Historical Returns with Dollar Cost Averaging

Research on Safe Withdrawal Rates

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Post by ElSupremo »

Greetings John :)
I thank God that we have ElSupremo and these boards. Without them, I would have no place to post my research.
Right back at'cha! I'm honored to have your stuff here John. Knowledge is good. And you provide plenty of it! :great: Let me put my thanks right up there next to Kathyet's. 8)
"The best things in life are FREE!"

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Post by hocus2004 »

"Perhaps you should read over those rules again. These are guidelines."

The word "guidelines" is indeed in the heading (rather than "NFB Rules," it says "NFB Guidelines." But the language of the "guidelines" states that: "You agree, through your use of these boards, that you WILL NOT (my emphasis) post any material which is false, defamatory, inaccurate, abusive, vulgar, hateful, harassing, obscene, profane, sexually oriented, threatening, invasive of a person's privacy, or otherwise in violation of ANY law(s)." It sounds to me as if adherence to these "guidelines" is being required as a condition of posting here.
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Post by hocus2004 »

"Good old intercst gives as good as he gets eh?"

Here is a link to the "For TH" thread.

http://nofeeboards.com/boards/viewtopic.php?t=2596

I challenge any community member to read the first post in this thread and then make the case that the abusive posting practices that intercst had engaged in are even remotely similar to the posting practices that have been followed by any other poster in any of the various FIRE/Passion Saving/Retire Early communities.
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Post by hocus2004 »

"I appreciate everything you write as well, John"

I much appreciate you saying that., Kathyet. I would be most grateful if, the next time you see a DCM engaging in JWR1945-bashing either at this site or at one of the others, you would stick your neck out a bit and put in a positive word on his behalf. JWR1945 has devoted a lot of time and effort to helping us all, and each time that one of us sticks up for him, it sends a message that helps make other Information Seekers know that they are not alone in their appreciation of all that he has done for us.

"I may not get it all but I try and read it and want to say thank you to you, and all the others that spend there time trying to educate and explain there ideas to us. You all just keep up the good work... "

Please try to ask questions when you can. A lot of JWR1945's stuff is over my head, so I fully relate to what you are saying. Please bear in mind that the Board Project is not for me and JWR1945 to understand this stuff. It is for all aspiring early retirees to understand and make use of what the historical data reveals. We need questions to make this thing work, the more basic the better. I know for certain that you are not alone in having difficulty figuring this all out. I know this for certain because I am to a large extent in the same boat. This stuff is too new for anyone to grasp it fully yet.
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Post by hocus2004 »

"I thank God that we have ElSupremo and these boards. Without them, I would have no place to post my research. "

Your research is wonderful, JWR1945. It would be a lot more wonderful if we had a good number of community members chipping in with comments and questions and insights of their own. It's not supposed to be a posting board. It's supposed to be a discussion board. I want to see it become that. When this board becomes a true discussion board, that's when the real fireworks (the good kind!) begin.
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Post by hocus2004 »

"Right back at'cha! I'm honored to have your stuff here John. Knowledge is good. And you provide plenty of it! Let me put my thanks right up there next to Kathyet's. "

It's hard for me to understand how you can be so gushing in your recognition of the good work that JWR1945 has done and so reserved in your appreciation of the good work that I have done, ES. JWR1945 certainly has never been the least bit hesitant to set the record straight when one of the DCM puts forward some bit of ugliness in one of the various Smear Campaigns.

I hope that we can win you over in time, ES. A few well-placed words from you would do a lot to bring a change to the tone of the discussions held here. I doubt that there is anyone (DCMs included) who in their heart of hearts wouldn't very much like to see that sort of change take place.
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Post by JWR1945 »

From hocus2004:
"Good old intercst gives as good as he gets eh?"
Here is a link to the "For TH" thread.

I have extracted the following paragraphs from the For "TH" post:
"Stock Allocation Goal: My goal is to get to a 50 percent stock allocation. I initially made the zero percent allocation to stocks for two reasons:

"(1) I accumulated all of my retirement stash in a short amount of time. It was nine years from having zero in the bank to retirement date. So any stock purchases made in anticipation of retirement would not have been "for the long term." My worst nightmare was that, one year short of my retirement date, stocks would go into a downturn. I was not counting the months until retirement, I was counting the weeks. There was no way I wanted to take the risk of losses that could put off the retirement date for years.

"(2) Stocks were at extreme levels of overvaluation at the time I began accumulating large sums for investment. I preferred to put money ultimately to be allocated for stocks into safe investment classes until stocks could be purchased at prices closer to average valuations. That way, I can purchase many more shares for the same portion of my retirement stash. Once I find reasonable purchase points, I intend to hold the stocks for the long term (no "timing" in and out of the market).
Reference: For "TH" dated Sat Jun 12, 2004.
http://nofeeboards.com/boards/viewtopic.php?t=2596

Now lets go back to the beginning of this thread. I wrote:
Extrapolating (visually), today's P/E10 levels suggest that the odds of getting an advantage from dollar cost averaging (versus inflation-matched cash equivalents) is only slightly better than 50-50%.
At today's valuations and with today's stock market outlook, it is a good idea to consider alternatives to dollar cost averaging into the market as a whole. One attractive approach is to purchase income streams directly by focusing on dividends (i.e., using one of our dividends-based strategies). Buying TIPS and ibonds (while being careful about taxes) is an attractive alternative for those who may need to convert (some of) their holdings directly into cash quickly.

