionable. Depending on your exact field you likely won't be able to get a job earning nearly as much money as you did before, and you may well not be able to get any job at all DURING a recession.

However I don't think that there is strong consensus on this point on the forums either. Here's a nice long debate on the exact topic: https://forum.mrmoneymustache.com/welcome-to-the-forum/jobs-you-can-realistically-get-in-a-fire-failure-situation/

I remember that thread, or a similar one. Having experienced unemployment in a tech city during the dotbomb, it's not easy to get a job, even a crappy one. I remain highly skeptical.

Andy R

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Re: Bogleheads Forum
« Reply #56 on: December 19, 2018, 09:00:54 PM »
I see very few people on boggleheads say you should work for a long time. I've read it every day for close to a year now and these comments are rare.

What I like about boghleads is they are a non-stop machine of people criticising bullshit
  • The bullshit of market timing.
  • The bullshit of dividend investing.
  • The bullshit that people can sector/market pick implying they know something the market doesn't.
  • The bullshit that average people can stock pick.
  • The bullshit that (all or even most) can live without bonds and see a substantial net worth that took them 15 years or more of sacrifice halve in front of their eyes.
  • The bullshit that "it will be ok because I can get a job if there is a recession" even though in a recession the economy is stuffed and unemployment rises sharply at the time you need it.
  • The bullshit that you can just "adjust your spending" in a recession or bad sequence of returns, especially for those living a frugal life where there is not much slack in spending to cut from.
There is non-stop bullshit on just about every forum, and most forums have sheeple supporting the bullshit because most people are incapable of critical thinking to try and poke holes before accepting what they read as truth. It is nice to have a forum that consistently and relentlessly calls out the bullshit over and over again, and I haven't found another forum that even comes close.

In regards to the post mentioned, for a withdrawal rates, I use this. I don't see how anyone can not consider it the definitive guide.
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

Good post.  Amidst a thread full of bullshit posts attacking someone for disagreeing with anything MMM has to say (Boofinator).  this is why i spend my time at BH now.


The MMM forums are generally hostile to the first 4 in that list, too. It's not "non-stop" because, as has been pointed out, MMM is more about the lifestyle rather than the numbers.

I don't see point 5 (bonds) as being a particular MMM stipulation. The bond tent has been discussed in these forums and it's recognized that bonds do yield less volatility when withdrawing.

Point 6 -- agreed. This is one of the specific "optimisms" that I'm skeptical about. However, a FIRE failure takes years and getting a job doesn't have to happen immediately at the height of a recession. It can happen when the economy starts to recover.* Take a look at the Y2k retiree (at the bottom of the page):

http://www.retireearlyhomepage.com/reallife18.html

This retiree will make it to 30 years on a 75/25 portfolio but getting a part-time job in, say, 2014-5, would lengthen the timeline and make the portfolio last for 40 years pretty easily.

Point 7 -- in BH land, there's no slack if you're spending $40k/year because they're high rollers. There are threads titled, "Net worth of $3.7M at age 47 - can I retire?" that would receive a far different response on the MMM forums.


* "randomguy" on BH just made a similar comment.

Just to be clear, and I apologise if I wasn't before, I wasn't saying that MMM'ers overall agree with the "bullshit" (I have left many other forums that do), but there is not a constant rapid-fire criticism of bullshit on here the way there is on BH's.

I also disagree with your comment on about BH's being rich. I've seen the occasional person post with 4m and 10m and 20m but I'm not sure why a few people who ask how to manage their large amount of money makes it somehow the norm. Their discussion is aimed at dispelling the bullshit that goes on to varying degrees almost everywhere else, and to put you on a simple path to manage your own wealth by offering a philosophy to consider using as a guide. I'm not sure what the amount of wealth has to do with it really, and actually when people ask if you need to invest differently with 10m to 1m, the answer comes back as no.

I find a lot of value on this forum, which is why I stick around. The value comes from people discussing finances from a point of view of getting out of the rat race and being comfortable on less. The investing part is a subset of it, where as the investing part is the whole thing on BHs, more of a deep-dive.

I also think this thread has taken on a life of it's own (and not a good one). The same with the MMM thread on BH's which I have actively ignored, and I think I'll bail on this one too. Not sure what can be gained from a shit-fight.

bacchi

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Re: Bogleheads Forum
« Reply #57 on: December 19, 2018, 10:06:16 PM »
I also disagree with your comment on about BH's being rich. I've seen the occasional person post with 4m and 10m and 20m but I'm not sure why a few people who ask how to manage their large amount of money makes it somehow the norm.

Without empirical evidence, it's of course just a feeling that the BH crowd lives larger, and seems wealthier, than the MMM crowd. There are certainly more topics there such as "401k limit is $55K - do you max it out?" and "Should I buy a Tesla?" and "Buyer's Remorse on purchasing a Mercedes."

Again, if the "Net worth of $3.7M at age 47 - can I retire?" topic was posted on MMM, the first comments would be, "Why are you spending so much?" and "Sell your home in DC, move somewhere less expensive, and retire already." There's some of that on BH but mostly it's answering the direct, financial, question.

