Possible FIRE FAQ
Posted: Mon Oct 06, 2003 12:29 pm
FIRE FAQ
Q: Fire?
A: Financial independence/ retire early. Originated by Wanderer.
Q: SWR?
A: Safe withdrawal rate. The answer to bylo's question "How much of my
savings can I withdraw in each year of my retirement without incurring an
undue risk of depleting my assets?"
http://www.bylo.org/saferetr.html
Gummy:
1. A number, expressed as a percentage (like 4%), called the SWR
... that's the Rate word.
2. This Rate determines (in some prescribed manner) how much to withdraw
from some portfolio value
... that's the Withdrawal word.
3. The result of withdrawing at this Rate will be that your portfolio will
last until you drop dead (or for 30 or 40 years or whatever)
... that's the Safe wordhttp://home.golden.net/~pjponzo/Safe-Withdrawals.htm
and:
When people talk about Safe Withdrawal Rates (see Bylo's list) they usually
assume certain Rules like
* rebalancing your portfolio at fixed intervals (annually, for example)
* maintaining some fixed allocation of assets (like 80% stocks + 20%
bonds, for example)
* withdrawing a certain percentage of your portfolio each year (like 5%,
for example)
* increasing withdrawal amounts with inflation (at 3%, perhaps)
http://home.golden.net/~pjponzo/sensibl ... rawals.htm
Some people seem to have unusually strongly held preferences on how to estimate or calculate a SWR. Sometimes they like to define their favorite as the only correct SWR.
Of course one can consider withdrawals as a constant percentage of the portfolio:
http://www.efficientfrontier.com/ef/998/hell.htm
Or consider "the other swr," sensible withdrawal rates:
http://home.golden.net/~pjponzo/sensibl ... rawals.htm[/quote]
What web sites have FIRE related information?:
Index fund FAQ at NFB
http://nofeeboards.com/docs/faq.html
Gummy Stuff:
http://home.golden.net/~pjponzo/gummy_stuff.htm
Efficient Frontier
http://www.efficientfrontier.com/
Bylo:
http://www.bylo.org/saferetr.html
Raddr
When to rebalance
Enhanced Monte Carlo simulation
Alterations in returns sequence
Mean Reversion
Gordon Equation
Life Expectancy and retirement withdrawals
And more: http://raddr.freehostingpro.com/
FIRE calculators
Cap'n Bill's FIREcalc
http://www.capn-bill.com/fire/
Chips: with an implicit strong recommendation from JohnR, I think, in his frequent use of it.
http://www.i-orp.com/
Chips: This calculator uses a powerful mathematical optimization technique, linear programming, in deriving its answers. Some retirement calculators that are over-simplified.
Retire Early Home Page
http://www.retireearlyhomepage.com/
(see footnote)
Vicki and Paul Terhorst Travel, Early Retirement, and Contemplation Page
http://www.geocities.com/TheTropics/Shores/5315/
Trinity Study at AAII:
http://www.aaii.com/promo/mstar/feature.shtml
(see footnote)
footnote:
The Trinity Study and REHP study are based on a time with high real stock returns (in the 6-7% range) There is a significant probability of lower future market returns and lower "safe" withdrawal rates (at least for investors using an S&P 500 or total stock market based approach)
AAII:
www.aaii.com
(some information restricted to members)
IRA information:
http://www.irs.gov/formspubs/page/0,,id=12598,00.html
IRA distributions can be taken early if you follow certain rules.
You can receive distributions from your traditional IRA that are part of a series of substantially equal payments over your life (or your life expectancy), or over the lives (or the joint life expectancies) of you and your beneficiary, without having to pay the 10% additional tax, even if you receive such distributions before you are age 59½. You must use an IRS-approved distribution method and you must take at least one distribution annually for this exception to apply. The required minimum distribution method, when used for this purpose, results in the exact amount required to be distributed, not the minimum amount.
http://www.fincalc.com/
chips: Calculators there offer quick (but possibly over-simplified) answers to questions like these:
How will retirement impact my cost of living? (not written yet)
How much will I need to save for retirement?
What retirement can I afford on my current course? (not written yet)
Social Security retirement income estimator
What is the impact of inflation on retirement spending? (not written yet)
I'm retired, how long will my money last? (not written yet)
I'm retired, what is my life expectancy? (not written yet)
Should I try to convert discretionary funds to savings?
Becoming a millionaire
Income generated by a savings plan.
How long will it take to double my money?
How long until my savings reach my goal?
Save now vs. save later calculator
How much should I save to reach my goal?
What will my current savings grow to?