Later, I referenced Professor Shiller's data and suggested two possible explanations for what our data show:
I think that there is a story in this graph that is more useful than the first year's value of P/E10.
..
In terms of my data, the years 1919, 1921 and 1975 stand out as being especially important.
..
You will notice a general relationship between how P/E10 has varied over time and these years. The relationship is not precise, possibly because dollar cost averaging spreads things out over time.
An alternative interpretation would be to focus on a single especially bad year. Dollar cost averaging builds up a portfolio, but a bad year right at the end hurts a lot. This corresponds to my general observation that preserving capital is most important when you have capital to preserve.

Notice how closely hocus2004's actions line up with our latest findings. They also line up closely with ES's recommendation for people getting near their retirement date.

I have found that real retirees who have looked into retirement finances typically end up making sound decisions. It is only later that someone like me comes along and verifies that they were right all along.

Another example is unclemick and his hobby stocks. He was forced into a defensive position until I ran the numbers. The fact is that he did very well. He made good decisions and sound investments.

Have fun.

John R.
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Post by hocus2004 »

"I have found that real retirees who have looked into retirement finances typically end up making sound decisions. "

Most people in the community are good people and most people in the community are smart people. The purpose of the boards is to allow good and smart people seeking to win financial freedom early in life to exchange ideas on how to go about doing so. That is a truly wonderful purpose. These boards are at their core truly wonderful boards, as has been demonstrated many times in the past.

Intercst is an aberration. He is not like the rest of us. Most of us are careful to give due consideration to other posters' view when stating our own. Intercst is not. Most of us generally offer reasonably sound advice. Intercst does not. Most of us possess at least a normal appreciation of what ethics requires of us. Intercst does not.

Following the logic chain tells me that this will end with the good and smart people of this community reaching a consesus to cut intercst loose. It is just a matter of time.
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Post by ben »

Just want to stick my neck out for Intercst: I am a big fan of his work! Cheers!
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Post by hocus2004 »

"Just want to stick my neck out for Intercst: I am a big fan of his work!"

I consider myself a bit of an intercst fan too for the following reasons:

1) He started the Motley Fool board, which in its Golden Age was the most important resource for learning about how to achieve financial freedom early in life that existed on Planet Earth;

2) The REHP study provides a good number of valuable insights (while getting the SWR number wrong). I have often recommened that aspiring early retirees pay to obtain a complete copy of the study and refer to it often when putting together their investing strategies (supplementing what the learn from it with the insights gained by looking at JWR1945's work and Chapter Two of Bernstein's "Four Pillars of Investing" and so forth, of course);

3) He brought a lot of people into the movement with his web site. There are a lot of people who would not even know that early retirement is a viable option had they not at some point happened across RetireEarlyHomePage.com; and

4) He has offered a number of warnings to be aware that health insurance costs may continue to rise at rates far in excess of the general rate of inflation, and I think that is a useful caution for aspiring early retirees to hear.

All that said, intercst had brought great discredit on himself with his posting behavior during The Great SWR Debate. The board communities have also brought discredit on themselves with their tolerance of his posting behavior. If anyone else had employed the trickery that intercst has employed in discussions as important as discussions of SWRs, he or she would have been shown the door a long time ago. It is a black mark on the integrity of the entire movement that we have permitted the Campaign of Terror to continue for a little over 30 months now. I hope that the ugliness will be brought to a quick stop for the benefit of all community members, including intercst, who has been hurt more than anyone else in this thing and for no good reason whatsoever.

If you are as big a fan of intercst as you indicate, Ben (and I believe that you are), I think you would be doing him a favor to send him an e-mail asking that he knock off the funny stuff and that he do that beginning today.
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Post by ben »

Hocus; we (you and I and probably many other people) do not have to agree :D . Thats why we call it a discussion forum.

You also have some great insights on FIRE; especially your old TMF posts but also your general view on the the FREEDOM that comes with FIRE.
Your SWR stuff not included - sorry. Cheers! :D
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Post by hocus2004 »

"we (you and I and probably many other people) do not have to agree .Thats why we call it a discussion forum. "

On this one we are 100 percent in agreement. Given your views on this question, I wish that you would think over once again whether it is appropriate for DCMs to participate in all sorts of abusive posting practices to intimidate those who believe that there are serious flaws in the REHP study from discussing those flaws amongst themselves. If you were to speak up in clear and firm terms against the abuses, it would count for double because people know that you do not agree with me on all the substance questions. I will be most grateful for any help you can provide in this regard.

