mschorer asks,Intercst, if you are the author of "Withdrawal rates..." off the Retire Early Home Page, I have a couple of foolish questions for you:1. A link off your page discusses the 25% equity as being better off in individual stocks over mutual funds because of the management fees in funds and because one can control cap gains when holding individual stocks. Is this your opinion? Or was someone else the author of that link? In this thread, you seem to be talking about the S&P500 (presumably an index fund) instead of individual stocks.It's my opinion that if you have a minimum of a $100,000 portfolio, selecting 20 or so stocks bought through a discount broker can save you some money in fees and commissions vs. an S&P500 index fund with little additional risk. The savings are even more with a $1 million portfolio. Of course this strategy assumes that your stock selections meet or beat the performance of the S&P500 index. If you are not confident in your ability to do that, there is no shame in just buying an index fund. You'll likely do better than 80% to 90% of professional investors, and I suspect you'll do better than an equal number of amateurs.The Retire Early Study on Safe Withdrawal Rates is based on holding an S&P500 index fund as your stock portfolio. The Soapbox report linked at the bottom of this page explains how to adjust your withdrawal rate downward if you are holding a more concentrated portfolio than an S&P500 index fund.2. Can you address the new EFTs? Could the 25% be in EFTs? How can we fools assess the $ gone to "managing" these baskets of stocks? It would seem they offer the same control over cap gains as individual stocks. ETFs don't offer the same ability of "matching the sale of your winners and losers" to reduce capital gains taxes. There may be a small reduction in the annual expense ratio vs. the Vanguard S&P500 index fund, but you incur a brokerage fee and the "bid-asked" spread in buying shares of an ETF. Small accounts will probably find a "plain vanilla" Vanguard S&P500 index fund to be cheaper and less hassle.intercst
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