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Subject:  Re: SWR and irrational exuberance Date:  2/7/2007  8:57 PM
Author:  intercst Number:  1300 of 117712

GusSmed writes,

It's awfully tempting to think I don't need quite as much money as I think I do for true financial independence. BuildMWell's post is the devil whispering in my ear. "You're smarter than the S&P 500. You can do better than Intercst's simulations. You won't have a big downturn."

Except that, you know, some of my stocks have lost money. The method is nothing like 100% predictive. Yeah, I made money during 2001-2003 while the S&P was still dropping, but will I do that the next time? I hardly know.


I think the Governor of Texas must be reading the BuildMWell board. He thinks he can sell the Texas Lottery to a private company, set up an $8 billion endowement with the procedes and then withdraw $800 million per year (a 10% SWR) to fund education in the state.

Perry also said the sale could provide more than $8 billion to be dedicated to a public education endowment, providing $800 million a year for public schools. However, the state-run lottery currently contributes $1 billion per year to public schools.

Perry spokesman Ted Royer said the governor's proposed two-year budget would make up the $200 million gap, and that if the lottery were sold for more than $14 billion that would produce extra money for education.


Most universities and large charitable foundations limit their endowement withdrawals to 4%-5% of assets per year


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