"You also have some great insights on FIRE; especially your old TMF posts but also your general view on the the FREEDOM that comes with FIRE. Your SWR stuff not included - sorry."

OK. There's nothing to be sorry about. It's a matter of opinion whether my SWR stuff or my non-SWR stuff is my best work. So long as you do not disrupt threads in which I am discussing the SWR stuff, we have no problem.

That said, I will point out to other community members that there are a good number of community members who have expressed a belief that my SWR work is the best work I have done. For example, raddr pointed to my "Coin Toss" post as one of the best posts he ever read at any discussion board anywhere on the internet. Several of my SWR posts are among the most popular ever put up in the history of the REHP board, as measured by the recs given them by fellow community members.

If there are community members interested in checking up on what I am saying here, please take a look at the last post in the "Normalization of SWR Discussions" thread. That post collects comments from about 20 REHP community members that were put forward prior to the time when Team Intercst was making threats of physical violence against anyone who posted in an honest and informed way on the SWR topic (the threats came shortly after I put up the "What Bernstein Says" post, which prompted several posters to express a desire that the disruption be reined in and that reasoned discussions of matters of substance be permitted to proceed). You will see in that post that there was a time when many community members felt free to express appreciation to me for pointing out the flaws of the REHP study and to express excitement about the things that were being learned through the discussions that followed in the wake of my May 13,. 2002, Post Heard Around the World.

Not all of those posters agreed with me on all aspects of the SWR question, of course. I am not sure that any of them agreed with me on all aspects of the question. But just about all of them were perfectly willing to acknowledge the wonderful learning experience that followed from me putting forward important questions and important insights about an important matter of board business. It is the insights developed through interactions with other community members with different views that causes me to believe that the internet discussion board will be an important communications medium of the future.

The "Debate About Having a Debate" has revealed to us the worst of this new communications medium. The Great SWR Debate has revealed to us the best of this new communications medium. The bad stuff has been real bad, but the good stuff has been so good that it leaves us no choice but to figure out a way to deal with the ugliness brought to the table by those who have elected to direct large portions of their life energies to disrupting the converstions of people with a genuine interest in learning what it takes to achierve finance freedom early in life.
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Post by hocus2004 »

"You also have some great insights on FIRE; especially your old TMF posts but also your general view on the the FREEDOM that comes with FIRE. "

Thanks, by the way, for those kind comments, Ben. I should have said that in my earlier response.
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Post by ben »

You are welcome! :D
I will never disrupt - I will politely engage and partake in the discussion and add my views the way I always do. That is what these forums are all about as you say.

Forgot to add that I also admire your guts to FIRE (well part-FIRE) with $400k at young age with wife and 2 kids and a $30k/year budget. We have elsewhere discussed minimum FIRE nest eggs needed, and many posters can't see less than a million do it.

Cheers!
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Post by hocus2004 »

"We have elsewhere discussed minimum FIRE nest eggs needed, and many posters can't see less than a million do it. "

My plan is not directly comparable to plans in which the person involved is going to be leaving the workforce for good. I "retired" only from the need to earn a corporate paycheck. I still work full-time at my freelance writing gig. I expect to be doing that for at least another 20 years. That ,makes a difference.

I have full ownership of a house worth about $300,000. If you add that to the $400,000 I have in investment assets, the total comes to $700,000. If you use the Mutliply-by-25 Rule to translate the value of the $10,000 mimimum annual income expectatiion I have for my writing work into terms that make my plan comparable to a plan that applies for a conventional "retirement," that brings my number up to $950,000. That's not so far off from the $1 million figure that has been cited in some threads at some other boards.

The reality is that I hope to be able to earn more than $10,000. I have all sorts of things that I want to be able to do with my life that would require me earning more than that. The $10,000 is a minimum figure that I have been using until I get my business up and running because I don't want to use big numbers until I have something real to point to. My hope is that in the not too distant future I will be able to up that number and thereby permit myself and my family more spending. We will have to wait and see how that works out, but that's the hope.

I am not a scrimper and saver by nature. I like the financial freedom that I have gained by cutting a lot of spending categories that were not providing me enough life enhancement in earlier days. But I am not one to cut spending just for the sake of cutting spending. My goal is to get the highest possible value from each dollar that I earn. I have had to lower spending for a time to build a bridge from corporate writing work to freelance writing work. Once I get safely to the other side of the river, I hope to be able to increase spending. I love all the good things that spending money can do for me almost as much as I love all the good things that saving money can do for me!
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Post by hocus2004 »

"I will never disrupt - I will politely engage and partake in the discussion and add my views the way I always do. That is what these forums are all about as you say. "

I am going to offer here some thoughts on the naturre of "Disruption" and also on the questiion of what "these forums are all about." I am using your comments here as a launching pad. But I do not intend for these comments to be directed to you in particular, Ben. They intended for the entire FIRE/Passion Saving./Retire Early community. You just happen to be the one who said some things that got me putting together some thoughts along these lines.