Quote
I find a lot of value on this forum, which is why I stick around. The value comes from people discussing finances from a point of view of getting out of the rat race and being comfortable on less. The investing part is a subset of it, where as the investing part is the whole thing on BHs, more of a deep-dive.

Agreed.

Quote
I also think this thread has taken on a life of it's own (and not a good one). The same with the MMM thread on BH's which I have actively ignored, and I think I'll bail on this one too. Not sure what can be gained from a shit-fight.

Eh, there's nothing wrong with acknowledging differences between forums. MMM is, and always has been, more of a lifestyle/eco/RE blog and forum. BH is more about optimizing investing and taxes, etc. RE is an afterthought, at best.

nereo

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Re: Bogleheads Forum
« Reply #58 on: December 20, 2018, 05:35:05 AM »

I also think this thread has taken on a life of it's own (and not a good one). The same with the MMM thread on BH's which I have actively ignored, and I think I'll bail on this one too. Not sure what can be gained from a shit-fight.

wait, what s*it fight?  I've seen people disagree, but in all it has seemed fairly civil and respectful.  Did i miss something?

RJC

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Re: Bogleheads Forum
« Reply #59 on: December 20, 2018, 05:58:12 AM »
I think this thread has been helpful. It's hard to see the differences in some of these forums especially for newcomers.

harvestbook

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Re: Bogleheads Forum
« Reply #60 on: December 20, 2018, 08:39:31 AM »
I come here for the face punches and go to BH to learn about the best $5,000 watch

Telecaster

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Re: Bogleheads Forum
« Reply #61 on: December 20, 2018, 11:07:16 AM »
I'm new to both this forum and Bogleheads but I've noticed some cross-forum discussions like the one below.

Do they have a valid point? How do you feel about their philosophy? Are the same folks on both?

https://www.bogleheads.org/forum/viewtopic.php?f=1&t=266780

Although this is a long thread already, but there are a couple (IMO) important concepts that haven't been touched on very much, so I'll start back up at the top. 

We all know the 4% SWR is based on past results.  At Bogleheads (generally speaking of course) there is the widely held belief that 4% is in fact too high, and lots recommend 3.5%, 3%, or even lower.   And indeed, the lower the WR, the "safer" you.  But as fattest_foot points out,  that hope of safety requires the guarantee of working longer, or accepting a lower standard of living in retirement.   

I personally believe that in all the endless slicing and dicing of WRs, people are ascribing a precision to the data that does not exist.   The United States, the world, and financial markets, are all radically different then they were 50 or 100 years ago.    But there are other risks besides a too high WR that will blow up your retirement.  Dying for example, as illustrated in this excellent thread:

https://forum.mrmoneymustache.com/welcome-to-the-forum/rich-broke-or-dead-visualizing-probabilities-of-outcomes-in-early-retirement/

And there are other risks that are much harder to quantify like divorce or serious illness.  There can be no perfect safety in retirement.   Yet, there is (literally!) discussion of the merits of a 3.56 vs.  3.66% WR.    Two decimal places!   Again, that is a precision that is unknowable, and ignores even more probable life events.  Remember also that in most scenarios the retiree with a 4% WR becomes filthy rich late in retirement.   

There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.   Most of us will have a backstop of Social Security at some point.   Many people at BH say that getting a side hustle or returning to work is bullshit.  Possibly, but not so fast.  Retirement portfolios go bust due to a poor sequence of returns early in the retirement.   You'll know within a few years of leaving the work force if you are in trouble.   In that case, you probably will be able to go back to work.   Depends on your skill set of course, but most people who have the ability to retire early did so because they developed in demand skill sets.   I don't like the term "side hustle" very much.  I prefer the term "income generating hobby."   If you have an income generating hobby early in your retirement, then you vastly increase your chances of portfolio survival.   Does an "income generating hobby"  sound like work?  Maybe, but working extra years to meet that 3.2% WR is definitely work.   

IMO, the only sensible thing to do is get the WR pretty close to what would have survived in the past and call it good and recognize there may be a need for course corrections along the way.    The second decimal place won't be enough to affect you, and the first one probably won't either.   


maizeman

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Re: Bogleheads Forum
« Reply #62 on: December 20, 2018, 11:13:35 AM »
Well said Telecaster. I'd just add one additional point or extension of something you said.

And there are other risks that are much harder to quantify like divorce or serious illness.  There can be no perfect safety in retirement. 

My personal bar is that, if the event would be something that would dramatically alter my life even if I still had a job, I'm not going to worry too much about the risk that it will also alter my life after I FIRE.

My favorite example of this is the people who use data from Japan and European markets to argue that safe withdrawal rates need to be much lower to (although that don't explicitly state this part) allow you to continue to spend the same amount of money each year uninterrupted while your country is invaded, your nation's government is overthrown, your nation's infrastructure is destroyed by shelling and bombing, and a significant fraction of an entire generation is killed in war either directly (combat) or indirectly (starvation and disease).

Car Jack

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Re: Bogleheads Forum
« Reply #63 on: December 20, 2018, 11:27:28 AM »
I'm on both and gain a lot of good knowledge from both.  Honestly, I'm too old to retire early, even if I quit today.  I'm also on the conservative side, even on the BH forum for my own dealings.  It's served me well.  My plan is to retire when I'm at 50 times spending (which a good market rally would easily put me to in my portfolio at this point).