What is the rate of return on an investment?
How do taxes and inflation impact my return?
What is my effective annual yield
Internet Acronyms
http://www.gaarde.org/acronyms/
http://emoticonuniverse.com/slang/
Interesting NFB Threads
Wanderer's practical fire analysis
http://nofeeboards.com/boards/viewtopic ... ight=#p521
JWR Fire Thresholds
http://nofeeboards.com/boards/viewtopic.php?t=129
Raddr on the unlucky Y2K retiree
http://nofeeboards.com/boards/viewtopic.php?p=770#p770
Raddr on the importance of the sequence of returns
http://nofeeboards.com/boards/viewtopic.php?t=119
Bensolar and valuation effect on swr
http://nofeeboards.com/boards/viewtopic ... 1046#p1046
and
http://nofeeboards.com/boards/viewtopic ... 3005#p3005
andrew61 and Terhorsts
http://nofeeboards.com/boards/viewtopic ... 3253#p3253
life expectancy and swr
http://nofeeboards.com/boards/viewtopic ... 5860#p5860
JWR and market timing
http://nofeeboards.com/boards/viewtopic ... 5071#p5071
FMO Gary Eldred and Real Estate
http://nofeeboards.com/boards/viewtopic.php?t=1185
Gordon Eq and future returns by raddr
http://www.nofeeboards.com/boards/viewt ... 8629#p8629
Therealchips the utility of money and personal life expectancy
http://www.nofeeboards.com/boards/viewt ... 7126#p7126
FIRE Books
Cashing in on the American Dream: How to Retire at 35
Paul Terhorst
http://www.amazon.com/exec/obidos/tg/de ... 553052896/
YMOYL by Dominguez and Robbins
(aka Your Money or Your Life: Transforming Your Relationship With Money and Achieving Financial Independence )
http://www.amazon.com/exec/obidos/ASIN/0140286780/
Hyperborea points out that the investing advice in the book is highly questionable. I think people mostly like the other parts.
How to Retire Early and Live Well with Less than a Million Dollars
Gillette Edmunds
Dual: A lot of practical advice both for saving for retirement and investing afterwards from someone who has actually done it. Short on justification for the advice other than the author's personal experience. There is a dark tone to the discussion on the personal side with talk of Edmunds' divorce and more than one reference to suicide if your investments go against you. Ends on an upbeat note giving positive advice for handling market downturns.
http://www.amazon.com/exec/obidos/tg/de ... 580622011/
The Millionaire Next Door, The Surprising Secrets of America's Wealthy by Thomas J. Stanley and William D. Danko.
Reviews located by Chips:
http://www.washingtonpost.com/wp-srv/st ... xtdoor.htm and
http://www.bookbrowse.com/dyn_/title/titleID/242.htm
http://www.dealtime.com/xMPR-~PD-486536 ... ~RI-985455
Clutter's Last Stand by Don Aslett
http://www.amazon.com/exec/obidos/tg/de ... 898791375/
Not for Packrats Only by Don Aslett
http://www.amazon.com/exec/obidos/tg/de ... 452265932/
The Joy of Not Working by Ernie Zelinski
Karma: is good for getting you in the right frame of mind. Looks like he is issuing another edition this month.
http://www.amazon.com/exec/obidos/ASIN/1580085520/
Get a Life: You Don't Need a Million to Retire Well by Ralph Warner
Dual: The author goes a little bit overboard for my taste, but the emotional/social part of retirement is as important as the financial IMO. The author has a good discussion about how to do volunteering so you don't end up stuffing envelopes and answering phones (unless you want to).
The Intelligent Asset Allocator by Wm. Bernstein
Tuffy88: His first book, about the best index asset allocation book I have read
Common Sense on Mutual Funds by Bogle
Four Pillars by Bernstein
Financial Peace Revisited by Dave Ramsey
Financial Peace Workbook by Dave Ramsey
Smart Couples Finish Rich by David Bach
The Finish Rich Workbook by David Bach
How to get out of debt, stay out of debt & live prosperously
by Jerrold Mundis
Peteyperson: key book to help people clear debt
to start on the path to FIRE - many people cut back to pay off
debt, realise they have spare cash having done that for 2 years
and want to know where to put it. So books on personal finance
lay the groundwork.)
The Richest Man in Babylon
WiseNlucky: "had profound impact on me."
A Modest Home Study Course from William Bernstein:
http://www.efficientfrontier.com/reading.htm
Investing in Real Estate By andrew Mclean and Gary Eldred
(nice comparison of stock investments vs real estate in the 4th Ed based on current relative dividends/rents)
Make Money with Condominiums and Townhouses
Gary Eldred
Q: Fire?