The phrase that I use to refer to disruptive posting practices is "DCM-type posting practices." A DCM is a Defender of the Conventional Methodology. So what I am trying to suggest with that phrase is that any defense of the conventional methodology (or in particular, the study published at RetireEarlyHomePage.com) is disruptive. I think it might be helpful to explain why I say it that way, and why I think it is right to say it that way.

You have indicated that you make use of the REHP study in your planning, but that your "common sense" tells you not to use the study in the way in which intercst advocates that it be used. Intercst says that the study actually tells you the take-out number that is safe, the one that applies in the event that stocks perform in the future somewhat in the way in which they have always performed in the past. You understand that the study makes no adjustment for changes in valuation, and you understand that valuation is a critical factor in any reasonable determination of what withdrawal rate is safe. So you make a mental adjustment in the number generated by the REHP study. It sounds to me that what you are saying is that you take the study into consideration but you also take its conclusions with a grain of salt because you appreciate that the study was designed in such a way that all it does is report on what happened historically without including the elements required to make the findings reflective of what the historical data actually reveals on the question of what withdrawal rate is safe.

There are others saying things similar to what you are saying, Ben. Your position reminds me of the Dory36 position. Dory36 at one time was a big believer in the REHP study. There are threads from the old days at the Motley Fool board where Dory36 explored the implications of the REHP findings in great depth, suggesting that he took those findings to be both accurate and significant. Today he sings a very different tune. Dory36 has not publicly endorsed my view that the REHP study is "analytically invalid." What he says instead is that anyone using the study needs to include lots of slack in his or her plan. The clear suggestion is that Dory36 does not believe that the humber that intercst identified as "100 percent safe" is really "100 percent safe." If it was 100 percent safem you wouldn't need to provide so much slack, would you?

What both you and Dory36 and a lot of others are doing is twisting yourselves into logic pretzels in an effort to avoid stating the obvious truth of the matter, that intercst got the number wrong in the study. I think this is a terrible mistake. Your "solution" may work in regard to providing for safety in your personal plan. That's a good thing. I don't want to see your plan go bust, and if you build in enough slack, you lessen the chances of that happening. So your decision to not take the intercst SWR claims too seriously serves a good purpose in this limited personal sense.

It serves a very bad purpose in terms of the discussions that the rest of us try to hold on the various discussion boards, however. The REHP study does not purport to be a presentation of intercst's personal views on what withdrawal rate is safe. It purports to be a study, a piece of research. When people engage in research, there are certain disciplines that come into play. A study has to define its terms, and then it has to employ those terms in the way in which they have been defined. This intercst has failed to do. The REHP study is an intellectually bankrupt piece of research.

The REHP study reports the "optimal" stock allocation incorrectly. BenSolar demonstrated this beyond any reasonable doubt. Intercst has never corrected the study. The REHP study reports the "100 percent safe" withdrawal rate incorrectly. Raddr, JWR1945, and William Bernstein have all showed this beyond any reasonable doubt. Intercst has never corrected the study. These are serious flaws. The entire point of the study is to reveal what the historical data says about the optimal allocation and about the SWR, and on both of these points intercst got the number wrong. These errors need to be corrected so that aspiring early retirees are not misled as to what the historical data actually says. Intercst's unwillingness to correct the errors he made in the study is unacceptable. Your pretzel logic defenses of his unwillingness to correct the errors he made in this study makes "The Debate About Having a Debate" extend far longer than it should need to extent. I wish you would cut it out, Ben.

You are of course correct that discussion forums exist to permit discussions of differing points of view. If you were to say that, from today forward, you were going to agree with me on every point I put forward, I would lose any hope of gaining anything from reading your posts. I need you to challenge me if I am to learn from your contributions. So I obviously do not want you to agree with me on all aspects of the SWR question or any other question. But when you refuse to acknowledge that a mathematical calculation that was obviously done improperly was done improperly, you make reasoned discussion impossible. People need to be able to agree at least on some basics for there to be any hope of reasoned exchange on the more advanced points.

Say that I put forward a post saying that I really like the song "Hey Jude" because it is so melodic. And say that you were to respond that you did not really view the distorted electric guitar effects heard throughout the song are a good example of the use of melody. Say that you were thinking of the song "Revolution,: which is on the flip side of "Hey Jude," rather than "Hey Jude." Now say that I corrected you, and noted that there are no distorted guitar effects on "Hey Jude." And say that you continued to pretend that the song "Revolution" is the song "Hey Jude." Say that I observed that I like the lyric about "anytime you feel the pain, hey Jude, refrain," and your response was that you personally enjoy the line about "if you go carrying pictures of Chairman Mao" a lot better and that , besides, there is no line about "anything you feel the pain" in the song Hey Jude."

Do you see how this conversation would become nonsense gibberish over time. If two people are going to exchange views on something, they need to first define what that "something" is. They need to be talking about the same thing. Overwise their efforts cannot bear good fruit.