We probably all agree that the average age at BH is higher than here.  With that comes different questions looking at retirement.  For you guys, child care seems like a big expense.  For me, having been there, I usually use the term "mouse nuts" because its nothing compared to college, health insurance or a black swan event.  RMDs are a big focus at BH.  Social security strategy is a big focus.  Sequence of withdrawals is a big focus.  Not something I even looked at before I turned 50.

Black Swan Events:  I'm just hoping that I never have a year like 2018 again with the black swans landing on my house.  Having first hand knowledge of when a lawyer's work cost $275 an hour, $400 an hour or $500 an hour is not something I'd wish on anyone!

There's absolutely a dichotomy on BH wrt college for the kids.  Long ago, I planned for having to pay $1MM for my 2 boys.  Fortunately, it's been cheaper, but I was ready for that much.  I see a lot on BH where I think people have the view "Let them live in a cardboard box and pay their own way through college".  The other end is like me, where I'll pay for the best, appropriate education possible with strings attached.  Major in engineering....fine.  Major in Art History?  Not getting a dime. 


Boofinator

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Re: Bogleheads Forum
« Reply #64 on: December 20, 2018, 01:11:00 PM »
There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.

Actually, in most cases holding on to a mortgage past retirement worsens survival rates (though of course many factors come into play). Posted here:

https://forum.mrmoneymustache.com/investor-alley/stop-saying-it-is-not-mathematically-correct-to-pay-off-your-mortgage-early!/msg2181733/#msg2181733

nereo

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Re: Bogleheads Forum
« Reply #65 on: December 20, 2018, 02:08:28 PM »
There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.

Actually, in most cases holding on to a mortgage past retirement worsens survival rates (though of course many factors come into play). Posted here:

https://forum.mrmoneymustache.com/investor-alley/stop-saying-it-is-not-mathematically-correct-to-pay-off-your-mortgage-early!/msg2181733/#msg2181733

It seems many of the posts in that thread run contrary to your statement above, including your own post linked here. (
Quote
"... yes, this only refers to someone about to FIRE. If one is early in the savings stage, paying off the mortgage will not help to FIRE earlier under just about any circumstance given today's interest rates (and assuming you can't predict the market)."
[/i])
 Unless I'm missing something?

Boofinator

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Re: Bogleheads Forum
« Reply #66 on: December 20, 2018, 02:23:21 PM »
There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.

Actually, in most cases holding on to a mortgage past retirement worsens survival rates (though of course many factors come into play). Posted here:

https://forum.mrmoneymustache.com/investor-alley/stop-saying-it-is-not-mathematically-correct-to-pay-off-your-mortgage-early!/msg2181733/#msg2181733

It seems many of the posts in that thread run contrary to your statement above, including your own post linked here. (
Quote
"... yes, this only refers to someone about to FIRE. If one is early in the savings stage, paying off the mortgage will not help to FIRE earlier under just about any circumstance given today's interest rates (and assuming you can't predict the market)."
[/i])
 Unless I'm missing something?

I look at it as the optimization of two different objectives in the accumulation phase versus the retirement phase.

During the accumulation phase, the objective is to minimize expected time to FI. This is when you want to go heavy on the riskier / more volatile assets and use some safe leverage, with the expectation that you will reach FI quicker, but with a small likelihood that you might have to work a little longer due to poor sequence of returns.

During the retirement phase, the objective is to maximize the survival rate (to some reasonable number, say 95%). The 4% rule is based on this concept. This is when it is important to consider reduced volatility to minimize the risk from sequence of returns.

Paying off a mortgage earlier, even with lower interest rates, in many cases increases survival rate while simultaneously decreasing final expected value. This makes it a good strategy to consider just before or during FIRE (you've won the game, who cares about final expected value?), but a generally poor strategy during accumulation.

maizeman

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Re: Bogleheads Forum
« Reply #67 on: December 20, 2018, 06:41:35 PM »
There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.

Actually, in most cases holding on to a mortgage past retirement worsens survival rates (though of course many factors come into play). Posted here:

https://forum.mrmoneymustache.com/investor-alley/stop-saying-it-is-not-mathematically-correct-to-pay-off-your-mortgage-early!/msg2181733/#msg2181733

I would agree that if you are going into FIRE with a mortgage with a low interest rate mortgage that has run for a significant part of its term (say 12 years left on a 30 year term) paying off the mortgage increases success relative to continuing to pay it in FIRE. As far as I know, when you brought that point up a month ago, it really was a new insight, and I continue to give you credit for it.

Yet, as we discussed a month ago, your own work also demonstrates that refinancing into a new 30 year term increases success relative to either of the previous two options.

sol

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Re: Bogleheads Forum
« Reply #68 on: December 20, 2018, 06:58:18 PM »
The only thing I strongly dislike about the bogleheads forum is the absolute disdain with which they treat the MMM community.  They are not nice people, on this particular topic. 

So I don't spend time there anymore.  I learned a lot, years ago, but it didn't take me very long to realize that I did not value money for its own sake.  There are more important things in life than dying with the biggest pile of money, and I feel like many of the members over there have a hard time accepting that.

