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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 63008  
Subject: Re: SWR and irrational exuberance Date: 2/7/2007 8:57 PM
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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.

</snip>


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.

http://www.dallasnews.com/sharedcontent/APStories/stories/D8N4NFG00.html

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.

</snip>


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

intercst

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