The term "safe withdrawal rate" has a defined meaning in the literature. When I say that the number that intercst reports in his study in nowhere in the ballpark of the number that you get when you take an informed look at the date, it is the definition of the term "safe withdrawal rate"used in the literature that I am making reference to. Obviously if you make up new defintions each time a word is used, it is possible to come up with some crazy sort of argument that intercst did not get the number wrong. No study ever done in the hitory of the univererse ever got anything wrong if you are willing to redefine the terms used each time a new flaw in the study in question is identfied. But that's not the way that serious people talk about serious questions.. When serious people talk about seriious questions, they use the standard defnitions of words to determine what was intended when those words were put forth in studies,. Using the standard definitions of the term "safe withdrawal rate" the number that intercst reports in the REHP study as "100 percent safe" is off the mark by a clear country mile.

Anyone who puts forward a post suggesting that the REHP study has not been entirely discredited during the course of the Great SWR Board is misleading aspiring early retirees about what the historical data says. There is no connection between what that study claims about the historical data and what the historical data actually says. It is disruption to put up a post at a FIRE board that is aimed at misleading readers of that board about what the historical data says re SWRs. That sort of thing should stop.

ALL defenses of the REHP study are exercises in disruption. I am not saying that people who use the 4 percent number in their planning, while making mental adjustments to compensate for the flaws in the study, should not do so or should not report to the board community that they do so. That's fine so long as things are put in context in the post in which these statements are made,. If you say "I understand that the REHP study is analytically invalid for purposes of determining SWRs, so I make a mental adjustment to the number reported as safe in that study when using it for purposes of putting together my plan," you are shooting straight. if you fail to note in your post that you understand that the number reported in the REHP study as "safe" is in fact not that at all, then you are not.

The key here is that we bring all community members up to speed on the flaws of the REHP study. We want people to know that the study has been discredited. We don't want people looking at our discussions and thinking "hmm, these people think that that REHP study is a pretty darn good piece of work, maybe I should tak a look at that." There is no harm in people taking a look at it, so long as they are aware of the study's grave analytical flaws. But if we send people to the study without letting them know that the study got the number wrong, we are misleading them in a serious way on a serious issue. We have a responsibility to our fellow community members not to do that. We need to shoot straight. It's OK to let people know if there is something you like about the study. But you MUST also always include a note that you understand that the study does not do what it purports to do, to report accurately what the historical data says re what withdrawal rate is safe.

There is no question at this point that the study got the number wrong. Raddr says that the REHP study is "bogus." William Bernstein says that it is "highly misleading." JWR1945 says that it is "analytically invalid for purposes of determining SWRs. The following experts reject out of hand the key assumption of the study, that changes in valuation levels have zero effect on long-term returns: (1) William Bernstein; (2) Peter Bernstein; (3) Ed Easterling; (4) JWR1945; (5) raddr; (6) Robert Shiller; (7) Rob Arnott; and (Cool Andrew Smithers. Is it possible that all of these people got it wrong and that intercst, whose only qualification to speak on this subject is that he has figured out how to post stuff on the internet, got it right? No, it is not possible. No serious person can believe today that intercst got it right in the REHP study. Intercst got it wrong and he got it wrong in a very serious way.

We need to get that message out. We don't want to keep this finding to ourselves. We want all aspiring early retirees to know what they need to know about SWRs and one important thing to know is that intercst got the number wrong in the study published at RetireEarlyHomePage.com. We should all be shouting that message from the rooftops. At he very least, we should avoid ever putting forward a post suggesting the contrary, that perhaps under some twisted pretzel logic, e got the number right. We need to be clear in our message on this point because the safety of people's retirements is at stake. None of us should be in the business of trying to cause busted retirements.

Do we do this to embarrass intercst? Obviously not. He was asked to correct the study a long long time ago. He failed to do so. Any embarassment he feels when we report accuractely what the historical data says is embarassment that he brings on himself. It's too bad but that's the way it is.

Those are some thoughts on the nature of the disruption we have seen re the SWR matter. I will go to a separate post to put forward some thoughts I have on the question of "what these forums are all about."
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Post by hocus2004 »

What are these discussion forums about? They are about two things: (1) learning together; and (2) social interaction. Some are more interested in one or the other, but just about everyone who paricipates is at least a little interested in both. The two primary motivations for using the board are inter-connected. It is the social interaction that makes learning together possible. It is the subject on which the learning is being done that provides the context in which the social interaction takes place.

I could learn from reading a magazine or a book or by listening to a speech, right? Is a discussion board just another communications medium that does the same sort of thing as the others? It is not. What makes the learning experience obtained through a discussion board special is the way in which it facililitates social interaction. I have learned a lot about SWRs from JWR1945. He hasn't written any books. So the knowledge that he possesses was unavailable to me until discussion boards were invented. Through a discussion board, I was able to let people know that I was interested in the subject of SWRs, and to connect with someone who shares that interest and who can teach me lots of things about it. That is pretty darn cool, is it not?