Mighty-Dollar

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Re: Bogleheads Forum
« Reply #69 on: December 20, 2018, 07:14:22 PM »
Best allocation bond/stock ratio from 2000 - 2017
https://www.youtube.com/watch?v=opNohVglLX0

Best allocation bond/stock ratio during Great Depression
https://www.youtube.com/watch?v=ZOXu2cu7ZUw

nereo

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Re: Bogleheads Forum
« Reply #70 on: December 21, 2018, 05:22:09 AM »
The only thing I strongly dislike about the bogleheads forum is the absolute disdain with which they treat the MMM community.  They are not nice people, on this particular topic. 


This is why I've ceased to bring up my involvement on the MMM forum whenever I post on BH.  It gets nasty.  However, I don't find the reverse to be true - I frequently hear people suggest that one should post a question over there to get more detailed feedback.

Boofinator

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Re: Bogleheads Forum
« Reply #71 on: December 21, 2018, 09:43:20 AM »
There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.

Actually, in most cases holding on to a mortgage past retirement worsens survival rates (though of course many factors come into play). Posted here:

https://forum.mrmoneymustache.com/investor-alley/stop-saying-it-is-not-mathematically-correct-to-pay-off-your-mortgage-early!/msg2181733/#msg2181733

I would agree that if you are going into FIRE with a mortgage with a low interest rate mortgage that has run for a significant part of its term (say 12 years left on a 30 year term) paying off the mortgage increases success relative to continuing to pay it in FIRE. As far as I know, when you brought that point up a month ago, it really was a new insight, and I continue to give you credit for it.

Yet, as we discussed a month ago, your own work also demonstrates that refinancing into a new 30 year term increases success relative to either of the previous two options.

Yes, I agree, there are some cases where holding a mortgage early in FIRE makes more sense. But even then, depending on the performance of the market, the optimal choice might be to pay it off at some point later in FIRE.

All of that being said, I am just trying to change the collective wisdom of many around here that it is always better to hold the mortgage. Pre-FIRE, yes, you're almost certainly getting to FI quicker by holding your mortgage at today's rates. But post-FIRE, you can be introducing significant risk of running out of money (and hence no longer being FI or FIRE) by holding on to the mortgage.

spartana

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Re: Bogleheads Forum
« Reply #72 on: December 21, 2018, 10:14:46 AM »
Thanks for your responses. I find it interesting that some folks on the Bogleheads forum think MMM is a "false prophet" and that it's not realistic (or honest) to tell people to live on 40k/yr when his blog makes over 400k yearly. I'm still new so trying to understand some of the dynamics going on here.
You need to poke around this forum awhile longer. There are a lot of us here who have been retired as long as MMM or longer (even before the Great Recession) and have lived on less then MMMs $25k/year the entire time without any side gig or blog income (although some of us crazy types deleted our posts for privacy reasons ;-)). They all seem pretty happy to me (points at self). Everyone's situation is different due to location, family size, medical costs, etc so your ymmv but from my experience most Bogelheads save way too much, spend way to much and retire way to late.
« Last Edit: December 21, 2018, 10:49:08 AM by spartana »

CanuckExpat

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Re: Bogleheads Forum
« Reply #73 on: December 21, 2018, 12:26:39 PM »
I'm still new so trying to understand some of the dynamics going on here.

Generally speaking, for general and beginner investment advice I would steer people towards the Bogleheads Wiki, or Bogleheads forum.
There is great investment discussion here on this forum, but often what I would consider questionable advice sneaks in here, but that is coming from my dogma: own a total US stock market fund, own a total international stock market fund, own a total bond fund; divide between the three in some proportions; maybe tilt to size and value if you feel like you need to do something.

For information and advice on retiring early, you will get better information and advice here, and a healthier serving of face punches (if those are still being served)

Telecaster

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Re: Bogleheads Forum
« Reply #74 on: December 21, 2018, 03:47:13 PM »
There are also a few common sense things that can improve portfolio survival as well.  For example, in many cases simply holding onto a mortgage through retirement improves survival.

Actually, in most cases holding on to a mortgage past retirement worsens survival rates (though of course many factors come into play). Posted here:

https://forum.mrmoneymustache.com/investor-alley/stop-saying-it-is-not-mathematically-correct-to-pay-off-your-mortgage-early!/msg2181733/#msg2181733

I would agree that if you are going into FIRE with a mortgage with a low interest rate mortgage that has run for a significant part of its term (say 12 years left on a 30 year term) paying off the mortgage increases success relative to continuing to pay it in FIRE. As far as I know, when you brought that point up a month ago, it really was a new insight, and I continue to give you credit for it.

Yet, as we discussed a month ago, your own work also demonstrates that refinancing into a new 30 year term increases success relative to either of the previous two options.

Yes, I agree, there are some cases where holding a mortgage early in FIRE makes more sense. But even then, depending on the performance of the market, the optimal choice might be to pay it off at some point later in FIRE.

