My account has market swings of $40k in a day, the market brought it down $300k in one year. I don't flinch, I also don't have much emotions regarding my plan. I just follow it.
Just curious, and I'm not doubting you. Why do you believe this about yourself? Do you have low fixed costs relative to your passive income? HAve you audited or vetted your own behavior? Or do you just feel this way because of confidence?
During the accumulation stage, the fluctuations are meaningless. If I was retiring with a 4% SWR and the market dropped the first year, I would be concerned even if the models showed that based on the worst sequence I was still safe. During the accumulation stage if the markets dropped 50% the year before I was going to retire, I would just work another year or even two to ensure that I was safe. During the accumulation stage, I believe most people should be 100% equity. If they can't handle the market swings then they need to create a portfolio that works for their emotional state. I also think that people that are paying off their 4% fixed rate 30 year mortgages are crazy. They are emotionally feeling better about getting rid of debt, even though it is hurting their financial well being. If they had the facts, they would be emotionally feel safer keeping their mortgage.
I look forward to seeing you grow your knowledge over the next few years. I think your emotional state will change.
Good Luck!
Can I make another note of mortgages and such. I am so not married to the idea of owning a home. It would be cool, I like going on redfin and imagining things, but I'm also not saving for a downpayment. In fact, more and more it is just seeming like it isn't worth it to do so vs keeping my money in the market. Really I would only save for a down payment if I switched jobs and negotiated a much higher salary relative to whatever cost of living I have. Or, through some other means, my income increased relative to my current housing market, OR the housing market I planned to live in.
I also would only move into a house if the cost of staying there was low. Outside of any tax advantages or equity appreciate, it would have to comparable to my current rent, which is 15% of my take home pay. I think I mentioned earlier, but I would pretty much follow DR's advice and go with less than 25% on a 15 year. I actually realized something. At this level, I could pretty much be FIRE, since the option would be available to take on room mates or airbnb to cover the rest of the cost. I'm not saying I'd go this route necessarily but it would be comforting.
Here is the thing. Looking at the country as a whole. There are some areas where I could do this
in less than decade. Places I wouldn't mind working, like austin, rahleigh, atlanta, colorodo, etc. etc. OR I could go to a HCOL area like SF or LA, negotiate a higher salary, work for a decade, and then geo arbitrage.
Now I know this is a lot of planning. But when I say I want a paid off house asap. Those are the assumptions I'm working with. What I wouldn't do is go get a house tommorow, put it on a 30 year loan, deal with house BS, pay closing, inspection, fees, insurance, and property taxes, spend time doing maintence, and then pat myself on the back for being a grown upy adult. And then justify the whole thing because I'm investing the difference. I'd rather avoid that, invest the difference anyway, live in my tiny apt (which is across from my job and gives me an incredible 5 minute walking commute), and utilize the flexibility of being a single 30 year to improve my financial decision 5,10,15, 200 years later (Why not live to 200 YOLO).
I'm not saying this path is for everyone, but those are the assumptions I'm dealing with. But they are the reason I think mortgaging a 30 year place is kind of insane relative to the alternative.
Also I'm curious. Are people really taking 4% SWRs and having that match closely with their expected costs. I actually think that is a bit pushing it. I could understand if your fixed costs were like 15k and 4% gave you 20,30, or 40k per year. But if you absolutely NEED that 4% to the extent that you'll be hosed if you don't get it, then I can understand glide paths and such. Ionno, people seem to really like the 4%, when I say it is important to give yourself some wiggle room.