The REHP board was in its day the most important resource on Planet Earth for learning what it takes to achieve financial freedom early in life. How could that be so? There were no Harvard professors on the board. Was the board really a better resource than the research papers put out by Harvard professors. The board had no team of editors and proofreaders and fact-checkers. Was it really a better resource than Random House? Could you learn things at the old REHP board that you could not learn by buying books published by Random House? You sure could.

What the REHP board possessed that these other learning resources did not possess was people from all walks of life who had personal experience with the subject matter. We had high-income people and moderate-income people, blue-collar workers and white-coller workers, young people and old people, married people and single people, and on and on. These people shared with the community their dreams for the future. That's intimate stuff. They shared their budgets. That's perhaps even more intimate stuff. You don't see that sort of stuff written up too often in Random House books or in Harvard studies. Where you see it written up is on discussion boards. Discussion boards are an important communications medium of the future, and the reason why they are important is that they allow people to engage in learning though social interaction in a unique and new way. The social interaction is focused on the theme of the board. The connection between the learning together theme and the social interaction process creates a dynamic not experienced with other communications mediums. Discussion boards permit us to develop new sorts of insights and to make our lives better by doing so.

That's the good side of discussion boards. There is a bad side too and the bad side is really just the reverse of the coin. The same social interaction that can make for a new way of learning can make for a new way of wasting one's time. Not all social interactions are positive. A communications medium that relies so heavily on social interaction to achieve its goals carries risks with it. If the social reaction is of a negative type, what you get as a work product is not good information but bad information. What you get is a negative learning experience rather than a positive one.

Look at the post from intercst that I quoted earlier in this thread. Wanderer is one of the most important posters in the history of the Motley Fool board. He was highly informed and highly popular. He brought lots of new blood into the community because there were many people who came to that board regularly with the hope that they would see more of his stuff. You would think that intercst, the moderator of that board, would be grateful to Wanderer for having made these contributions, would you not? You would think wrong.

Wanderer is going through a very hard time. His wife has left him and she has taken his children. Wanderer's family means a lot to him. So he is going through great pain. He told the community about this in a post at the raddr board and a good number of community members came forward with expressions of sympathy. That's how normal people respond to situations of this sort.

How did intercst respond to it? With venom. Wanderer once posted honestly on real estate at the Motley Fool board and that enraged intercst. Honest and informed comments on the benefits of real estate as an investment are not appreciated by intercst because they conflict with his nonsense gibberish all-stocks-all-the-time dogmas. So intercst led a Smear Campaign against Wanderer and Wanderer was exiled from the board. That was a long time ago. But intercst hasn't forgotten. The way that intercst sees it is that Wanderer once told the truth about real estate on "his" board, so intercst must spend the rest of his days looking for opportunities to detroy Wanderer. Wanderer's recent misfortunes presented a promising opportunity to pile on the guy when he is in great pain, and intercst took full advantage. He put forward the most hurtul comments he could think of in the hopes of sending a clear message to any free-thinking souls who might wander onto "his" board that this is the sort of "treatment" that they can expect if they ever happen to forget that no one ever "crosses" intercst, no one ever points out any of the many flaws present in just about all of his nonsense gibberish Retire Early dogmas.

The way that I often put it is that intercst pours poison into the water supply of all of the boards as which he participates. It is social interaction that allows the learning process to proceed and this individual over and over and over again behaves in inappropriate ways that do great harm to the social bonds that it takes each board community long time-periods to develop. The rest of us build the various boards day by day, post by post. Intercst with his hate-filled posting (and those comments about Wanderer are indeed hateful, don't try to tell me different) destroys the work that the rest of us have done.

Does it matter? Yes, it matters big time. Is the Wanderer incident an isolated one? It is not.

The intercst Smear Campaign against me has gone on so long now that it is hard to imagine that there is any community member who is not aware of it. But I am by no means the only well-respected poster who intercst has chosen to make the focus of one of his hate-filled Smear Campagins. Try out these names: (1) JWR1945; (2) Wanderer; (3) FoolMeOnce; (4) raddr; (5) BenSolar; (6) Mikey; (7) CatherineCoy; (Cool InParadise; (9) Jammerh; (10) Gary1Putt; (11)PtSurmr; and on and on and on. No one could possibly make a list of all the Smear Campaigns led by intercst. There are new ones on almost a weeky basis. Some of them are short. The poster being smeared gets fed up and just leaves the community. Some of them are long-standing, like the one directed against me. All of them do great damage. Each and every one of the intercst-led Smear Campaigns has ripped the social fabric of our community.

Do you happen to know how the FIRE board here got its start, Ben? That board was started by a group of people who got fed up with the lies they had to tell to participate at the Motley Fool board and were looking for a refuge from the intercst dogmas and looked to ES to provide it for them here. Our very first FIRE post was a piece of research by raddr in which he showed how absurd are the intercst SWR claims. That post was put to the Index Funds board at the old MSN site. I had never posted in this community until then, but I was excited to see the raddr research because it helped me in the Great SWR Debate that was going on at the Motley Fool board. So I came over and expressed my thanks to raddr. Several others said that they would like to see more posts taking a realistic look at SWRs and a ES offered to start a new board faciliatating that. A few weeks later, he moved the new board over to this site. That's the origen of our FIRE board. It was develped as a place for aspiring early retirees to escape intercst, to be able to talk in honest and informed ways about what it takes to win financial freedon early in life.