All of that being said, I am just trying to change the collective wisdom of many around here that it is always better to hold the mortgage. Pre-FIRE, yes, you're almost certainly getting to FI quicker by holding your mortgage at today's rates. But post-FIRE, you can be introducing significant risk of running out of money (and hence no longer being FI or FIRE) by holding on to the mortgage.

You got the wrong guy.  I didn't say it was always better to hold the mortgage.   I said "in many cases" it is better to hold a mortgage.   And in many cases it is.  And this consideration should be of particular interest today, not only for  people who recently purchased at low rates, but people who refinanced older mortgages into lower rates as well and therefore still have many years remaining on their mortgages.  I don't know how big that cohort is, but mortgage questions are a common topic on this board, so I feel it is safe to say that number is close to, if not actually, "many."     

However, my point isn't to re-hash the mortgage debate in this thread.  My point is that the promise of safety requires the guarantee of working longer, or accepting a lower standard of living in retirement.    That is an expensive promise, so I think it is worthwhile to evaluate what the 4% rule is really telling us.  There are ways to insure yourself against portfolio failure (and in my prior post I acknowledged not every solution works for everyone, but some do), and there are other risks besides portfolio failure as well.   

Zikoris

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Re: Bogleheads Forum
« Reply #75 on: December 22, 2018, 10:37:57 AM »
I see very few people on boggleheads say you should work for a long time. I've read it every day for close to a year now and these comments are rare.

What I like about boghleads is they are a non-stop machine of people criticising bullshit
  • The bullshit of market timing.
  • The bullshit of dividend investing.
  • The bullshit that people can sector/market pick implying they know something the market doesn't.
  • The bullshit that average people can stock pick.
  • The bullshit that (all or even most) can live without bonds and see a substantial net worth that took them 15 years or more of sacrifice halve in front of their eyes.
  • The bullshit that "it will be ok because I can get a job if there is a recession" even though in a recession the economy is stuffed and unemployment rises sharply at the time you need it.
  • The bullshit that you can just "adjust your spending" in a recession or bad sequence of returns, especially for those living a frugal life where there is not much slack in spending to cut from.
There is non-stop bullshit on just about every forum, and most forums have sheeple supporting the bullshit because most people are incapable of critical thinking to try and poke holes before accepting what they read as truth. It is nice to have a forum that consistently and relentlessly calls out the bullshit over and over again, and I haven't found another forum that even comes close.

In regards to the post mentioned, for a withdrawal rates, I use this. I don't see how anyone can not consider it the definitive guide.
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

The only two of those I take issue with are the last two.

For jobs, I think most capable people could get SOME sort of job in dire circumstances. It likely wouldn't be in whatever you were doing pre-FIRE. But I remember plenty of help wanted signs in all sorts of low paying stuff last recession. If you're living at all frugally all you'd really need is a bit of part-time work to help ride it out. I think most of us here would be perfectly capable of getting hired at McDonalds, or some shop, or as a temp preparing tax returns during that time of year, and so on. So many options.

For cutting spending, I mean, you can just look at your spending and it should be obvious if there are easy cuts or not. We are generally considered frugal, with our typical $27,000/year household spending. We could cut that by over 30% off of that simply by not going to Asia and Europe for one year. Literally not changing a single other thing in our lives - we'd still do our fitness classes, buy all our video games, live in downtown Vancouver, go to concerts, and do everything else we do now. So it's just not a blanket rule that people can't easily cut expenses. Maybe they can, maybe they can't, but look at the budget and it will be right there.

dandypandys

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Re: Bogleheads Forum
« Reply #76 on: December 22, 2018, 10:43:37 AM »
i read BH a lot when starting out- they were such great help in my case study- and asset allocation help- went with the 3 fund porfolio in the end.
Sad to hear they have disdain for mmm.. i didnt see that back then. But am more of a member here than there, these days.
Anyone know what BH think about Collins stock series and book? I personally love it.

Frankies Girl

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Re: Bogleheads Forum
« Reply #77 on: December 22, 2018, 11:50:15 AM »
i read BH a lot when starting out- they were such great help in my case study- and asset allocation help- went with the 3 fund porfolio in the end.
Sad to hear they have disdain for mmm.. i didnt see that back then. But am more of a member here than there, these days.
Anyone know what BH think about Collins stock series and book? I personally love it.

I've yet to see it mentioned in most any capacity. They appear to be highly disdainful of any FIRE advocates that might be linked to MMM thinking. It's sort of a mental block en mass IMO. I've thrown it into any book rec threads that are active when I visit, but it is almost universally ignored despite the fact that it is a recent book, espouses BH theory almost completely, and is easy to read, and appeals to a younger crowd (which many of their current tried and true recs just don't).


Andy R

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Re: Bogleheads Forum
« Reply #78 on: December 22, 2018, 08:31:51 PM »
I've yet to see it mentioned in most any capacity.

Actually, Taylor himself recommended it in a new thread, then there were a mixed review, or from what I remember maybe 70/30, with the 70 saying that it was nothing new and the lack of bonds are dangerous and the lack of international also not so good (very valid points if you ask me, the lack of bonds and international part), and the others saying it was good. It wasn't a very long thread though, and also I read it a while ago so the 70/30 figure might be off.

