The Power of Dumb Investing

Research on Safe Withdrawal Rates

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unclemick
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The Power of Dumb Investing

Post by unclemick » Thu Mar 17, 2005 8:23 am

As a take off to the annuity thread - and given the current environment.

Suppose you are planning to ER today - and have no expertise in stocks, bonds, real estate, etc., etc.

What would you do?

hocus2004
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Post by hocus2004 » Thu Mar 17, 2005 9:55 am

I would get about the business of developing some expertise.

I would pray that someone would point me to a board like this, and when God answered that prayer, I would begin my review of the Post Archives. I would read the good stuff more than once, enough times for me to gain a firm handle on at least the basics.

Then I would make the best investment choices I was able to make, leaving myself open to the option of changing my plan as adjustments became necessary and as I gained a better idea of what it is that I am trying to do and how best to go about doing it.

I would also try to count my blessings, realizing that, while I may not know a whole heck of a lot about invvesting, I must know a whole heck of a lot about saving or I wouldn't be in a position to retire early in the first place. I would comfort myself in the knowledge that a person able to learn about the one important money matter probably possesses what it takes to learn about the other as well.

Finally, I would put up a post in favor of revocation of intercst's posting priviledges at all of the various Retire Early/FIRE/Passion Saving boards.

Just kidding about that last one. Sort of.

Mike
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Post by Mike » Thu Mar 17, 2005 7:19 pm

...and have no expertise...
I would try to get some.

JWR1945
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Post by JWR1945 » Thu Mar 17, 2005 8:16 pm

unclemick wrote:As a take off to the annuity thread - and given the current environment.

Suppose you are planning to ER today - and have no expertise in stocks, bonds, real estate, etc., etc.

What would you do?
I would preserve capital. Cash at zero percent nominal interest is much better than a 10% or 20%+ loss.

Of course, if I had no expertise, I might not know that I need to preserve capital.

I would proceed cautiously over the next one to two years. As long as the nest egg is protected from sudden loss, there is plenty of time to think things through.

Have fun.

John R.

unclemick
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Post by unclemick » Fri Mar 18, 2005 6:36 am

Hint

Vanguard Target Retirement Series - Income. Ignore the age write up.

It doesn't matter if you are 45 or 65 - IF you are in retirement. Live off the current yield.

Read and study - or forget it and enjoy your retirement.

P.S. buried within - 20% stocks plus 25% inflation protected securicities gives some hope against long term inflation.

peteyperson
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Post by peteyperson » Sat Mar 19, 2005 1:03 am

unclemick wrote:As a take off to the annuity thread - and given the current environment.

Suppose you are planning to ER today - and have no expertise in stocks, bonds, real estate, etc., etc.

What would you do?
I would spend as long as it took to understand what I didn't know. I would not go to an advisor as they could not teach me what I needed to know. I may choose to use one after, but like with salespeople I like to know the subject matter beforehand so I can determine whether they're talking shit or actually know their subject. More often than not I realise Iknow more than them after putting myself thru a mini training course!

In the meantime I would dump the max yearly £15k into UK I-Bonds with their tax-free, no market price volatility position, dump £7k max into tax-free cash ISA offering non-inflation linked 1% above current inflation and the rest in a plain Jane savings account instant access. Would diversify the savings institutions till I knew how to proceed.

Petey

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