Financial Independence Why hold a bond tent when we can have T-bills/TIPS? |
- Why hold a bond tent when we can have T-bills/TIPS?
- Has anybody here FIREd and survived through a negative market cycle?
- Daily FI discussion thread - October 07, 2018
- Are social security monthly benefits really this low? Trying to calculate the monthly SS benefit of a hypothetical worker who earned $100k every year from 1983 to 2017.
- Teaching our kids
- Balancing diversification with SWR
- I want to secure FIRE monthly passive income so that I can run my business more aggressively
| Why hold a bond tent when we can have T-bills/TIPS? Posted: 07 Oct 2018 09:34 AM PDT If bonds can help survive a downturn, why hold it instead of using T-bills/TIPS? Bonds can still go down in value. So in theory, if you are moving to retirement and you need a tent to protect against sequence risk, why wouldn't you, say, store 1-3 years of living costs in T-bills as opposed to bonds? [link] [comments]  |
| Has anybody here FIREd and survived through a negative market cycle? Posted: 06 Oct 2018 08:10 PM PDT Serious question. I have been seeing a lot of posts lately about people's current status with $500K, $1mm+, etc and how they got there over the last few weeks. The vast majority show a relatively small account balance through the 2008 market cycle with an account that is substantially higher now, having saved and invested copiously through a 9.5 year bull market. The S&P loss peak to trough was (iirc) 46% Nov 07-Mar 09 and took another close to four years to recover, to break even. That's a crushing hit if you are already retired early and living off your investments. I read somewhere that the average age on Reddit was late 20's, though I'd guess this group might be older. The optimism about investment growth rates continuing is very reminiscent of both '99 and '07. It seems most people likely haven't gone through a full market cycle, or at least not with real wealth yet. I know of only one person in real life: he was a tech guy who made a ton 96-99, then cashed out when he got a bad feeling - even he admits he was absolutely lucky. But he's gone back to some work just for insurance for his kids. Back to my original question: Is there anybody here who truly FIREd and went through the negative market cycle? Not based on selling a company and getting ridiculously wealthy, but by living frugally and saving, who FIREd and did so through a negative cycle, and continued to do such? [link] [comments]  |
| Daily FI discussion thread - October 07, 2018 Posted: 07 Oct 2018 04:08 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| Posted: 06 Oct 2018 06:51 PM PDT
EDIT: Should be $2,879.95, instead of $2,364.70. Turns out I added up Actual Earnings instead of Indexed Earnings in my original calculations. Updated screenshot here: https://imgur.com/FZTNQec.jpg [link] [comments]  |
| Posted: 07 Oct 2018 04:11 PM PDT What games, systems, methods do people use to teach our kids how to handle money. I am really bad with money and I want to teach my son better. I know there are several systems out their I just don't know if they work. Anyone have any advice? [link] [comments]  |
| Balancing diversification with SWR Posted: 07 Oct 2018 07:24 AM PDT Mmm and what I understand about the trinity study and SWR of 4% advocate almost full investment in equities, which allow for the highest amount of long term growth historically ensuring a SWR of ~4% is safe. If you diversify into bonds or other safer but lower yield investments doesn't that obviously make your SWR lower? Jlcollins advocates ~75% equities and ~25% bonds in wealth preservation stage. Something like that seems much safer when living off investments in the face of a large market crash than 100% equities, but doesn't that mean you would need more than 25x expenses and/or a lower than 4% SWR? I usually see one side or the other talked about but not how to make it all line up. [link] [comments]  |
| I want to secure FIRE monthly passive income so that I can run my business more aggressively Posted: 07 Oct 2018 09:21 AM PDT I want the best of both worlds here and am trying to figure out the best way to structure it. I'm shooting for my RE goal where I can have stable monthly income, so that I can feel comfortable to move my business in the direction that I want without restriction or feeling of guilt. I enjoy business and want to continue while still having the secure feeling of a monthly check. With my current structure of being invested in index funds, I can't bring myself to sell off investments to make that monthly check happen. I end up just not doing it because I don't "need it" as the business is bringing in enough. What is the best way for me to go here? I've thought about rental real estate but don't have the time to invest at the moment. Another thought was dividend paying stocks/bonds and disabling the reinvestment option, but I don't know the tax repercussions of this. Anyone in a similar situation? [link] [comments]  |
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