Edit: here ya go

Edit: Taylor also put it in a page of books to read.
« Last Edit: December 22, 2018, 08:35:52 PM by Andy R »

sol

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Re: Bogleheads Forum
« Reply #79 on: December 22, 2018, 09:09:24 PM »
very valid points if you ask me, the lack of bonds and international part)

I'm less convinced that the benefits of diversification into so many different asset classes is so vital.  I understand modern portfolio theory, and I've seen all the graphs that show averages and deviations for various mixes, but there has to be a limit, right? 

I think owning two stocks is more risky than owning 500 stocks, but is owning two asset classes more risky than owning 500 asset classes?  Are we each supposed to be exposed to both residential and commercial real estate, with differing loan types, in differing regions?  Do I need to "diversify" into questionable investments like cryptocurrencies, and if so how many of them?  Do I need international bonds in addition to international stocks?  Do my international bonds need to include both international treasury and international municipal bonds?  Do the international stocks need to be split into growth and value, or into international healthcare vs international manufacturing?  At what point are we just being silly in the pursuit of "diversification" that no longer helps, and in some cases (ahem, cryptos) actively undermines returns by stretching to include stupid asset classes?

I think most of these so-called asset classes are just advertising.  They're brokerage wrappers, ways to convince you to buy more of their products.  You need an emerging markets fund!  You need international blue chips!  You need REITs!  No, you really don't.  You need to own the index in the most successful economy in the world, that's it.  Then if you want to, you can lower your long-term returns and control your short-term volatility by adding bonds.  Then if you want to, you can branch out into other assets for fun but they are by no means necessary.

Andy R

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Re: Bogleheads Forum
« Reply #80 on: December 22, 2018, 11:24:31 PM »
I think most of these so-called asset classes are just advertising.  They're brokerage wrappers, ways to convince you to buy more of their products.  You need an emerging markets fund!  You need international blue chips!  You need REITs!  No, you really don't.  You need to own the index in the most successful economy in the world, that's it.  Then if you want to, you can lower your long-term returns and control your short-term volatility by adding bonds.  Then if you want to, you can branch out into other assets for fun but they are by no means necessary.

I don't have a link to it but I recall a vanguard paper showing that with 30% international you had the same return but lower volatility. The only reason I know to not diversify and get this benefit is recency bias.

dandypandys

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Re: Bogleheads Forum
« Reply #81 on: December 23, 2018, 05:52:24 AM »
I've yet to see it mentioned in most any capacity.

Actually, Taylor himself recommended it in a new thread, then there were a mixed review, or from what I remember maybe 70/30, with the 70 saying that it was nothing new and the lack of bonds are dangerous and the lack of international also not so good (very valid points if you ask me, the lack of bonds and international part), and the others saying it was good. It wasn't a very long thread though, and also I read it a while ago so the 70/30 figure might be off.

Edit: here ya go

Edit: Taylor also put it in a page of books to read.

Thanks! Taylor was a great help with getting my 3-Fund in order, nice guy!
I feel like putting the youtube Collins did in a post to bump that thread- will it piss BH off though? The vid is so gooooood.
I hope you all know what I am talking about. :)

MDM

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Re: Bogleheads Forum
« Reply #82 on: December 23, 2018, 10:25:01 AM »
Thanks! Taylor was a great help with getting my 3-Fund in order, nice guy!
I feel like putting the youtube Collins did in a post to bump that thread- will it piss BH off though? The vid is so gooooood.
I hope you all know what I am talking about. :)
No idea what video you mean.  If it seems worthwhile to you and likely to others, why not post it there?  There may or may not be some who won't like it, but that can be said about many things.

dandypandys

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Re: Bogleheads Forum
« Reply #83 on: December 23, 2018, 10:30:20 AM »
This one https://www.youtube.com/watch?v=eikbQPldhPY
But I'm not going to post it, as it could be offensive to some of the old timers on BH.. esp don't want to offend Taylor.
I love it though :) and his book- and althought I didn't take his advice of 100% VTSAX I think it is a great book to dive into again, or keep in mind, when you want to stay the course.

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Re: Bogleheads Forum
« Reply #84 on: December 23, 2018, 10:48:42 AM »
So I've read a couple of Jack Bogle's books, and in them he states that owning international index funds isn't necessary due to US companies being multinational anyway. Yet, a group that calls themselves Bogleheads seems to believe international funds are a necessity.

Can anyone explain this discrepncy?

MDM

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Re: Bogleheads Forum
« Reply #85 on: December 23, 2018, 10:55:34 AM »
This one https://www.youtube.com/watch?v=eikbQPldhPY
But I'm not going to post it, as it could be offensive to some of the old timers on BH.. esp don't want to offend Taylor.
I love it though :) and his book- and althought I didn't take his advice of 100% VTSAX I think it is a great book to dive into again, or keep in mind, when you want to stay the course.
Yeah, that would not fit within that forum's rules. ;)

MDM

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Re: Bogleheads Forum
« Reply #86 on: December 23, 2018, 10:57:50 AM »
So I've read a couple of Jack Bogle's books, and in them he states that owning international index funds isn't necessary due to US companies being multinational anyway. Yet, a group that calls themselves Bogleheads seems to believe international funds are a necessity.

