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Time to buy SQQQ / TTT / TZA?
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Anybody looking for a ServiceNow job?
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Thank you!!
Just dropped 3k in Safemoon.
If it dies, it dies.
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Anyone follow Millennial Revolution?
You’ll die long before 100, don’t worry 😂
Mentor
No.
Mentor
I can’t recite the trinity study, but if 25x @ a 4% SWR is back tested to 30 years — I don’t think it’s as easy as doubling your number to 50x. You’d need to do some serious backtesting to prove out. The last thing you want to do is be eating Old Roy dog food @ 80 because you ran out of $$$
In theory, but I think you need to model out economic downturns and look at how damaging a 4% withdrawal can be when the market loses 10%. If you're doing FatFIRE, maybe you'll survive by only going lean during bear markets and fat during bull markets. Or maybe you have significant investment in stable/conservative investments. Or in a nontraditional high cash flow vehicle.
Too many factors to say just yes or no. Like most questions, you just have to model it out.
Also, I'll never reach FIRE before 59 unless I start a business. But even if I did, i'd still try to start a business, do part time work, or freelance because that's a loooooot of uncertainty. Think about life 60 years ago and how much standards and cost of living has changed
Different ways to think about it. 4% drawdown on exact cost of living is potentially problematic, unless you’re heavy in stocks. If you save enough you only need to do 3% draw down, you’ll be that much less likely to run out
Mentor
Your question can only be answered in probabilities, not in a yes or no fashion. The chances of 4% SWR lasting 60 years is definitely not 100% but they are also not zero. The worst case scenario would be a steep market drop lasting couple years right after you retire. That will certainly kill it with close to no chance of recovery. On the other hand, if you retired in 2009 at the bottom with 4% withdrawal rate, you have far higher chances of stretching your portfolio because you would be at much higher number today.
Sequence of returns risk is significant in your scenario. Proceed with caution (or revise your numbers)
You need to do a Monte Carlo analysis. If your portfolio undergoes a significant downturn early on, your retirement would be compromised.
It also depends on the size of your portfolio and how many ppl you’re planning to support on it. If you’re aiming for $10M for yourself (no SO/kids) then there’s a good chance it should last you a while.
If you’re aiming for $1-3M, might be tough during the recession years given sequence of returns risk.
Why not work 3-5 more years and have more of a nest egg?
Or go into some kind of contract roll? My plan once I hit FI is to do projects from time to time via contracting. I’ve been angling my career to make this a realistic possibility.
While the sequencing risk is real, I’m not sure it would influence my decision to retire at 40 if that’s your goal. If there was a major downturn early, you’re still young enough to go back to work. I might think of it as ‘If 4% of my current portfolio (not beginning portfolio) isn’t enough to live on, I’ll go back to work for a few years’
But agree with above poster that 45 sounds better, realistically that puts your planning horizon down to 40 years