Does raddr know that the intercst SWR claims are nonsense? Of course. He referred to the REHP study as "bogus." Raddr knows the score.

Does wanderer know? Of course. He sent me an e-mail once telling me that he went to the Motley Fool board on an almost daily basis just for the purpose of giving a rec to each of my Great SWR Debate posts.

Does FoolMeOnce know the score? Of course. When intercst endorsed the use of threats of physical violence to silence the community members who were asking that reasoned debate on SWRs be permitted, FoolMeOnce put up a post saying that he could no longer in good consience partiicipate in that board community.

Does PeteyPerson know the score? Yup. Petey put up several posts when Ataloss started in with his word game stuff asking Ataloss to knock off the funny business.

Does BenSolar know the score? Of course. He is the one who provied beyond any reaosonable doubt that intercst got the number wrong on the optimal allocation question.

Even Ataloss knows the score to a far greater extent than he lets on. Ataloss sent me an e-mail early in the Great Debate saying that he was fed up with the narrow scope of permissble debate at the Motley Fool board, and asking that I set up my own board because he would like a new place at which to post about early retirement stuff.

Now consider what has happened at the NFB site. We have raddr taking shots at ES, and ES taking shots at raddr. We have Ataloss taking shots at me and raddr taking shots at me and Wanderer taking shots at me. And we have raddr and Ataloss and Wanderer taking shots at JWR1945, and ES defending JWR1945, and people on several board communities arguing that me and JWR1945 are the same person and all other sorts of nonsense.

None of this is healthy,. All of this junk makes it hard for us to engage in a learning together experience. And what is the cause of it all? The cause is intercst. It is conflicts caused by the unreasonable demands of intercst and his supporters that cause all this.

When I first came to this board I was extended a warm welcome because people appreciated the work I had done at Motley Fool and because I was another poster looking for an escape from the intercst dogmas. So how is it that it came to me that a number of posters here participated in Smear Campaigns against me? What happened is that I made it clear that my long-term intent was to free up the Motley Fool board for honest and informed on-topic posting. That is still my long-term goal, so the Smear Campaign continues to this day.

Is there something wrong with having that as a goal? If there is, I sure would like someone to explain to me what it is. I think it is a wonderful goal. The community there expressed in no uncertain terms a desire for reasoned on-topic debate. The community there has a proud history. That board was once the most important resource for learning how to win financil freedom that existed on Planet Earth. The Motley Fool site has several big advantages. One, it is a pay-for site, which I believe in the long term means that it is going to be run in a more professional way than most other sites (that is obviously not the cas today). Two, there are over 2 million visitors each month to the Motley Fool site. There are hundreds of thousands of dollars worth of promotional activity that goes to bringing those 2 million visitors to the site. Is there some reason why we should not want those 2 million people to learn about our movement? Is there some reason why we should not want those people to learn what we know about early retirement and to share with us what they know? If there is some reason, again I would much appreciate it if someone could tell me what it is. I want those people joining in oui discussions.

Intercst does not. Intercst wants a little band of enablers that will never question his dogmas, that will never dare to correct him when he gets a number wrong in a study. Me and intercst have different agendas, that much is clear. The question we need to struggle wiith as a community is, Does that justify a Smear Campaign against me?

I say no. I say that I am perfectly in my rights to let community members know that intercst got the number wrong in the REHP study. I also say that I am perfectly in my rights to let people know that he is a venomous poster who pours poison in the water supply of every discussion board community he visits. Intercst and discussion board communities do not go well together. Communities need reasoned discussion and social interaction to thrive. Intercst hates reasoned discussion with an intense passion (reasoned discussion tends not to support his dogmas) and he regularly posts in such a way as to rip apart the social fabric of the communities at which he participates.

We are going to need to deal with the intercst problem. It is the elephant in the living room that everyone is aware of and that few want to talk about frankly. We must talk about it frankly. The work we do at these boards is important. The work cannot be done properly so long as intercst is able to exercise the influence that he is currently able to exercise. We have not only the venom of intercst's own posting to deal with at this point, but the venom spread by the various DCMs as well. The nonense needs to be brought to a stop. Resposible people must step forward and steer things in a more positive direction.

Intercst is one poster. There is no one poster who in more important than the entire community. He needs to be reined in big time and the DCMs need to be reined in too. We want to get raddr back. We want to get Wanderer back. We want to get PeteyPerson back. We want to get BenSolar back.. We want to get FoolMeOnce back. We want to get the magic back.

The magic is the social interaction experienced when we direct our energies to reasoned discussions of the subject matter of the board. Take a look at the title of this thread. Isn't it supposed to be about dollar-cost averaging or something? Our discussions are rarely about what they are supposed to be about anymore. On just about any subject we talk about, one of the intercst dogmas applies and if some poster dares to post in an honest and informed manner on the topic at issue, one of the DCMs interject some nonsense gibberish defense of the intercst position into the discussions and we are all led down a trail of darkness.