Can anyone explain this discrepncy?
Perhaps because they are people not sheeple?

sol

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Re: Bogleheads Forum
« Reply #87 on: December 23, 2018, 11:00:12 AM »
So I've read a couple of Jack Bogle's books, and in them he states that owning international index funds isn't necessary due to US companies being multinational anyway. Yet, a group that calls themselves Bogleheads seems to believe international funds are a necessity.

Can anyone explain this discrepncy?
Perhaps because they are people not sheeple?

Perhaps because they are sheeple, and have been duped by decades of advertising by brokerage houses and the financial press trying to sell them something new and different?

MDM

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Re: Bogleheads Forum
« Reply #88 on: December 23, 2018, 11:23:11 AM »
So I've read a couple of Jack Bogle's books, and in them he states that owning international index funds isn't necessary due to US companies being multinational anyway. Yet, a group that calls themselves Bogleheads seems to believe international funds are a necessity.

Can anyone explain this discrepncy?
Perhaps because they are people not sheeple?

Perhaps because they are sheeple, and have been duped by decades of advertising by brokerage houses and the financial press trying to sell them something new and different?
Within the Bogleheads® investment philosophy there is plenty of room for individual flavoring.  It's possible to deviate from the one dimensional line between 100% VTSAX and 100% VBTLX without committing apostasy.

sol

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Re: Bogleheads Forum
« Reply #89 on: December 23, 2018, 11:32:00 AM »
Within the Bogleheads® investment philosophy there is plenty of room for individual flavoring.  It's possible to deviate from the one dimensional line between 100% VTSAX and 100% VBTLX without committing apostasy.

I agree, tons of room! 

But the questions wasn't "why do bogleheads deviate from Bogle's recommendation?" it was "why do boggleheads insist that you HAVE to deviate from Bogle's recommendation?"  Bogle said you don't need it, the bogleheads say you do need it.  This isn't a question of whether you have the freedom to choose, it's a question of why that community insists that you don't.

I don't mean to come down on the BH crowd, we all have our blind spots and their advice is generally good for people who expect to work long profitable careers and then retire into the 1%. 
« Last Edit: December 23, 2018, 11:46:15 AM by sol »

Telecaster

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Re: Bogleheads Forum
« Reply #90 on: December 23, 2018, 12:17:16 PM »
very valid points if you ask me, the lack of bonds and international part)

I'm less convinced that the benefits of diversification into so many different asset classes is so vital.  I understand modern portfolio theory, and I've seen all the graphs that show averages and deviations for various mixes, but there has to be a limit, right? 


Cosigned.  In theory there could be an improvement, so some international diversification isn't a bad thing to do.   And international companies tend to be more heavily weighted in different sectors than U.S. companies.   So you get a bit of sector diversification there.   

But how much difference does it make really?   I do have an international fund, but I don't think it is a requirement.   You get more benefit from saving lots.   

MDM

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Re: Bogleheads Forum
« Reply #91 on: December 23, 2018, 12:39:50 PM »
Within the Bogleheads® investment philosophy there is plenty of room for individual flavoring.  It's possible to deviate from the one dimensional line between 100% VTSAX and 100% VBTLX without committing apostasy.

I agree, tons of room! 

But the questions wasn't "why do bogleheads deviate from Bogle's recommendation?" it was "why do boggleheads insist that you HAVE to deviate from Bogle's recommendation?"  Bogle said you don't need it, the bogleheads say you do need it.  This isn't a question of whether you have the freedom to choose, it's a question of why that community insists that you don't.

I don't mean to come down on the BH crowd, we all have our blind spots and their advice is generally good for people who expect to work long profitable careers and then retire into the 1%.
Sure, some people in the bogleheads forum say you need it.  Much as some people in the MMM forum say some things with which not everyone agrees. :)

dustinst22

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Re: Bogleheads Forum
« Reply #92 on: December 23, 2018, 02:16:39 PM »
So I've read a couple of Jack Bogle's books, and in them he states that owning international index funds isn't necessary due to US companies being multinational anyway. Yet, a group that calls themselves Bogleheads seems to believe international funds are a necessity.

Can anyone explain this discrepncy?

This actually doesn't come from the Boggleheads, but from Vanguard's own excellent research:

https://personal.vanguard.com/pdf/icriecr.pdf

No major target date fund has followed his advice, including of course Vanguard's.  The advice to not invest internationally is American exceptionalism writ large.
« Last Edit: December 23, 2018, 02:20:37 PM by dustinst22 »

Gin1984

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Re: Bogleheads Forum
« Reply #93 on: December 23, 2018, 03:03:15 PM »
I'm on both and gain a lot of good knowledge from both.  Honestly, I'm too old to retire early, even if I quit today.  I'm also on the conservative side, even on the BH forum for my own dealings.  It's served me well.  My plan is to retire when I'm at 50 times spending (which a good market rally would easily put me to in my portfolio at this point).

We probably all agree that the average age at BH is higher than here.  With that comes different questions looking at retirement. For you guys, child care seems like a big expense.  For me, having been there, I usually use the term "mouse nuts" because its nothing compared to college, health insurance or a black swan event.  RMDs are a big focus at BH.  Social security strategy is a big focus.  Sequence of withdrawals is a big focus.  Not something I even looked at before I turned 50.