A: Financial independence/ retire early. Originated by Wanderer.
Q: SWR?
A: Safe withdrawal rate. The answer to bylo's question "How much of my
savings can I withdraw in each year of my retirement without incurring an
undue risk of depleting my assets?"
http://www.bylo.org/saferetr.html
Gummy:
1. A number, expressed as a percentage (like 4%), called the SWR
... that's the Rate word.
2. This Rate determines (in some prescribed manner) how much to withdraw
from some portfolio value
... that's the Withdrawal word.
3. The result of withdrawing at this Rate will be that your portfolio will
last until you drop dead (or for 30 or 40 years or whatever)
... that's the Safe wordhttp://home.golden.net/~pjponzo/Safe-Withdrawals.htm
and:
When people talk about Safe Withdrawal Rates (see Bylo's list) they usually
assume certain Rules like
* rebalancing your portfolio at fixed intervals (annually, for example)
* maintaining some fixed allocation of assets (like 80% stocks + 20%
bonds, for example)
* withdrawing a certain percentage of your portfolio each year (like 5%,
for example)
* increasing withdrawal amounts with inflation (at 3%, perhaps)
http://home.golden.net/~pjponzo/sensibl ... rawals.htm
Some people seem to have unusually strongly held preferences on how to estimate or calculate a SWR. Sometimes they like to define their favorite as the only correct SWR.
Of course one can consider withdrawals as a constant percentage of the portfolio:
http://www.efficientfrontier.com/ef/998/hell.htm
Or consider "the other swr," sensible withdrawal rates:
http://home.golden.net/~pjponzo/sensibl ... rawals.htm[/quote]
What web sites have FIRE related information?:
Index fund FAQ at NFB
http://nofeeboards.com/docs/faq.html
Gummy Stuff:
http://home.golden.net/~pjponzo/gummy_stuff.htm
Efficient Frontier
http://www.efficientfrontier.com/
Bylo:
http://www.bylo.org/saferetr.html
Raddr
When to rebalance
Enhanced Monte Carlo simulation
Alterations in returns sequence
Mean Reversion
Gordon Equation
Life Expectancy and retirement withdrawals
And more: http://raddr.freehostingpro.com/
FIRE calculators
Cap'n Bill's FIREcalc
http://www.capn-bill.com/fire/
Chips: with an implicit strong recommendation from JohnR, I think, in his frequent use of it.
http://www.i-orp.com/
Chips: This calculator uses a powerful mathematical optimization technique, linear programming, in deriving its answers. Some retirement calculators that are over-simplified.
Retire Early Home Page
http://www.retireearlyhomepage.com/
(see footnote)
Vicki and Paul Terhorst Travel, Early Retirement, and Contemplation Page
http://www.geocities.com/TheTropics/Shores/5315/
Trinity Study at AAII:
http://www.aaii.com/promo/mstar/feature.shtml
(see footnote)
footnote:
The Trinity Study and REHP study are based on a time with high real stock returns (in the 6-7% range) There is a significant probability of lower future market returns and lower "safe" withdrawal rates (at least for investors using an S&P 500 or total stock market based approach)
AAII:
www.aaii.com
(some information restricted to members)
IRA information:
http://www.irs.gov/formspubs/page/0,,id=12598,00.html
IRA distributions can be taken early if you follow certain rules.
You can receive distributions from your traditional IRA that are part of a series of substantially equal payments over your life (or your life expectancy), or over the lives (or the joint life expectancies) of you and your beneficiary, without having to pay the 10% additional tax, even if you receive such distributions before you are age 59½. You must use an IRS-approved distribution method and you must take at least one distribution annually for this exception to apply. The required minimum distribution method, when used for this purpose, results in the exact amount required to be distributed, not the minimum amount.
http://www.fincalc.com/
chips: Calculators there offer quick (but possibly over-simplified) answers to questions like these:
How will retirement impact my cost of living? (not written yet)
How much will I need to save for retirement?
What retirement can I afford on my current course? (not written yet)
Social Security retirement income estimator
What is the impact of inflation on retirement spending? (not written yet)
I'm retired, how long will my money last? (not written yet)
I'm retired, what is my life expectancy? (not written yet)
Should I try to convert discretionary funds to savings?
Becoming a millionaire
Income generated by a savings plan.
How long will it take to double my money?
How long until my savings reach my goal?
Save now vs. save later calculator
How much should I save to reach my goal?
What will my current savings grow to?
What is the rate of return on an investment?
How do taxes and inflation impact my return?
