Good reads from around the Web.
Now that he’s just three years from financial freedom, blogger R.I.T. is rethinking how much he can withdraw from his retirement portfolio.
This week [1] he decided that for a UK investor, 3% looks much safer than the oft-quoted 4%:
Staying with only UK stocks and bonds in your portfolio and following the 4% Rule over a 30 year period would have resulted in you running out of assets 23.8% of the time.
To be 100% “safe” you have to drop to a safe withdrawal rate of 3.05%.
Switch to global stocks and bonds and the news isn’t much better. 100% “safety” and your safe withdrawal rate is still only 3.26%.
The comments [2] following the article are also worth reading. There are some real-life stories from the frontline of early retirement, and more than one millionaire who doesn’t think a million is enough.
I tend to think a million is the bare minimum for me today, the way I intend to do it – which is to replace my drawn earnings [3] from work with investment income and not to touch my capital. (The pot can mainly go to charity when I’m gone, to make me feel less terrible about a life obsessed with finance!)
But if you intend to run down your capital, then your numbers will be very different. A million may well be overkill, depending on your retirement age.
Let’s have a few opinions: What’s your number for a safe withdrawal rate, and what size pot do you need to get it?
And at what age does that enable you to retire?
From the blogs
Making good use of the things that we find…
Passive investing
- Inner peace through index investing – Canadian Couch Potato [4]
- Why do ETF yields differ? [Canadian, but interesting] – CCP [5]
- How robo-advisers could re-invent indexing [For geeks] – Kitces [6]
Active investing
- Becoming an ISA millionaire, John Lee style – Stockopedia [7]
- Running a dividend income retirement portfolio – UK Value Investor [8]
- Notes from the London Value Investor Conference – Market Folly [9]
- Adam Sandler and complacency risk – A Wealth of Common Sense [10]
- More thoughts [via a comment] on the PEG ratio – iii blog [11]
Other articles
- The gift of not worrying about money – Mr Money Mustache [12]
- Keys to writing about investing – Clear Eyes Investing [13]
- Why compound interest won’t help you retire early – SLIS [14]
- Buy-to-let investing – the low-risk way – Under The Money Tree [15]
- Mortgages, and the banker’s jar – The Escape Artist [16]
- Life lessons with a golfing psychologist – FIREStarter [17]
Product of the week: The Telegraph [18] reports on a new investment trust, P2P Global, that invests in a portfolio of peer-to-peer loans from the likes of Zopa [19] and Ratesetter. It’s targeting a 6-8% yield. Interesting, but this is an unproven model so tread carefully.
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1 [20]
Passive investing
- It’s time to check your risk tolerance – Roth/CBS [21]
- Inside Larry Swedroe’s portfolio – Swedroe/ETF.com [22]
Active investing
- Change your environment to invest better… – WSJ [23]
- …or perhaps start meditating – Bloomberg [24]
- Knowing a business versus its valuation – The Value Perspective [25]
- The real reason hedge funds have underperformed – Fortune [26]
Other stuff worth reading
- So, you think you’re rational? – Housel/Motley Fool [27]
- What happens to your pension when you retire abroad – Guardian [28]
- London house price rise at fastest rate ever; £588 a day – Telegraph [29]
- The towns that offer the best buy-to-let returns – Telegraph [30]
- And there’s crowd-funded BTL [Beware: Unproven!] – ThisIsMoney [31]
- Millionaires: How to invest in an English vineyard – ThisIsMoney [32]
Book of the week: A smart entrepreneurial friend of mine insists that Ricardo Semler’s The Seven-Day Weekend [33]
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- Reader Ken notes that: “FT articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”.” [↩ [38]]