Black Swan Events:  I'm just hoping that I never have a year like 2018 again with the black swans landing on my house.  Having first hand knowledge of when a lawyer's work cost $275 an hour, $400 an hour or $500 an hour is not something I'd wish on anyone!

There's absolutely a dichotomy on BH wrt college for the kids.  Long ago, I planned for having to pay $1MM for my 2 boys.  Fortunately, it's been cheaper, but I was ready for that much.  I see a lot on BH where I think people have the view "Let them live in a cardboard box and pay their own way through college".  The other end is like me, where I'll pay for the best, appropriate education possible with strings attached.  Major in engineering....fine.  Major in Art History?  Not getting a dime.
I would disagree.  I was in graduate school when I had my eldest daughter.  Her daycare, on campus, cost more than my tuition.

TomTX

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Re: Bogleheads Forum
« Reply #94 on: December 23, 2018, 05:56:37 PM »
Thanks for mentioning me with some forum legends, @fattest_foot. A lot of the credit (at least from my perspective) for continuing to make the case that the risk of working to long and dying too soon should be taken just as seriously as leaving work too early and going broke goes to @Retire-Canada I make mathematical models, that guy writes with passion about the topic.*

*And gets on my case when I start forgetting that the easiest way to guarantee I won't run out of money is to keep working until I die at my desk. ;-)

Friend of mine did that less than a week ago. Not literally at his desk - he left work early not feeling well, then died.

TomTX

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Re: Bogleheads Forum
« Reply #95 on: December 23, 2018, 06:29:07 PM »
I also admit I've found MMM's optimism to be a little... much. I mean, it's easy to be optimistic when your little retirement project turned into a huge moneymaker, and your portfolio had the benefit of a nice long bull market. Once you're past the Scylla and Charybdis of SORR, the sailing tends to be a lot smoother.

If you take the more "conservative" approach you are typically trading for a guaranteed several years of additional work to insure against small-to-moderate chance of needing to use flexibility* in retirement.

*Maybe a part time job for a couple years, or selling stuff on Craigslist/ebay/whatever, or CC churning, or reducing expenses by skipping planned traveling or whatever, etc.

nereo

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Re: Bogleheads Forum
« Reply #96 on: December 24, 2018, 07:22:06 AM »
I also admit I've found MMM's optimism to be a little... much. I mean, it's easy to be optimistic when your little retirement project turned into a huge moneymaker, and your portfolio had the benefit of a nice long bull market. Once you're past the Scylla and Charybdis of SORR, the sailing tends to be a lot smoother.

If you take the more "conservative" approach you are typically trading for a guaranteed several years of additional work to insure against small-to-moderate chance of needing to use flexibility* in retirement.

*Maybe a part time job for a couple years, or selling stuff on Craigslist/ebay/whatever, or CC churning, or reducing expenses by skipping planned traveling or whatever, etc.

This seems to be a perpetual source of disagreement between the two forums.  BH posters argue that finding additional work if necessary will not be nearly as easy as posters on this forum suggest (and that needing to work means you ‘failed’ in retirement planning).  By contrast, posters here will point out that working longer means fewer years retired to prevent an increasingly diminishing chance of portfolio failure. 
Both have valid points, and a both can be mediated somewhat - it just comes down to what concerns you more.

TomTX

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Re: Bogleheads Forum
« Reply #97 on: December 24, 2018, 09:34:15 AM »
This seems to be a perpetual source of disagreement between the two forums.  BH posters argue that finding additional work if necessary will not be nearly as easy as posters on this forum suggest (and that needing to work means you ‘failed’ in retirement planning).  By contrast, posters here will point out that working longer means fewer years retired to prevent an increasingly diminishing chance of portfolio failure. 
Both have valid points, and a both can be mediated somewhat - it just comes down to what concerns you more.

Agreed.  Bogleheads also tend to retire later, which does make returning to work somewhat more of a concern. They also seem FAR more risk averse in general, and it seems to be an emotional thing - not math. Which I get. I have feeling of risk aversion, but try to make logic take the center stage.

For me, weighing:

100% chance of working 3-5 more years to get to 3% WR

Against

5% chance of needing more income (max 3 years of part time work during the first 10 years of ER)  due to using a 4% WR

...seems like a pretty simple and easy to understand equation.

nereo

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Re: Bogleheads Forum
« Reply #98 on: December 24, 2018, 10:09:28 AM »
...and that’s where income levels, age, future plans and spending rates become so important.

The view of a couple of professional DINKs earning $200k and wanting to spend $60k/year in retirement is much different from a household with a SAHP earning $70k and needing $40k in retirement.  The former could easily reduce their WR considerably by working another couple of years. The latter might require a full decade, and at the expense of missing more time with their growing children.  The DINKs might not care about leaving any inheritance behind, whereas the larger family might want/need to support their kids through college.

Cassie

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Re: Bogleheads Forum
« Reply #99 on: December 24, 2018, 12:59:14 PM »
Finding work after age 50 is difficult. DH knows from personal experience.