What is my effective annual yield
Internet Acronyms
http://www.gaarde.org/acronyms/
http://emoticonuniverse.com/slang/
Interesting NFB Threads
Wanderer's practical fire analysis
http://nofeeboards.com/boards/viewtopic ... ight=#p521
JWR Fire Thresholds
http://nofeeboards.com/boards/viewtopic.php?t=129
Raddr on the unlucky Y2K retiree
http://nofeeboards.com/boards/viewtopic.php?p=770#p770
Raddr on the importance of the sequence of returns
http://nofeeboards.com/boards/viewtopic.php?t=119
Bensolar and valuation effect on swr
http://nofeeboards.com/boards/viewtopic ... 1046#p1046
and
http://nofeeboards.com/boards/viewtopic ... 3005#p3005
andrew61 and Terhorsts
http://nofeeboards.com/boards/viewtopic ... 3253#p3253
life expectancy and swr
http://nofeeboards.com/boards/viewtopic ... 5860#p5860
JWR and market timing
http://nofeeboards.com/boards/viewtopic ... 5071#p5071
FMO Gary Eldred and Real Estate
http://nofeeboards.com/boards/viewtopic.php?t=1185
Gordon Eq and future returns by raddr
http://www.nofeeboards.com/boards/viewt ... 8629#p8629
Therealchips the utility of money and personal life expectancy
http://www.nofeeboards.com/boards/viewt ... 7126#p7126
FIRE Books
Cashing in on the American Dream: How to Retire at 35
Paul Terhorst
http://www.amazon.com/exec/obidos/tg/de ... 553052896/
YMOYL by Dominguez and Robbins
(aka Your Money or Your Life: Transforming Your Relationship With Money and Achieving Financial Independence )
http://www.amazon.com/exec/obidos/ASIN/0140286780/
Hyperborea points out that the investing advice in the book is highly questionable. I think people mostly like the other parts.
How to Retire Early and Live Well with Less than a Million Dollars
Gillette Edmunds
Dual: A lot of practical advice both for saving for retirement and investing afterwards from someone who has actually done it. Short on justification for the advice other than the author's personal experience. There is a dark tone to the discussion on the personal side with talk of Edmunds' divorce and more than one reference to suicide if your investments go against you. Ends on an upbeat note giving positive advice for handling market downturns.
http://www.amazon.com/exec/obidos/tg/de ... 580622011/
The Millionaire Next Door, The Surprising Secrets of America's Wealthy by Thomas J. Stanley and William D. Danko.
Reviews located by Chips:
http://www.washingtonpost.com/wp-srv/st ... xtdoor.htm and
http://www.bookbrowse.com/dyn_/title/titleID/242.htm
http://www.dealtime.com/xMPR-~PD-486536 ... ~RI-985455
Clutter's Last Stand by Don Aslett
http://www.amazon.com/exec/obidos/tg/de ... 898791375/
Not for Packrats Only by Don Aslett
http://www.amazon.com/exec/obidos/tg/de ... 452265932/
The Joy of Not Working by Ernie Zelinski
Karma: is good for getting you in the right frame of mind. Looks like he is issuing another edition this month.
http://www.amazon.com/exec/obidos/ASIN/1580085520/
Get a Life: You Don't Need a Million to Retire Well by Ralph Warner
Dual: The author goes a little bit overboard for my taste, but the emotional/social part of retirement is as important as the financial IMO. The author has a good discussion about how to do volunteering so you don't end up stuffing envelopes and answering phones (unless you want to).
The Intelligent Asset Allocator by Wm. Bernstein
Tuffy88: His first book, about the best index asset allocation book I have read
Common Sense on Mutual Funds by Bogle
Four Pillars by Bernstein
Financial Peace Revisited by Dave Ramsey
Financial Peace Workbook by Dave Ramsey
Smart Couples Finish Rich by David Bach
The Finish Rich Workbook by David Bach
How to get out of debt, stay out of debt & live prosperously
by Jerrold Mundis
Peteyperson: key book to help people clear debt
to start on the path to FIRE - many people cut back to pay off
debt, realise they have spare cash having done that for 2 years
and want to know where to put it. So books on personal finance
lay the groundwork.)
The Richest Man in Babylon
WiseNlucky: "had profound impact on me."
A Modest Home Study Course from William Bernstein:
http://www.efficientfrontier.com/reading.htm
Investing in Real Estate By andrew Mclean and Gary Eldred
(nice comparison of stock investments vs real estate in the 4th Ed based on current relative dividends/rents)
Make Money with Condominiums and Townhouses
Gary Eldred