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Greetings, OldOne, and welcome. You asked:

<<From reading the thread starting at: http://boards.fool.com/registered/Message.asp?id=1040013000079000&sort=postdate, I gather that the "safe" withdrawal rate is on the order of 6% for equities invested along any of the BTD strategies.

An interesting (for me at least) question is can I safely increase this rate to some percentage of my net worth if I have a substantial holding in real estate?

The real estate is divided between two income properties and my primary residence. Right now the equity represents 40% of my net worth.

It was 50% until last month when I refinanced, took out a substantial amount of money and put it into the Foolish Four.

Early retirement could be 1 to 2 years away if I can justify a withdrawal rate that would keep my standard of living about constant.

The rate of equity increase in real estate has been at least as good or possibly better than equities for me. At least the bottom line is that over the years I have put less money into real estate than stocks, and the net value of the real estate was equal until I deliberately reduced it. On the other hand I wasn't a Fool until 3 years ago...>>


The readings you refer to were based on the total return and liquidation of individual stocks. That's a far cry than trying to sell real estate to generate the same level of income. I wouldn't count on your real estate holdings in the same way as I do stocks holdings. In fact, were it me, I would discount them heavily for withdrawal purposes. Who knows when and at what price they might sell if you needed to do so to generate living expenses? Someone said to decrease their value by 25%, but I'm more inclined to say don't value them at more than 25% if you want to count them as part of your assets available for withdrawal. Nevertheless, the decision is yours, so if you can live with it, that's just fine with me. :-)

Regards….Pixy
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