We don't address the problem by putting our heads in the sand. We address the problem by addressing the problem. We should make a practice of addressing it in positive-spirited and constructive ways, beginning today. I don't expect that intercst is going to be with us all that much longer. I expect that the various communities are going to be facilitating discussions about financial freefom for many years to come. We need to begin placing community ahead of intercst. He is a failed leader. It is time to accept the reality and move on.
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ben
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Post by ben »

Woaw! :lol:
Is that your book Hocus!? :lol:
I might get back to you with more comments when I have had a chance to read it all (might take a few days.. or weeks... ;) ) but your:
any defense of the conventional methodology (or in particular, the study published at RetireEarlyHomePage.com) is disruptive.
certainly does not leave much room for any discussion....

Thanks for clarifying your financial status at FIRE (or semi-FIRE). The magic million seems like a realistic nest egg for many when willing to cut cost (without going overboard).

As for how I use the study I have long time ago learned that focusing on a non-diversified portfolio with only USA large caps and bonds does not bring the diversification I want - therefore the study, the HSWR, can not be directly applied to my case. Also I would adjust with drawals depending on my investment returns (up AND down) - common sense again for me.

I agree that the debate about having the debate can be a bit tiresome - albeit sometimes amusing.
I am perfectly in my rights to let community members know that intercst got the number wrong in the REHP study. I also say that I am perfectly in my rights to let people know that he is a venomous poster who pours poison in the water supply of every discussion board community he visits
No comments...
The term "safe withdrawal rate" has a defined meaning in the literature.
I did not know that - what literature? If the REHP studies then the disclaimer clearly clarifies that it is an HSWR.

As for:
(1) William Bernstein; (2) Peter Bernstein; (3) Ed Easterling; (4) JWR1945; (5) raddr; (6) Robert Shiller; (7) Rob Arnott; and ( Andrew Smithers
I believe they all question whether the FSWR will be the same as the HSWR due to current valuations, but only future will tell - not mathematical calculations I think.
I don't expect that intercst is going to be with us all that much longer.
Is he sick? ;)
Normal; to put on clothes bought for work, go to work in car bought to get to work needed to pay for the clothes, the car and the home left empty all day in order to afford to live in it...
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ben
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Post by ben »

By the way; I think this thread went off track because you demanded recognition from ES. Cheers! :D
Normal; to put on clothes bought for work, go to work in car bought to get to work needed to pay for the clothes, the car and the home left empty all day in order to afford to live in it...
hocus2004
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Post by hocus2004 »

"certainly does not leave much room for any discussion.... "

Just the opposite is so.

So long as we are trapped in discussions of nonsense gibberish, the discussions go around and around in circles. We talk about one thing over and over again.

Once we acknowledge the obvious truth of things, that intercst got the number wrong in the study, all sorts of opportunities for wonderful discussions open up. That allows us to take full advantage of all the wonderful insights on SWRs that have been put forward by researchers who did NOT get the number wrong. We can talk about what Bernstein came up with. We can talk about what raddr came up with. We can talk about what JWR1945 came up with.

The SWR topic is a wonderful topic. We have seen it bring boards to life over and over again. The problem is when it gets tied down in nonsense gibberish by DCMs trying to put engage us in linguistic pretzels under which some sort of claim can be made that intercst didn't get the number wrong. All of that junk is a big waste of time.

If you want to see a good example of how this plays out, take a look at the "SWR for 26 Years of 6.2 percent?" thread at the Early Retirement Forum. That was one of the best threads in the history of that board. All sorts of community members participated and just about all of them made great contributions from all sorts of different perspectives.

That discussion was continued in the "Yahoo Finance Quiz" thread. That was another great thread until intercst showed up and injected his poison into it. The level of discussion feel off a cliff at that point.

This is a pattern that has been repeated again and again and again. Look at the discussions at this site's FIRE board. Absolutely wonderful stuff until Ataloss starts with the Word Games. Then everything falls off a cliff.

What you suggest with the words quoted above is that, if we agree on one thing, we must agree on all things. This is fallaciious reasoning. To fail to reach consensus on a numerical calculation just shows that we are engaged in nonsense word games. There should be no controversy over a numerical calculation whatsoever. Every informed analyst who has done an SWR calculation in recent years has come to an answer nowhere even in the same ballpark as the intercst answer. There's a good reason why. No informed researcher can find support in the historical data for the intercst claims.

Reaching a consensus that intercst got the number wrong does not shut the discussions down. What it shuts down is the Debate About Having a Debate. That's something we want to shut down. You shut down the nonsense and you get to all the good stuff on the other side. You shut down the DCMs and we get to spend our time in honest and informed discussions of how to win financial freedom early in life.

That was the original idea, was it not? We all need to get back to where we once belonged. Intercst isn't worth it.
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