The Motley Fool Discussion Boards
Retirement Discussions / Retire Early Liberal Edition
|Subject: Re: SWR and irrational exuberance||Date: 2/7/2007 9:06 PM|
|Author: 0x6a74||Number: 1301 of 58821|
To take a forced example, suppose we lose 50% in the first year, stay there for a year, and gain 200% in the third year, for a cumulative CAGR of 15%.
Year 1: $600 -> $300K, spend $60K, $240K left.
Year 2: $240K -> $240K, spend $60K, $180K left.
Year 3: $180K -> $540K, spend $60K, $480K left.
of course that can happen regardless of system & expectations.
that's why 'they' say at least five years expenses in fixed income ...
and recommend index funds.
no system can promise. no system gives a moneyback guarantee.
.... remember similar discussions when TMF was pimping "the Foolish Four" ... and became very skeptical of systems --but i could be wrong
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