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Subject:  Re: No bonds??? Date:  6/4/2005  12:22 PM
Author:  drippinfool Number:  46334 of 88810

rkmacdonald wrote:

"I have tried this (buckets of money) approach, and, in theory, it should work. However, you wouldn't believe how hard it is to liquidate a year's living expenses from your stocks to buy CD's, when your stocks are increasing nicely and you won't need the money from the CD's for another five years. It is very very tempting to just skip the liquidation, and now you have only 4 years of CD's, and it will be nearly impossible to liquidate 2 years of expenses next time.

I finally abandoned this approach, because I didn't believe I could maintain it over the long term."

Sounds to me like a discipline issue. Human nature allows emotions to guide our investment decisions, making it difficult to consistently buy low and sell high. We find it hard to let go of "winners" and latch on to "losers." The "buckets of money" approach requires (and forces, if followed religiously) us to do just that - buy low and sell high. Is there any other way to profit from your investments? A few years ago TMFPixey wrote a series of articles on building a comfy retirement cushion. I have kept them and refer to them often. If they're still in the archives, I'll post a link in my next message.

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